Connecting the Dots: KM Initiatives and Business Performance

Moria Levy and Nurit Linn

Management & Information Science, Bar Ilan University, Ramat Gan, Israel

MA Applied Organizational Sociology, Haifa University, Aba Khoushy Ave, Mount Carmel, Haifa, Israel

Keywords: Knowledge Management, KM, Improvement, Business Performance, Organizational Change, Case Study,

Foster Care, Care Services.

Abstract: For over two decades now, knowledge management (KM) has been an academic discipline, extensively

taught, learned, and researched. It has been practiced in organizations for a similar period. However, demon-

strating long-term improvement in business performance as a result of KM initiatives is not an easy task. KM

processes and changes are rarely standalone and usually go hand in hand with other organizational changes.

This in itself makes it difficult to demonstrate that said organizational changes originate from KM initiatives,

and not from other changes in the organizational environment.

This research provides a case study in which shifts in organizational performance as a result of KM initiatives

can be examined. This research is significant for KM researchers because it suggests a new research model

for further studies. In addition, it provides organizations with an optimistic vision, namely that systematic

management of organizational knowledge assets is not merely an idea that sounds good, but can actually be

proven to be effective. Connecting the dots between KM and business performance is a known challenge.

However, thanks to our research model, it is easier to overcome this challenge.

The research method is based on a qualitative and quantitative case study in which foster care activities in

Israel underwent KM intervention for a period of eight years. During this period, failures of foster care cases

resulting in unsuccessful placement dropped by 32%, with KM being a major factor contributing to this

change.

The research has several limitations. Although KM was the main variant during the years covered by this

research, there is no guarantee that other factors—unnoted by researchers and the people interviewed—did

not also affect foster care services, and therefore influence fostering performance. In addition, any case study

research based only on one case is limited in its ability to suggest a generalized hypothesis.

This research is original and somewhat unique. It is one of very few studies that demonstrate the relationship

between KM initiatives and business performance.

1 CONNECTING THE DOTS: KM

INITIATIVES AND BUSINESS

PERFORMANCE

Knowledge is one of the most valuable assets in any

organization. According to Peter Drucker, the first

scholar who defined the Knowledge Worker:

“knowledge is the only meaningful economic

resource” (Drucker, 1995).

Research on how these knowledge assets can be

managed is relatively new. The first studies were

published in the early ’90s. They included “The

Knowledge-Creating Company” (Nonaka, 1991) and

“A model of Knowledge Management and the N-form

corporation” (Hedlund, 1994).

One of the significant challenges of research in the

field of social studies in general, and specifically in

Knowledge Management (KM), is evaluating the

influence and contribution of KM interventions to

business performance. As for KM, this is true both

because it is a relatively "young" discipline and

because of its affinity to social studies.

KM interventions usually take a long period. In

many cases, it takes several years to complete a

thorough organizational change.

In most organizations, KM processes are

intertwined with other simultaneous processes, thus

making it difficult to evaluate the influence of

Knowledge Management as a standalone factor of

organizational transformations, external or internal

ones.

Levy, M. and Linn, N.

Connecting the Dots: KM Initiatives and Business Performance.

DOI: 10.5220/0010046701470152

In Proceedings of the 12th International Joint Conference on Knowledge Discovery, Knowledge Engineering and Knowledge Management (IC3K 2020) - Volume 3: KMIS, pages 147-152

ISBN: 978-989-758-474-9

147

That being said, research on KM effects is very

important: “the emergent literature in knowledge

management speaks to the importance of being able

to measure the impact of KM in the organization as

an essential element in refining its efforts and

justifying its expense” (Kern, 2008, pp. 57-58).

Connecting the dots between KM initiatives and

business improvement is a motivation widely

discussed in research. However, limitations exist as to

the nature of the challenges, as described. The level

of the type of linkage also varies among research

papers.

This paper describes a unique case study of the

foster care services in Israel, in which knowledge

sharing and knowledge development led strategic and

policy-based-decisions during the years of 2007 and

2015. Prior to this period, two major external changes

took place in the foster care services: the privatization

of the services in 1998-2001 and the amendment of

the foster care services law in 2016. During the period

in question (2007-2015), no major changes occurred,

while internal decisions regarding policy, regulation,

and working instructions were triggered by ideas and

recommendations from the knowledge development

teams. Cases that were triggered by factors other than

KM were "translated" by the knowledge development

teams in order to implement them in accordance with

KM guidelines. As a result, there is a strong case for

research and evaluation of the results, and for

connecting these results to KM efforts.

The aim of this research is to learn whether and to

what extent KM has affected the business results of

the foster care services in Israel.

2 LITERATURE REVIEW

Shift In Performance as a Result of Knowledge

Management Initiatives. Evaluating a shift in

performance as a result of initiatives in social science

studies is, in most cases, far from being an easy task.

In KM studies, this has been an ongoing effort,

starting from the first days of Knowledge

Management as a discipline, and continuing to date.

Even though the question of whether a significant

shift in performance is a result of KM initiatives is of

great importance, only a small percentage of studies

explicitly aims to address this issue.

Dalkir in “Knowledge Management in Theory and

in Practice” (2017) addresses the issue of proving this

connection as a challenge: “Knowledge assets are a

source of competitive advantage for firms that

possess them. Yet the way the possession of

knowledge translates into a competitive advantage is

not well understood.” (p. 313).

Wickhorst in “Measuring the ROI on Knowledge

Management Systems” (2002) states that “Illustrating

the return-on-investment (ROI) for a portal solution

or Knowledge Management (KM) system has proven

an elusive target” (p. 96).

Muthuveloo et al., (2017) review the connection

between tacit KM and organizational performance,

and review evidence from Malaysia as to the

connection between the four layers of tacit

knowledge—socialization,externalization,

combination, and internalization—and organizational

knowledge (p. 196).

In Making cents out of knowledge management,

Liebowitz (2008) cites an interview with Mike

Anderson, the director of information systems at

Buckman Labs: “it is difficult to put a dollar figure on

the value of this resource” (p. 43). The book covers

ten case studies, half of which deal with measuring

business outcomes.

The collection Measuring the ROI of knowledge

management (Roche, 2013) explores the challenges

of ROI measurement from different perspectives.

Howley, for example, suggests speaking in terms of

‘justifying the investment,’ while measuring benefits

delivery and sharing success stories. Bostelman

considers the positive influence of KM on financial

drivers. Boisssonnet diverts the discussion to return

on knowledge, arguing that potentially, “well defined

KM strategies can influence innovation, performance

and productivity” (p. 53). Few case studies directly

aim to measure a shift in performance.

A number of studies, such as “Determining the

Business impact of Knowledge Management”

(Aaron, 2009), do analyze cases in which continuous

KM interventions take place and the shift in

performance or even ROI are measured. Additional

research has studied the business outcomes resulting

from integrated interventions, including intellectual

capital, KM, human resources, organizational

behavior, information technology and accounting

(Bontis & Fitz-Enz, 2002). Several studies have

evaluated knowledge retention projects, describing

specific knowledge gained from knowledge transfer

activities, as well as the savings resulting from those

segments of knowledge (i.e., McManus et al., 2003).

Nonetheless, studies that include a chain of

evidence involving complementary research, as well

as both quantitative and qualitative evidence, are

extremely rare.

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2.1 The Case of Foster Care Services in

Israel

The Need for KM. The state of Israel, like many

other states worldwide, assumes responsibility for

children whose biological family cannot care for

them. As part of this responsibility, some children are

assigned temporary placements, whether in institutes

(popular placements in Japan and Israel) or in

families (placement in foster care). Foster care

services in Israel were privatized in 2001. Three years

later, in 2004, the Ministry of Social Affairs and

Social Services recognized that even though the

change yielded a major increase in such

services, the

Ministry itself was losing knowledge and potentially

stood to lose the ability to professionally lead policies

and to effectively supervise the privatized service.

Knowledge had become an asset of private bodies

that might be financially driven. The need for

governability increased as a result of privatization. At

the same time, the ability to fulfill this mission

decreased, as the knowledge was distributed. The

professionalism of the discipline was at risk in all

respects because of these changes (Korazim-Kőrösy

& Leibowitz, 2005).

The Knowledge Management Intervention. In

2007 a continuous process was initiated, which lasted

until 2015. This entailed the analysis of the processes

undertaken by foster care services and the designation

of ten teams. The aim was to develop a doctrine based

on field knowledge and research, encompassing

professional foster care services. Learning was based

on the ‘case study approach’ and KM methodology

described in Levy (2008) and Sabah and Cook (2010).

3 RESEARCH FRAMEWORK

The research described here aims to ascertain whether

the influence of KM interventions can be evaluated

and measured. The method chosen is a single case

study. The research thesis is that the link between KM

activities and business results can be proven in some

KM interventions, especially in cases where the

intervention is applied for a long period and where

circumstances are such that all major changes are

related to KM.

A linkage between change initiatives and business

results can be proven if there is evidence of (a)

significant change initiatives; (b) improved business

results; (c) knowledge and implementation of the

changes discussed above; (d) linkage by main

stakeholders between change initiative and results.

Figure 1: Research theoretical framework.

Hypothesis: KM initiatives performed [a], known

and implemented [c], improve business results [b].

4 METHODOLOGY

Multiple sources were chosen to investigate whether

the hypothesis can be proven, establishing a chain of

evidence:

• [a] Existence of significant change initiatives.

Gleaned from documentation— evidence of

learning activities, knowledge sharing activities,

and new knowledge bodies. We examined 124

documents supplied by the Ministry of Social

Affairs.

• [b] Existence of improvement in business

results: Improved business results were assessed

from three aspects: Was there a change in

addressing children who were placed in

fostering settlements? Are fostering families

satisfied with the settlement (based on external

research conducted before, during, and after the

period of intervention)? Were there fewer non-

successful endings of such settlements (based on

quantitative data from the Ministry of Social

Affairs regarding fostering settlements—

quantities of children in the settlement, the

period of time of foster care for each child—the

duration of the child’s stays, and how the foster

placement ended).

• [c] Knowledge and implementation of the

discussed changes: Determined using a survey

and through interviews of the workers who are

to implement the changes. Both managers and

field workers were addressed (121 workers out

of 170 answered the survey; 25 interviews were

conducted). Questions addressed the familiarity

of the knowledge, tools, and ease of use.

•

[d] Linkage between change and results: One of

the reasons for choosing the test case was the

high probability for linkage due to the

Connecting the Dots: KM Initiatives and Business Performance

149

following. First, the intervention period was

long (7 years). Second, in this period, all policy

changes within the organization were linked to

the knowledge interventions. Third, the external

changes that had effect, occurred before and

after this period, not during it. As linkage has to

be proved, a survey and a series of interviews,

as described above, were conducted. Employees

who were to use the knowledge and see its

benefits in their work were asked if and to what

level the knowledge contributed to the

improvement of their work and their results.

This indicated whether a linkage existed what

the linkage was.

5 FINDINGS

We offer several major findings (described in

alignment with the theoretical framework).

KM Change Initiatives [a]. Finding: From 2007 to

2014, an additional KM change initiative was

initiated every 6-12 months. In all, there were 9

initiatives, each including the development and

sharing of knowledge:

• selection of families to serve as foster

families (knowledge developed in 2009);

• matching of children with foster families

(knowledge developed in 2007);

• preparation and training of foster families

(knowledge developed in 2010);

• supporting the safe re-attachment of the child

with foster parents (knowledge developed in

2008);

• handling the issue of sexual assaults

(knowledge developed in 2008);

• guiding the foster families (knowledge

developed in 2011);

• handling children with special needs

(knowledge developed in 2013);

• working with the parents while the children

are in foster care placements (knowledge

developed in 2014);

• predicting and handling warning signals as to

fostering health (knowledge developed in

2007).

Business Improvement [b]. Finding: More children

were sent to foster care placements. Operating bodies

found the knowledge development teams to be a tool

of cooperation, leading to mutual consultation and

learning. A higher percentage of children were sent to

foster care placements. Table 1 includes details of the

changes over the years. There was a 15.7% increase

in the number of children sent to foster care

placements (530 additional children in foster care, as

compared to continuing previous assignment ratios).

A contributing factor to this change, according to

Korazim is the high rate of professionalism of the

field workers, which is highly appreciated by the

management of the Ministry of Social Affairs.

Table 1: Fostering preferred as a placement for children.

Percentage

change

Children

placed in

foster

care

Children

placed

away

from

home

Year

12.1% 3,323 27,373 2006

12.3% 3,418 27,704 2007

11.9% 3,392 28,470 2008

11.8% 3,402 28,695 2009

13.0% 3,548 27,125 2010

13.5% 3,738 27,680 2011

14.0% 3,812 27,126 2012

15.7% 3,853 (missing)2014

+530 -247 Change in

numbers

+15.7 -0.9% Change %

Finding: Fostering families (parents) were highly

satisfied with the professionalism of the foster care

social services’ (2014). A majority described their

satisfaction level as ‘satisfied’ or ‘very satisfied’ in

the following aspects, as presented in Table 2.

Table 2: Parents’ Satisfaction.

Percentage of

satisfied parents

Aspect

91% Having fostering-

related knowledge

90% Emotionally

supporting

89% Understanding

family needs

88% Understanding the

child’s needs

81% Giving helpful

advice

Finding: The foster care placements were stable.

We found that 68% of the children had remained in

the same foster care family since they left home.

Fewer foster care placements ended unsuccessfully.

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The literature points to the fact that stability and

duration of placement have a great influence on the

chances of rehabilitation (Brooks et al., 2005;

Rushton, 2004; Simmel, 2007; Wrobel et al., 2006;

Sorek et al., 2014).

Stability is based on several factors, including

moving between placements, between families, and

unsuccessful placement ending.

The business success analysis of unsuccessful

endings is based on the issues dealt with and

developed during the intervention. Unsuccessful

endings can occur, triggered by unpredictable and

unpreventable circumstances, but professional work

can affect and lower the ratio of unsuccessful endings.

The ratio of unsuccessful foster care endings was

found to be the most relevant business success

indicator, with regard to the knowledge acquired and

shared.

Finding: There was a decrease of 32% in the rate

of unsuccessful placement endings (Figure 2).

Figure 2: Unsuccessful Placement Ending Percentage.

Knowledge Was Acquired and Implemented [c].

Finding: The survey revealed that employees were

familiar with the knowledge and tools of the field and

used them. We found that 97% of employees are

familiar with the knowledge and tools developed.

71% of employees find the knowledge easy to access.

78% find the tools easy to access. 68% find the tools

professional and easy to use. 69% were trained based

on the knowledge and tools developed.

Interviews support these findings and the usage of

these tools in daily routine.

Linkage Between Performance Improvement and

Knowledge Interventions [d]. Finding: The survey

revealed that employees found the knowledge

significantly contributed to their professionalism at

work. The knowledge contributes to their work,

according to 95% of employees; of

these, 51% stated

that there was a high level of contribution and 7%

stated there was a very high level of contribution.

99% of employees stated that the training course

based solely on the knowledge developed contributes

to their work; among them, 88% stated that there was

a high or very high level of contribution.

Interviews strengthened these findings, although the

level of contribution varied among the issues

developed and studied.

6 DISCUSSION

Connecting the dots between a change and business

results, as described in the literature, is not trivial.

After proving an improvement in the results, these

results must be linked to the change performed. The

linkage is not easy to identify because in any given

period we usually experience more than one change

simultaneously. Therefore, a common method—

demonstrated in the literature, and also used here—is

to make this linkage by questioning stakeholders,

using qualitative tools to capture their understanding

of the contribution of the change to the results. In that

manner, this research relies on the same strategy to

validate the connection, including both a large survey

and a set of interviews.

The findings in this research prove that there is a

relationship between the change and business results

and that the KM efforts were beneficial in terms of

lowering unsuccessful endings of foster care

settlements.

However, the case in research also demonstrates

the strength of the test case: A criteria list can be

defined based on the case, suggesting where there will

be a higher chance of linkage between the change and

the results:

Establishing a connection between KM activities

and the improvement of business performance is valid

when the following conditions exist:

• KM activities are performed for a decent

period, enabling impact (at least several

years).

• During this period, no major external factors

change the characteristics of the business

activity.

• During the same period, strategy decisions,

policy decisions, and all other major

decisions are based on KM initiatives, and

their implementation is accompanied by KM

activities.

• There is an applicable quantitative method to

measure business performance.

28%

29,80%

21,70%

23,50%

22%

19,00%

10%

20%

30%

40%

2005 2007 2009 2011 2013 2015

Unsuccessful endings of

foster care placements

Connecting the Dots: KM Initiatives and Business Performance

151

• There is an applicable qualitative method to

validate the connection between KM efforts

and business results.

The research conducted has practical and

managerial implications; it not only sheds light on a

successful KM effort, but also enables further usage

of the suggested model to test future links between

changes activities and business results.

The research described offers a strong chain of

evidence for these linkages, yet it has limitations that

weaken its conclusions. These limitations include a

lack of a control group and a comparison that is based

solely on the dimension of time. Furthermore, the

proposed model is based only on one case study,

which naturally limits the ability to generalize our

findings.

7 CONCLUSION

When dealing with real life, real people, and soft

changes, proving connections between activities and

results is not an easy task. There is no way to prove

that changes are the result of a specific intervention.

This research provides a strong chain of evidence

regarding such a connection in the foster care services

in Israel, triggered by KM interventions. This case

study may be used as a model for additional research

on linking KM activities and business results. It can

also encourage organizations to apply KM activities,

demonstrating the power of significant KM to

business performance.

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