Endowment Effect on Knowledge Management

An article in this week's The Economist discusses the endowment effect: It's Mine I tell You. The endowment effect (also known as divestiture aversion):

"is a hypothesis that people value a good or service more once their property right to it has been established. In other words, people place a higher value on objects they own than objects that they do not. In one experiment, people demanded a higher price for a coffee mug that had been given to them but put a lower price on one they did not yet own."

I look at this behavior as to its impact on knowledge management. One of the many challenges in knowledge management is getting people to contribute. You need to build a cultural and enable the tools to get people sharing what they know. There are obvious technology challenges to this sharing. But the soft side of encouraging the sharing has been the bigger problem.

The endowment effect now seems fairly obvious to me. People are less likely to share because they have a sense of ownership over the knowledge. Inside the law firm, this knowledge is usually acquired through the assets of the firm. The attorney probably started with some existing agreement from the document management system, used their secretary and junior attorneys to help craft the knowledge and attended seminars on the firm's dime.

The endowment effect seems to explain why people are less likely to share. One of my approaches to knowledge management is to look for ways to capture the knowledge of the attorney in a way that is more useful to the individual attorney. That the knowledge is being shared is just a by-product. I have seen this approach labeled personal knowledge management and knowledge management 2.0. The most important consumer of an individual's knowledge assets is that individual.

A blog is a classic example. Especially inside the law firm, the blog is a great tool to "catch the butterflies" of knowledge as they pass through your day. It is a quick and easy way to capture interesting articles, thoughts and ideas that may otherwise end up in a stack or file folder. With the blog you can categorize your butterflies and search for them in a way that makes sense to the individual. That others inside the enterprise can find them is merely a by-product. It is an important by-product for knowledge management. But the focus of the tool is on the individual, not the firm.

CRM in Law Firms

Andrew K. Burger has a story in CRM Buyer: CRM in Law Firms: The Jury's Still Out. Carolyn Elefant at Legal Blog Watch pointed out this story in her post: Law Firms Still Not Relating to Client Relations Management Software.

The Firm uses Interaction as its CRM. I find Interaction to be much better in theory than practice. I think everyone agrees at a firm level that the sharing of contact information and relationships across the firm is a terrific goal and adds tremendous value to the firm. In my experience, attorneys are willing to share contact and relationship information with members of the firm. Yes, they are cautious how it is used and want some some credit for the relationship. But that position is true for all knowledge sharing.

As Carolyn points out:

[T]he larger barrier to integration of CRM is institutional: Most lawyers simply aren't willing to take the time (or sacrifice the billable hours) to input critical data. Then, when CRM fails due to lack of lawyer commitment, lawyers blame the software and subsequently grow even more resistant to CRM efforts.

Knowledge sharing is a marketplace. If I am going to take time to contribute something, I expect to get something back in return. Increasing the knowledge resources of the firm is not enough. I previously wrote about this in Personal Knowledge Management and the Knowledge Market. A lawyer is more likely to use a new tool if it provides more functionality to them then an existing tool. Why should I enter information into a clunky public space instead of a persona space where I can organize the information in the way that makes sense to me.

I want the CRM system to make it easier for me to do my job. Contributing contact and relationship information into a public repository creates little or no marginal value to me. All of that information is already sitting in my email contacts, in my head and other local places. The current CRM system does very little to help me manage that information. I would spend much more time using Interaction if it provided much more functionality to me as an individual. All of its extra function is derived from collecting information from others, not in providing function to the individual.

Unfortunately, CRM systems only provide a small margin of additional benefit to the individual lawyer. That margin is too small to motivate lawyers to change behaviors or to learn the new tool.

This scenario is true of lots of first generation knowledge management tools. They put the emphasis on the benefit of sharing knowledge across the firm. They did not focus on making it easier for the individual to manage their own knowledge or the knowledge of a small group.

Perhaps there is some future hope for Interaction and CRM for law firms. The article in CRM Buyer has this quote:

"The foundation for incorporating Web 2.0 applications, such as wikis, blogs and other social networking tools, into InterAction are likewise already in place, and LexisNexis is moving in that direction, according to [Tracey Blackburn, LexisNexis product marketing manager]."

For now, InterAction does not even have a field for linking to a person's LinkedIn profile. That is a place where people are updating information about themselves and who they know. If InterAction could combine external information about people, with our internal information and give me a better way to organize and manage my contacts, that would make it useful for me.

KM and Web 2.0 - A User’s Perspective

Presentation Summary From
Boston Knowledge Management Forum Symposium on Leveraging Knowledge
What is KM 2.0? Is it real, or just vendor hype?

Ray Sims, formerly Director of Knowledge Management at Novell (now of Deloitte)

This presentation begins by summarizing what Web 2.0 means from a behavioral (not tools) perspective and what that implies for the future of knowledge management. It then connects these ideas via an exploration of the business-driven use cases related to KM that most benefit from Web 2.0 behaviors and software application approaches. The presentation concludes with some general observations of where we are collectively in this journey and provides some prescriptive guidance for those on the path to knowledge management and Enterprise 2.0.

Ray started with a timeline of his adoption of Web 2.0 technology. He moved onto his definition of knowledge management and his post on 43 knowledge management definitions. (Now up to 57 definitions). He also pointed out the analysis of these knowledge management definitions by Stephen Bounds.

One of the trains of thoughts are that knowledge management exists at different levels. One level is the personal level; organizing knowledge for your own use. Another is at a team level; organizing for a small group. Then there is the enterprise level of knowledge management.

Ray also talked about the differences between knowledge as a flow and as artifact. (I posted about this a few weeks ago: Knowledge is an Artifact and a Flow and Wikis as a Knowledge Artifact and a Knowledge Flow.)

Ray concludes that Web 2.0 is "ideally situated to personal knowledge management and a personal learning environment." He sees the benefits of personal knowledge management as increasing knowledge in a chosen field. Writing and thinking about field should increase your knowledge and expertise. Using Web 2.0 helps you build your external network. (For enterprise 2.0 is should help you build your internal network.)

Ray believes wikis should be the THE tool as a default text and management tool. He thinks blogs are a great way to manage projects and provide status reports. For the projects he manages, Ray intends to ban project email. (Also see Luis Suarez's journey on not using email).

Ray sees the four greatest opportunities for Web 2.0 / E 2.0 through the knowledge management lens:

• Increased social capital
• Increased innovation
• Improved decision making
• Improved efficiency

Why improved efficiency? The increased transparency and openness makes things more findable. You can also leverage the power of the network, getting input from more people. There is also the raw speed. It is much faster to edit a wiki and share changes than editing a document and emailing it around.

Ray also peppered his presentation with the virtues of Twitter (Twitter@dougcornelius) (Twitter@rsims). Twitter is "his girlfriend of the moment."

UPDATE: Ray posted about his presentation and published his slidedeck: KM2.0 Presentation - Boston KM Forum.

Personal Knowledge Management and the Knowledge Market

As Davenport and Prusak state in Working Knowledge: "People rarely give away valuable possessions, including knowledge, without expecting something in return."

First generation knowledge systems expected people to contribute to them because it was for the collective good. Everyone had the benefit of this good work product, organized in the central taxonomy of the firm.

Many companies offered incentives, like gift cards, for contributing to the system. If you have to give away a prize to motivate people to contribute, then perhaps they do not seen enough value in contributing. What in it for me? Sure, you get the Starbucks giftcard. And you get some smug satisfaction for contributing into the central knowledge system vault.

The failure of these first generation knowledge management systems was that the central knowledge system does give the user a significantly better way to manage their personal knowledge. It is outside of their normal workflow and outside of the places they normally look for knowledge and advice. The contribution helps others find the contributor's work product, but it does not make it easier for the contributor to find and manage their own work product.

Knowledge management solutions will work better if they are focused on improving the normal workflow and better capturing that information. The user is more likely to use a new tool if it is easy to use and provides more functionality than what they currently use. As Dion Hincliffe pointed out, the new tool needs to be many times more useful than the current tool for people to use the new tool.

A case in point is a document management system. The system needs to provide much more functionality than the user would get from saving the documents to their local computer. Our Interwoven document management system offers version control, better searching, automatic backup, and many other features you do not get on you desktop. In exchange, as part of the knowledge market the rest of the firm gets the ability to find and reuse those documents.

Tacit versus Explicit Knowledge

Many knowledge management texts draw a distinction between explicit and tacit knowledge. With one being knowledge in someone’s head and the other being knowledge that is written down somewhere. Frankly, I find these terms so abstract that I have forgotten which term is which.

And, I think this is the wrong distinction to make. The knowledge is either findable by your computer or it is not findable by your computer.

By finding the knowledge I mean finding the knowledge itself or finding the person who has the knowledge. Certainly all knowledge within a firm is not going to be transferred into a form that is findable by a computer. That is why it is important to identify subject matter experts and make them findable by a computer search.

Knowledge written down on a piece of paper and thrown in a file does not do anyone any good. I have first-hand experience at this. (I think everyone has first-hand experience at this). Last week, I was cleaning up a stack on my desk and found some hand-written notes from a conference I went to last year. It was good stuff, but it had been lost. (One of the reasons I now blog conferences.) I had some vague recollections of the conference, but the written notes brought back a whole waterfall of recollections, action items and information. The notes were written but had not done me any good until I accidentally stumbled on them. They certainly were not doing any good for the rest of my firm.

A file saved on your local computer does not make the knowledge in that file findable by anyone but you.

Sending out an email makes the knowledge potentially more findable. But, you as the sender and all of recipients are going to end up keeping that email in different places, in different folders with different meta-data. As the sender, the email ends up in your list of sent items. As the recipient, the email lands in my inbox. Then it may stay there, or I may transfer it to a different location. Or I may delete it. Most likely any two recipients are going to treat the email in completely different ways. Email makes it more findable, but the parties to the email end up having to find it in different ways.

If the knowledge is not findable by my computer, then I have to know it myself or have to send out a blast email asking if anyone knows about it. Of course the responses end-up in my email or voice mail, being findable only by me.

The Four Types of Search and Vivisimo's Social Search

After looking at my post on the Vivisimo Social Search, I thought back to how it relates to each of the four types of search. For those of you who missed my post from a few months ago on types of search, my studies show there to be four types of search: fetch, recall, precedent and research.

With the fetch, you have exact identifying information. For instance, with a document in the document management system you have the document number, or you have a filename and path, or a URL. Obviously, an enterprise search engine adds little to this type of document search. The social search would allow you or others to annotate that item. For instance, the law has changed and a provision in the document does not work anymore.

With the recall search, you have some distinct information about the nature of the item. You remember a matter it was associated with, who created it, when it was created, etc. With this type of search you typically get back several or many items and you need to sort through the results to find the item you were looking for. The social search may help with this sorting. For instance, if an item were tagged as the final document. Or just the opposite, the item was tagged as being an interim or discarded draft.

The research is the type of search that an enterprise search was built for. You want to find information on a topic and you may have no idea if the enterprise has any information on that topic. Information could be stored in a variety of sources/databases. The social enterprise search should pull back information that others found useful, more so than just an enterprise search. If I am looking for information on "poison pills" it would be great if the search pulled back intranet pages on the subject, documents on poison pills and personnel with experience with poison pills. It would be even better if those search results were improved with tags and annotations from others: "useful summary memo", "helped me get poison pill approved by the board", "the courts overturned this poison pill", etc.

The enterprise social search also gives you a tool to allow for or improve your search for a precedent. With a precedent search, the information that makes the item relevant is generally not in the text of the document. For instance, if I were looking for a purchase and sale agreement for a retail shopping center in Florida that is buyer favorable. The words "Florida" "retail shopping center" and "buyer favorable" may not appear in the document and if they do they may only appear once or twice. To enable this kind of search you need to harness the document collection to another database of information. The social search gives you another option. You can just add an annotation to the document that it is a "buyer favorable agreement for a retail shopping center in Florida."

Some skeptics of the social search will point out that you can already accomplish some of the same results. For instance, if you have a comments field in your document management system, you could use that comment field for annotations. The problem is that the comment field is anonymous and therefore the annotation is anonymous. I do not know if I wrote it, someone smarter than me wrote it or someone less competent wrote it.

I think Vivisimo's new search tool offers a lot of promise to improve all of the types of searching and better harness the knowledge of an enterprise.

Using Social Search to Drive Innovation through Collaboration

I sat in on this webinar sponsored by KM World. I was knocked over by the demonstration of Vivisimo's new Velocity 6.0 search tool.

Lynda Moulton from the Gilbane Group started off the presentation.

Clustering and federating searches is a great tool from an enterprise search tool. It comes from the machine trying to put the documents into context and groups that the machine thinks makes sense. Adding the human factor can add more value than what the machine can do. A person's annotations or tags can create more value than the machine.

One of the goals of using a social search is that it elevates discoveries into teaching moments. By sharing with the crowd what they found and they can put it into context and wrap more information around it. That way you can find it again and others can find it and reuse it.

You are more likely to go to someone in your network for help and expertise. That same behavior should carry over to tagging. You are more likely to rely on the tagging and notes from people you know and trust.

Social search can have enlightened self-interest by getting something back when you give something yourself.

Lynda recommends looking for early adopters by looking for groups that have serious information gathering needs. Start small.




This was big softball for Vivisimo to show how the new release of their product.

Next up was Rebecca Thompson from Vivisimo to showcase the release of their new Velocity 6.0 tool. She labeled as Enterprise Search 2.0.

First thing is the ability to vote on whether the item in the search result is useful. It displays the percentage of people that voted up and down. This in turn is fed back into the relevancy algorithm of the search engine. The next step is adding a rating. You can give up to five stars. It also displays the average rating and the number of votes. Administrators can get reports on the rating and use this highlight useful items and bury bad ones.

They also give the ability to tag an item in the search result. They allow both a free text and a force vocabulary. They also will auto-suggest tags. The big plus is that this adds concepts and words that do not actually appear in the text of the document. (I gave a search vendor the task of finding a purchase and sale agreement for a retail shopping center in Florida where we represented the purchaser. The words "Florida" and "retail shopping center generally would not appear in the document. Even if the word did appear it may only be once or twice in a 25+ page document. The key was tying the matter identification from the document in the document management system to the matter information in our matter tracking system.)

They allow annotations to the search items: free text with no limitation on the size. Like tagging, this allows context that does not appear in the document. It allows others to see what the document is about, without opening it.

They also allow you to saved search items into shared virtual folders, such as around topics.

They also allow searching for experts. They create an employee mashup from different sources. One item is pulling the person's tagging activity.

They also provide dashboards showing top taggers, top tags, etc.

Vivisimo thinks that web 2.0 technologies are setting higher standards for the tools within the enterprise. (I agree. I can set up a blog or a wiki for free on the Internet in 30 seconds. Why can't I do that inside the enterprise.)

I was blown away by the features of this product. I have been following enterprise search for a while as we have been shopping vendors. This product is a quantum leap above anything I have seen.

Wow!!

This seems to fit into the personal knowledge management theme in my post from Friday. You make it easy for the person to characterize their information, but allow this information to be shared across the enterprise.

Personal Knowledge Management

I am at a knowledge management conference today. The personal knowledge management session is focusing on ways to rethink knowledge management.

Where are we now? Knowledge management has spent a lot of time fiddling with content, finding ways to serve it up and berating people to use our systems.

The current trajectory of knowledge management is to have grand plans with bigger budgets and expanding the staff. With all of this investment, the system needs to be fail-safe. If they fail (and they do most of the time) we engage people to figure out why it did not get used.

Maybe we should concentrate on personal systems and less on firm-wide systems?

Should knowledge management adopt the Ayn Rand philosophy: Forget the collective good and focus on the individual.

Train front line lawyers to implement personal KM and KM specialist to coach the lawyers and provide the necessary tools to implement personal KM. Coach attorneys to help develop personal knowledge base, give them the platforms and systems to implement their personal knowledge base, and mine those systems to leverage across the firm.

To create a personal knowledge base, we need a strategy for transforming the random bits of information and transform it into a usable system. It is important for others in the attorney's network and for the firm to be able to harvest the individual's personal knowledge management systems.

Things like shared folders in the document management system, blogs and wikis provide simple and easy to use tools to collect information that can be harvested by others.

Does training for these personal knowledge management systems require personal training? It is hard to get attorneys into training rooms. (It is hard to get anyone into a training room). One firm has one-on-one training sessions in the attorney's office. This allows them find out what the attorney does not know and expand on the tools that work best for their practice and their workflow. It was also useful to show that attorney how other attorneys use the various tools. The benefit of the one-on-one training is that is removes the possible stigma of being identified as not knowing how to use popular tools.

Should be also make this personal knowledge system to be portable? Departing attorneys are going to take stuff with them when they leave. It may be controversial, but it is going to happen anyway. The portability could be another incentive to contribute, knowing they can take it with them. (I think we need to make sure they only take a copy.)

Part of the role of knowledge management will be to get the attorneys to use platforms that can leveraged across the enterprise. Collecting shortcuts that can shared with others is a useful to gather information for the individual, but can be harvested by others.

Incorporating the narrative is an important part of KM training. People respond to stories (particularly failure stories) better than they do to statistics and databases.