KNOWLEDGE MANAGEMENT PRACTICES

KNOWLEDGE MANAGEMENT PRACTICES IN A NOT FOR PROFIT ORGANIZATIONS: A CASE STUDY OF I2E


Matthew Broaddus and Suliman Hawamdeh
School of Library and Information Studies
College of Arts and Sciences
University of Oklahoma
Tulsa, OK, 74135
Email: Suliman@ou.edu
This paper studies knowledge management practices of i2E, Inc. (innovation 2 Enterprise), a nonprofit organization which focuses on expanding Oklahoma’s technology-based entrepreneurial economy. i2E serves as a knowledge repository of resources for individuals who have ideas and want to develop those ideas into an enterprise. They developed a program that educates would-be entrepreneurs on how to navigate the waters of developing a business, where to find resources, and how to be successful. Educating the entrepreneurs is done through i2E’s ability to manage knowledge and provide knowledge resources to their clients. This study examines the extent by which i2E uses knowledge management tools to help their clients be successful.
1. Introduction
Ideas are conceived and lost on a daily basis. Products, technology, medicines and a plethora of other innovations are born in the minds of inventors and vanish just as quickly, never coming to fruition. Many times this loss happens because an anomalous state of knowledge exists and the inventor does not have the knowledge necessary to move forward in their endeavor (Case 2007, 74). Inadequacies in information can be lacks, gaps, uncertainty, misunderstanding or any general wrongness concerning information (Belkin 1980, 137). Through a process of knowledge management, i2E provides entrepreneurs with the knowledge of how to move forward with their innovation, such as filling in the gaps, uncertainties and misunderstandings that occur in the early stages of entrepreneurial endeavors. The knowledge i2E manages and shares with entrepreneurs includes the commercial life cycle, where to find resources and how to develop business plans. i2E’s ability to manage and disseminate knowledge to and from diverse sources is an example of what Wulff (2007) sees as a prerequisite for success in information intense industries. While i2E is not a typical venture capital company, their ultimate goal is the same – the creation of new enterprise. In this case study, we explore the underlying success factor of i2E and the knowledge management practices and tools that i2E uses to serve their clients.
1.1. I2E and Oklahoma
The Oklahoma Center for the Advancement of Science and Technology (OCAST) was created in 1987 with the purpose of fostering innovation in businesses by supporting applied research, facilitating technology transfer, providing seed-capital and fostering competitiveness in Oklahoma firms. In 1998, OCAST launched an initiative to foster the creation and long-term growth of advance technology firms in Oklahoma. i2E grew from that initiative. i2E is a private, non-profit organization focused on wealth creation and reinforcing the technology-based entrepreneurial economy in Oklahoma. Originally chartered as the Oklahoma Technology Development Corporation in 1997, i2E assumed its current name in 2004, to better reflect its high-tech vision and mission. i2E’s vision is to, “facilitate the growth of high performance, advanced technology companies in the state, which will increase Oklahoma’s global competitiveness, per capita income, and quality of life” (i2e.org, 2008). Their mission supports this vision through economic development, fostering the birth and nurturing the growth of advanced technology companies in Oklahoma. “This mission is accomplished through a well-designed strategy that includes: providing technology development knowledge and know-how; delivering comprehensive enterprise development services; providing access to capital, and ensuring a quality enterprise” (i2e.org, 2008). Oklahoma is lagging behind other states in technology development and the funding needed to promote such endeavors (Dobberstein, 2006). In 2006, Kansas spent four times what Oklahoma spent in innovation investment and committed to spending $500 million over the next eight years. Oklahoma only spends $10 million per year investing in innovation. In 2006, despite the low state investment, OCAST (in part through i2E) had leveraged every state dollar spent on innovation into fifteen dollars (Dobberstein, 2006).

i2E’s commercialization process provides entrepreneurs with the knowledge to take a new technology through inception, validation, and commercialization by providing: hands-on marketing and business knowledge; investment resources and expertise in risk capital; and by promoting a local, innovation-based economy, (i2E.org 2008). i2E’s strategy for educating entrepreneurs and providing them with resources to develop advance technology firms is based on knowledge management practices, particularly, knowledge sharing and collaboration.

2. KM Practices

Knowledge management is a new and emerging discipline that should be utilized in every organization to provide employees with the best opportunities to succeed. It is the process of identifying, organizing and managing knowledge resources, including information, learning capacity and other resources (Al-Hawamdeh, 2004). Knowledge management practices and processes include areas such as knowledge sharing and transfer, knowledge creation and discovery, communities of practice, best practices, learning organization and so on. The advancements in business and the growth in global competition demand proactive knowledge management practices as well as the deployment of knowledge management tools and technologies (Bergman, et al. 2004). Knowledge resides in the minds of people and therefore knowledge management is the practice of supporting individuals to share and utilize the knowledge they have (Widen-Wulff, 2007). An individual’s knowledge is of no value to anyone else if it is not shared or turned into some sort of product or service. Effective knowledge sharing involves transmission and absorption of knowledge. The outcome of knowledge sharing should be the creation of new knowledge and innovation that will significantly improve organizational performance.

One of the key elements that make i2E effective at fortifying entrepreneurs is the ability to provide a learning environment in which new ideas are encouraged and fostered. Businesses that exhibit a learning culture tend to be more successful in leveraging knowledge (Widen-Wulff, 2007). Smith (1999) sees such an environment as a “rapid and continuous exchange between explicit and tacit… knowledge” that leaves little time for participants to get stuck in a negative learning pattern. i2E invests heavily in knowledge and knowledge resources in the hope of turning ideas and innovation into products and services. One way to advance innovation is through promoting best practices and communities of practice. “Communities of practice provide the platform needed for the exchange of ideas and discussions about similar problems and like solutions” (Al-Hawamdeh 2003, 130). Participants in a community of practice share their understanding about what they know and do (Lave and Wenger 1991). External communities of practice happen outside of a single organization and can include anyone with an interest in the communities focus, (Erat, et al. 2006, 513). “A community of practice is a group of people who share a common concern, a set of problems or a passion about a topic, who deepen their knowledge and expertise in this area by interacting on an ongoing basis,” (Al-Hawamdeh 2003, 121). i2E not only employs individuals who are experts in their field, but the organization also act as a communities of practice through holding meetings, networking and collaboration. They hold regular events such as Tech Night Out and i2E luncheons in an effort to develop communities of practice. These are events where entrepreneurs, inventors, investors and others who are interested in the growth of the technology industry in Oklahoma come together as a community of practice.

In the ever changing business climate, companies are finding it more difficult to take on all of the tasks required to be successful. Therefore, many organizations are turning to collaborative practices with outside partners to help carry the burden and risks of business. Collaboration provides the opportunity for an organization to minimize risk, share knowledge, and share in the development of new ideas (Horton 1998, 4-12). i2E has leveraged this collaborative environment into a powerful network of resource development. Resource development is i2E’s ability to link their clients with financial, business and technical resources, furthering their goal of expanding the growth of technology-based businesses in Oklahoma.

3. Methodology
A case study methodology is normally adopted when a holistic and an in-depth investigation is needed . Data analysis in a case study consists of examining, categorizing, tabulating, or otherwise recombining the evidence to address the initial propositions of a study (Yin, 1994). A content analysis of material relating to i2E was conducted to determine the extent by which i2E utilizes knowledge management practices, particularly knowledge sharing and collaboration. Content analysis is the classification and evaluation of documents (i.e. book, newspaper article, video, Websites, or any other media used). Content analysis is a formal, systematic method of evaluating text, giving the evaluator the opportunity to draw inferences about the information, (Webber 1990, 12). It is an attempt to characterize the meaning in a given body of discourse in a systematic and quantitative fashion (Kaplan, 1943). Information is coded in a format which represents the original intent of the author. Drawing conclusions based on the frequency of a code is the simplest and most useful way to conduct content analysis.


3.1 Coding Procedure and Reliability Testing
Seven areas of knowledge management were identified and each item that shows knowledge management traits was coded accordingly. For example, if a document discussed the organization participation in a forum, then the story can be coded as knowledge sharing or knowledge transfer activity. If the forum was specifically about how to raise seed money for startup companies, the story could have also been coded as resource development. The knowledge management areas used to analyze i2E include collaboration, communities of practice, innovation, knowledge creation, knowledge sharing and transfer, learning organization and resource development. To ensure consistency and reliability in the results, the researchers carried out coding independently. Disagreements in coding were resolved by jointly discussing and reviewing the articles. Reliability was also strengthened by the use of multiple data sources (Patton, 2001).

4. Findings
The findings from the content analysis of i2E support the assumption that i2E utilizes knowledge management practices in general and knowledge sharing and collaboration in particular to serve their clients. The content analyses of the documents used in this study, including newspaper articles about i2E, provided the most data. Content analysis include data was collected from Oklahoma’s three leading newspapers since 2004, when i2E began operating under that name. The newspaper articles were searched using terms such as i2E, innovations, research funding, OCAST and so on. The content of each article was then evaluated based on the knowledge management element discussed above and each article was assigned codes based on the matching content.

Figure 1: Newspaper Analysis

It is clear from Figure 1 that knowledge sharing is the most visible knowledge management practice. Nearly 19 percent of the newspaper articles studied dealt with i2E’s knowledge sharing practices. Out of the 1,100 companies that submitted ideas to i2E for consideration, nearly 600 were brought on as clients to utilize their services. By sharing knowledge about the commercialization process and how to build a successful enterprise, i2E was successful in attracting that many ideas. Resource development and resource sharing was the subject of 18.24 percent of the newspaper articles. Again, this is not a normal function of knowledge management, but it is an important part of i2E’s knowledge sharing practices. In fact, the newspaper content analysis shows that nearly half of i2E’s knowledge sharing is focused on resource development. Resource development and resource sharing is true knowledge management activity, since i2E does not provide resources but rather assists clients by arming them with the knowledge needed of where to find, apply for and get those resources. According to several newspaper articles, OCAST’s return on investment is 27 to 1, with much of that funding being identified through the resource development of i2E. The funding that i2E guides its clients to is different from that developed by most venture capital organizations. While many for profit venture capital groups focus on multi-million dollar investments, i2E helps provide funding for smaller startup firms. For example, in July 2006, i2E provided 10 high-tech startup firms with $100,000 each in OCAST funding. This funding provided pre-seed money which was used to stimulate additional private investment. These firms are required to raise an additional $3 for every dollar of OCAST funding they receive. i2E also provides access to angel investment funding. These are investors who help fill the financial gap between seed funding and full venture capital funding. i2E has also developed a community of practice to help develop a pool of ready angel investors.

Nearly 12.5 percent of the document content analysis showed development of, or participation in, communities of practice such as the angel investor community, Tech Night Out events and other networking opportunities. Not only does i2E develop communities of practice for their clients, but they also represent Oklahoma by participating in other out of state communities and forums. For example, i2E participates in several national technology and enterprise forums. They do this to glean knowledge for their clients and to share knowledge about technology developments in Oklahoma. Many times, collaborative practices grow from these communities of practice. The results show 16.39 percent of i2E’s knowledge management activities were dedicated to building collaborations. In 2006, i2E took over operation of the dormant Oklahoma Investment Services forum. Part of the revival of this forum was designed to create communities of practice where mentoring would occur. From this mentoring, fledgling companies and inventors can develop a collaborative network of people who will invest funds, provide knowledge and share other burdens of the startup. i2E actually serves as a collaborative partner to inventors since they are taking on the burden of providing marketing and development services, another function that most venture capital firms do not perform.

From both communities of practice and collaboration, new ideas grow. While the overarching goal of i2E is to develop and innovate, only 11.36 percent of their knowledge management practices are focused on innovation. This shows that i2E takes a balanced approach to knowledge management, integrating several elements of the discipline to achieve the ultimate goal of modernization. In 2006, i2E received the 2006 Innovator Award for their role of innovation in Oklahoma. i2E’s ability to utilize knowledge management practices has not only led to growth but offers more evidence of a strong knowledge management culture which includes the elements that make a learning organization. 7.08 percent of the newspaper content analysis focused on i2E’s knowledge management practices involving a learning organization. While a learning organization is normally an internal function that is not always visible, i2E’s learning culture can be seen in the way they learn from and teach their clients. i2E learns from its client’s past successes and failures and passes improved practices to new clients. i2E stays relevant to their client’s success by constantly learning, growing and adapting.

The final knowledge management category used to evaluate i2E was knowledge creation, which made up 15.46 percent of the newspaper content analysis. While i2E offers several educational programs and works to further knowledge, it does not create knowledge. The reason this category was so high was due to the Donald W. Reynolds Governor’s Cup, a competition for Oklahoma college students. The Governor’s Cup encourages college students to come up with or act upon existing ideas which might grow into future innovations. A $20,000 cash prize is given to both graduate and undergraduate winners. A team from Cameron University won the 2006 Governor’s Cup for a business plan they developed to market a cancer drug. While the Governor’s Cup does inspire the creation of knowledge, it is inaccurate to say i2E spends 15.46 percent of their knowledge management resources creating knowledge. The Governor’s Cup received a higher percentage of coverage in all three newspapers due to the public nature of the competition. Each year, all three newspapers cover several stories on the competition, the teams and the innovations. However, this publicity does create and share knowledge about i2E and its endeavors in Oklahoma, knowledge that might not otherwise be known by the general public.

While the newspaper content analysis showed a wide spread variety of knowledge management activities, with somewhat equal distribution, the internal documents analysis and the Web site analysis showed a more concentrated focus on resource development and knowledge sharing. This is due to the types of material which was analyzed. Newspaper articles were written for the general public and focused on informing readers of activities, events and newsworthy happenings occurring with i2E. The Web page analysis consisted of mainly official i2E Web sites and links, which are designed to educate and inform potential and existing clients of knowledge and resources i2E offers. i2E’s publicly available internal documents serve the same purpose as the Web sites, but also showcase success.

Figure 2: Web Page Analysis

For the content analysis of web pages, each of i2E’s pages where evaluated for elements of knowledge management. Those elements where then coded and compiled in the same way as the newspaper articles. The web page analysis again showed knowledge sharing (48.15 percent) as the most robust knowledge management practice at i2E (Figure 2). Resource development and resource sharing was again the second most practiced knowledge management element at 37.05 percent. If you view resource development as part of knowledge sharing, more than 85 percent of the web page analysis of i2E exhibits knowledge-sharing activities. The other five knowledge management practices were much less prevalent in web page material. Collaboration, communities of practice, innovation and knowledge creation were each represented with 3.70 percent of the web analysis. Learning organization practices were not present on the website. While i2E shows strong characteristics of being a learning organization, these traits were not evident through the web page analysis. Again, this can be explained by the focus of external knowledge sharing, rather than internal, as the web pages are designed to provide.
The analysis of the i2E documents was conducted using their annual impact reports, biannual Innovation and Enterprise newsletter and their prospective client material.
Figure 3: Internal Documents Analysis

Knowledge sharing (38.89 percent) and knowledge resource development (38.89 percent) were again the largest categories of knowledge management practices found, totaling 77.78 percent. I2E’s client material showed the strongest knowledge sharing and resource development activities. The content analysis of the newsletter also showed substantial information on communities (16.66 percent) and collaborative practices (5.56 percent).

The overall analysis from the three different types of material analyzed indicates that i2E is doing well in knowledge sharing and knowledge resource development. It also shows that i2E is within the stated purpose of fostering innovation in businesses by providing the needed knowledge infrastructure for its clients. This is probably one of the most important intangible performance measures for i2E, provided beside the monetary return on investment. In 2007 and in an annual performance survey carried out by i2E, participating companies reported a $33 million in gross pay to Oklahoma’s economy, with an average salary of $50,000 per year after four years in business. These companies also reported $99 million in sales revenue, 211 new jobs created, 629 jobs retained and 318 new products created for FY 2007. Of the new jobs created, 76 percent required a bachelor degree or higher. OCAST provides a technology business financing program (TBFP) which i2E administrates. Of the 102 clients surveyed for the FY 2007 report, the TBFP impact report showed the program provided 68 new jobs, retained 301 jobs and aided in the creation of 65 new products. Since the inception of TBFP, 65 companies have been funded, $7.2 million in funding has been provided, $174 million more in investments have been made and there has been a 70 percent survival rate for companies. It is also reported that since 1998, i2E clients have raised $294 million in funding. These growth patterns remain consistent through all available impact reports.

5.0 Conclusion

I2E’s vision is to grow technology-based businesses in Oklahoma through fostering innovation in businesses. It is clear that knowledge sharing is the chief export of i2E. They provide knowledge to their clients on a vast number of topics, ranging from how to start a business to how to raise funds, as well as facilitating interaction among clients. The study of i2E through content analysis of documented information only provides a window into their knowledge management practices. While it was not fully supported by the content analysis, i2E has an interesting learning culture that should be studied further. i2E’s success in comparison to traditional venture capital firms could also serve as a study in itself. While i2E provides knowledge sharing to their clients, they also have a program dedicated to education and knowledge creation, such as the Governors Cup. The successes stemming from the Governors Cup could provide a rich ground of studies to pursue.

It is important to point out some of the limitations and shortcoming of this study. The study was limited to documented information and did not include interviewing or surveying people from i2E or their clients. The other limitation and inherit weakness of the methodology used is that content analysis based on documented information is susceptible to the effect of the researcher bias in turn might affect the collection, analysis and interpretation of data. A triangulation method that combines multiple sources of data as well as qualitative and quantitative techniques can be used to enhance the content analysis technique.


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