**1. Introduction**

Innovation is a key driver of economic growth. New and improved products, processes, and services account for the bulk of trade and industry advancement since the Industrial Revolution. Technology innovations receive a lot of the credit for economic growth. However, modifications in organizational design, infrastructure, policy, and other factors in the orga‐ nizational ecosystems also deserve significant credit. All these changes depend on genera‐ tion of new knowledge and its application. In recognition of the central role of knowledge in organization performance, the field of knowledge management (KM) emerged as a focus on improved understanding of the processes and their links to organizational performance

© 2016 The Author(s). Licensee InTech. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. © 2017 The Author(s). Licensee InTech. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

in modern organizations [1, 2]. Simultaneously, the field of human resource development (HRD) emerged with a focus on improved understanding of the processes of learning and development (L&D) in organizations and their links to performance [3]. KM and HRD seem to intertwine naturally in their approaches to organizational effectiveness.

HRD processes change the competencies of employees at all levels in an organization and thereby play major roles in driving innovation and economic growth. People competencies and the way those competencies are leveraged across the organization due to changes in organizational design occur largely because of innovations in the HR, human resource management (HRM), and human resource development (HRD) departments—the people development functions in the organization. In that trio of special functions, HRD focuses on learning and development at the individual, team, and organizational levels. Innovation inside an organization occurs when employees have the knowledge, skills, and attitudes for learning, taking thoughtful risks, shar‐ ing knowledge, and thinking creatively, and the organization's systems provide needed support [4]. Ishak et al. [5] suggest KM is essential for developing the human resource. We further sug‐ gest HRD is essential for growing the knowledge that flows through the KM system.

### **1.1. Applicable literature**

Although many definitions of innovation have been published, we will select the follow‐ ing: innovation is executing new ideas to create value [6]. Crossan and Apaydin [7] refer to innovation as both a process and an outcome. Using a complex adaptive systems frame‐ work, Harkema [8] linked learning and knowledge generation when he defined innovation as a knowledge process for generating new knowledge, so it drives incremental or radical change.

This chapter focuses on KM and HRD practices that enable innovation within some of the world's most innovative companies. Examples from these innovative organizations will facili‐ tate an understanding of the way enablers and critical success factors of innovation, KM, and learning are implemented for competitive advantage.

A learning organization consists of formal and informal systems that facilitate learning by its members and rapid change in adapting to the environment—a culture where learning drives proactive change. Knowledge sharing benefits from developments in any part of the learning organization that improves the flow of knowledge. For example, HRD work in the organization can build up the communication‐related competencies of employees, upgrade organizational design to reduce silo effects, and develop employees' ability to effectively utilize technology, all of which contribute to knowledge‐sharing capability within the orga‐ nization. HRD plays a pivotal role in leading innovative activities with responsive guid‐ ance [9]. HRD practitioners increase learning effectiveness from individual, group/team, and organizational levels. Through continuous learning and improving, HRD fosters a culture that favors innovation [10]. In addition, HRD offers diverse solutions to explore challenges by analyzing the organization from the organization development standpoint [11]. Finally, HRD creates reward mechanisms that motivate employees to challenge the status quo and embrace change.

We view KM as "an iterative process of handling actionable knowledge that results from individual, group, and organizational learning to improve organizational performance" [12]. In this context, knowledge consists of individuals' insights, experiences, know‐how, and val‐ ues that are justified through social interactions among participants [13] to make knowledge actionable and embedded in organizational repositories [14]. Consequently, KM functions so organizations can use their actionable knowledge effectively to improve their performance [12]. Generally, HRD can contribute to innovation by promoting organizational activities that better manage the flow of knowledge (i.e., to acquire, create, store, share, use, and assess) throughout an organization [15].

in modern organizations [1, 2]. Simultaneously, the field of human resource development (HRD) emerged with a focus on improved understanding of the processes of learning and development (L&D) in organizations and their links to performance [3]. KM and HRD seem

HRD processes change the competencies of employees at all levels in an organization and thereby play major roles in driving innovation and economic growth. People competencies and the way those competencies are leveraged across the organization due to changes in organizational design occur largely because of innovations in the HR, human resource management (HRM), and human resource development (HRD) departments—the people development functions in the organization. In that trio of special functions, HRD focuses on learning and development at the individual, team, and organizational levels. Innovation inside an organization occurs when employees have the knowledge, skills, and attitudes for learning, taking thoughtful risks, shar‐ ing knowledge, and thinking creatively, and the organization's systems provide needed support [4]. Ishak et al. [5] suggest KM is essential for developing the human resource. We further sug‐

to intertwine naturally in their approaches to organizational effectiveness.

gest HRD is essential for growing the knowledge that flows through the KM system.

Although many definitions of innovation have been published, we will select the follow‐ ing: innovation is executing new ideas to create value [6]. Crossan and Apaydin [7] refer to innovation as both a process and an outcome. Using a complex adaptive systems frame‐ work, Harkema [8] linked learning and knowledge generation when he defined innovation as a knowledge process for generating new knowledge, so it drives incremental or radical

This chapter focuses on KM and HRD practices that enable innovation within some of the world's most innovative companies. Examples from these innovative organizations will facili‐ tate an understanding of the way enablers and critical success factors of innovation, KM, and

A learning organization consists of formal and informal systems that facilitate learning by its members and rapid change in adapting to the environment—a culture where learning drives proactive change. Knowledge sharing benefits from developments in any part of the learning organization that improves the flow of knowledge. For example, HRD work in the organization can build up the communication‐related competencies of employees, upgrade organizational design to reduce silo effects, and develop employees' ability to effectively utilize technology, all of which contribute to knowledge‐sharing capability within the orga‐ nization. HRD plays a pivotal role in leading innovative activities with responsive guid‐ ance [9]. HRD practitioners increase learning effectiveness from individual, group/team, and organizational levels. Through continuous learning and improving, HRD fosters a culture that favors innovation [10]. In addition, HRD offers diverse solutions to explore challenges by analyzing the organization from the organization development standpoint [11]. Finally, HRD creates reward mechanisms that motivate employees to challenge the status quo and

**1.1. Applicable literature**

26 Knowledge Management Strategies and Applications

learning are implemented for competitive advantage.

change.

embrace change.

Formal, informal, and incidental learning drives innovation in industry [16–18]. Practitioners in HRD develop learning systems that include an emphasis on career development, train‐ ing and development, and organizational development. The field of HRD has been changing rapidly over the past two decades and finds itself in a special role in companies of all sizes that make its tools and processes highly valuable in the rapidly changing organizations of the twenty‐first century.

In this chapter, we profile five organizations where HRD provides the kind of support that makes learning and development central to the strategic development of knowl‐ edge‐based organizations. Based on interviews of HRD staff members in these organiza‐ tions and a study of their Websites, publications, and company reports, we present ways in which HRD creates conditions for enabling knowledge sharing and learning and the processes that enable innovation within these organizations. The five innovative organiza‐ tions discussed in this chapter include Air Liquide based in France, Krungthai Card Public Company Limited (KTC) in Thailand, and Rockwell Collins, FMC Technologies Inc. (FMC Technologies), and Praxair in the USA (**Table 1**). This sample of innovative organizations was intentionally selected to represent a diverse set of countries and industries as a way of illustrating ways that HRD can promote learning and change inside organizations that stimulates their ability to innovate.

Sustainable organizations are complex, adaptive systems [19]. The challenges that organi‐ zations and their employees face today in turbulent market conditions demand an internal environment of continuous learning and knowledge creation, transfer, and sharing as keys to adaptation and innovation and a culture that stimulates a risk‐taking mindset. The inter‐ related processes of learning and knowledge creation occur within a social and a cognitive system embedded in a hierarchy of complex systems. Many hurdles to effective learning and knowledge creation, transfer, and sharing in those systems impede the processes that pro‐ mote problem solving and utilization of process outputs. Few aspects of the work environ‐ ment effectively promote those processes. HRD professionals develop the required human capital and create a work environment that unleashes and leverages its human capital for con‐ tinuous innovation. The same types of HRD tools and methods may be at use in several orga‐ nizations, but their application depends on the local culture. The next section presents five profiles of innovative organizations using tools and methods of HRD to create more effective knowledge management systems (KMSs). The profiles are necessarily brief and so provide only a small slice of the dynamic processes of human capital development in these companies.


**Table 1.** General company characteristics.

The companies were selected from the Fortune 500 list but also had to be recognized for their innovativeness. They represent a variety of industries and locations.
