Case Studies in Knowledge Management

Reserve Bank of New Zealand 217

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but must be carefully tailored to meet the unique organisational characteristics. By
contrast, Snowden’s principles of “organic knowledge management” and interest in
complex adaptive theory support the view that knowledge management solutions are
unique to the organisational context in which they are created (Lelic, 2002).
As a quasi-government department, the Reserve Bank was able to leverage public
sector interest in knowledge management in support of its knowledge management
journey.

CASE DESCRIPTION

The nature of the work of the Reserve Bank was such that it required a range of
specialist skill sets that were not readily available within New Zealand. This was mainly
due to the fact that each country has only one central bank, and therefore does not have
a large pool of individuals with the specialist skill sets, such as macro-economics and
banking supervision, that are required. Consequently, recruitment of staff was effec-
tively limited to a global pool of specifically skilled labour drawn from central banks
around the world.
In addition to the scarcity of skill sets, the average length of service at the Reserve
Bank was more than nine years, as shown in Table 2.
During this time, staff members accumulated an extensive knowledge of the Bank
and its operations, resulting in a very high exposure to loss of knowledge on the departure
of key staff. As a consequence of this exposure and of the “rightsizing” program that the
Bank was then undergoing, the Bank recognised that it needed to take action to minimise
the risk of knowledge loss. Although the NZRB was one of the first to recognise the
significance of these issues, other central banks such as the Bank of Canada have also
expanded their research programs to include the issues of talent and knowledge sharing
(Bank of Canada, 2002).
In 1999, the Bank was not alone in recognising the growing importance of knowledge
management. At the same time, the Information Technology Advisory Group (ITAG),
comprising academics and representatives from the business community and public
sector, presented a report to the New Zealand Government, titled “The Knowledge
Economy.” The report focussed on the need for New Zealand to change its economic mix
and warned that if the nation failed to make the transition from a pastoral to a knowledge
economy, then it was destined to become nothing more than a holiday destination for
visitors from countries where the knowledge economy had been embraced (ITAG, 1999).

Table 2. Human resource statistics (adapted from Reserve Bank, 2002)

1994/

1995

1995/

1996

1996/

1997

1997/

1998

1998/

1999

1999/

2000

2000/

2001

2001/

2002

2002/

2003

Total staff at

June 30 (FTE)

293

290

289

281

283

237

199

182

193

Average years of

service at June

30

8.6

8.6

8.7

8.3

8.8

9.4

9.4

9.2

9.2

Annual staff

turnover 9.6%^ 15.0%^ 10.6%^ 8.8%^ 10.0%^ 10.4%^ 14.9%^ 13.5%^ 11.3%^