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Communities of Practice

Inter-Organizational Communities of Practice
by C. van Winkelen

Dr Christine van Winkelen coordinates research at the Henley Knowledge Management Forum. She is an Associate Member of Faculty of Henley Management College (UK) and an independent KM Consultant.

Communities of Practice are formed by groups of people who come together to learn from one another face-to-face and virtually. This article explores how to design and sustain these communities effectively within organizations.

Community is not a new concept – it is a natural part of human behaviour to socialise and work with others. Yet communities of practice have only gained significant management attention over the past decade, with a flurry of activity as recently as the past three years. Much of this attention has been by large corporations seeking to find new ways to drawn on expertise dispersed across global operations so that they can respond ever more quickly to the demands of customers and the pace of change of technology.

In this report, we briefly look at the key drivers behind these trends and the main learning that has been gained about how to design and sustain these communities effectively within organizations. We will then move on to some of the additional issues that need to be considered when communities reach across external boundaries to support inter-organizational collaboration.

The question at the heart of this report is how to gain satisfactory returns from the investments made in forming and supporting communities of practice. Having looked at the practical activities needed to support effective communities, the report ends with a view of the way in which the value they generate can be measured.

This document has been prepared for the ESEN project. It is intended to stimulate debate around the subject of inter-organization communities of practice, not to provide specific recommendations. It draws on research undertaken by the Henley Management College Knowledge Management Forum, together with published literature.

1. Why form communities of practice?
1.1 Communities of practice within organizations
1.2 Communities of practice as a method of inter-organization collaboration
2. The Knowledge Perspective
3. Enabling communities of practice to be successful
3.1 The experience gained from communities of practice within organizations
3.2 The challenge of inter-organizational communities
4. Measuring the value added by communities
5. Conclusion
6. References

1. Why form communities of practice?

A usefully comprehensive definition of communities of practice is [1]: “Groups of people who come together to share and to learn from one another face-to-face and virtually. They are held together by a common interest in a body of knowledge and are driven by a desire and need to share problems, experiences, insights, templates, tools and best practices. Community members deepen their knowledge by interacting on an ongoing basis”.

Diverse approaches to supporting communities of practice have been adopted by different organizations: some see them as largely emergent phenomena, others have adopted more deliberate strategies to design and manage their shape and purpose. A community of practice is fundamentally a self-organizing collection of volunteers. Knowledge is shared within the community based on relationships with others, rather than direct transactions. Hence membership involves an emotional as well as an intellectual component [2].

1.1 Communities of practice within organizations

Communities of practice are different from other organisational groups (such as formal work groups, project teams or informal networks) as shown in Table 1. They also differ from communities of interest, in which people tend to gather around a particular issue. Communities of practice involve people jointly developing a shared collection of resources to support work in a specific field.

Community of Practice
Developing members' capabilities by building and exchanging knowledge
Whilst there is interest by the members
Formal Work Group
Delivering a product or service
Until there is a re-organisation
Project Team
Accomplishing a specified task
Until the end of the project
Informal Network
Collecting and passing on business information
As long as people have reason to connect
Table 1. A comparison between communities and other types of groups [3]

The driver for organizations to invest in developing communities of practice is deeply rooted in their value as ways of transferring knowledge between people – organizations such as IBM, HP and Unisys even prefer to call them “knowledge networks”. In the knowledge economy, organizations need their employees to become “knowledge workers,” that is individuals who constantly draw on a wealth of knowledge to devise new responses and solutions for a rapidly changing market place. This means that employees need to be able to participate in a flow of knowledge that consists of not only documentation and on-line information sources, but the exchange of ideas with others who have experience and skill related to the same area of work [4]. Conventional functional, project and matrix structures used to organize work in companies provide useful solutions to performance and accountability issues. However, they often create barriers to the flow of knowledge between people engaged in the same types of work, or needing the same types of knowledge, particularly if those people are in different parts of the company and possibly even different parts of the world.

Communities of practice offer a form of social structure that can take responsibility for fostering learning, developing competencies and managing knowledge. One of main purposes of a community of practice is establishing the common baseline of knowledge in that subject area. By ensuring that this is well understood, people can focus their creative energies on more advanced issues [5].

Another benefit from investing in developing communities of practice has also been proposed: they offer the opportunity to increase the job satisfaction of knowledge workers and therefore reduce staff turnover. As individuals develop greater awareness of their own worth in the knowledge economy and recognise that inevitably they must take responsibility for their own career and future (as job security no longer exists), they will increasingly add into their own decision-making process consideration of the opportunity a potential work experience offers to learn and allow them to retain their own market value in the future. Organizations that can offer the opportunity to participate in a leading community of practice in the professional knowledge domains of their workers now appear particularly attractive [6]. Being within the company forms the basis for staying ahead in the discipline and this is the source of future individual “marketability”. The pace of change and the rate of development of new knowledge mean that it has become too difficult for individuals to do this independently.

Having looked at the reasons why organizations are investing in communities of practice for knowledge flows across internal boundaries, we now move on to look at why they are also being used to support collaboration across external boundaries.

1.2 Communities of practice as a method of inter-organization collaboration

Collaboration is: “a cooperative, inter-organizational relationship that relies on neither market nor hierarchical mechanisms of control but is instead negotiated in an ongoing communicative process” [7].

Communities of practice are a mechanism within which collaboration between organizations can occur. Collaboration between organizations has come into focus in recent years with the recognition that success in a global economy comes from innovation. This is the only way any organization can keep pace with the rapid developments in technology, increasingly demanding customers and changes in the competitive environment through deregulation, social changes, and the actions of competitors. Innovation depends on the exchange of ideas and insights through trusted relationships, which depends on knowing how to collaborate effectively. Table 2 shows how there has been a transition towards collaboration over the past century.

Economic era
Capability needed
Organizational model
Divisional, matrix and network
Alliances, spin-offs and federations
Key asset
Physical assets such as plant and machinery
Information about how to transfer experience from one area of the business to another
Knowledge used to make connections between ideas and produce new insights
Table 2. Economic and organizational evolution over the last century [8]

Another driver for increased collaboration comes from the idea that the more change there is in its environment, the more connections an organization needs with the outside world. The principle of requisite variety states that the level of diversity inside an organization should match the variety and complexity of outside conditions [9]. In other words, the greater the external complexity, the greater the diversity of information and knowledge needed to understand what is happening and make effective decisions.

An alliance is a governance mechanism to pursue collaborative interests between two or more independent firms [10]. Alliances range from loose co-operative arrangements to formal contractual relationships. Table 3 summarises different types of alliances and some of the influences that determine which form should be adopted depending on the situation. Informal approaches to collaboration include communities of practice. Adopting a less contractual approach has the benefit of allowing flexibility and incremental development of the relationships.

Loose (Informal Cooperation)
Ownership (Shareholding or asset sharing)
Forms of Alliances


Communities of practice

Opportunistic alliances

Technical exchanges





Supply agreements


Joint ventures


Development partnerships


Speed of change in the environment
Rapid Change
Slow Change
Asset Management
Assets do not need joint management
Asset management can be isolated
Assets need to be jointly managed
Table 3. Types of strategic alliances based on the form of governance and the influences that determine which form to adopt [Based on 11, 12].

The objectives for entering into an alliance tend to be either to exploit current resources and areas of strength or to explore new possibilities. The range of motives tends to fall into three broad categories [11]:

· The need to work with others to achieve a critical mass to reduce costs and improve value delivered to customers.
· Co-specialisation to allow each partner to concentrate on its own strengths. This is often the motive for working with partners to develop new products or to move into new markets.
· Learning from partners to develop expertise that may be more widely exploited within the individual organizations.

The ability to meet these objectives depends on the appropriateness and effectiveness of the alliance form and collaborative processes adopted. Communities of practice are particularly appropriate when there is a learning motive for collaboration. An example of an organization that used communities of practice within a strategic process of collaboration for learning was the World Bank which redefined its purpose to encompass establishing and maintaining a network of collaborative relationships motivated by knowledge sharing [13].

The World Bank had always offered development assistance in the form of a mix of finance and ideas to improve living standards. In 1996, the President announced that it would become the first point of contact for information and knowledge about development. This shift emphasised the importance of drawing on experience from other similar situations in the success of development projects.

The World Bank works within a network of other bodies also dedicated to development, for example, donor governments, non-governmental organizations, borrower governments and private sector groups. It set out to systematically capture and organize the knowledge and experience of staff, clients and development partners, make this knowledge available and create new collaborative links between network partners.

A basic infrastructure and set of programmes was established to share knowledge within the World Bank and with clients and partner organizations. These included:

· Communities of practice (both internal to the World Bank and with external individuals and groups).
· Advisory services to provide quick and easy access to resources.
· Regional and country-level programs to provide customized information and knowledge.
· Initiatives to bring development practitioners from many organizations together, both face-to-face and virtually, to share experience and ideas.

These initiatives have been successful because they were aligned with the core business of the World Bank and because collaboration clearly added value to each member of the network.

2. The Knowledge Perspective

Having recognised that a primary purpose of communities of practice is supporting knowledge flows between people, we will briefly look at how they relate to other knowledge management initiatives.

“Knowledge management means using the ideas and experience of employees, customers and suppliers to improve the organization’s performance.” [14]

Knowledge management initiatives often focus on one of two categories of knowledge: explicit and tacit. Explicit knowledge is knowledge that has been codified into words and so is easily transferable in essence, if not in value. Explicit knowledge produces greater value when widely applied, but it also leaks to others because it is easy to transfer. Some people argue that explicit knowledge inevitably loses its contextual relevance in the codification process and becomes simply information.

In contrast, tacit knowledge is knowledge that cannot easily be put into words. It takes time and considerable investment to develop. Ultimately tacit knowledge provides greater potential for long-term business value because it tends to be more widely applicable to different circumstances, creates greater differentiation and is easier to protect [15].

In recent years, many organizations have adopted a wide range of knowledge related practices, often starting with information and communications technology projects to facilitate explicit knowledge flows (for example, designing portals and intranets and group decision support systems) [16]. Communities of practice are now being seen as a useful way to share explicit knowledge too – people often prefer to ask a colleague rather than search a database. However, they also allow people form relationships, establish trust and eventually reach the position where meaningful tacit knowledge can also be exchanged.

Communities of practice are also able to contribute to the achievement of two of the main strategic questions that need to be asked when designing a knowledge management strategy:

a) To what extent is cost control the basis for competing successfully?

If cost control is important, then knowledge management needs to be used to deliver increased efficiency through the widespread adoption and standardisation of best practices. Communities of practice can be used as a part of such a strategy by identifying, validating, documenting and sharing the practices across conventional organizational boundaries. This was the approach adopted by the Ford Motor Company.

The Ford Motor Company Best Practice Replication Process (eBPR) used the company intranet to collect and share working practices around the world [17]. It facilitated the effective operation of communities of practice that had grown organically around groups of people who did similar work in different countries. Proven practices were shared, rather than unproven ideas, and the community of practice always quantified or qualified the value added to the business. The community set its own guidelines for values, level of detail and types of media to use. A small central team provided the technology infrastructure and guidance on how to launch and sustain a community, but responsibility for making the process work was embedded into the daily work of the members of the community of practice themselves. The person who first identified the best practice was named and this offered recognition amongst peers around the world.

b) To what extent is differentiation and innovation in the market place the source of competitive success?

If differentiation and innovation are important, then knowledge management needs to enable knowledge to flow through the organization so that people can make new connections between ideas and generate innovate produces and services. Communities of practice can be used to stimulate interest in new topics. This was the approach adopted in Hewlett Packard.

Hewlett Packard used Work Innovation Networks to develop its innovation capability. They could be created by any of Hewlett Packard’s businesses and were a means of focusing effort on developing a creative approach to a current problem [18]. A business announced itself as the host for a series of presentations, conferences and seminars on a topic it was currently striving to understand. An invitation was broadcast to the rest of the company and if the “market” responded, then the subject area took on a life of its own with on-going meetings and a community of practice evolved.

3. Enabling communities of practice to be successful

3.1 The experience gained from communities of practice within organizations

A useful framework of seven principles has been suggested to generate “aliveness” and energy within communities of practice [5]. These acknowledge that while communities of practice need to be spontaneous and self-directed, guidelines can be helpful in creating the conditions for them to flourish. The principles are summarised in Table 4.

Principle 1
Design for evolution
Allow new people to become involved and new interests to be explored. Accept that there will be different activity levels and different kinds of support needed at different times.
Principle 2
Open a dialogue between inside and outside perspectives
Encourage a discussion between those within the community and those outside about what it could achieve. For example, encourage links with communities in other organizations.
Principle 3
Invite different levels of participation
Some people will be active in the community and some people will appear passive. Accept that contributions and learning take place in different ways.
Principle 4
Develop both public and private community spaces
Relationships form during informal community events and person-to-person communication is the purpose of the community. Formal organized events and discussion spaces are needed to help people feel part of a community. Both are important.
Principle 5
Focus on value
The true value of a community may emerge as it matures and develops. Community members should be encouraged to be explicit about the value being delivered. This may initially help raise awareness. Over time, value from participating should be come more apparent and more concrete measures can be collected.
Principle 6Combine familiarity and excitementFamiliar community spaces and activities help people to feel comfortable in participating. Introducing new ideas to challenge thinking also stimulates interest and keeps people engaged.
Principle 7Create a rhythm for the community. Regular events, paced to avoid overload, create points around which activity can converge. They encourage people to keep coming back, rather than gradually drifting away.

Table 4. Principles for cultivating successful communities of practice [5]

An individual’s motivation to participate in a community of practice and an organization’s willingness to support that community both stem from an expectation that it will deliver a particular value. Sustaining the delivery of value and ensuring that there is alignment in the expectations of the value to be delivered are therefore fundamental aspects of designing successful communities of practice [19]. In addition to the general principles we have just seen, various design elements help create alignment in the delivery of value. It is useful to describe these using a specific example of a group of companies that set out to create a range of different types of virtual communities, including communities of practice [16]. The St. Paul Companies is a global organization providing insurance products and services. It recognised that its commercial success depended on the expertise of its people and as a global operation extensive knowledge sharing activities in various forms were needed to develop that expertise to a consistent level in all countries [20]. They launched an intranet site called the Knowledge Exchange to provide tools and processes for on-line virtual communities, allowing people to share expertise and experience to solve work problems. Their approach can be mapped onto elements of the design of successful communities:

a) An appropriate subject area

They deliberately set out to support several types of virtual community and the nature of the community determined the subject that they focused on:

Community of practice Voluntary groups of people coming together because of their shared interest in the subject and a desire to further their knowledge about it for the benefit of the business. For example, globally dispersed people who were involved in insurance products relating to workers’ compensation had been struggling to connect with colleagues from across the company before the Knowledge Exchange was launched.

Centre of expertise Experts about a highly specialised knowledge area appointed by management to be a resource for the company. These acted as a hub for employees wishing to find out about the topic.

Work groups People from the same department with a shared responsibility for a product or service.

Project teams Cross-functional groups responsible for a time-specific project. Secure discussion areas and document sharing facilities supported collaboration.

Virtual classroom community An on-line collaborative platform enabling the exchange of ideas after classroom based learning.

b) A clear purpose

They emphasised the purpose of the virtual communities as tools to get useful work completed more effectively. The purpose and relevance of each community was made clear so that participation was not perceived to be additional work.

c) The fulfilment of certain roles

In the St. Paul Companies communities, the facilitator was termed the “mayor” and this role was seen to be the key to the success of the community. They found that the mayor needed to be respected for their expertise in the community’s knowledge domain and also needed sufficient skills in motivating and leading others in a virtual environment.

d) Appropriate organisational support

The supporting technology was designed to be easy to use and it took less than 30 seconds to set up each community space. Coaching and online resources were available to help the community as it established itself.

e) A culture of trust and openness

Sharing news, documents and questions and answers around important issues was used to build trust and openness. Community participants were encouraged to post personal information such as photographs and family information to help build relationships.

f) Organisational acquiescence

The corporate level appointment of a Chief Knowledge officer with responsibility for learning and knowledge management across businesses and geographical boundaries demonstrated business level commitment to knowledge sharing. The virtual communities were integrated into a portfolio of other learning based initiatives including the St. Paul University and an online resource centre for education and learning information. Senior management support was active rather than passive, encouraged through revised leadership competencies for senior managers including “seeking and sharing knowledge”.

The St. Paul Companies recognised the importance of connecting communities, with the Chief Knowledge Officer observing “inter-community collaboration is the mark of a truly powerful knowledge exchange system”.

Another aspect of the design of communities of practice is recognising that they pass through different stages over time, facing different issues at each stage and therefore needing different kinds of support. Figure 1 illustrates a five stage model of community of practice evolution.

Figure 1: Stages of community development [5]

· Potential – loose networks that hold the potential of becoming more connected and thus a more important part of the organization. Development tension: defining the scope of the domain to interest people, finding people and helping them imagine how increased networking and knowledge sharing could be valuable.

· As members build connections, they coalesce into a community. Development tension: establishing the value of sharing knowledge and building trust to discuss difficult problems.

· Mature - growing in both membership and depth of knowledge shared. Development tension: defining role and relationship to other communities, managing the boundary of the community, moving from knowledge sharing to taking stewardship seriously.

· When mature, communities go through cycles of high and low activity. They often take active stewardship of the knowledge and practices they share and consciously develop them. Development tensions: maintaining relevance, keeping tone and focus lively and engaging, staying at the cutting edge.

· Transformation – may be transformation of the community into something else. There may be a lack of focus if pressing problems have been resolved. The community may turn into a social club, split into different communities or merge with others.

3.2 The challenge of inter-organizational communities

The experience gained in designing successful communities of practice within organizations is directly transferable to communities of practice that reach across organizational boundaries. However, one aspect needs particular attention. We have seen that a “culture of trust and openness” is needed to allow meaningful knowledge to be exchanged.

Research looking at knowledge networks between SMEs in Australia showed that even when there was adoption of networked technologies to allow connectivity between the companies, the potential for knowledge exchange was highly dependent on the level of trust. Similar work on SME collaboration in Asia showed that information sharing and learning was based on the prior existence of trust and an atmosphere of continued trust building. SMEs fear opportunistic behaviour from competitors and need confidence, either through trust or formal legal mechanisms that other firms will be cooperative and not take competitive advantage of knowledge-based exchanges [21].

Establishing this culture between organizations involves investments in building social capital or “the goodwill that is engendered by the fabric of social relations and that can be mobilized to facilitate action” [22].

Social capital is a way of describing the collective strength of the relationships within a group, where members of the group can include individuals, teams, communities, business units and discrete organizations. It develops as a result of the structure and configuration of the connections between the group members, their compatibility in understanding and ability to communicate, and the quality of the relationships (as shown by the levels of trust, shared norms of behaviour and alignment with each others’ values and objectives).

Building social capital requires investments of time and effort and its beneficial effects are seen in terms of improved access to information, greater influence and higher solidarity. To earn social capital, each party must have the opportunity, the motivation and the ability to contribute to the relationships.

4. Measuring the value added by communities

The benefits of communities of practice can be summarised as [23]:

· Easier reuse of explicit knowledge assets, for example through shared access to a repository of best practices, reference documents, presentations etc.
· Quicker response to customer needs by providing access to the expertise needed to solve problems.
· Reducing the time taken for new employees to become productive by access to assistance and mentoring.
· Generating new ideas for products and services by sharing perspectives and ideas.

Although many organizations are happy to invest in communities of practice based on a judgement that they will achieve these benefits, at some point most try to measure more formally the value that is being delivered from the investments that have been made. Training facilitators, providing technology to support collaboration, allowing people the time to participate and the travel expenses to participate in community events are all costs that can be calculated reasonably easily. The return on these investments can be more difficult to assess. Activity measures (such as the number of contributions to a discussion group or database) have some value, but it is much more useful to assess the real financial returns delivered. Metrics may be designed that relate to [24]:

· business problems solved in the community;
· new knowledge created in the community;
· joint learning occurring in the community;
· existing knowledge reused by the community;
· innovations;
· iprovements in process performance;
· the community’s role in recruiting and retaining talent.

One of the most effective ways of collecting information to support these measures is through systematically collecting anecdotal information from community members. The oil company Shell has adopted this approach to justify its investments in community initiatives [5]. Community coordinators (with external assistance) conduct interviews with a sample of community members and then document stories showing the causal links between community activities, knowledge resources and value. Combining all of the stories produces an overall picture of the costs and benefits associated with the communities.

This approach involves:

· determining an approximate numeric value, such as time saved, the cost avoided or the additional revenue;
· estimating the percentage of that value that can be directly attributed to participation in the community;
· estimating the certainty of that estimation (as a percentage).

Multiplying these figures results in a conservative assessment of the value added, and when combined with a generous assessment of the costs, produces a credible argument for the contribution of communities.

5. Conclusion

“A group of participants becomes a community through being a community. It is through interacting and experiencing common events that the community is created. “ [25]

Communities of practice have become the focus of knowledge management initiatives within many large organizations. They also offer an informal mechanism for collaboration between organizations, particularly when learning is the prime motivation. Although many of the principles and design elements of successful communities of practice are now understood, particular attention needs to be paid to building trust and generating social capital when they reach across external organizational boundaries.

6. References

1. Hubert, C., B. Newhouse, and W. Vestal, Building and Sustaining Communities of Practice. in Next-Generation Knowledge Management: Enabling Business Processes. 2001. Houston, USA.

2. van Winkelen, C. and P. Ramsell, Building Effective Communities. in Henley Knowledge Management Forum Second Annual Conference. 2002. Henley Management College.

3. Wenger, E. and W. Snyder, Communities of Practice: The Organizational Frontier. Harvard Business Review, 2000. 78(1): p. 139-145.

4. Gongla, P. and C. Rizzuto, Evolving Communities of Practice: IBM Global Services Experience. IBM Systems Journal, 2001. 40(4): p. 842-862.

5. Wenger, E., R. McDermott, and W. Snyder, Cultivating Communities of Practice. 2002: Harvard Business School Press.

6. Wenger, E., R. McDermott, and W.M. Snyder, Cultivating Communities of Practice. 2002, Boston, Mass: Harvard Business School Publishing.

7. Lawrence, T., N. Philips, and C. Hardy, Watching whale watching. Exploring the discursive foundations of collaborative relationships. Journal of Applied Behavioural Science, 1999. 35(4): p. 479-502.

8. Miles, R., C. Snow, and G. Miles, The Future.org. Long Range Planning, 2000. 33(3): p. 300-321.

9. Ashby, W.R., An Introduction to Cybernetics. 1956, London: Chapman and Hall.

10. Park, S.H. and G.T. Ungson, Interfirm rivalry and managerial complexity. Organization Science, 2001. 12(1): p. 37-53.

11. Johnson, G. and K. Scholes, Exploring Corporate Strategy. Sixth Edition. 2002, Harlow: Pearson Education Ltd.

12. Inkpen, A.C., Learning, knowledge acquisition and strategic alliances. European Management Journal, 1998. 16(2): p. 223-229.

13. LaPorte, B., Knowledge is currency at the World Bank. KM Review, 2002. 5(5): p. 10-13.

14. Skapinker, M., The Change Agenda. 2002, CIPD: London.

15. Boisot, M.H., Knowledge Assets; Securing Competitive Advantage in the Knowledge Economy. 1998, Oxford: Oxford University Press.

16. McKenzie, J. and C. van Winkelen, Understanding the Knowledgeable Organization: Nurturing Knowledge Competence. (Forthcoming). 2003, London: Thomson Learning.

17. Kwiecien, S. and D. Wolford, Gaining real value through best-practice replication. Knowledge Management Review, 2001. 4(1): p. 12-15.

18. Stewart, T.A., Intellectual Capital: The New Wealth of Organizations. 1997, New York: Doubleday.

19. van Winkelen, C. and P. Ramsell, Aligning value is key to designing communities. Knowledge Management Review, 2003. 5(6): p. 20-23.

20. Owens, D. and E. Thompson, Fusing learning and knowledge at the St. Paul Companies. Knowledge Management Review, 2001. 4(3): p. 24-29.

21. Braun, P., Digital knowledge networks: Linking communities of practice with innovation. Journal of Business Strategies, 2002. 19(1): p. 43-54.

22. Adler, P.S. and S.-W. Kwon, Social Capital; Prospects for a new concept. Academy of Management Review, 2002. 27(1): p. 17-40.

23. Lesser, E. and K. Everest, Using Communities of Practice to Manage Intellectual Capital. Ivey Business Journal, 2001. 65(4): p. 37-41.

24. Botkin, H. and C. Seeley, The Knowledge Management Manifesto: Why KM requires community-building. Knowledge Management Review, 2001. 3(6): p. 16-21.

25. Tosey, P., The peer learning community: a contextual design for learning? Management Decision, 1999. 37(5): p. 403-410.

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