Tata Steel: KM = people + culture + technology
by Madanmohan Rao
"The key to business modernization in the 21st century is not just through the expenditure of huge sums of money to create physical assets, but orienting people - the greatest asset - towards meeting the opportunities and challenges of the future," says Ravi Arora, head of Knowledge Management at Tata Steel.
The importance of combining intellectual with technological assets via a KM culture was learned the hard way by the Indian steel giant in 1999. That year, it was informed by a foreign technical consultant that he was referred the exact same problem by the company two years in a row! In other words, the company, despite having a sophisticated IT infrastructure, did not seem to systematically "know" what its problems were and how it had been solving them.
With 48,000 employees, an asset base of US$2.3 billion, and annual turnover of US$1.5 billion, the steel manufacturer sells long and flat steel products to over 5,000 customers around the world.
The company aggressively embraced IT-enabled processes in the late 1990s, and by 1999 had installed a corporate Intranet, SAP ERP system, employee portal, and "special interest groups" focusing on various operational and manufacturing issues. The company's mission statement in 1998 was re-drafted to include: "Tata Steel enters the new millennium with the confidence of a learning and knowledge-based organization."
And yet, says Arora, there was no effort being made to capture experts' knowledge into intellectual assets, and no systematic way of aligning the employee portals with solving business problems.
In April 1999, a concerted effort was made to launch a KM practice. Over the next year, through April 2000, a core group of five members was formed, best practices were studied, knowledge taxonomies devised, knowledge repositories created, knowledge communities formed, and employee training launched on KM behaviours.
"Though this was a good textbook beginning, connectivity was still poor and access technology was not standardized. We noticed a lot of irrelevant and superfluous contributions coming into the knowledge repositories," Arora recalls. Worse, there were cultural problems with technology phobia and attitudes like "This is another method to downsize" and "Why should I share my precious knowledge?"
A new refined strategy was adopted in May 2000-January 2001, which included a seminar on KM, consulting on communities of practice by an external firm (McKinsey), and identification as well as recognition of successful KM efforts.
Communities of practice aligned with business processes and strategy were formally launched in 21 areas, including iron making, steel making, rolling, maintenance, mining, waste management, cost engineering, energy management, HR, IT and KM. Care was taken to ensure that each CoP had a champion, convener and senior manager.
However, some problems still remained. "There was no easy way to cull out the referable, usable contributions. Irrelevant and unsolicited contributions contributed to pour in," says Arora.
For the next year - January 2001 to 2002 - benchmarking steps were introduced, a composite KM index was created, and KM activity was included in performance evaluation. A directory of experts and skills was devised, a formal rewards and recognition system was put in place, and seminars on KM were conducted.
And new problems arose! The management realized that they had not adequately planned budgetary outlays for KM community support, or devised ways of summarizing knowledge contributions and identifying which were the similar and redundant ones.
"Key questions facing us were: Is this KM approach really encouraging innovation? How can we involve the grassroots levels as well?" Arora recalls.
So in February 2002, the company began to formally focus on promotion of innovation by encouraging more active experimentation, and rewarding intelligent failures as well. KM activity was more closely monitored. It was learnt that the number of KM users had grown from about 1,000 in early 2001 to over 3,000 by late 2002; in the same period, page views of the body of knowledge grew from barely 200 to almost 2,000 per day.
The number of new products manufactured has significantly increased, downtime has decreased, and costs have come down, Arora claims. In monetary terms, savings of Rs. 3.41 crore were realized (47 rupees = 1 USD: 10 million = 1 crore) from the KM system.
At a cultural level, employee attitudes shifted from one of "I am an expert, I do not need new knowledge" to one of a continuous quest for knowledge; from just "I need help" to "I can also help." The extent of organizational knowledge changed from narrow and shallow silos to wider and more permeable silos, says Arora.
Funds have now been allocated to enhance knowledge activities, and Tata Steel is even providing KM guidance to its sister companies of the vast Tata group in India. Arora is regularly invited to speak at KM conferences around the world, including the recent KM Asia 2002 summit in Singapore hosted by the Ark Group.
Other steel plants are also requesting Tata Steel for assistance in KM implementation, and the company is sharing its experiences with other Indian organisations like ICICI, Infosys Technologies (winner of the MAKE Asia 2002 award), TCS and HLL.
Future plans for KM at Tata Steel include linking e-learning with the KM repository and KM communities, devising an intellectual capital index, networking with retired employees, employee skill development for better externalization of knowledge, and integration with customer's knowledge.
Key lessons from this KM journey, according to Arora, include the importance of avoiding the creation of silos among communities, providing communities with detailed structures, and keeping databases current.
"The most important challenge in this economy is creating conversations," Arora sums up.
Madanmohan Rao is the author of "The Asia-Pacific Internet Handbook" and can be reached at firstname.lastname@example.org
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