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The Executive's Role in Knowledge Management
By Carla O’Dell
2004 APQC Publications (www.apqc.org), Houston
Review by Madanmohan Rao firstname.lastname@example.org
The absolute, most critical success factor in knowledge management (KM) success is senior level support via role models, executive sponsorship, removal of barriers to knowledge sharing, and making learning a priority – according to this new publication from the American Productivity and Quality Centre (www.apqc.org).
The book draws on solid research and case studies conducted for over a decade by APQC, which has analysed KM projects in over 300 organisations and hosted dozens of conferences for KM practitioners and analysts. Carla O’Dell is the author of “If only we knew what we know: The transfer of internal knowledge and best practice” (Free Press, 1998).
The material is divided into six pithy chapters, covering KM tools, strategy, culture and case studies. Companies today are facing increasing pressures of ensuring effective design reuse, expertise location, compressed time-to-competence, smarter decision-making, changing cultures during M&As, and directed learning, O’Dell begins.
Over the past decade, the KM arena has rapidly evolved in scope and practice. “The most significant change has been in the business community’s level of understanding. Eight years ago, we did not have tools to analyse how knowledge flows in an organisation; we did not have the methodologies for improving the follow and use; and we did not even know how to see the work of the organisation in terms of what was productive knowledge to manage. Today, KM has come of age,” according to O’Dell.
KM approaches are emerging
for specific business problems, across a wide range of processes, enabled
by user-friendly technologies, and with refined metrics for measuring
KM impacts. And many CEOs in successful companies have become “zealots
about the value of knowledge and sharing of best practices.” Executives
are adopting an active vision and approach to KM over and above grassroots
“For good results, develop a vision for the KM initiative. For exceptional results, translate that vision into explicit expectations and demand tangible results,” advises O’Dell.
KM: Basics and implementation
One chapter covers KM definitions and implementation phases. Knowledge is “information in action that people can make use of, along with the rules and context of its use.” Sources of knowledge include customers, products, processes, skills and experiences. Successful KM includes a combination of push and pull strategies. KM activities range from “self-service” approaches using tools leveraging explicit knowledge, to more interactive communities of practice and facilitated transfers of best practices.
APQC recommends a KM roadmap consisting of phases like assessment, developing a strategy, launch of KM initiative, education/communication, expansion and institutionalisation. Alignment with business objectives and design of effective pilot projects are important considerations here. Leadership plays a key role in “passing on the passion,” devising budgets and reward/recognition schemes, and steering the core KM group.
Supporting the business strategy
A visible connection needs to be established between knowledge sharing and business strategy. This can be a focus on better project management (as in American Management Systems), improving service quality via getting information to field workers (Halliburton), reuse of solutions and expertise (IBM), lowering operating costs, or improving innovation. The appropriate KM activities can include best practices transfer (for operations), expertise locator (for sales), and lessons-learned (for R&D).
Key issues to be resolved here include spelling out financial responsibilities, identifying internal sources and flows of knowledge, and choosing appropriate measurement frameworks. “Hard” measures can include savings on energy, time and labour; “soft” measures can be enhanced innovation, better morale, and employee satisfaction. These measures themselves evolve with maturity of a KM initiative. It is not uncommon for large organisations to spend more than a million dollars to launch a KM program and then a million a year to sustain and enlarge it.
Technology support for KM
“The availability of new technologies, particularly the Internet, has been instrumental in catalysing the KM movement,” explains O’Dell. The importance of making connections -- of people to people and people to information – is the driver to use IT in KM initiatives. IT tools should be embedded into work processes. Enterprise solutions should be amenable to integration and scalability.
Culture and communications
On the culture front, organisations vary in their history, expectations, unwritten rules, social mores, beliefs and even sub-cultures or micro-cultures. Knowledge-oriented organisations should provide employees with opportunities to explore new ideas, make it easy for them to approach managers, reward employees for innovation, recognise team players and collaborators, and reward group achievements before individual accomplishments.
The knowledge vision should be articulated across the organisation, and employees should feel empowered to use KM principles in their own work environment. Approaches like storytelling work effectively here. Reward strategies in action include HP’s Knowledge Masters Awards, Xerox’s Community Hall of Fame, and Lotus’s Cash for Wins.
The book also features numerous documented successes of KM in action. Each case study is structured with sections like origins of KM initiative, business case, specific KM activities, KM core group, funding, measures and impacts.
For instance, Caterpillar’s KM initiative is supported its corporate university, and focuses on usability, flexibility, immediate results and value of the KM solution. Its 18,000 employees have access to over 1,900 communities of practice. Knowledge screening and validation processes are important in this context. The company has invested about $2.5 million in its KM practice since 2000, and expects savings of about $75 million by 2008. A third-party researcher is examining impacts on productivity, cost savings and quality in departments like engineering, manufacturing, HR and information services.
Ford’s Best Practice Replication initiative, spurred by economic pressures in the late 1990s, has more than 50 communities of practice spanning HR, IT, logistics and manufacturing. After Action Reviews are routinely held during major projects. Initial surveys indicated that engineers were spending approximately 25 per cent of their time looking for information but finding only 10 per cent of what they needed. Metrics were devised to measure how much of this gap could be closed, and how to translate these measures into the appropriate language and needs of each community.
Ford has documented over $1 billion of hard value from 1995 to 2002 thanks to this initiative, which costs no more than $500 million annually to administer and support. The rate of accidents also dropped. Ford has now integrated best practice replication from its KM initiative into its Six Sigma initiative.
Halliburton launched a KM core group in 2001 to become a “real-time knowledge company” servicing the petroleum industry. Roles like global knowledge champion, knowledge brokering, community managers and content editors were identified. A key focus was on avoiding the problems that occur because information does not reach appropriate people at the right time. Specific measure areas included time to repair, duplicate orders, maintenance cost reductions, and lost hours. The company reported improved customer satisfaction, more resolution of outstanding issues, and greater technician user satisfaction as a result of the KM initiative.
IBM’s KM initiative – KM Blue – powers its internal research as well as external service offerings. Focus areas include e-learning, global expertise location, and project management. There are now 82 registered communities of practice; challenges to be overcome include language barriers. IBM has saved over $50 million a year in travel costs by finding information more quickly through the CommunityMap and videoconferencing.
In 1996, the World Bank’s president James Wolfensohn announced that KM would be a key strategy for the organisation to also become a knowledge bank. Its activities included benchmarking exercises with APQC, a knowledge fair, and active communication via the Web and publications like the World Development Report focusing on knowledge. Objectives included meeting staff attrition, sharing information across similar local environments, and enhancing the capacity of clients. Specific processes included weeding out obsolete information, project debriefings, feedback mechanisms, team working, and common knowledge taxonomies. Funding was to the tune of $50 million per year.
In conclusion O’Dell advises KM practitioners to develop long-term vision with mid-term measures, look for “teachable moments,” supply magnet content, and watch how organisational culture changes as a result of knowledge sharing. “A knowledge management initiative, if successful, never ends,” O’Dell predicts.
In sum, this slender volume makes for a straightforward and useful read, with sidebars summarising key points and peppered with informative quotes from KM professionals. It would be appropriate to end this review with some of these quotes:
“I do not have all the answers, but together we all do.” – Dave Lesar, CEO, Halliburton
“ ‘Just work harder’ was not going to work really well. We needed to do things differently.” – Todd Abraham, VP, Pillsbury
“Of all the initiatives we’ve undertaken at Chevron during the 1990s, few have been as important or rewarding as our efforts to build a learning organisation by sharing and managing knowledge throughout our company.” – Ken Derr, former Chairman, Chevron
“Managers should move from a managing mindset to a leading mindset.” – Michael Joyce, former VP, Lockheed Martin
“Viewing culture as a knowledge resource suggests a crucial role for senior management in shaping this asset.” – Cyde Holsapple, editor, Handbook on Knowledge Management
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