Chapter 5
Getting Started and Going Forward

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In this chapter, we show you how to launch a knowledge management initiative. We will focus on two key areas:

•   Getting started

•   Going forward

The goal of knowledge management is not to pursue knowledge for its own sake or to be seduced by technology. Rather, companies manage knowledge to enhance their unique competitive advantage by increasing their overall know-how—the core competencies that help them do the things they do better than any other company. To expand know-how, you need to capture knowledge in both its explicit and tacit forms. You need to develop both information technology and the social relationships through which people learn much of what they learn at work.

If your company is the world leader in a niche market, providing widgets that extend the life expectancy of the leading brand of hearing aid, then your core competencies and strategies will center on defining and reaching buyers of that specific product and never losing sight of their specific needs. It would be unnecessary to evolve a knowledge management strategy focused on new product development. But it might be highly useful to have your knowledge management strategy include a way for the sales and distribution forces to be better aligned in sharing information about expected deals, customer ordering cycles, and customer product development activities.

If, on the other hand, your company’s success tends to ride on the freshness of its ideas and products, the knowledge you nurture centers around new product development. By getting back to offering personal computers that look and “feel” different, Apple revived its fortunes and its brand with the iMac and the iBook computers. For years, Gillette’s fortunes have ridden upon new generations of razors that work better than their predecessors. For all the jokes Viagra has spawned, it has spawned even more profits for Pfizer—an excellent return on the R&D investment in this remedy. Getting the ideas right, keeping schedules tight, and meeting or exceeding expectations, not only for innovation, but also for quality and availability, become your core competencies. Knowledge activities should focus on building know-how in those areas.

As we discuss how to get started, we will provide you with a process, a model, and a set of questions to help you stay on a strategic track and avoid veering off into the deep technology woods. As we discuss how to implement a knowledge management initiative, we will offer you best practices and guidelines.

Getting Started

Imagine that you are the newly appointed Vice President of Human Resources in a global Fortune 500 consumer products company. Your senior executive team has decided that better management of its knowledge resources will yield benefits such as closer ties to the customer and greater responsiveness to changing market requirements. The team has made knowledge management one of its top 10 corporate initiatives. They have given you a mandate: institute knowledge management initiatives throughout your organization. Where do you begin?

You have heard about decision support systems, information portals, customer relationship management systems, partner relationship management systems, document management systems, knowledge mapping, on-line learning, virtual teaming— the list grows longer every day. And under the pressure of your corporate mandate, it is tempting to jump into action and install something you can point to. However, in our experience, jumping without the necessary strategic due diligence proves to be expensive and counterproductive. Success with knowledge management demands not only the right fit between technology or process and the business need, but also an implementation process that wins buy-in, not resistance.

Knowledge Management Landscape. You have to focus and choose your path. The RICE model, described in the previous chapter, helps focus thinking on your company’s core competencies and strategic growth areas. Using it, you can determine whether your company needs to develop, maintain, or expand strength in the areas of:

•   Responsiveness to the market

•   Innovation of new products and services

•   Competency of your skill base

•   Efficiency of work processes

Now, building on the RICE model, we will offer you a more detailed framework and diagnostic questions from which you can begin to tailor practical knowledge management initiatives for your organization. The following framework illustrates the knowledge management landscape within which you can map your own unique situation. Each element of this framework defines solutions related to the areas of the RICE model— responsiveness, innovation, competency, and efficiency.

We have used our model with many companies to help them imagine what is possible. No company can or should implement every element of the model. Its purpose is to open up possibilities, which your company can then assess on its reality meter using strategic priorities, cultural determinants, and fiscal constraints.

As we explore this model, remember that in the real world nothing is as compact and delineated as it can appear on paper. The edges of each area will inevitably blur and run into other areas. You should not think of this as a jigsaw puzzle where each piece has its neat place. Rather, think of it as a dynamic, moving montage—with overlap, change, and redirection happening as market and internal strategy dictates.

The large oval represents the company. The planet linked to the oval by a two-headed arrow represents customers, partners, suppliers, and others who are outside the company’s boundaries, but linked to its success. Strategy, surrounded by Information and Collaboration, is at the center of this landscape. All knowledge management activities have to be tethered to the gravitational pull of the core corporate strategies. You don’t want any runaway knowledge management projects drawing off resources and attention from the true business of the organization. And all knowledge management activities are built on a platform of information plus collaboration. Even those that are largely focused on information management require collaboration to be assembled, introduced, and maintained.

Orbiting around this center are several constellations of possible knowledge management initiatives. Each one relates to one of the four strategic knowledge management areas in the RICE model. We will describe them in a particular sequence, but they actually can be orchestrated in any order that fits the strategic imperatives. And they may not all fit into your unique corporate environment.

Competency modeling, distance learning, and expert networks focus on recognizing, developing, and improving the skill base of the workforce—spreading the know-how.

Competency Modeling. Once you have a clear vision of the strategic direction of the corporation and know what your core business is, you need to staff it with people who have the right skill sets. You will need systems and technology to accomplish three goals:

•   Assessing the skill base of your current employees

•   Providing the learning environments employees need to upgrade their skills

•   Instituting systems for continually reassessing and advancing that skill base

A key first step is to know the current competency profile of the organization. In order to determine hiring needs, training needs, staffing directions, and career development, you need to know who knows what. And to prepare the organization for future growth in the knowledge arena and cultivate the right future capabilities, you need to know its current capabilities. A competency modeling initiative can have real strategic value, with visible and useful results. The company finds out where its intellectual capital strengths and deficits lie, and employees know which of their strengths fit the company’s needs and which need developing.

Our hypothetical Vice President of Human Resources has primary responsibility for finding strong job candidates, hiring them, and training them. This is one of her top strategic imperatives. The company’s leaders tacitly expect that employees’ skills and competencies will keep pace as their jobs evolve. But they have not established objectives, formal processes, or ways to measure progress. The company has no systematic process in place for continuous assessment of employee competencies. Keeping employee skills at levels commensurate with changing job needs is more of a tacit expectation rather than a measured objective. Employees are told that they have five days of training available to them each year; but no one monitors whether the training days are used to train for tomorrow’s job requirements—or even if they are used at all. And there is certainly no system in place for recognizing employees with valuable aptitudes and proactively providing them with the right education. Our VP is beginning to see a possible match between a competency modeling initiative and some of her objectives.

Distance Learning. Once you’ve made this competency assessment, you will need to find ways to upgrade and continually elevate the skill base of the organization. Particularly if you’re a global, distributed company, you will need to find ways to provide this ongoing learning without continually having to remove people from their day-to-day work to bring them face-to-face for classroom teaching. Distance learning environments may become part of your strategy. Distance learning can be in the form of computer-based training in which an individual learns from a CD-ROM or a self-paced Web-based module at a desktop. Or, distance learning can be interactive and group-based using technology to create a virtual classroom with students in multiple locations and an instructor who can share a white board, manipulate objects, take quizzes, and post and respond to discussion points.

In large professional services firms, where at any given moment 50 percent of the workforce is either leaving or just coming on board, the need to retain knowledge and train new people rapidly requires some creative learning options. One option is an on-line education system that can provide employees with learning on their desktop computers, while they stay on the job. For example, if you’re a consultant, you’ve just joined a new firm, and you are about to begin your first engagement, you can review a virtual, interactive module on contracting as you’re about to set off for a meeting with your new customer.

Expert Networks. Once you have systems in place for assessing and upgrading the skill base of your workforce, you will have taken some large steps toward increasing the overall know-how of your people. Next, you will need a system for tracking and locating these highly skilled people—so you know where they are, what they’re doing and learning, and how to find them. You have created a strong expertise base; now you need a way to tap into it, as needed.

As we discussed earlier, the knowledge needed to address changing customer and market shifts may not be located in any one document or report. That knowledge may be in tacit form, in the minds of several experts. Organizations need some form of expert networking system to track down the right people who have the right knowledge to contribute to a project team, make a high-level decision, or respond to a customer crisis.

A very simple version of an expert network or employee profiling system is the company white pages—a simple, searchable directory of names, locations, and reporting structures, preferably on-line. IBM’s Blue Pages is such a system. These systems provide basic information, but are not very useful for helping a manager identify the right person to work on a particular, complex problem. Some systems include on-line resumes, a list of copyrights and patents won, and a list of most recent projects worked on. This is more useful, as long as it is on-line and searchable, but it is still static. The onus is on the employee to update the information, and that rarely happens.

Expert network systems are being developed that are capable of automatically culling relevant profiling data from existing sources and automatically keeping the employee profile current. With the employee’s knowledge and approval, these systems can pull relevant information from places such as other company databases, internal knowledge community websites, and the training and education system. These kinds of expert network systems enable managers to match employees with detailed work requirements—for example, someone with experience in both Web interface design and marketing in the Asia-Pacific region

So far, our Vice President of Human Resources is very interested in these three types of initiatives—Competency Modeling, Distance Learning, and Expert Network. She sees that these areas fall within her strategic objectives. They could add significant value to HR’s contribution to keeping the company’s overall know-how at high levels. She is eager to get started, but we would recommend that she subject her first impressions to a more rigorous due diligence.

Innovation initiatives focus on the systems and technology that are concerned with developing new processes and products.

Innovation Systems. Once you have a skilled workforce continually upgrading its know-how, and you have a way of finding out who knows what and where these individuals are, you need to have this workforce doing work that increases the overall core competency of the organization. They need to be doing the work that keeps your company “best in the world” in its market. They need to be able to innovate to develop new products and new processes.

Innovation is actually a complex series of processes and will require several layers of support. On the cultural side of the spectrum, the corporate environment needs to be one in which new ideas are nourished, mistakes are not punished, and crosspollination is encouraged. The overall culture needs to be one of knowledge sharing, not knowledge hoarding.

In an innovative culture, employees need an idea collection and review system into which they can pump their new ideas. Many times a day, workers uncover challenges and come up with good ideas for addressing them. Most of these ideas are lost because no system exists for collecting them. One of the simplest things a company can do is institute an idea-harvesting system. If this system is electronic, employees can submit ideas anytime, anywhere, and the ideas can be searched, sorted, and organized easily. The following are key elements of such a system:

•   It is accessible and easy to use

•   All ideas are welcome

•   A review process is in place to advance promising ideas beyond the suggestion stage to implementation

An innovation system also needs review and implementation components. A system must be in place to review ideas submitted and to assess them based on their potential for high value and their fit with corporate strategy. Promising ideas then need to be adequately funded and supported so that some of them can result in new or improved products and processes.

Decision Systems. One could say that the business of management is to make decisions and to see that those decisions are turned into actions. Managers make dozens of decisions every day. Some of these fall within the scope of the manager’s knowledge domain and sphere of influence and can be acted on relatively quickly. Many involve multiple fields of knowledge and several constituencies. If the innovation system is successful in eliciting a fruitful crop of new possibilities, tough decisions will have to be made about which projects to fund and resource. High-level decisions concerning global strategy, product direction, and sales and marketing systems are often so complex that expertise from outside the company needs to be brought in. And the window for making effective decisions opens and closes on Internet time and grows shorter as competitive challenges accelerate.

Decision systems help managers make sense out of data and information. They can involve both technology and community. The technology can help to analyze the layers of compound information that go into making complex decisions. And the community of decision-makers can apply their tacit understanding and personal experience base to make sense out of ever-changing information. Effective systems can help managers see intersecting information sets and patterns, track trends, make comparisons and benchmark, and even create scenarios. They can also help to surface critical inconsistencies and valuable new questions. Decision systems can be combined with an expert network system so that the right set of expertise is brought to bear on a problem.

Efficiency initiatives focus on group collaboration to deliver value and to improve the existing processes of the organization. This is where people work, day to day, in teams and communities.

Team Rooms. Much of the day-to-day work of business happens in teams. Teams develop products, conduct research efforts, develop strategy, sell to customers, and engage in innumerable other activities. These days, teams are rarely together in one office where they can see each other any time. The globalization of companies and the ever-increasing pace of mergers and acquisitions and partnerships mean that team members are often spread across several regions and work in many functions and divisions.

The image of a team as a defined group of people hunkered down around a table committed to working on one project harks back to the height of the industrial era. In the Internet era, teams are dynamic, changing, mobile, and global. This represents a challenge. The players are often on the move, but the work still has to get done in a timely, efficient manner. Development teams at pharmaceutical companies are often composed of a core team of scientists dedicated to that product, along with a rotating membership of statisticians, legal consultants, and manufacturing representatives who spread themselves over several teams. Client engagement teams at professional services firms may have consultants from many regions—wherever the customer has offices—and will call in specialists as needed. Product development teams may outsource component parts of the overall work to other companies. Even teams that are located in one place may operate on shifts or have members who often travel. And, given the high turnover rate in many industries, you can count on team membership changing during the lifetime of any effort.

Technology can play a vital role in helping teams coordinate complex work across the boundaries of time and space. Teams often use a combination of tools to ensure the effective management of projects even though the team membership is distributed and changing.

In essence, just as co-located teams have had a “war room” which they can plaster with charts, schedules, and models; distributed teams need a virtual team room to help them coordinate the complex pieces of their overall project. We are using “room” as both a metaphor and an actuality. Teams need some space in which to work—be it a composite of several ingredients, or a full-scale virtual space. Some teams create this room using e-mail to communicate and maintain records. Others use a group calendar to share schedules and plan milestones and meetings. Many distributed teams are beginning to use virtual team spaces—electronic databases and websites—to share information, coordinate and track actions, and house their work products. These virtual teams call for new leadership styles and new team roles such as on-line team facilitator.

One of the advantages of using an electronic space that can retain a record of the team’s work is that this record, in and of itself, often becomes an important knowledge artifact. The process a team used to reach key decisions, the record of those key decisions, the trail of actions assigned and actions completed, the results of experiments and conversations—all these elements represent the tacit knowledge of the team, now rendered explicit in an electronic container. Hallway conversations help only those who happen to participate. Virtual conversations and records can be there for future team members and future project teams to refer to. Wheels don’t have to be reinvented if they have been archived and can be found and reused.

There is no one right team tool or tool set. The team and its managers will need to determine the media that best serve their needs. What is essential is that dynamic, global teams be provided with the electronic tools they need to get their jobs done. No tool, no matter how sophisticated, will turn a group into a high-performance team. A clear mission, along with clear objectives, goals, roles, and values, is the essence of team performance. Technology can help enable high performance, but it cannot inspire it.

Team Networks. Teams generally do not operate in isolation or as stand-alone units. A team is often part of a string of teams working in collaboration to deliver pieces of a larger whole. We call these strings of teams “team networks.”

An organization may have several teams working side by side on different components of one overall project. For example, at a pharmaceutical company, one team may be working on a solid form of a new drug while another is working on the liquid form. Or teams may work sequentially, with each team handing off its completed piece to the next team who adds subsequent components. One team may be assigned to the first version of a new product and a second team, perhaps with some of the same members, may come on board for the second revision.

The work of one team intertwines with the work of many others, at multiple points along the production continuum, working in related domains. A software product development effort involves a team network: teams who are coding, teams who are checking the code for errors (quality assurance), and teams who are creating the product documentation. Teams like these need to share information and knowledge. In fact, the efficiency of information exchange and collaboration among all the teams is essential to producing the desired results.

Breakdowns often occur at the intersections of these teams. Communication about expectations, deliverable schedules, and responsibilities sometimes gets lost in the space between teams. For example, if a software development team decides to shift directions in a feature set without the proper processes in place for informing the quality assurance team or the documentation team, those teams will lose valuable time working on outdated code. And more often than you might think, sale teams from the same company do not communicate with each other and end up pitching to the same customer and inadvertently underbidding and competing with each other.

These types of side-by-side teams need a system that supports interteam communication and collaboration. And managers who are responsible for the big picture need a way to manage information and activity flow across teams. Again, technology can play a pivotal role. Systems can be set up that automatically notify a team member, a manager, or the entire team when a critical decision has been made that has cross-team impact or when one team requires an action by another to reach a critical project deadline. Postings from one team’s virtual work space that are red alerts to other teams in the network can automatically appear in those teams’ virtual space or in their e-mail. Key learnings, or knowledge nuggets, created and posted in one team’s work space can be flagged and harvested to a communal team space so that all interested parties can benefit. With team networks, as with teams, technology cannot substitute for well-thought-out process and cultural considerations. Teams need to be willing to collaborate and understand their shared objectives if technology is to add value.

Community Space. Communities have always existed as a means for people to make connections around common interests and leverage the strength of many—from medieval craft guilds to modern urban neighborhood watches. Communities are nothing new. What is new is that corporations are recognizing the tremendous advantage the community concept offers as a strategic advantage.

Communities in organizations become hubs of knowledge exchange. They are the meeting place, physical and virtual, for people with shared interests and practices to come together for their benefit, each other’s benefit—and the company’s benefit. In an unpredictable, fluid, global environment in which the strategic direction, the players, and the very boundaries of the organization can blur and shift without much warning, communities become home base and are often where people go to learn about the organization and to master the tools of their trade. A new regional sales manager in a consumer products company needs to know who’s who, how things get done, and how other sales managers become successful. She is not likely to get the full information picture from her boss, her subordinates, or Human Resources. She needs to find and plug into the informal communities in her areas of practice that will help her come up to speed as quickly as possible and begin to form the essential ongoing connections she will need to stay successful. She needs communities.

Communities are the social infrastructure of ongoing knowledge creation and exchange. They focus on enhancing overall know-how and core competencies, not on building a specific product. Engineers at Royal Dutch/Shell meet to discuss innovations in deep-water drilling. Engineers at DaimlerChrysler transfer their lessons learned across the company. Scientists in specialty fields at IBM Research share findings and provide consultations across geographies. Xerox repair technicians share their war stories and lessons learned to create a dynamic learning system that far surpasses the static technician repair manual. These are all examples of corporate communities that serve social, learning, and strategic purposes.

Communities provide links among moving targets and pathways through shifting organizational sands. They last longer than teams, and often longer than some departments. While its membership may change, the community itself persists, and can be the continuous learning environment in the ever-changing corporate landscape.

Communities exist naturally in organizations. Managers need to determine which of these contribute to enhancing the corporate culture, organizational learning, and organizational core competence. For these valuable, self-seeding kinds of communities, corporate policy and managers need to offer sustenance in two forms:

•   Providing resources—meeting rooms, databases, time and funding for conferences, online community facilitators, etc.

•   Reducing interference—preventing people from trying to manage communities as if they were projects. A more organic approach is required in which the natural momentum of the community is the driver, not management by directive.

Managers may also be able to catalyze potential new communities into life. Starting new communities can be difficult. They often show initial promise, then quickly fizzle. Buckman Labs has been successful at creating communities that share innovative ways of solving customer problems. Some professional service firms have created communities in specialty practice areas to share best practices. The organization can emphasize the strategic value of this new community, find talented allies and proponents, and fund a kick-off meeting where people can meet face to face. Then it is up to the community members to find their own ongoing purpose and process.

Technology as an enabler of ongoing communication is very valuable in helping to maintain the cohesiveness of the community over time and space. Communities, like teams, need contact to rekindle the social links. Especially if the community is large and widely distributed geographically, face-to-face opportunities are rare and expensive. Technology can:

•   Provide various settings for large and smaller group interests

•   Enable large group discussions and one-to-one chat

•   Offer on-line learning modules

•   House a library of materials relevant to the community

•   House an archive of community artifacts and products that may be of value to new members and to the larger organization.

A Community Space technology can help a diverse community stay focused and connected and can become a greenhouse of reusable knowledge assets.

Responsiveness activities are concerned with taking in information from the marketplace and using that information to respond to customer interests.

Knowledge Commerce. Knowledge commerce is a vast realm, encompassing areas such as e-business, business-to-business, employee-to-business, and customer relationship management. Knowledge commerce refers to those initiatives that leverage Internet (and extranet) capabilities to sense and respond rapidly to customer and market shifts and take advantage of emergent business opportunities.

Knowledge commerce activities can exist within the organization. More importantly, they link the organization to the outside world (in what is often called e-business)—to its customers, other businesses, vendors, suppliers, partners, and to potential new collaborators. In a recent survey, the Gartner Group predicted that Internet-based business-to-business activities—a $145 billion market in 1999—will reach $7.29 trillion worldwide by 2004. (The total amount of all business-to-business sales last year was $14 trillion.)²

Knowledge commerce activities are varied. Business-to-business commerce, such as supply chains, use the Internet to link multiple players in series of complex interactions. Manufacturers can interact directly with consumers, distributors with suppliers, and consumers with each other. Customer relationship management systems can keep customer knowledge and industry research fresh and available to all who need it.

The magazine Fast Company has created a community of its readers who interact with each other and with staff on its website. This not only draws readers closer to the magazine, but can also serve as an early detection system alerting editors to the latest reader interests and reactions. Hyundai uses a B2B system to stay closer to its dealers and enable them to see regular updates in its catalogue and learn about special dealer-only inventory and promotion offers. Honeywell is implementing a B2B Internet ordering system for the auto dealers, parts distributors, lube centers, and retail chains that stock its consumer products. On the buyer side, General Motors, Ford, and DaimlerChrysler are setting up an e-marketplace for their suppliers. Currently, these three companies spend $240 billion a year on the parts and materials they buy from suppliers.³

Knowledge commerce can also include the development of new knowledge internally which then becomes available to the marketplace. The knowledge that companies produce as part of their day-to-day operations can develop into new, sellable products or services. The Balanced Scorecard, for example, was developed for business clients by Robert S. Kaplan, a Harvard Business School professor and David H. Norton, a management consultant. They have evolved the approach into a consulting product which they license to certain consulting firms. Lotus Institute, an R&D facility within Lotus/IBM, developed a tool (TeamRoom) and a process for helping to better orchestrate the work of internal teams and task forces. The design principles and the implementation methodology that were refined internally evolved into new product offerings for customers: a new template included with the core product offering and a stand-alone hostable team tool, Quickplace.

By now, you are probably beginning to consider some of these possibilities for your own organization. For our new VP of Human Resources, it is becoming clear that competency modeling, distance learning, and an expert network could be valuable initiatives. She is also wondering if spearheading a company-wide program to accelerate virtual teaming might integrate Human Resources even more fully into the day-today processes of the business.

Take a Moment

Take a moment to note which of these areas are beginning to seem more likely candidates for your own organization’s knowledge management focus.

Consider the following list of questions as you begin to construct your own knowledge management strategy:

1.   Strategy

2.   Knowledge

3. Culture

4.   Technology

Recap

This chapter focused on how to launch a knowledge management initiative. It builds on the RICE model—Responsiveness, Innovation, Competency, and Efficiency. We have explored how a manager charged with launching knowledge management can focus on nine specific action areas linked to each part of the RICE model. These action areas provide targeted ways to assess and build competency, use knowledge to make processes more efficient, increase responsiveness, and nurture innovation.

Endnotes

¹ James Brian Quinn, “Strategic Outsourcing: Leveraging Knowledge Capabilities,” Sloan Management Review, Summer 1999, 9–21.

² Michelle Delio, “Bridging B2B with B2E,” Knowledge Management, May 2000, 18; Louis Uchitelle, “Business to Business; It’s Just the Beginning,” New York Times, June 7, 2000.

³ “Business to Business: It’s Just the Beginning,” New York Times, June 7, 2000.