Practical Aspects of Knowledge Management Knowing what knowledge is

Lately I’ve been monitoring some heated discussions in an online community dedicated to Knowledge Management (KM), and while it’s fascinating, I’m a bit out of step with the group’s comments and concerns. Much of the energy and debate seems focused on defining Knowledge Management, on what ”knowing” and ”knowledge” are, and how to build a case with senior management for launching a KM initiative in a large company. Interesting topics, but most of the concerns seem awfully academic. Some participants are so consumed with the issue itself that they’re missing the fact that many companies already accept that effective KM is crucial to their success – they just want to figure out what to do and how to do it, and fast. Here I offer not a general answer or one suitable for any particular organization, but rather a short case study describing a set of principles and observations drawn from our experiences at Viant, where we are aggressively experimenting with and adapting our Knowledge Management processes as we build our company.

Conditions required for the success of KM Before getting into some of the practical aspects of KM, I propose the following initial and ideal organizational conditions, which can help KM take root and flourish. For medium to large companies that have been in existence for years, changing the mindset and habits of hundreds or thousands of employees to create this environment may well be the toughest hurdle. Any company that can start fresh, writing new rules and building a culture that supports KM, has a distinct advantage in this area. Either way, for a KM initiative to be successful, employees must have the motivation to participate, access to adequate training when necessary, feel a sense of security in sharing their knowledge, and get some form of reward for doing so. When the goals of individuals are aligned with those of the company, people adopt behaviors that are consistent with those required for the success of KM.

Conditions at Viant that make KM necessary Founded in 1996, Viant is a professional services firm that helps companies build digital business strategies, brands, operations, and implementations in the I*Net space. Our founders had some lofty goals about openness, sharing, and lack of rigid hierarchy – a tall order, but not too hard to achieve in a company with 50 people in two offices. Now, with more than 400 employees in eight offices from Los Angeles to London, Viant is moving away a bit from the ”start-up mentality,” but is still focused on preserving an environment that remains conducive to KM. Truth is, it’s more important now than ever before, and it will become increasingly valuable as we grow. To deliver value to clients, Viant brings together a range of skills and backgrounds to address the needs of companies ranging from Fortune 1000 to still-need-a-business-plan startups. Employees who may have never met are working on similar projects or encountering similar problems. They need facilities for recording and locating explicit knowledge assets, allowing reuse of materials that may contribute to the completion of their projects. They also need the ability to locate and interact with experts and interested parties, sharing tacit knowledge in collaborative communities. Clearly, there’s a lot of KM ground to cover.

Conditions at Viant that make KM a reality To make KM work at Viant, we start with the directive stated above: aligning the goals of individuals with those of the company. Our corporate goals include rapid but stable growth, while continuing to perform innovative and challenging work that meets or exceeds all client expectations. These goals cover both motivation and reward. They resound with employees, who want to do the most interesting work possible, as well as build a successful firm that can, and will, contribute to their own financial goals. All Viant employees receive stock options upon joining, making each of us a shareholder. Security comes from the understanding that knowledge sharing presents no risk to our job or our chances to pursue the path we find most satisfying. Again, the founding principles of openness and sharing, and the absence of a rigid hierarchy – actively preserved as we have grown – make this kind of security possible. And in fact, security is tied to reward – sharing knowledge and experience is actively encouraged, and Viant rewards performance and growth in the form of public recognition and direct compensation. Performance is defined as an individual’s direct contribution to the success of client projects; growth encompasses demonstrable personal skill growth, role growth, and the individual’s contribution to the growth of the firm. Finally, all employees start their Viant careers with a mandatory training program we call QuickStart. Held monthly in our Boston headquarters, new hires from all offices spend three weeks together, learning about Viant’s culture and norms, the processes that guide our work, and the infrastructure and systems that support us. This training comes together in week three of the program, with small team projects that replicate our project environment. When QuickStarters return to their home offices, a support structure is made available to them in the form of KM specialists,

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or Project Catalysts, who provide ongoing help and assistance in the correct application of process and the best use of the systems and tools at hand. Additional training, delivered in-house, on-line, or in classrooms outside the company, remains available to all employees throughout our time at Viant. Training, too, is tied to reward: two-thirds of Viant’s recognition and compensation program is based on growth and learning. All of these cultural norms and programs create an ongoing motivation to participate in KM for the ”greater good.” Incidentally, there’s also the matter of technology infrastructure. Serving clients’ needs in the Internet space has also helped us think through our own needs to build a robust and pervasive infrastructure that supports all Viant employees in all offices. As a result, individuals and teams have access to the full knowledge and resources of the firm from any Viant office worldwide. Connected by high-speed lines, we share a common email system and an Intranet that provides staff and revenue reporting, project collaboration, document sharing and categorization, plus index and search capabilities.

Where to begin? To launch a KM initiative in your organization, start by considering the four primary cultural factors: motivation, security, reward, and training. What can you do to promote these? Stating the explicit goals for your KM initiative and some success metrics to measure performance against those goals is important for management buy-in. No matter what the goals might be, success will require that some individuals put something into the initiative to get it going, without receiving any direct immediate benefit. This calls for the dedication of ”true believers,” or maybe someone willing to make that their job responsibility for a while – it takes time to define and put in place the processes. Once you figure out a plan to capture and categorize explicit knowledge, or facilitate the creation of communities to share tacit knowledge, you can pilot a program with a minimal amount of funding and technology infrastructure. You may even have spare capacity on some systems where you can embark on your efforts without much expense. To recap: when developing a KM program, consider cultural factors, define goals for success, lead with process, and let technology follow once you know what you really want.

Define goals and success metrics Goals can take many forms. For some companies, the primary goal of a KM initiative might be to make more of the tacit, or ”unspoken,” knowledge in the organization explicit, and then create mechanisms to share it. Others may choose to ignore recording and categorizing explicit knowledge, preferring to create opportunities for direct collaboration where knowledge seekers locate experts to interact directly, even if those interactions go unrecorded and not made explicit. The goals of Viant’s KM program are simple, and defined with a focus on project teams: to improve the efficiency, repeatability, and consistency of those executing client work. Even though all clients and their needs are unique, we encounter many patterns and similar elements in our work. That’s why we have placed emphasis on capturing and conveying explicit knowledge, both in the process of delivering client work, as codified in Viant’s Service Model, as well as in the artifacts required to complete that work, such as financial models, creative style guides, system architectures, source code, etc. Measuring success is a step that’s easy to skip, which isn’t fatal at first, but if you clearly define what you hope to get out of a KM initiative and create a way to actually measure it from the beginning, you’ll be much better off. Remember that KM costs an organization in people, in time, in the ”extra” work it demands at the beginning (at least until critical mass is achieved), and in the financial investment required for hardware and software. Even in the most enthusiastic organizations -those that already believe in the value of KM – having some indicators to track and measure success over time are important to ongoing executive support and good employee participation. Viant has three ways of measuring the success of our KM efforts: activity, investment, and effectiveness. The following are some of the areas to which we apply those measures. Core Knowledge represents generally accessible assets (documents, charts, graphics, papers, etc.) that have been identified as having the potential for broad reuse or reference. Core Knowledge assets are ”scrubbed” of any mention of specific clients, and may not contain real client data. Community Workspaces represent email list servers, threaded discussion groups, and shared document repositories that allow communities to form and collaborate around a specific topic. Directory Assets are those that usually have no intrinsic value, but organize, recommend, and direct people to other assets that may be used directly in their client work. (Note that Directory Assets themselves may be directly applicable to a team’s client work if the client is pursuing a KM initiative.) Activity is measured monthly by analyzing information associated with KM system use, including:

• Total number of Core Knowledge and Community Workspaces, and the number of newly created ones.

• Number of accesses to KM Directory Assets.

• Total number of documents classified as Core Knowledge, and the number of newly created ones.

• Number of unique user accesses of Core Knowledge documents.

• Total number of established, active communities (leader/moderator + collaboration space + activity).

• Total number of collaborative Community Workspace sessions/threads conducted.

• Total number of Viant experts accessed from other project teams via KM channels.

• Total number of Project Catalyst interactions with project teams and communities.

Investment is measured monthly in total dollars allocated to salaries, hardware, software, and services, and in total person-weeks spent on KM activities such as training and knowledge capture. Each month, we analyze:

• Total number and total salary of KM personnel.

• Total spent on outside KM services/contractors.

• Total capital investment for KM & Collaboration (hardware and software).

• Total person-weeks allocated to dedicated training (QuickStart, classroom, online).

• Total person-weeks spent by project teams in knowledge capture and making assets reusable.

Although the effectiveness of our KM program cannot be measured directly, it can be measured through a set of proxies. The items we track monthly include:

• Percent of accesses to KM directory assets that lead to use of a project-related asset.

• For completed projects, the percent of project deliverables derived from reused assets.

There are also several ”soft” factors that are more difficult to measure or to prove are the direct result of KM activities, but which we strongly believe are affected by it. These include enthusiasm and support by all employees for KM efforts, and the external image this helps Viant build with potential clients and investors. There may also be a correlation between KM activities and project profitability. We will look for these correlations; if we identify any, we may attempt to prove causality at that time.

Put processes in place Once goals and metrics to gauge them are defined, carefully consider the processes that will work in your organization. You’ll want to help create and advance a culture that supports KM (or a sub-culture if you’re starting at the departmental level). Not all KM practices require a lot of technology to support them, and many begin with little more than file sharing, list servers, and email capabilities. After all, the goal is get people to record and share knowledge, or to find each other and interact directly. What you will need, however, are defined processes or channels, with effective owners or champions. There must be at least one person in the organization dedicated to driving your KM initiative, and bearing the responsibility for its success or failure; better still, a few people. Once they’re done defining it, they need to spend time ”selling” it – informing, inviting, cajoling, reminding, training, and challenging people to participate. If all goes well, enough people in the organization will buy in and become secondary agents. Through their belief in the KM program and the benefits they receive from it, they will naturally and informally assist in propagating it, building support, and helping it to spread more rapidly. Within Viant, several groups participate in the processes that directly support KM. Each has a primary target audience they are meant to support. The Development & Learning group runs the QuickStart program, and organizes much of the subsequent training and direct mentoring available to all individuals. Regional Discipline Leaders help organize the technology, strategy, and creative communities by chairing periodic conference calls that we call Conduit Calls. These calls include a few key members of the community from each office, who then serve as conduits to report back to the rest of the local community. They also capture news and issues from the community and discuss them on the Conduit Call. The discipline leaders also track the needs of their communities in terms of best practices, emerging trends, and needs for training and resources. Finally, the Catalyst group concentrates on helping project teams execute efficiently by addressing their needs in the areas of tools, assets, processes, and knowledge. Regional Project Catalysts support project teams by coaching them in best practices in our delivery process, helping them locate assets and expertise that is relevant to the work they are doing, and training them in the correct and complete use of the various systems available to them. Based on frequent interactions with many project teams, the Project Catalysts also publish a monthly report, which is distributed over the Intranet, describing best practices, lessons learned, and best-of-breed assets contributed by those teams. All of the support roles described above are full time, meaning the people who perform them are not staffed to client work at the same time. Some people accept these support roles permanently, while others commit to the role for one year. In the latter case, these individuals have usually done client work prior to their rotation, and plan to return to it at the end of their tenure.

Add supporting technology Finally, it’s time to think about the technology you will need to support the goals you’ve specified, the stakeholders you’ve chosen to support, and the way your organization works (or is willing to work). For example, if your goal is to capture and categorize explicit knowledge, you’ll need a document store, a database, an index & search engine, and a web server. Workflow support for document authoring and publishing may also be important. You’ll require a process to define a categorization hierarchy or nomenclature for documents, identify the best ones to capture, clean them up or convert their formats for publication if necessary, and categorize them. Ongoing processes will also be required to identify new documents that belong in the document store and categorize those. Note that this is somewhat process heavy, and may be seen as intrusive in some organizations. As a result, some organizations choose paths they see as less intrusive. One example is the class of email monitoring and analysis software. Such software analyzes the content of selected emails (which theoretically, people are already creating), and profiles employees’ areas of expertise and interests. Once profiles are built, employees can submit questions targeted at subject matter experts, or explicitly search for expertise. Many ”Big Brother” concerns surface in this area. However, depending on the specific product, only emails specified by the creator will be analyzed, and each individual’s expertise profile will remain under their own control, hidden until that person chooses to expose it. Supporting technology here includes email servers, web servers, a database, and the expertise profiling software. Another category of software deals with communities and collaboration. Rather than try to record assets or profile individuals, bring people together to share ideas and experiences. The mechanism by which the communities come together may be ignored by the supporting products, but real-time chat software, asynchronous threaded discussions, video conferencing, live document sharing, and whiteboarding can all contribute to compressing distances, reducing travel costs, and allowing idea sharing to flourish. To provide end-users with a consistent and coherent experience that unites separate products, systems, and information stores, several vendors offer web portal products. These allow information to be united for display on a single screen in a web browser, as well as for search purposes, combined as a single logical source of data and information. For organizations that have a variety of legacy systems and sources of data – many that may have no web-based interfaces – this is an effective way to unlock, unify, and deliver a large amount of information that could not be accessed previously using pervasive and affordable technology. Viant has combined many of these elements in our Intranet system, and created some custom applications, as well. For more than two years, we have been using a web-based enterprise document store that allows categorization and search, and supports secured access. Separate workspaces are organized for each project team, community, and area of corporate core knowledge. Corporate news and headlines are placed on the home page of the Intranet, keeping everyone informed about major events of broad interest. Several Resource Centers exist to help employees navigate through process- oriented areas or special topics. Through a separate system, employee information is available, with project staffing history and skill profiles. The professional resumes of all consultants are also available, and may be searched as well to locate subject matter experts. All employees may contact each other through email and live chat sessions, and may discuss topics of interest through threaded discussion groups and list servers.

Looking ahead In the coming year, we will unite some of these capabilities behind a corporate portal, allowing personalization and customization so that each employee can combine the elements most important to them into a single view that best supports the way they prefer to work. Copyright © 2000, Viant Corporation. All Rights Reserved.

Sharing the Wealth

How Siemens is using knowledge management to pool the expertise of all its workers

In July, 1999, about 60 managers in Siemens’ telecommunications division (SMAWY ) were deposited on the shores of Lake Starnberger, 12 miles south of Munich, and told to build rafts. All they had to work with were steel drums, logs, pontoons, and some rope. Another catch: No talking. The managers, who gathered from offices around the world, could only scribble messages and diagrams on a flip chart. For the better part of a day, it was knowledge-sharing at its most basic. Yet the group managed to put together a small fleet of rafts, which they paddled about triumphantly on the placid waters of the lake. Okay, Survivor it ain’t. But the exercise has its own can-do lessons for companies trying to find a competitive edge in a slowing economy. The raft confab showed managers just how vital sharing information can be. It was organized by Joachim Döring, a Siemens vice-president in charge of creating a high-tech solution to the age-old problem of getting employees to stop hoarding their knowhow. His grand plan: Use the Internet to spread the knowledge of 461,000 co-workers around the globe so that people could build off one another’s expertise. “People who give up knowhow get knowhow back,” says Döring, a hyperactive 31-year-old who likes to spend his free time skydiving. At the heart of his vision is a Web site called ShareNet. The site combines elements of a chat room, a database, and a search engine. An online entry form lets employees store information they think might be useful to colleagues–anything from a description of a successful project to a PowerPoint presentation. Other Siemens workers can search or browse by topic, then contact the authors via e-mail for more information. So far, the payoff has been a dandy: Since its inception in April, 1999, ShareNet has been put to the test by nearly 12,000 salespeople in Siemens’ $10.5 billion Information & Communications Networks Group, which provides telecom equipment and services. The tool, which cost only $7.8 million, has added $122 million in sales. For example, it was crucial to landing a $3 million contract to build a pilot broadband network for Telekom Malaysia. The local salespeople did not have enough expertise to put together a proposal, but through ShareNet they discovered a team in Denmark that had done a nearly identical project. Using the Denmark group’s expertise, the Malaysia team won the job. Better yet, the system lets staffers post an alert when they need help fast. In Switzerland, Siemens won a $460,000 contract to build a telecommunications network for two hospitals even though its bid was 30% higher than a competitor’s. The clincher: Via ShareNet, colleagues in the Netherlands provided technical data to help the sales rep prove that Siemens’ system would be substantially more reliable. ShareNet is a case study in knowledge-management systems, which are gaining a foothold in corporations around the world. Advocates preach that the collective expertise of workers is a company’s most precious resource, so executives need to tear down the walls between departments and individuals. By using the Net, companies can quickly and easily unlock the profit potential of the knowledge tucked away in the brains of their best employees. While only 6% of global corporations now have company-wide, knowledge-management programs, that will surge to 60% in five years, according to a 2000 survey by the Conference Board. Among the early birds: Chevron (CHV ), Johnson & Johnson (JNJ ), Royal Dutch/Shell (RD ), Ford

Siemens’ project has become something of a poster child. For the past two years, it has been voted “best practice” by members of the American Productivity & Quality Center, a Houston-based industry group with more than 400 member organizations. “They’ve accomplished a whole lot more as compared to any other organization,” says Farida Hasanali, a project leader for the center. Companies, including Intel (INTC ), Philips, and Volkswagen (VLKAY ) studied ShareNet before setting up their own knowledge systems. Siemens has had little choice but to lead the parade. The $73 billion conglomerate, which makes everything from X-ray machines to high-speed trains, is under intense pressure because of uncertainty about the global economy and shrinking profit margins. Some analysts believe it may have to sell off chunks of its empire, perhaps divesting slower-growing industrial units such as power plants and focusing on tech businesses like telecom and medical technology. Boot Camp. That’s a path Chief Executive Heinrich von Pierer rejects. He is trying to prove big can work–and might even be an advantage in the Information Age.

The CEO wants to take the ShareNet approach beyond the telecom unit to every nook and cranny of the Siemens empire. Next up: people who service telecom equipment and scientists in research and development. Siemens already has staged a ShareNet boot camp for telecom service people and started rolling out the system. So far, a few hundred of the staff of 10,000 are online. “The only rationale for these businesses staying together is if they share their knowledge,” says Thomas Davenport, director of the Institute for Strategic Change at Accenture, formerly Andersen Consulting. Davenport has worked as a consultant to Siemens and is co-author of an in-house textbook on the company’s knowledge-management programs. Siemens may even set up specially tailored ShareNets to give customers direct access to its knowledge storehouse. Döring and his team plan to start small in a few months with an experimental ShareNet involving a few select customers. The puzzle, which Siemens is working on, is how to protect customers’ confidential information. If the system works, customers should get quicker access to technical info, and Siemens hopes the online dialogue will lead to the development of better products. Even though the advantages are clear, getting employees to change their ways and share is the toughest obstacle to overcome. “You have to go in and change processes around. It takes a lot of time,” says Greg Dyer, a senior research analyst of knowledge management services at IDC.

Siemens has tackled this problem through a three-pronged effort. It has anointed 100 internal evangelists drawn from all its country units, who are responsible for training, answering questions, and monitoring the system. Siemens’ top management has shown that it’s behind the projects. And the company is providing incentives to overcome employees’ resistance to change. Delicate balance. Siemens uses the carrot and the stick. Managers get bonuses if they use ShareNet and generate additional sales. But CEOs and CFOs of the company’s country business units can’t collect all their performance-linked bonuses unless they demonstrate that they either gave information over ShareNet or borrowed information from it to build sales. Employees get prizes such as trips to professional conferences if they contribute knowledge that proves valuable to someone else. That may not sound like much, unless you’re a salesperson in Bombay and the conference is in New York. But the real incentive is much more basic. Commission-driven salespeople have learned that drawing on the expertise of their far-flung colleagues can be crucial in winning lucrative contracts. “They realize very soon that people using ShareNet have an advantage, and that convinces them to join the club,” says Roland Koch, CEO of Siemens’ telecom unit.

Now comes the hard part. What’s the incentive for someone in R&D or marketing to use the system? They’ll contribute as long as ShareNet provides useful information in a convenient way. But that depends on a delicate balance between giving and getting, says Döring. People need to believe that if they reveal precious secrets, others will too. “As it gets bigger and bigger, there’s a danger you’ll lose that trust,” acknowledges Döring. Servicepeople will continue to log on if they learn new tricks of the trade. R&D people will join if the system helps them develop new products faster. One challenge is spreading the ShareNet idea around the company without creating an unwieldy monster. Siemens is loath to restrict access or exert too much control over how employees use it. But some restrictions are necessary to keep ShareNets from getting so overloaded with information they become useless. Siemens employs teams of people that keep an eye on ShareNet content and weed out the trivial or irrelevant. It’s not enough to create groovy software. The system has to serve up the best ideas in digestible bites that help people do their jobs better. By Jack Ewing Contributing: Faith Keenan

Copyright 2000-2001, by The McGraw-Hill Companies Inc. All rights reserved.

Intro to KM: Glossary of Knowledge Management (KM) Terms

Balanced Scorecard System (BCS): method of measuring performance of a firm beyond the typical financial measures. Links corporate goals and direct performance measures in a framework specific to a firm, and is one method of measuring the impact of knowledge management. (2)

Best Practice: those practices that have produced outstanding results in another situation and that could be adapted for our situation. (2)

Calculated Intangible Value: an “elegant way to put a dollar value on intangible assets” uses a measure of the company’s ability to outperform an average competitor that has similar tangible assets as the firm’s value of intangible assets. Uses the following steps: 1. Calculate average pretax earnings for three years; 2. Go to the balance sheet and get the average year-end tangible assets for three years; 3. Divide earnings by assets to get the return on assets. 4. For the same three years, find the industry’s average ROA; 5. Calculate the “excess return” by multiplying the firm’s assets by the industry ROA and subtracting them from the firm’s pretax earnings; 6) calculate the three year average income tax rate and multiply it by the excess return, this results in the premium attributable to intangible assets; 7) calculate the net present value of the premium by dividing the premium by the company’s cost of capital. (7)

Case Based Reasoning: a branch of artificial intelligence that attempts to combine the power of narrative with the codification of knowledge on computers. Involves extraction of knowledge from a series of narratives, or cases, about the problem. (1)

Collaborative Tools: tools such as groupware that enable both structured and free-flow sharing of knowledge and best practices. An example is Lotus Notes. (2)

Communities of Practice: aka affinity groups;

A) informal networks and forums, where tips are exchanged and ideas generated. (7)

B) a group of professionals, informally bound to one another through exposure to a common class of problems, common pursuit of solutions, and thereby themselves embodying a store of knowledge. (8)

Core Capabilities:

A) constitute a competitive advantage for a firm; they have built up over time and cannot be easily imitated. They are distinct from both supplemental and enabling capabilities, neither of which is sufficiently superior to those of competitors to offer a sustainable advantage. (6);

B) bestow a competitive advantage on a company . . . distinctive, firm-specific, or organizational competencies; resource deployments; or invisible assets. (6)

Core Rigidities: refers to the idea that a firm’s strengths are also – simultaneously – its weaknesses. The dimensions that distinguish a company competitively have grown up over time as an accumulation of activities and decisions that focus on one kind of knowledge at the expense of others. Companies, like people, cannot be skillful at everything. Therefore, core capabilities both advantage and disadvantage a company. (6)

Customer Capital: the value of an organization’s relationships with the people with whom it does business, or the value of its [the companies] franchise, its ongoing relationships with the people or organizations to which it sells. (7)

Data:

A) set of discrete, objective facts about events. Data is transformed into information by adding value through context, categorization, calculations, corrections, and condensation. (1);

B) facts and figures, without context and interpretation. (2)

Back to the Top

Enabling Capabilities: necessary [to enter a market] but not sufficient in themselves to competitively distinguish a company. (6)

Enablers of Knowledge Management: systems and infrastructures which ensure knowledge is created, captured, shared, and leveraged. These include culture, technology, infrastructure, and measurement. (2)

Experience: refers to what we have done and what has happened to us in the past. (1)

Explicit Knowledge: formal/codified . . . comes in the form of books, documents, white papers, databases, and policy manuals. (2)

Human Capital: the capabilities of the individuals required to provide solutions to customers. (7)

Information:

A) a message, usually in the form of a document or an audible or visible communication . . . meant to change the way the receiver perceives something, to have an impact on his judgment and behavior . . . it’s data that makes a difference. (1);

B) patterns in the data. (2)

Intellectual Capital: refers to the commercial value of trademarks, licenses, brand names, formulations, and patents. (2)

Knowledge:

A) a fluid mix of framed experience, values, contextual information, and expert insight that provides a framework for evaluating and incorporating new experiences and information. It originates and is applied in the minds of knowers. In organizations, it often becomes embedded not only in documents or repositories but also in organizational routines, processes, practices, and norms. Key concepts of knowledge are experience, truth, judgment, and rules of thumb. (1);

B) actionable information. (2);

C) a defined body of information . . . depending on the definition, the body of information might consist of facts, opinions, ideas, theories, principles, and models (or other frameworks) . . . also refers to a person’s state of being with respect to some body of information. These states include ignorance, awareness, familiarity, understanding, facility, and so on. (4);

D) the integration of ideas, experience, intuition, skill, and lessons learned that has the potential to create value for a business, its employees, its products and services, its customers and ultimately its shareholders by informing decisions and improving actions. (5)

Knowledge Interrogators: aka corporate librarian and knowledge integrator; person responsible for managing the content of organizational knowledge as well as its technology. [they] keep the database orderly, categorize and format documents and chucking the obsolete, and connect the users with the information they seek. (7)

Knowledge Management:

A) make an organization’s knowledge stores more accessible and useful. (3);

B) a business activity with two primary aspects: (1) treating the knowledge component of business activities as an explicit concern of business reflected in strategy, policy, and practice at all levels of the organization [and (2)] making a direct connection between an organization’s intellectual assets — both explicit [recorded] and tacit [personal know-how] — and positive business results. (4);

C) conscious strategy of getting the right knowledge to the right people at the right time and helping people share and put information into action in ways that strive to improve organizational performance. (2)

Learning Organization: term popularized by Peter Senge’s the Fifth Discipline meaning a corporate culture that cherishes continuous improvement.

Market-to-Book Ratio: common method of valuing knowledge intensive companies. Equal to (price per share X total number of shares outstanding) divided by book equity, which is the equity portion of a company’s balance sheet. (7)

Rules of Thumb: shortcuts to solutions to new problems that resemble problems previously solved by experienced workers. (1)

Signature Skill: an ability by which a person prefers to identify himself or herself professionally. (6)

Structural Capital:

A) legal rights to ownership: technologies, inventions, data, publications, and processes [that] can be patented, copyrighted, or shielded by trade-secret laws. (7)

B) strategy and culture, structures and systems, organizational routines and procedures – assets that are often far more extensive and valuable than the codified ones. (7)

Supplemental Capabilities: those that add value to core capabilities but that could be imitated. (6)

Tacit Knowledge:

A) [knowledge] developed and internalized by the knower over a long period of time . . . incorporates so much accrued and embedded learning that its rules may be impossible to separate from how an individual acts. (1);

B) informal/uncodified . . . found in the heads of employees, the experience of customers, the memories of past vendors . . . highly experiential, difficult to document in any detail, ephemeral and transitory. (2)

Technological Capability: term used to encompass the system of activities, physical systems, skills and knowledge bases, managerial systems of education and reward, and values that create a special advantage for a company or line of business. (6)

Value Proposition: the logical link between action and payoff that knowledge mangement must create to be effective. Customer intimacy, product-to-market excellence, and operational excellence are examples. (2)

Creating Fertile Ground for Knowledge at Monsanto

There are various paths by which organizations

come to the realization that they must

do more to manage their knowledge. For

many, it follows in the wake of reengineering and

downsizing: with fewer people to do the work, they

need to equip each to work smarter. For others, it’s a

wake-up call from a major customer, taking their

business to a more state-of-the-art competitor. But at

Monsanto, the motivation is more positive, if no less

pressing: here, in the midst of prosperity, the driving

concern is growth.

White Spaces and Gray Matter

When our Chairman and CEO Bob Shapiro took

office in 1995, his first priority was to make

Monsanto more growth-oriented. The demands of

an increasingly global economy were making it clear

that profits for the foreseeable future were not

enough; world-class competitors would be vying for

share, and Monsanto would have to grow faster to

remain a dominant player.

Mr. Shapiro stresses two major themes in his quest

for growth: more agility in existing businesses; and

faster recognition and exploitation of new business

possibilities. With an eye to the first, he effected a

“radical decentralization,” transforming Monsanto’s

four huge operating companies into fifteen business

units—each of a size more conducive to flexibility,

focus, and speed of adaptation. To help with the

second, he charged one of those units to focus purely

Creating Fertile Ground for

Knowledge at Monsanto

on growth opportunities. Called “Growth Enterprises,”

the unit’s mission is: “to grow existing business within

business units and create new business by exploiting

‘white spaces’ where core competencies exist to

increase the overall profitability of the enterprise.”

The “white spaces” concept is an important one

drawn from the work of Gary Hamel and C.K.

Prahalad, but it raised immediate challenges. How

would we find such spaces? What determines

whether they are unexploited opportunities, or

truly barren ground? How can priorities be set

among the opportunities? The key is in the reference

to “core competencies”: growth at Monsanto will be

driven by how well we are able to apply and build

on the knowledge our people already have. The

mission of the Growth Enterprises unit was soon

accompanied by a vision: “to create and enable a

learning and sharing environment where knowledge

and information are effectively used across

the enterprise.”

What Knowledge Management Can Do

From the outset, there has been no quibbling at

Monsanto about the need for more explicit

knowledge management. Our Board of Directors

readily approved a significant investment in it.

But the way to apply that investment was not immediately

apparent: what would do most to make individuals’

knowledge more accessible to others? To

ensure that the best knowledge is being applied

to decisions? To uncover knowledge gaps and to

fill them?

In considering the right approach to knowledge management,

it helped to consult the available literature

on the topic and, even more so, to share ideas with

other managers focusing on knowledge. Our current

thinking is that knowledge management at Monsanto

should focus on five objectives:

T Connecting people with other knowledgeable

people

T Connecting people with information

T Enabling the conversion of information to

knowledge

T Encapsulating knowledge, to make it easier

to transfer

T Disseminating knowledge around the firm

It also seems clear that, despite the claims of some

technology vendors, there are no “silver bullets” to

accomplish any of these objectives. In our knowledge

management efforts, as in any major business

initiative, lasting change can only come about

through a sustained and balanced interplay of

process, technology, and people.

Knowledge Creation as a Process

Most managers today would agree that managing an

area requires an understanding of the basic processes

involved. Certainly I, as a manager tasked with

improving knowledge management, felt I needed a

better understanding of knowledge processes, and

particularly of those involved in knowledge creation.

How does a business become knowledgeable about a

new area (a “white space”)? What’s the difference

between collecting data points and advancing

knowledge? How would Monsanto know if it were

becoming more knowledgeable in net over time?

An excellent resource in thinking about these

questions was the work of Ikujiro Nonaka and

Hirotaka Takeuchi, who wrote The Knowledge-

Creating Company. Their starting point became

Monsanto’s: that, “in a strict sense, knowledge is

created only by individuals.” That observation,

simple as it seems, has served many times as a touchstone

for proposed initiatives. Far from denying the

value of organization-level knowledge management, it

emphasizes the need for explicit efforts to make

knowledge more widely known. In their words,

“Organizational knowledge creation should be understood

as a process that ‘organizationally’ amplifies

the knowledge created by individuals and crystallizes

it as a part of the knowledge network of the organization.”

That process, as Nonaka and Takeuchi describe it, can

seem chaotic—yet there is some orderliness to it.

“Externalization” involves putting knowledge to use;

this happens when the organization makes a decision,

for example, or states a goal. “Combination” is the

bringing together of diverse pieces of knowledge to

produce new insight. And “internalization” happens

when an individual, exposed to someone else’s

knowledge, makes it their own.

The interesting thing is that the process can start in

any of the four quadrants, and will trigger activity in

the others. “Organizational Knowledge Creation,”

explain Nonaka and Takeuchi, “is a spiral process in

which the above interaction takes place repeatedly.”

For this spiral to remain active and ascending, it must

take place in an “open system,” in which knowledge is

constantly exchanged with the outside environment.

And it must be fueled by seeming contradictions and

paradoxes; by constantly challenging the existing

knowledge, these infusions will force higher discoveries

and syntheses. (It’s important to realize that

good knowledge management is not about making

everyone’s life more comfortable. Better to make it

uncomfortable! The knowledge creation process

should generate more questions than answers.)

Reflecting on any typical work week, it’s clear most of

us vacillate between upward and downward spirals.

As might be expected, the downward trend is set in

motion when knowledge activity does not culminate

in “internalization.” Meetings may be called, opinions

may be vocalized, decisions may be made—but if a

significant number of individuals do not leave the

table with their own knowledge enhanced, there is no

lasting gain. For Monsanto, the process laid out by

Nonaka and Takeuchi made the management

challenge clear: to stay in an upward spiral.

Modes of Knowledge Conversion

Externalization

Figure 1

Knowledge

Socialization

Internalization

Combination

Adapted from Nonaka and Takeuchi, The Knowledge-Creating Company.

The Well-Read Manager, pg. 85 Murray Gell-Mann, pg. 75

Innovation

in Action

37

Technology: Building a “Connection-Making

Machine”

Socialize, externalize, combine, internalize. At its

heart, the knowledge creation process is about

making connections. The objective of Monsanto’s

knowledge work, then, is to facilitate those

connections, first, among knowledgeable people (by

helping them find and interact with one another) and

second, between people and sources of information.

Information technology, of course, is a key enabler of

connections, and this has been a big part of our work

to date. Through a variety of information initiatives

we have implemented data warehousing, full-text

search engines, internet/intranet capabilities, collaborative

workgroup software, and major new operational

systems (SAP). More broadly, our work in

information management has three thrusts:

T To create repositories (data warehouses, operational

systems) to house important information,

both quantitative and qualitative;

T To cross-link those repositories so that navigation

is easy and the technology is transparent to

users; and

T To improve our capabilities to perform analyses in

support of decision-making.

Our IT focus in knowledge management has been

on infrastructure—that is, on creating enterprisewide

capabilities and not on delivering information

systems per se. Together, the systems we have implemented

comprise a logical architecture by which enduser

applications tap the structured and unstructured

knowledge available to the organization.

The People Aspects: Networks and New Roles

As consuming as some of our technology implementations

have been, we have tried to keep in mind

at all times that any information system is simply a

means to an end. Information technology may be a

necessary but will never be a sufficient condition for

knowledge creation and sharing. Coming back to

Nonaka and Takeuchi’s observation, we realize at

Monsanto that knowledge is fundamentally about

people management—equipping and encouraging

people to generate knowledge important to our

future and share it with others in the organization.

Accordingly, much of our work has been directed at

the creation, care, and feeding of networks, or “communities

of practice.” Networks of people are not

only mechanisms for communicating; they help to

advance collective understanding by providing a

forum for “sense-making.” In so doing, they create

value for their individual members as well as the

organization. What is needed to sustain a vibrant network?

We believe it takes information, permeable

and natural communication, dynamism in the network

itself, and some key supporting roles: what we

have come to call “stewards” (or “shepherds”), topic

experts, and “cross-pollinators.”

Knowledge is created through socialization, externalization, combination, and internalization. The challenge is to

support all of these processes so that the organization enjoys an upward spiral of knowledge creation. Since

all of them involve making connections among people and information sources, the objective of Monsanto’s technology

and people-oriented changes has been to turn the company into a “connection-making machine.” New IT

capabilities have been implemented to create knowledge repositories, cross-link them for easy navigation, and

support decision-making. At the same time, people are connecting more effectively through networks or

“communities of practice.”

article abstract

whose perspectives help the network “make sense”

of the information before them, by recognizing

patterns and providing context. “Cross-pollinators,”

finally, are the conduits to and from other networks

and other sources of knowledge. Their activity

supports synthesis and “outside the box” thinking

by the networks.

Supporting all these functions at Monsanto is a web

of knowledge teams, tasked with creating and maintaining

a “yellow pages” guide to the company’s

knowledge, and serving as points of contact for

people seeking information about different subjects.

These teams are far more than information “help

desks.” They are proactive and creative in thinking

about Monsanto’s knowledge needs in their

assigned topic areas. If a business manager asks for

information, they know not to stop simply at fulfilling

the letter of the request. Instead, they probe further

into why that information is valuable, how it will be

used, and therefore who else might find the same

information—or access to the requester’s increasing

knowledge—of value. Because these teams must cast

a wide net, covering internal and external, qualitative

and quantitative information, their composition is

similarly diverse: each brings together people trained

in information technology , library science, and relevant

content areas. The teams are geographically

dispersed and self-directed.

The role of “knowledge steward” can be stated in

terms of Nonaka and Takeuchi’s emphasis on the

“upward spiral” of knowledge creation. Sustaining

that spiral requires focus and resources—and this is

the responsibility of the steward. Think about the

mission director’s role in Apollo 13, the famous NASA

moon shot in which a crew was nearly stranded in

space. His role was to clarify the most important

knowledge problem facing the group, marshal the

right resources and experts, and tighten their

collective focus on finding a solution. Importantly, at

Monsanto, the steward is not necessarily the ranking

member of a given team; playing the role has much

more to do with having the right instincts and

inclinations than having the right title. Similarly,

“topic experts” can come from all walks of the

organization; they are the knowledge workers

Various important “knowledge worker” roles are being recognized and formalized at Monsanto. These

include knowledge stewards, topic experts, cross-pollinators, and knowledge teams.

In its ongoing knowledge efforts, Monsanto will benefit from an emerging methodology that ties knowledge

management to business strategy. The methodology calls for mapping the business at successive levels, so

that the overall business model is translated into requirements for information, knowledge, performance

measures, and supporting systems. In future efforts, as always, the greatest successes will come from a

balanced approach featuring people, process, and technology-related changes.

article abstract

Mapping the Way Forward

If there is any such thing as a “knowledge management

methodology,” it is being invented on the fly

by organizations like Monsanto in the midst of

knowledge experiments. With the benefit of only our

experience to date, we would propose a methodology

based on a series of maps, charting the knowledge

challenges facing a firm at progressively finer degrees

of resolution.

First, it makes sense to map the overall business

model driving the firm’s performance and profitability.

What actions and decisions are most important

to its success? We have come to call a map

drawn at this level a “learning map”—mainly

because it is so useful as tool to educate the entire

organization and help them to internalize the

strategic aims of the business.

Once a learning map has illustrated what drives the

business, it is possible to construct an “information

map” noting the information required to support

that activity and decision-making. This information

map must consider qualitative (or unstructured)

information as well as quantitative, and information

from both internal and external sources. (See

Figure 2.)

A “knowledge map” can come next, illustrating how

information is codified, transformed into knowledge,

and used. Among the important uses of this map are

to highlight knowledge strengths and shortfalls in the

organization and to inform the creation and support

of knowledge networks.

The fourth type of map is something more widely

known as a “Balanced Scorecard”—that is, the set of

performance measures that top management should

use to gauge the health and progress of the business.

Such scorecards are “balanced” because they combine

traditional financial measures (which lag performance)

with important non-financial measures

(which are often leading indicators). Many firms are

implementing balanced scorecards with or without

knowledge initiatives. It’s important to include them

in a knowledge management methodology for two

reasons: 1) because knowledge fuels performance in

fundamental ways, and 2) because measures must

be defined to track the impact of knowledge

management efforts.

All four of these maps highlight needs for data and

information storage, manipulation, and integration.

Thus, the final map is an information technology map

reflecting the infrastructure and systems needed to

support the knowledge work of the organization.

This basic five-map methodology, stated here at a

very high level, is the framework we intend to apply

to our ongoing knowledge management efforts

at Monsanto.

Knowledge Management: The Essential Elements

If Monsanto’s efforts at knowledge management are

succeeding, it is probably due most to our holistic

approach. Rather than relying on a single bullet—like

knowledge-sharing incentives, for example, or groupware—

Monsanto is drawing on a whole arsenal of

people-, process-, and technology-related changes.

The first priority in terms of people has been to recognize

and formalize the roles of different kinds of

“knowledge workers.” The work on process has been,

first, to focus on knowledge creation, and then to

define ways in which individual knowledge becomes

an organizational asset. And the focus of technology

efforts has been to impose better organization on

knowledge and enable connections among people

and information.

Is it working? Certainly, Monsanto is growing

profitably, and our success in “exploiting white

spaces”—particularly in the exploding field of

biotechnology—has been proven. One of our most

interesting new products, for example, is BollgardTM,

which can properly be called a “smart product.”

Bollgard is a new kind of cotton plant, genetically

engineered for greater defense against a pest which

accounts for 80% of cotton plant destruction in the

United States. In fact, in one six-month period since

the firm began actively managing knowledge, it was

awarded four regulatory approvals to sell innovative

new products—this, in an industry where the typical

EPA approval process has taken over eight years.

Is this purely due to better knowledge management?

Of course not. The number of variables that come

into play in a regulatory approval process is great.

But does there seem to be a direct correlation

between investment in knowledge and better performance

in new product and business development?

Clearly, yes. Monsanto is moving ahead as a source of

innovation and effectiveness. And if stock price is any

indicator, the word is getting out that we have some

very productive units, and that we are figuring out

how to engage the collective intellect of our people.

Becoming a Knowledge-Based Business, pg. 9 A Prescription for Knowledge Management, pg. 26

Knowing the Drill:Virtual Teamwork at BP

On a cold day on the North Sea in 1995, a group of BP

Exploration drilling engineers had a problem.

Equipment failure had brought operations to a halt—

and because they couldn’t diagnose the trouble, they

faced the prospect of taking the mobile drilling ship

(leased at a cost of $150,000 a day) back to port indefinitely.

Instead, they hauled the faulty hardware in

front of a tiny video camera connected to a newly

installed computer workstation. Using a satellite link,

they dialed up a BP drilling equipment expert in

Aberdeen. To him, the problem was apparent, and he

guided them quickly through the repair. The down

time, as it turned out, lasted only a few hours.

The equipment aboard the ship was there thanks to a

pilot project BP had just undertaken called “Virtual

Teamwork.” The name reflects the aim: to support

collaboration across the barriers of distance and

organizational structure, through the use of

sophisticated technology.

The project had grown out of BP Exploration’s

reorganization a year earlier into forty-two separate

business assets. Prior to that, exploration activities

had been carried out by a few closely controlled

regional operating centers. Believing that smaller,

more autonomous businesses could work more efficiently

and creatively, Managing Director John

Browne had overseen the transformation of the company

into “a federation of assets,” each with the freedom

to develop processes and solutions to serve its

own local needs. The assumption was that some local

initiatives would turn out to be applicable elsewhere

in the company. BP would benefit from the variety

and creative power of forty-two moderate-sized

companies sharing their experiences.1

Good communication was clearly essential to

making the federation work. In videoconferencing

technology, Browne and others saw potential for

fostering some of the creative synergy they

sought. Accordingly, management authorized an

eighteen-month, $13 million pilot project to test

the concept.

Designing the Pilot

Browne asked John Cross, then head of Information

Technology, to lay the groundwork. Cross’s first

decision was that the project should be undertaken

by an independent group formed for the purpose—

not “owned” by Information Technologies. He wanted

to emphasize that the objective was behavior and

work pattern change, not technology. It also made

sense, given the aim of transcending organizational

boundaries, that the project team be drawn from

diverse parts of the company. A core team of five was

appointed, most of whom had had experience in more

than one area. It was led by Kent Greenes, who

worked in Human Resources and had a background

in Operations.

The team began work in December 1994, specifying

hardware and software for the Virtual Teamwork

station (or “client”). The package included desktop

videoconferencing equipment, multimedia e-mail,

application sharing, shared chalkboards, tools to

record video clips, groupware, and a web browser.

A document scanner—a last-minute addition that

proved extremely useful—completed the setup.

Connections were made using ISDN lines and, where

necessary, satellite links.

For the pilot, the team decided to equip five different

communities with Virtual Teamwork clients, to provide

enough variety for a fair test. First, they chose

the Andrew Project group, which was completing a

new drilling platform for an emerging oil field.

The others included a mature oil field group; an

established network of experts who had already

been communicating with each other by e-mail,

newsletters, and occasional meetings; a new network

of geoscientists and engineers formed specifically for

the project; and what the team called the “business

center network.” This last consisted of five VT clients

placed in key BP offices around the world, each with

a full-time “host” whose job was to encourage its use

at that location.

After highly centralized BP Exploration was reorganized into a “federation of assets,”

new ways had to be found to enable knowledge-sharing across parts of the business. One

success has been videoconferencing. BP piloted the technology in five geographically

dispersed work communities, being careful to set clear business goals by which to measure

its value. The project team knew it was not true that “if you build it, they will come.”

People with much to gain from the new capability still required coaching to see how it could

enhance their work.

article abstract

Research Roundup, pg. 87

Innovation

in Action

16

An unplanned experiment helped prove them right.

Due to budget constraints, one of the projects—the

new network of geoscientists and engineers—was set

up without coaching. The members of what was called

the Virtual Petrotechnical Team were given VT equipment

and essentially left alone to find uses for it. This

project was the only one of the five that failed. The

problem was not that the group couldn’t make the

technology work—it was fairly simple to operate.

What they lacked was an understanding of why they

should bother. Remarks from the team (“I don’t see

how this fits in with my work.” “The people I want to

talk to are not on the network.”) were similar to those

made initially by other teams. In part because there

was no one to help the group explore the value of the

system and overcome their skepticism, their VT

network declined and eventually fell silent.

Proof of Concept

In the four other groups, once clients were put in

place, project directors were surprised at how quickly

virtual teamworking became an integral part of their

work. Teams began to experience the benefits of the

system within weeks—in some cases within days—and

enthusiasm and use increased.

The Andrew Project provides a good example of the

positive impact of virtual teamworking. The use of VT

technology was one of two innovations on the project.

The other was the decision to complete as much

of the platform as possible on shore before moving

construction to the offshore drilling site. There was

no link between the innovations, but together they

In establishing the goals of the project, the emphasis

was entirely on promoting the achievement of

business goals. Performance agreements were

co-developed by the core team and participants in

each of the five groups. Goals included increasing the

efficiency and effectiveness of decision-making,

reducing costs, adhering to schedules, and solving

problems creatively. Recognizing the importance of

measuring these results objectively, the core team

hired an independent consulting firm to perform the

task. The consultants helped generate the list of

expected benefits at the start and tracked actual

results as the pilot progressed.

The Importance of Coaching

A subgroup of the core team called the Change

Management Team was responsible for helping

participants understand both how to use the

technology and how it could further their work. This

effort was deliberately called “coaching” rather than

“training”: coaches work to get the best out of

players—they don’t simply present information to

passive recipients. Only twenty percent of the

coaches’ time was designated for training people

in how to use the system. The rest would consist

of challenging and helping them to exploit its

capabilities to serve their business needs. The core

team was so convinced that extensive coaching was

essential to the success of the project that they spent

approximately half the pilot’s budget on it.

seemed to create an enthusiasm for doing work in

new ways. Building the platform was a joint effort by

BP and two other companies: Brown & Root, a

Houston-based design and engineering firm with an

office in Wimbledon; and Trafalgar House, a Teesside

construction company. This project would test virtual

teamworking’s usefulness not only in connecting

employees over distance but also in linking separate

organizations. Initially, Trafalgar House expressed

doubt; they questioned whether the value of a faceto-

face meeting could really be provided by viewing

distant team members on a computer monitor.

Certainly, virtual teamworking did not eliminate the

need for meetings. Colleagues still needed them to

establish mutual trust and to hash out important

issues involving large groups. Meetings were,

however, significantly reduced. Having met once,

participants found that videoconferencing maintained

a richness of communication and a sense of direct

personal contact that phone calls, e-mail, or memos

could not match. Before long, even Trafalgar House

praised the system.

But the quantifiable benefits on the Andrew Project

went well beyond reductions in travel expenses and

time. There were also measurable productivity

improvements related to more efficient information

searches and issue resolution, and less “miscommunication.”

One finding was that commitments made

“face-to-face” using the VT stations were honored

much more consistently than commitments made by

phone or mail. (This underscores John Cross’s point,

that the project was principally about behavior, not

technology.) Time frames were also compressed by

things like the VT clients’ application-sharing feature,

which allowed teams to write memos jointly, avoiding

hours or days of sending drafts back and forth. In

sum, virtual teamworking contributed significantly to

the project’s meeting its target date and incurring a

much lower total cost of steadily bringing forward

first oil, a principal milestone in the development of a

new field.

Another unplanned use of the network allowed

teamwork to transcend not only distance but time.

Quarterly, Rodney Chase (head of BP Exploration)

holds a Performance Review where reports are

submitted by managers of all the firm’s assets. In

the past, the review was a mish-mash of live presentations

and, from those managers who could not

make the meeting, prose reports or bullet-point

slides. Four days before the December 1995 Quarterly

Performance Review, it occurred to one of Chase’s

assistants that VT might enrich the review. Working

through the Business Center Network hosts, the VT

team arranged for every asset manager to create a

video report. As well as increasing the review’s

quality, the effort extended its reach. All reports were

taped and subsequently published on CD-ROM, to

make them available to senior managers worldwide.

Next Steps

Based on the success of the pilot, plans were

approved to expand Virtual Teamworking by a significant

number of new clients in 1996. By the end of

1997, the team hopes the equipment will be available

to a high proportion of professional staff—providing

the “critical mass” needed to transform the company

into a far-flung but close-knit federation of business

units and workers.

They are currently developing online videocon-

Unexpected Uses

The VT team was even more encouraged by some

spontaneous and relatively unstructured uses of the

technology they observed. Although the immediate

benefits are less clear than the cost reductions and

productivity increases of the Andrew Project, these

explorations suggest that virtual teamworking is

developing a life of its own, and may have far-ranging

impact on the way work at BP Exploration is done.

For example, VT users began communicating across

projects, with members of the Andrew Project, for

instance, contacting members of the Miller Team. The

connection was important: much of the knowledge

the latter team had gained from a now-mature oil

field was highly applicable to work on the emerging

Andrew field. The collaboration inspired an imaginary

headline—”Scottish oil discovered in Alaska!”—coined

by the core team to proclaim VT’s ability to nullify

distance and transfer knowledge.

The “hosts” of the Business Center Network, meanwhile,

decided to hold weekly “virtual coffee breaks.”

The idea was to try to mimic a knowledge-sharing

opportunity that co-located employees enjoy every

day. Famously, “water cooler conversations” are how

people absorb corporate culture; they also bring

about chance conversations that sometimes spark

creative ideas. With no set agenda announced, these

virtual coffee breaks have attracted up to twenty

people at eight separate locations. Their expectation—

and the company’s—is that the conversations

will pay off in unpredictable ways.

Choosing Your Spots . . . , pg. 45

John Kao, pg. 73

Innovation

in Action

19

ferencing “yellow pages” to replace the pilot project’s

simple phonebook. Yellow page listings will include

photographs and short biographies noting individuals’

interests, not just their formal roles. The team also

hopes to integrate a knowledge base into the

system that will guide people with questions to

sources of expertise.

At the same time, BP established a knowledge management

task force, reporting to Director Russell Seal,

whose purpose is to identify and recommend new

opportunities and strategies for organizational learning

and knowledge sharing. The task force will evaluate

knowledge activities inside and outside the

company to determine which should be expanded or

introduced. Building on the objective of the Virtual

Teamworking project, the goal is to improve performance

by promoting behavioral changes that will

make continuous learning and knowledge-sharing the

company norm

Buckman Labs Is Nothing but Net

By: Glenn RifkinTue Dec 18, 2007 at 5:38 PM

Buckman Labs makes chemicals — but it sells knowledge. The challenge: invent a way for the global salesforce to spend more time with customers and share its brainpower.

At the headquarters of Buckman Laboratories International in Memphis, Tennessee, knowledge is the stuff of legend. A favorite story goes like this: veteran Buckman sales rep Doug Yoder is making a presentation to a handful of engineers at a paper company that represents a $1 million order.

“At Buckman,” he begins, “when you ask one person a question, you have the power of 1,200 employees behind you — including our CEO, Bob Buckman.” Eyes wander.

Yoder turns it up a notch. “Our added value is not only speed of response but also global solutions.” The engineers fidget.

Yoder continues. “Our knowledge network is a pillar of our culture. And it’s there to help you.”

To make the point, he fires up his laptop, logs onto the Buckman knowledge sharing system — K’Netix — and poses a question to the appropriate technical forum.

The answer comes from Brazil — and it’s from Bob Buckman. He and Yoder spend the next 20 minutes online, addressing the paper company’s specific concerns.

Yoder finally logs off. “When I say everyone at Buckman Laboratories accesses the forum, I mean everyone.” The paper company engineers are impressed.

Buckman Laboratories, a $270 million company with 1,200 people in 80 countries, makes more than 1,000 different specialty chemicals in 8 factories around the world. But its real product is knowledge. Bigger companies in sexier industries are busy talking about knowledge, scrambling to hire chief knowledge officers, and wrestling with the computer technology to capture a corporate knowledge base. To Bob Buckman and his group of globe-trotting salespeople, that’s old news: been there, done that, got the floppy.

Buckman and his people began treating knowledge as their most critical corporate asset in 1992. As a result, Buckman Labs has become a Mecca for other companies looking for “how-to” lessons in the art and science of knowledge management. Executives from AT& T, 3M, Champion International, International Paper Company, and USWest have made the pilgrimage to this small, privately held chemical company to look and learn. What they’ve seen is a company that is fast, global, and interactive, built on a system that is simple, powerful, and revolutionary.

“You can’t really understand the transformation that has happened until you come in here,” drawls Bob Buckman, the company’s 58-year-old CEO and resident knowledge visionary. “I need a chalkboard.”

In the conference room adjacent to his office there’s a table, a chalkboard, and an easel, one of many that decorate the company’s offices. Each bears a different saying. This one has a quote from Machiavelli: “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.” Buckman goes to the chalkboard and starts scribbling furiously.

“The customer is most important,” he barks, sounding more like a southern football coach giving a half-time chalk-talk than a CEO. He draws an inverted pyramid with the customer at the top. “We need to be effectively engaged on the front line, actively involved in satisfying the needs of our customers.”

“We need to cut the umbilical cord,” he continues — a reference to the mainframe mentality that kept people tied to the office. Buckman rattles off the numbers. “If you work a 40-hour week, you’re in the office less than 25% of your time. If you travel 40% of the workweek, you’re in the office less than 15% of your time. And if you’re a salesperson, you’re in the office 0% of your time.”

Part techno-visionary, part hard-nosed businessman, Bob Buckman poses the challenge of competition in the knowledge-intensive ’90s: Close the gap with the customer. Stay in touch with each other. Bring all of the company’s brainpower to bear in serving each customer. “The real questions are,” says Buckman, “How do we stay connected? How do we share knowledge? How do we function anytime, anywhere — no matter what?”

The Real Power of Knowledge

The answer that Bob Buckman came up with was the knowledge network — K’Netix.

It came to him eight years ago, when he was flat on his back, confined to bed after rupturing his back. Unable to get up, unable even to sit up, Buckman propped a laptop computer on his belly and took dead aim on the real power of knowledge.

“Lying there thinking how isolated I was,” says Buckman, recalling his two weeks in bed. “I got to thinking about what I wanted.”

What he wanted was information, not just for himself but for all his people, a steady stream of information about products, markets, customers. And he wanted it to be easily accessible, easily shared. A relentless student of business and management writing, he had recently read a comment from Jan Carlzon, the former head of SAS, and it had struck a chord with him: “An individual without information cannot take responsibility; an individual who is given information cannot help but take responsibility.”

“If you can’t maximize the power of the individual, you haven’t done anything,” Buckman thought. “The basic philosophy is, How do we take this individual and make him bigger, give him power? How? Connect him to the world.”

On his laptop, Buckman wrote his ideal knowledge transfer system:

• It would make it possible for people to talk to each other directly, to minimize distortion.
• It would give everyone access to the company’s knowledge base.
• It would allow each individual in the company to enter knowledge into the system.
• It would be available 24 hours a day, 7 days a week.
• It would be easy to use.
• It would communicate in whatever language is best for the user.
• It would be updated automatically, capturing questions and answers as a future knowledge base.

Such a system, he realized, would mean a cultural transformation. It would mean turning the company upside down.

Which was precisely what he wanted to do — and had wanted to do since 1961 when he’d joined the company his father had founded. With a degree in chemical engineering from Purdue University and an MBA from the University of Chicago, Buckman had long been fascinated by organizational dynamics and the potential for change that computers had created. And he’d chafed working under his father, Stanley, who epitomized the classic pyramid-style leader: he oversaw every decision, sales order, check, memo.

In 1978, at the age of 69, Stanley Buckman suffered a heart attack and died on his office couch, and the reins of control passed to Bob. “I knew I didn’t want to do it his way,” Buckman says. “Everything went through my father. The general managers of our different ventures had never even met each other. I thought, this is too much work.”

His epiphany showed him the path to the future. “I realized that if I can give everybody complete access to information about the company, then I don’t have to tell them what to do all the time,” he says. “The organization starts moving forward on its own initiative.” The knowledge network would become the organization.

But first he had to create the organization to manage the knowledge network. In March 1992, Buckman set up a Knowledge Transfer Department and appointed Victor Baillargeon, then a 34-year-old PhD in organic chemistry, to run it. For a company that was determined to break the rules, Baillargeon was the perfect choice: he had spent the previous year as Buckman’s assistant, researching the concept of knowledge transfer, and was eager to put the theories to the test. And he was no member of the card-carrying information technology fraternity; he came to the job free of mainframe baggage.

Baillargeon’s first hurdle was to build a network that was both ubiquitous and easy to access from around the world. With that in mind, Baillargeon suggested that the company put its entire worldwide network up on CompuServe, the public online service. CompuServe offered e-mail access to 35 public network services and the ability to create private bulletin boards for intracompany use. And all it took was a single phone call to connect.

Baillargeon engineered the move to CompuServe in just 30 days. Every Buckman salesperson was given an IBM ThinkPad 720 with a modem. For a total of $75,000 per month in access charges, all Buckman employees could make a single phone call that established a point-to-point link with headquarters and provided access to all of CompuServe’s global information services. On that platform Baillargeon built K’Netix, the company’s global knowledge transfer network, and established seven technical forums to organize the company’s online conversations.

That was four years ago. Today Buckman and his team have a clearer line of sight than most into what it means to do business in the knowledge economy. In particular, four categories of lessons emerge from Bob Buckman’s knowledge laboratory: the importance of customer engagement; how to encourage knowledge-sharing; the value of values; and how to think about measurements.

“Effectively Engage with the Customer”

It’s one of Bob Buckman’s most repeated phrases: effectively engaged on the front line — a constant reminder that knowledge transfer at Buckman Labs is not an end in itself. The whole point is to deploy knowledge at the point of sale — to win business and to serve the customer. To Buckman, it all can be reduced to a simple ratio: “The number of people in the organization working on the relationship with the customer, relative to the total organization, will determine the momentum of the organization,” he says.

For that reason, the percentage of the company that is “effectively engaged with the customer” is data that Buckman tracks religiously. In 1979, before K’Netix was launched, it was a mere 16%. Today, it’s about 50%. By the year 2000, Buckman says, it will be 80%. The message is simple: the front line and the bottom line have everything to do with each other.

Buckman competes in a variety of businesses, from pulp and paper processing and water treatment, which makes up 60% of its sales, to leather, agriculture, and personal care. Arrayed against it are companies three to five times its size: $700 million Betz Laboratories of Trevose, Pennsylvania, for example, or $1.2 billion Nalco of Naperville, Illinois. And the industry is consolidating as customers like International Paper Company, Sherwin-Williams, Chinet, and Citgo, pare down their list of vendors to just a few — from whom they expect more.

Under these conditions, Buckman’s commitment to knowledge takes on a new urgency. Salespeople must have the right answer for each customer — and fast. K’Netix makes that an everyday occurrence, an exercise in speed, globality, and interactivity.

Take the case of Dennis Dalton, who is based in Singapore as managing director of all company activities in Asia. According to the K’Netix archives, Dalton sent out a call for help last January 3 at 12:05 p.m.: “We will be proposing a pitch-control program to an Indonesian pulp mill,” he wrote. “I would appreciate an update on successful recent pitch-control strategies in your parts of the world.”

The first response came three hours later, from Phil Hoekstra in Memphis, and included a suggestion of the specific Buckman chemical to use and a reference to a master’s thesis on pitch control of tropical hardwoods, written by an Indonesian studying at North Carolina State University.

Fifty minutes later Michael Sund logged on from Canada and offered his experience in solving the pitch problem in British Columbia. Then Nils Hallberg chimed in with examples from Sweden; Wendy Biijker offered details from a New Zealand paper mill; Jos* Vallcorba gave two examples from Spain and France; Chip Hill in Memphis contributed scientific advice from the company’s R & D team; Javier Del Rosal sent a detailed chemical formula and specific application directions from Mexico; and Lionel Hughes weighed in with two types of pitch-control programs in use in South Africa. In all, Dalton’s request for help generated 11 replies from six countries, stimulated several “sidebar conversations” as participants followed-up on new knowledge they’d just learned — and catapulted Dalton into position to secure a $6 million order from the Indonesian mill.

The customer focus of the knowledge system is built into the design of K’Netix. For some of Buckman’s core customers, for example, there are private forums where the conversation is about only that customer and the advice is tailored to its needs. In addition, the Customer Information Center contains all available information about the company’s customers, including internal memos, documents, and sales orders — a complete file cabinet on each customer.

“We have to be so tuned into our customers that we anticipate what they need,” says Buckman. “If an employee is not effectively engaged with the customer, why are they employed?”

Knowledge-Sharing Is Power

Over the years, people have taught themselves to hoard knowledge to achieve power,” says Buckman. “We have to reverse that: the most powerful people are those who become a source of knowledge by sharing what they know.” But four years ago, when Buckman Labs launched its K’Netix program, the big unanswered question was, Would people share their knowledge?

“There was a sense of hesitancy in the beginning,” remembers Alison Tucker, 36, K’Netix forum manager. “There were people whose file cabinets were filled with everything they knew, and that was their source of power.”

Ultimately, what emerged was a carrot-and-stick balance, mixing visible incentives with invisible pressure, and an organization-wide bias toward teamwork and knowledge reciprocity. As one carrot, Buckman organized a one-time event in Scottsdale, Arizona at a fashionable resort as a celebration to recognize the 150 best knowledge-sharers. Those selected received a new IBM ThinkPad 755, a leather computer bag, and listened to a presentation by Tom Peters. Within the company, the high-profile event — dubbed “The 4th Wave” — sparked a good deal of discussion, particularly among those who failed to make the cut. The event served its purpose: in the weeks afterward, participation on the K’Netix forums increased dramatically.