KM The Right Way
- 05 August, 2002 10:17
Reader ROI
- Learn how to judge whether your organisation is ready for KM
- Learn what you need to evaluate before you jump into KM
- Understand why technology is only a small part of the KM equation.
When Tom Rossi, director of the Innovation Lab at the US Naval War College in Newport, Rhode Island, began a knowledge management initiative in 1999, he thought he knew everything. Rossi and his team were charged with creating a futuristic environment for computerised war games. The games, held annually for more than 20 years, have about 500 senior military and civilian players who need to share real-time information about troop deployments, battle readiness and the battlefield environment. Prior to Rossi's KM project, the gamer commanders had to gather information via phone calls, memos, e-mails and game books - none of which encouraged the kind of instantaneous decision-making necessary in combat situations.
Rossi and his team put together a KM system that integrated a collaborative software suite, a naval war games software tool and Microsoft Exchange's Conferencing Server for Internet video and chat capabilities. In the year between games, Rossi worked with engineers and a metrics team to fine-tune the system. They tailored the command and control databases so that various commanders had access to the same information; as one group of officers plotted troop positions and battle tactics, other participants lower down the chain of command could see the plans as they formed and anticipate what their own tasks would be.
In theory, Rossi's project sounded great. But by 2001, the technology bogged down. "We had gadgets and tools, but when we brought the gamers together, it became clear that we'd given them too much IT," Rossi says. "By the time we brought them up to speed on the new tools, the game was well under way and they got frustrated fast."
As a result, the 2002 war games were cancelled.
Rossi's misstep is a common one. While KM is a sound field with real benefits such as reduced training time for new employees, improved decision making and better operational efficiency, it's difficult to get it right. "The biggest misconception that IT leaders make is that knowledge management is about technology," says Shir Nir, managing partner at Knowledge Transformation Partners (KTP), a KM consultancy based in New York City. "Usually people begin a KM project by focusing on the technology needs, whether they want a database or a portal. But the key is people and process."
It's natural for CIOs to focus on technology, and many vendors are happy to oblige them by marketing so-called off-the-shelf KM systems. Yet as Rossi and countless others have learned, there's no cookie-cutter approach to adopting knowledge management. Every organisation and company has its own definition of knowledge and how it should be gathered, categorised and made available to employees. What works for one company won't work for another because organisational knowledge is so subjective.
The one-size-fits-all mentality, coupled with the tendency to focus on technology rather than people and process, has obscured the real benefits that KM can bring, according to Nir. It doesn't help that knowledge management means different things - and often involves different kinds of technologies - at different organisations.
In terms of technology, KM often covers some of the same territory as CRM and sales-force automation, each of which gather information in an effort to increase efficiency and quality of service. Because KM usually requires changes in work patterns, there is also some crossover with change management and HR. The sticking point for many KM initiatives: knowledge deemed valuable to the organisation is often tied to individual experiences, attitudes and behaviours. For example, what makes one salesman better than another may be his individual contact lists. But as most salespeople are loath to share any of their inside customer information, an organisation must provide motivation for them to do so, such as offering them compensation or encouraging them to close sales collaboratively rather than individually. That is why paying attention to people and process is so important.
Defined broadly, knowledge management is the process through which organisations extract value from their intellectual assets. To get KM initiatives off to a good start, executives must evaluate whether their organisation has a strategic need for knowledge management in the first place. Then it's necessary to decide whether the current process of dealing with corporate knowledge is effective and if the culture is ready for procedural changes. Once executives have resolved those issues, the CIO can evaluate the existing technology infrastructure to determine whether it's adequate for KM or whether new systems are needed.
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STEP 1: Ask Why
The first step toward a successful KM project is to look closely at your organisation and define the strategic business need. If KM isn't tied to a business goal, the organisation could end up with an expensive system that takes up server space but has no real purpose or ROI. Unfortunately, this first step is one many organisations fail to take. In a recent study by The Conference Board, 82 per cent of participating companies indicated they were involved in a KM project, but only 15 per cent of them said they had specific, stated objectives for the project.
Often companies link a need for KM with an event. During mergers, for example, information about intellectual assets, processes and potential collaboration should be collected for use in the new organisation. Some people also view retrenchments as a good time to look at KM. But Gene Wright, director of the manufacturing practice at Born, a Minneapolis-based technology consultancy, says companies shouldn't wait for a major shake-up. "When you look up and notice a redundant process or an example of repeated inefficiency where you realise you're spending all your time searching for information online instead of communicating with your clients or customers, that's a good time to think about KM," he says. "It's when you reach the point of pain, when you realise you can do things better."
For Brad Sidwell, CIO of Ice Miller, a law firm in Indianapolis, the need for KM became painfully apparent during a meeting with a prospective client that wanted to know whether the firm had worked with any of its competitors and, if so, what kind of work was done. "We discovered that we had no clue," Sidwell says.
To get started on a KM project, Sidwell defined the scope of the data he wanted to collect and organise - information on past and current clients, what work had been done for them, and their legal preferences. Each lawyer's knowledge and expertise had to be gathered and stored for others to access. Sidwell chose a product from Interface Software called InterAction to help set up a database for collecting client information. From a technology standpoint, the project is a success, Sidwell says, though he admits that the firm still struggles with motivating lawyers to contribute personal knowledge about old clients. (They are more willing to contribute information about new clients.) By taking a proactive approach to KM, Sidwell's firm is in the minority, says Skip Boettger, chief knowledge architect at software company PTC's global services division. Usually it takes some kind of disaster to jolt a company into understanding the business benefits of KM. "Whether it's low profit margins or overspending, it takes a lot to get a CEO's attention," Boettger says. "But it doesn't take much for a business to realise it can improve the whole process of gathering and organising knowledge. The key is that you have to focus on the business need, whether it's a problem you want to solve or a process you want to improve upon."
Once companies determine the business need, they can get a handle on the nature and scope of the intellectual assets they want to manage. Then they can determine how KM will affect the work routines of employees, Boettger says, which is an essential step to moving forward.
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STEP 2: Show and Tell
How executives introduce a KM project to their company - and how those executives help the employees adjust to changes in their work routine - can make or break the project. "It's not a system solution, it's a people solution," says KTP's Nir. "It's about sharing as a whole organisation, not just about the knowledge itself."
In spring 2000, when Paul McKeon, a former partner and chief e-business officer at Ketchum, a New York City-based public relations company, planned the rollout of his company's new knowledge management system, he knew changing the staff's work routine and culture to incorporate the sharing of relevant knowledge would be a challenge.
At the time, Ketchum was experiencing a high rate of turnover. McKeon and other executives realised that incalculable amounts of expertise and knowledge were walking out the door every time an employee moved on. "In a professional services business, all your investment is in your people," says McKeon (now president of Chamber Edit, a company that provides portal software to chambers of commerce).
Ketchum's system has three parts, which all require the participation of every employee: a document management system catalogues documents that previously existed on servers and hard drives at the company's 29 offices; an expertise database contains an employee directory that lists staff biographies and photographs, areas of expertise, and client experience; and the client database lists past and present clients, and the work the firm has done for them.
Instead of gradually introducing the staff to the process of contributing information, McKeon worked with Ketchum's workplace practices group to create a campaign similar to what the firm does to gear up for a new client. During what Ketchum dubbed Reboot Week, McKeon taught the staff how to use the new system through Webcasts and conference calls. Employees spent the week going through files, documents and e-mails, and entering all relevant information into the document database, as well as creating and updating their personal pages in the employee directory.
Reboot Week helped staff members overcome their hesitancy about sharing client information. To reinforce that message, McKeon made sharing mandatory; each employee's contribution to the KM system has become part of their performance review.
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STEP 3: Pick the Right Tool for the Job
One of the biggest mistakes a company or CIO makes at the outset of a KM initiative is to get carried away with the technology. "If KM is just handed over to IT, it ensures failure. The CIO's role is to make sure the technology end of a KM initiative does what the company needs it to," according to Born's Wright.
Before the Federal Highway Administration (FHWA) in Washington, DC, went forward with plans for a knowledge management system, officials took a look at their technology and realised something new was needed. The FHWA ran primarily on an Oracle platform, which worked well for database management but didn't deal well with the kind of unstructured, research-based data targeted for organisation, says Mike Burk, the FHWA's chief knowledge officer.
The FHWA's employees worked primarily within Novell's GroupWise system and did most of their business via e-mail. Burk knew that employees wouldn't constantly monitor the site for new information updates, but they did check their e-mail regularly. He worked with the FHWA's CIO to link the existing Oracle-based system with the agency's Web site; they set up automatic e-mail updates that notified employees whenever new information had been placed in the Web site's knowledge base.
Burk's approach is uncommon, says Mark Horwitch, head of Bain & Company's knowledge management practice in Chicago. "The danger with KM is that most companies jump in without thinking through major questions," Horwitch says. "Look at the processes and information requirements that you need to succeed. Is the solution really a complex IT tool, or are you just underusing tools you already have? It's a lot easier and cheaper if you look from the top down."
In addition to a top-down view, organisations need to select KM tools that will complement how employees work rather than distract them. During the games at the Naval War College, participants defaulted to tools they were comfortable with such as Microsoft NetMeeting and Instant Messenger instead of using the collaborative KM tools Rossi implemented. The Naval War College skipped the 2002 war games in order to put more analytical rigour into its KM program. "We are clearing the slate and looking at tools we know we need instead of tools we'd like to use," Rossi says.
To make sure next year's participants don't get overwhelmed by the technology, Rossi plans to get the participant list early and involve all the players in building the game program. When they come to play next summer, he hopes everyone will be up to speed.
According to Born's Wright, a key role for CIOs is to make sure every employee gets hands-on training with KM systems. If no one knows how to use new tools, even the best KM project will fall flat on its face, he says. CIOs can also integrate change management efforts into a KM project by recruiting thought leaders within each department. The thought leaders can ferret out frustrations, resistance and department-specific needs for a KM system, which will help IT make the system as user-friendly as possible.
At California Casualty Management, a San Mateo-based insurance company, CIO Vasu Kadambi is looking into starting the IT rollout of a KM portal that will deliver sales, underwriting and claims information quickly to customer service representatives. Although he'll be immersed in the technology rollout, Kadambi is not in charge of the overall KM project. In his view, the CIO's job in KM is to ensure that the technology doesn't derail employees so that effective information sharing can take place. "My role is to help people get the information they need," he says. "Technology just helps the process of gathering information."
Those who have successfully tackled KM projects have taken a systematic approach. "Knowledge management is not a walk in the park," Nir says. "It can be overwhelming, so make sure you look at it one step at a time." That's not to say you have to be a business genius in order for your KM project to succeed. To ensure the best odds, take a big-picture view by first defining KM in terms of a business objective. Once that challenge is met, your company will be in a much better position to determine which of its intellectual assets are worth organising, managing and sharing. Take a look at the people and processes that will be affected by KM and address any relevant issues accordingly. And then it's up to the CIO to evaluate current technology and recommend and implement new systems as needed.
While there's no way to guarantee the ultimate success of any knowledge management project, organisations will have a better chance of maximising their investment if they take projects one step at a time.
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SIDEBAR: Getting Ready for KM
Mark Youman, a principal at American Management Systems, is an expert on project and knowledge management as well as IT strategy. We asked Youman what steps a CIO should take to help prepare his company for a major knowledge management initiative.
Before tackling a KM initiative, Youman says, CIOs should take a close look at the project's business objectives. Some common objectives include:
Improve returns on customer information. Consolidate and leverage information about customers and potential customers to tailor offerings, improve customer service and increase revenue.
Improve efficiency and effectiveness. Connect similar functions across geography to reduce redundancy and share practices.
Enable a mobile workforce. Connect mobile workers with information and with each other to create a virtual workplace that, like the physical one, derives its value primarily from the capabilities of its staff working together - not from access to the right data.
Integrate with business partners. Share knowledge and collaborate outside the firewall to enable efficient business networks or intergovernmental coordination.
One of the most common pitfalls of KM is when project leaders lose sight of objectives like those. These kinds of mistakes can take many forms. When CIOs approach KM as an academic initiative instead of a business initiative, they often try to teach executives and business leaders about the theories and language of KM. According to Youman, this can result in fuzzy explanations that fly over everyone's head, such as: "We want to forge communities of practice that use asynchronous collaboration to turn tacit knowledge into an explicit corporate asset." Project leaders should translate the concepts of KM into the language and practices of their organisation.
Youman advises CIOs to think about the following questions:
- Are there pressing needs for better knowledge sharing and use in areas that are important to your organisation?
- Can you find a group of people willing to explore new ways of working to address pressing knowledge needs?
- Can this group or another source provide limited seed funding to pilot new tools that enable new ways of working?
- Can you map out a pilot model that will scale to the entire organisation?
IT and organisational leaders often make the mistake of trying to achieve cross-organisational consensus before starting the project, a sure-fire way to guarantee everything gets pushed out a few months. Sometimes they try to change the corporate culture in advance of the project, rather than setting the business objectives and then judging how and if the culture should change. Then there's the inevitable KM-for-KM's-sake approach, which, Youman says, has nothing to do with business objectives. During KM initiatives, project leaders frequently forget to set benchmarks along the way because they forget that KM is a process, not a project with a finite end.
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SIDEBAR: I Was a KM Cheerleader
-Ray Kotcher
Historically, a successful PR practice has relied heavily on the ability of its partners to build relationships. For example, when I started in PR in the late 70s, it took a lot of interpersonal skills to get a client's story into top media outlets such as The New York Times or the major TV networks.
But the Internet has changed things. PR people are inundated with information from e-mail and the Web. And as they struggle to sort through this informational torrent, it's easy for the personal exchange of information - both with clients and with colleagues - to suffer.
Convinced that Ketchum needed to respond to this change, I convened our senior leadership in 1999 to examine how the company dealt with internal and external information exchange. We quickly realised that we needed to get a better handle on the vast rivers of electronic information flowing through our company.
The group decided to create an intranet and extranet that would allow employees and clients to rapidly sift through a huge knowledge base in a focused way, and would also give them the ability to contribute to that knowledge base. The idea solidified into the MyKGN project, a proposed Web portal with a personalised intranet for our employees and an extranet for our clients.
I saw my role almost as a cheerleader - the person who would really get people rooting for the project. So to kick off the development period, I led three days of meetings with 30 of our most senior executives; those sessions resulted in a further gathering of 60 partners from around the world who split into groups of 10 to 15 people to brainstorm desirable features for the new Web portal. These groups continued to meet weekly and reported to me every couple of weeks. We also assembled a top team for building the portal, and I met with them on a daily basis during the 10 months it took to build the application.
When rollout time came around, I knew I had to do some more cheerleading. So we decided to go all out for the kick-off of MyKGN on November 1, 2000. Because I wanted Ketchum employees to think of the rollout as a watershed moment for our company, I chose a noteworthy watershed - the first US manned space launch - to use as a theme. I did a live Webcast from our New York studio to all of our affiliates worldwide. As a backdrop, we used old footage of a rocket launch by Alan Shepard. I donned a helmet and space suit application and went over the features of MyKGN. Afterward, people kept talking about the whole thing. (I heard a lot of comments about the space suit.) I think it really helped them get excited about the new portal.
Since its implementation last fall, all our 1500 employees and about 45 clients have used MyKGN. An independent study said that we can expect a $US12.1 million return on our investment in the project's first four years. Collaboration was the objective of MyKGN, and interestingly, it was also integral to successful completion of the project. By taking the personal approach from the beginning and carrying it through to the end, we were able to build a great application and get employees on board.
Ketchum's ROI
According to Kotcher, Ketchum's hard ROI in terms of dollars and cents was determined based on the following criteria.
1. Increased sales due to the agency's ability to leverage KM capabilities to develop our client base through competitive differentiation and increased cross-selling opportunities with current clients.
2. Productivity gains derived from the reduction in effort of task such as information aggregation, time entry and locating subject matter experts within the network.
3. Productivity gains associated with bringing new employees and business partners up to speed on Ketchum's capabilities and organisational structure.
4. Reduction in travel costs - as part of Ketchum's KM initiative, the agency also launched a platform for online collaboration and application sharing.