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My first contact with Scott Shaffar came at a Delphi Conference several years ago in Palm Springs, California, where AOK was holding its own meeting in conjunction with the Delphi event. I must admit I did not fully learn and appreciate the wonder of this KM champion at that time. Then at a Delphi meeting earlier this year I met him again and attended his presentation. It was a 'note taker' for sure. Carl Frappaolo, EVP of Delphi, reminded me he had suggested Scott as a STAR Series moderator long ago, and I realized my folly. Since then, I've had the good fortune of spending several hours with Scott on a case report for Inside Knowledge magazine which was published in the September issue (see below). In the report, Scott describes how he seized the opportunity of a company crisis to establish one of the most effective KM programs in the world. I think of this story now as Peter Marshall and I look for ways of injecting KM into the Hurricane Katrina crises and as so many organizations -- public and private -- fail to take advantage of adversity. I know your time will be well spent during the October Dialogue. Please do your homework here. Then engage in the conversation, October 17-28.
Dr. Shaffar has a BS in aerospace engineering from the California State Polytechnic University, Pomona, and a MS and PhD in mechanical and aerospace engineering from the University of California at Irvine. He is a member of Northrop Grumman's Corporate Knowledge Management Council, The Knowledge Leadership Forum, and the American Society of Mechanical Engineers. His accomplishments in Knowledge Management have been recognized in Fortune Magazine, Aviation Week & Space Technology, Knowledge Management Magazine, PC Magazine, Information Week, Business 2.0, and CIO Magazine. Northrop Grumman Integrated Systems is a premier aerospace and defense systems integration enterprise. Headquartered in El Segundo, Calif., it designs, develops, produces and supports network-enabled integrated systems and subsystems for government and civil customers worldwide. Integrated Systems delivers best-value solutions, products and services that support military and homeland defense missions in the areas of intelligence, surveillance and reconnaissance; battle management command and control; and integrated strike warfare.
By Jerry Ash In KM circles, when stories are told about the era of Business Process Reengineering (BPR) in the 1990s, it is usually a sad tale of the effect of a short-sighted downsizing strategy that sent valuable knowledge out the door in the name of short-term cost reduction and a 'leaner/meaner' organisation. So the dark story goes, when companies awoke to the fact that they were leaner but weaker, they attempted to replace lost knowledge by hiring younger and cheaper workers with far less knowledge than the old ones who were sent packing. By this second strategy, they were to have had their cake and eaten it too by achieving some cost reduction while restoring corporate capability. That strategy didn't work either. Many companies are still suffering from the folly of downsizing. As a result, knowledge management has a much more difficult task than it would have had otherwise. In KM's perspective, the downsizing craze was anti-KM-one of the most destructive periods in the life of a developing knowledge management movement. This report is not another of those stories. In this case, downsizing was not driven by BPR but by the unavoidable losses of major markets. Nevertheless, the result was just as devastating. The loss of departing knowledge was a concern from day one and the episode gave birth to one of the most highly acclaimed knowledge management programmes in the world. Northrop Grumman Corporation's KM journey is a bright story about an awakening and a birth of a KM programme not thwarted, but launched by the pain of an unwanted and unplanned downsizing without knowing what its employees knew. Knowledge journey Prior to its major acquisitions that began in the mid-1990s, Northrop Grumman was principally a designer and manufacturer of military aircraft. Its largest single program was the U.S. Air Force's B-2 bomber, and the division that produced the bomber employed some 13,000 people, a large number of them engineers and technicians with unmeasured sums of individual knowledge. By 1997, with production of the B-2 about to end, Northrop Grumman was faced with reducing its B-2 work force to less than 1,500. The concern was how to capture departing knowledge while retaining a smaller work force that would maintain the B-2 for decades, even though production would cease. In truth, the focus was on skills, not knowledge, because Northrop Grumman as an organization had not yet learned about knowledge management. Typical of the period, the attempt to capture departing knowledge was a last-minute and frantic exercise in futility. It was entirely too late to learn what the company's employees knew. Worse, the lack of knowledge about employee knowledge made it difficult to know exactly which employees to retain or furlough. Even worse yet, because the company was decentralized, there was no mechanism in place to transfer the best and brightest from one sector to another. "During this episode we learned the difference between the skills that are required to do the job and the knowledge that is required to meet the future," Scott Shaffar, now director, knowledge management, says. "Because we started too late, we were not entirely successful at capturing either skills or knowledge as people departed, but we learned some valuable lessons that changed the way we manage our intellectual assets." While Northrop Grumman was learning about knowledge value the hard way, KM was a hot thing on the conference circuit. Shaffar had just returned to full-time employment with the company after completing his PhD in engineering and he was assigned to a rotation programme where his first stop was the business development office. "Coming from engineering," Shaffar says, "I knew of the brain drain that had been occurring and the difficulties of maintaining our support system for the B-2." Shaffar discussed the need to deal with that issue with the B-2 programme manager at the time, Scott Seymour, who agreed. "Why don't you work on that?" Seymour said, and that's how the KM programme at Northrop Grumman was born. Shaffar and several others attended meetings of the Delphi Group of Boston, and the American Productivity and Quality Center in Houston, and absorbed everything they could find out elsewhere about managing individual and corporate knowledge. Shaffar notes three things that happened as a result of the budding KM initiative in the B-2 support group:
In search of a broader base, Shaffar approached the human resource department where he struck a nerve and met Bob Payne, then project manager in the programme integration office (skills assessment), and Dan Cockroft, now director of HR. They became an informal team. By 1999 they had expanded KM from the B-2 program to its parent business unit, which was formed the same year. Unfortunately, the new unit also faced major downsizing because the industry was still adjusting to the reductions in the U.S. defense budget as a result of the end of the cold war. But Northrop Grumman had become smarter about handling the problem of losing not only skilled people, but knowledgeable people as well. The team understood what would work and what wouldn't. Over the two years of staff reduction they employed the same three practices discovered during the B-2 downsizing: implementing a document management system; establishing a database containing the known knowledge, skills and experience of every employee; and changing the way the business unit managed people through its Discipline Management Process. The business unit shrank from 10,000 people in 1999 to 4,000 in 2001-not a pleasant KM story, but one of success under adversity. The downsizing resulted in less harm to the company and better futures for exceptional people who were reassigned to other parts of the organisation. Other sectors actually gained knowledge assets during the downsizing. Meanwhile, the KM team was looking beyond the problem of departing knowledge in a down market to that of building knowledge during an up market or at least during better times. Carl Frappaolo, executive vice president of the Delphi Group, was hired to do a knowledge audit of the Air Combat Systems sector which had grown back to 6,000 employees by that time. "It gave us invaluable perspective," Shaffar says. "We learned the truth-that our people are our No.1 source for knowledge; that knowledge works best when it's a 'people to people' transfer and that people do like to share knowledge in the right environment. But also that the practice of knowledge sharing diminishes as we cross the boundaries of geography or organisation. Since we wanted to begin spreading knowledge around the organisation so it would no longer be isolated in individual heads or silos, we needed to build bridges between the local comfort zones to larger communities of practice (CoPs)." In 2000, Shaffar and Seymour started a corporate KM community of practice made up of 40 volunteer KM champions who came to the first meeting from key locations across the company. The CoP began holding KM Summits (a total of seven) that eventually attracted hundreds of interested people from all seven sectors of the rapidly growing company. KM had been a reactive strategy until this point, but it was about to transcend from problem solving to a full-blown, company-wide KM programme that does far more than troubleshoot staff reductions. While the B-2 and ACS programmes had suffered downsizing for five years, Northrop Grumman's corporate-wide business plan did not envision a shrinking company. Northrop Grumman had been formed through a merger of two companies (Northrop and Grumman) in 1994 and now the merged company was embarking on an era of merger and acquisition that moved the company well beyond 'aircraft manufacturer' to ships, missile defense, space exploration vehicles and satellites, electronic systems and information technology. Today, Northrop Grumman employs 125,000 people in all 50 United States and offers solutions that stretch literally from undersea to outerspace. The need for knowledge across the organisation has become so great that the dismissal of knowledgeable people because they are no longer needed has become an unpleasant memory. The process now is to recruit, enable and retain knowledgeable people. Within that framework, knowledge management got the attention of Northrop Grumman's CEO in 2001 as a central plank in the company's growth initiative. Scott Shaffar and Scott Seymour, who was promoted to corporate vice president and Integrated Systems sector vice-president, approached the CEO with a plan to form a Corporate Knowledge Management Council and received his approval. The broad scope of KM is now a key part of Northrop Grumman's corporate strategy. KM Governance and Strategy The Corporate KM Council is comprised of a corporate representative and one representative from each of the company's seven sectors-Electronic Systems, Information Technology, Integrated Systems, Mission Systems, Newport News, Ship Systems, and Space Technology. Scott Shaffar represents Integrated Systems on the Council. While he is now two layers of management away from his old KM co-champion, the two are still a unifying force across the company. It is a phenomenon not only enabled by friendship but by a collaborative KM structure that reaches across the gulfs of a decentralized organisational chart. The entire KM programme is a self-governance model. Governance is practiced by an up, down and cross-functional network that flows from the Corporate KM Council's strategic initiatives through seven Sector KM Councils and then on to tactical implementation by IT and KM teams within those sectors. The up, down, cross-functional flow starts next with steering groups sharing enterprise standards and best practices between and among sectors as well as with upper leadership and management. While it is uniquely a process developed for the KM programme, it could be a credible enterprise model for the broader governance issues faced by any decentralized company. Separate from governance, the corporate community of practice still exists and more than 60 other communities of practice have sprung up, rooted in locality, sector, region, discipline and cross-functional arenas. Until recently, the Corporate Council had no central staff. Two corporate level support staffers have been added, but Council members continue to carry out the council's strategies within their own sectors, accessing multiple funding sources wherever they can-such as money from R&D, indirect sources, capital assets (for such things as IT servers), IT funding for software and direct customer funding. Shaffar says "a KM leader or team cannot expect a single sponsor to provide a bucket of money." He sees that as a strength. "If one relies on a single source, then it is similar to 'putting all your eggs in one basket,'" he says. "The risk of canceling a KM effort is much higher when it is funded from a single source. The use of multiple sources has helped us sustain the effort over the past eight years." During its first year, the Corporate Council consulted with Hubert Saint-Onge, CEO, Konvergeandknow, in Toronto, Canada. It was an ironic coupling. While Northrop-Grumman was in the business of acquiring companies and turning them into knowledge-driven organisations, Saint-Onge was the victim of an acquisition that destroyed his own celebrated KM programme at Clarica, a Canadian-based life insurance company. When Sun Life purchased Clarica, Saint-Onge was a Clarica vice president and an icon in the KM field. Unfortunately, the acquiring Sun Life -- unlike Northrop Grumman -- did not understand or place value on KM and dismantled Saint-Onge's programme during the first year after assuming control. Saint-Onge's consulting expertise not only fit the NGC situation because of his exceptional knowledge in KM, he also had a strong background in human resources, saw the connection between HR and KM and understood the issues at Northrop Grumman very well. We worked backward on our strategy, starting with corporate objectives," Shaffar recalls. "We focused on how to enable cross sector activity in a decentralized organisation through both knowledge exchange and knowledge access. By 2002 the Corporate KM Council implemented a KM strategic plan. The objective: Enabling knowledge sharing to
The 'Knowledge Depot,' PeopleNet and more The strategic plan eventually led to 11 basic activities. One of the main initiatives was to create a knowledge repository-not just a document dump, but a collaborative environment called Enterprise Collaboration Services. An example of the collaborative nature of the system is what is known as the 'Knowledge Depot.' "Rather than a 'repository' where knowledge is filed away in an inactive dump, we preferred to call it a 'knowledge depot' which represents an active place where knowledge travels," Shaffar says. The depot represents traffic, not a parking lot. The Knowledge Depot is just weeks away from implementation. Depots are not a new idea at Northrop Grumman. Some sectors already had rudimentary knowledge depots, some providing resources for other sectors. The company-wide knowledge depot, therefore, is inspired by a grassroots initiative. With easy access to internal explicit knowledge, through exchange of internal tacit knowledge and through collaboration with customers and suppliers, Northrop Grumman improved its ability to sense the needs of customers and respond to those needs by collaborating with suppliers. "Collaboration and exchange better allow us to act to improve and efficiently execute our business processes," Shaffar says. There is more. PeopleNet provides
a mechanism to search through the thousands of business profiles
on file to find people who have the right experience, knowledge
and skills to help resolve a problem, find a solution or accelerate
an accomplishment.
And there is still more.
Conclusion Just eight years ago Northrop Grumman's KM programme sprang to life in the twilight of its signature product and soared upward by developing one of the most comprehensive and strategically-driven KM programmes in the world. Even more significantly, KM is now in a position to play a key part in achieving the company's goal of molding its multiple acquisitions and decentralized management structure into what is called 'One Northrop Grumman.' To achieve One Northrop Grumman, the company does not intend to abandon its decentralized structure. Rather the vision looks to find ways for the seven sectors to routinely collaborate. "In order to compete," Shaffar says, "we have to use more than the knowledge and expertise available in any one piece of the company to make it happen." Major programs have been awarded to Northrop Grumman in recent years on the strength of these combined resources, and many of the company's current contract bids depend on the contributions of several sectors. For example, Northrop Grumman is competing to win a contract to design and build NASA's successor to the Space Shuttle. In addition to bringing Boeing on board as its teammate, Northrop Grumman is drawing upon the systems engineering expertise of its Integrated Systems sector (the team leader) as well as contributions from other parts of the company, including the Space Technology sector. The company's KM strategy and infrastructure is well down the road and will likely be one of the key means of implementing such a business strategy. But as optimistic as that view may be, Shaffar says the road has not been easy so far and he expects the future of the KM programme to depend on success stories-not the kind written by company spin doctors, but the kind circulating word of mouth throughout the organisation because of personal positive experience. "We need at least one good story in circulation each year," Shaffar says. See sidebar: How Do I. In retrospect, Scott Shaffar notes the following catalysts for knowledge sharing: senior leadership support, business challenges that translate to knowledge challenges, line management champions, people who are passionate about their work and their colleagues, and dedicated knowledge managers. The lessons learned: people fundamentally want to share knowledge-management systems get in the way; a burning business issue helps fund KM ideas; people understand knowledge sharing; a very good story will keep KM going but you need one per funding cycle; the simplest solutions can be the best; be careful about using 'KM language,' and don't give up! SIDEBAR #1: Discipline Management Process Northrop Grumman's Discipline Management Process was developed to ensure that all people within a given engineering discipline are provided equal consideration when changes in staffing are required. It also fundamentally changes how Northrop Grumman manages knowledge and deploys and enables people to move more easily between programmes and across geographic boundaries. The system has spread across all disciplines including materials and processes, supportability, engineering, planning and administration. Within each discipline are skill sets that characterize the key talent areas. A discipline manager (DM) is assigned to each discipline and is responsible for balancing supply and demand as well as implementing employee development initiatives specific to that discipline. The DM's work in cooperation with the existing management team is to make sure all employees within a discipline are given equal access to staffing and development opportunities. More than a staffing system, however, Discipline Management's objectives are one part HR and one part KM aimed at
Discipline managers have strategic responsibilities to grow the discipline's knowledge and capability, employee career development, education, rotation, mentoring and more. They have the final authority on who's in the discipline and at what proficiency level. They are the key players in staffing and de-staffing. They promote consistency within the discipline and develop communities of practice. They are far from being traditional HR people; some might call them 'knowledge managers.' Northrop Grumman's KM programme depends on at least one story a year to create the kind of buzz that will sustain company-wide appreciation of KM's value. Last year's story was generated by the How Do I? site on the company intranet. It started when a leadership team asked the KM group to look at the company's policies and procedures to see if they could be improved as a more dynamic employee resource. Finding answers was difficult in the traditionally cryptic information found in the typical policies and procedures manual. Even knowing where to find answers was a problem, and many answers simply weren't there-such as "How do I get business cards printed?" While the answer wasn't in policies and procedures, it was available on the print center intranet site. The resulting How Do I? site became much more than policies and procedures or FAQs. To build the site, the KM network turned to the New Hire Community of Practice, asking young people just entering the work force to make a list of the questions they had coming into Northrop Grumman. Five members of the New Hire CoP volunteered to research the questions. Once the questions were known, the same five were asked to find the answers. After the Q & As were submitted to various experts for review, they were placed on the How Do I? site in the form of short answers with hyperlinks to the original resource where unlimited information could often be found. The whole project took three months, cost virtually nothing and provided answers to real questions. Even Scott Shaffar, a 20-year Northrop Grumman veteran, didn't know the answers to three-fourths of the questions. The How Do I? site now enjoys heavy traffic and continues to provide one of the major success stories for the KM programme. This year the KM programme developed a similar site for managers, but the traffic was not as vigorous. "It definitely helps new managers," Shaffar says, chuckling, "but I guess a lot of experienced managers think they already know it all."
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Preparing for Conversations with Scott Shaffar
Carpé Diem: Establishing, Growing and Formalizing
KM in a Large Organization
Scott W. Shaffar, PhD
Director, Knowledge Management
Northrop Grumman Integrated Systems
El Segundo, California, US
Introduction by Jerry Ash
led to the
invention of a low emission gas turbine combustor, which was
awarded a United States patent. In 1997, he was selected for
the Northrop Grumman Program Management Rotation Program, with
assignments to the Long Range Strike Business Development Team
and the B-2 Program Office. During this rotation program, Dr.
Shaffar established the Knowledge Management program at Northrop
Grumman. Since that time, Knowledge Management has expanded to
a corporate wide initiative with top leadership support. The
American Productivity and Quality Center recognized this program
as a best practice.