Conversations
with Tom Stewart -- Part III
Bursting Bubbles
Table of Contents
(Click
on list item to go directly to each topic)
 Quantify, But Don't
Identify KM
K.S.Srinivasa
Murty: David
Skyrme mentions the lack of attention to measuring and reporting
intellectual capital in the US as compared to Europe. Jo Parker-Whiting
(in Australia) referred to the problems in establishing direct
links between KM and ROI -- How do we prove ROI on KM programs?
In responding to
the forced choice options presented by Fred Schoeps,Tom picked
"pricing policy in the services division," with intellectual
assets being just one of the things priced. I would like to share
my thoughts on these issues.
I too am a believer
in the dictum that what gets measured, reported and rewarded
gets the attention and focus of people. I also strongly believe
that creation of intellectual assets and effective leveraging
of these assets for business results are key to sustainable competitive
advantage / performance. However, I am not convinced that measurement
of intellectual capital and pricing policy of intellectual assets
are the most important KM enablers. Let me explain my point of
view:
Sustained high performance
is based on two factors - 1. creation of intellectual assets
which provide competitive advantage and 2. Effective use of these
assets in business operations, to win in the market place. Like
any other assets, valuation / measurement are important to plan
and implement effective / productive use of these knowledge assets
but the accrual of business benefits is dependent on how well
these plans are executed. In my view, KM must focus on both the
creation of Intellectual assets as well on the quality of execution
/ use of these assets to tackle business problems. In both these
tasks -- creation of assets and execution, the most critical
element is the people / the talent ( knowledge / insights, team
working ability, mind set, passion for winning, can-do spirit
of the people, etc.) in the organization.
The organizational
culture, values and behaviors shape this ability to attract,
develop and retain talent. The mind set and culture of the people
impacts the ability to leverage collective knowledge, create
intellectual assets and leverage them in execution. Under these
circumstances, in a forced choice on where to focus to strengthen
KM practice in a company, should we not opt for the human resources
management function -- which through its people(all employees,
not just the managerial cadre) development role (selection of
talent, training and development, skills and competency development
processes, recognition and reward programs, and culture change
initiatives) should nurture and strengthen knowledge management
skills, competencies and mind set?
This is not to suggest
that pricing of a services division in a services sector company
is any less important. In the late 80s and early 90s I used to
head a specialty chemical company in India. When I moved there,
initially we were focused on selling products to our clients
and our prices did not reflect our competencies in product development
and technical support areas. We strengthened these functions
further and redefined our role as a company who would be a partner
to our customers in developing appropriate solutions to their
problems. This helped us grow faster and also significantly improve
profits.
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KM Before It Was
We did not talk
of knowledge management at that time, but what we did is identify
where we were able to add real value to our customers, develop
these intellectual assets and exploit them both for growth and
profit improvement. This is something all service sector companies
will always attempt to do. I feel, how well they do this will
depend on how well they leverage their collective knowledge and
experience of their people and their partners (suppliers and
customers). Won't it be fair to say that the relative growth
and profitability of a service company vis a vis its competitors
will in a way reflect how good it is in KM?
While in the services
sector (like the specialty chemicals, consulting etc.), where
collective knowledge / intellectual capital of the company seems
to constantly figure at the customer interface and therefore
leveraging collective knowledge is often seen a priority / key
to survival and success, this may not be true in the old economy
industries -- focused on selling products. I am not suggesting
that KM is any less important in these industries, it is just
that its adoption seems to meet with more resistance.
One last point --
the difficulty in linking KM with ROI stems from the fact that
while KM is a very important competence (to create and leverage
collective knowledge), ROI is delivered by people through a combination
of competencies and through people who reflect varying degrees
of this competence. I wonder if any of us can establish an ROI
accruing only from KM. Is it really necessary to establish an
ROI? What we can and must do is to link all KM efforts to the
strategic priorities of the organization and try to strengthen
knowledge sharing culture and mind set.
Mary
Beth Thornton, Director, Global Client Service, ACNielsen: Responding to extracts
from Srini Murty -- "In my limited experience, in our company
we have done a better job when we practiced KM without branding
it as a KM initiative, but branding it as a business process
/ functional initiative" -- not only as a matter of practical
experience, but even as a matter of the theory of the way it
ought to be.
And Tom Stewart's
response: "However, that leaves us with a problem/question.
Who are the "we" who "practice KM"? Do we
have a separate organization? How big is it? Where do we fit
in the company? How do we get power and influence? Is this a
"C-level" function?
I can identify with
what Srini says. My experience with KM is around implementation
of a value adding business process (Client Management) through
a formal global initiative (more detail available in the Power
Point program I presented at Delphi/AOK conference). At my company
- where over 50 percent of expenses are salaries, most of that
going to knowledge workers -- KM is not sponsored at the C-level.
However, the global initiative IS sponsored at the C-level.
I live and breath
the principals of KM in my day to day responsibilities. My boss
(SVP level) and I drive knowledge exchange, sharing the learning,
eliciting success stories, creating best known methods, demonstrating
incremental revenue associated with proper execution of the business
process. (Of course, I get to do all the grunt work -- that's
the hardest part!)
We do it because
we recognize it is crucial to the success of the initiative.
We have board level exposure and have made a conscientious effort
to demonstrate how KM techniques have contributed to our success.
We don't say we do 'KM'; rather, we emphasize how cross-border
and cross-functional sharing, sharing best practices and success
stories, capturing & exchanging tacit knowledge, etc. have
contributed to incremental revenue.
Others in my company
use the term KM, and guess what? They're the portal techies (who
say they understand the concept of KM but don't really practice
it) and the Communications group who use the portal for, well,
communicating their messages. There are pockets of KM'ers within
functional silos who have leveraged the portal to streamline
internal communications and availability of 'stuff'. There has
been only limited success using this organic approach, for the
usual reasons I don't need to enumerate for this audience.
While it's frustrating
to me personally that my company does not have a formal KM program
-- I know there is so much untapped potential!! There
is, nonetheless, a sense of fulfillment in recognizing that senior
management is now using and promoting "KM" language.
How do we get power and influence?
In my case the answer
is to leverage the high visibility of a successful initiative
focused on enhancing a core competency to market how KM plays
a critical role. My group has since been tapped to lead and assist
with other global efforts. Our learning around KM and its practice
will most definitely be transferred and integrated with the execution
of these highly strategic and visible initiatives. That's what
I call power and influence!
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Stealth KM Misses
Interdisciplinary Advantage
Jerry
Ash: When
the real experts -- STAR moderator and members -- are fully engaged,
I try very hard to stay out of the discussion. But Mary Beth
Thornton has touched my button once too often -- Srini and Tom
ahead of her.
I am very concerned
about the litany of opinions that counsel us "for God's
sake, don't call it KM!"
Now, I don't call
it KM either except when I'm at a loss for a term that is easily
recognized by the uninformed. KM has been dealt a confounding
blow by those who have bastardized the term. We carefully avoided
the dreaded "KM" when we named the Association of Knowledgework.
We chose the name "Knowledgework" because we believed
(and still do) that the action will be with those who are engaged
in knowledging; wherever they are; whatever their education,
training and experience; whatever their title or job description.
Our vision for AOK is still:
At the Association
of Knowledgework, people from every specialty cross professional,
geographic, cultural, economic and hierarchical barriers to learn
together. Not just another website, this is a virtual home for
those who work with this stuff called knowledge.
Our vision of the
knowledge community in your organization is no less grandiose!
Your KM practitioners and pros need a mutual home.
Here are just two
things that worry me about those who campaign to hide, disguise
or even bury KM:
First: KM is interdisciplinary.
House it in most existing departments or with a VP responsible
for a specific piece of the organizational pie and you run the
risk of losing the broad application of knowledging across organizational
silos. Fragment it into multiple fiefdoms and it's even worse.
Unless an organization has truly flattened itself (eliminated
the vertical chart), stealth KM faces huge pitfalls, though we
encourage it where there is no alternative.
Second: People (all
people) who have been educated and ensconced in a particular
professional discipline will have a difficult time seeing KM
through something other than their own myopic eyes. HR sees KM
the way HR sees the world; IT the same; and so on. Those of us
who sincerely want to "change our ways," should know
that we can never totally jettison our ingrained biases. Tom
may agree with me that journalists have a difficult time with
"unbiased reporting," some not trying, others kidding
themselves, and the truly dedicated bending so far over to be
"fair" that they risk biased reporting in the opposite
direction! That's the way it is with humans.
So, I think KM (or
LMNOP) needs to be enterprise-wide and needs to be powered by
a collaborative force. None of that can happen without the champions;
and, the champions can't be successful without each and every
knowledge practitioner in every corner of every level of the
enterprise. For that to happen, a broad vision must be continuously
broadcast. I know Srini does that in his own role as corporate
knowledge manager!
So, who are the
"we who practice KM?" We are people from the boardroom
to the mailroom; we are CKOs and KMs and librarians and help
desk professionals; we are R&D, marketing and sales, communication
and communications; and, we should be the CEO. Yes, KM should
not be a department or an add-on function of the organization,
but the vision of KM (imnsho) must ultimately be omnipresent.
That can't happen if you hide KM (or LMNOP or whatever makes
you comfortable) under a rock!
(sigh)
Jo
Parker-Whiting:
In response to Jerry's "can't succeed under a rock!,"
I just want to say that I support his sentiments. I would also
make the point that language and meaning are both evolutionary
and learnt. If we deliberately shy away from using the KM word
and associated concepts then they (being those who do not know
and understand!) will never be given the opportunity to learn.
If we do use the
KM word and associated concepts whenever appropriate, it may
take a while, but eventually they will begin to learn and as
more and more people cotton on to the language and meaning, the
learning and acceptance will snowball.
Tom
Stewart:
Jerry, your point's a good one, but a problematic one. Personally,
I've never been fond of the term knowledge management, and resist
business jargon acronyms as much as I can. I only write KM because
I make characteristic typos on both knolwedge (that one) and
mangement (that one) and want to save myself sokme proofreading
(applying six sigma principles to a process?). But let me respond
to this in another way.
A few years ago
I got into a bizarre argument with a woman who worked, I think
I remember correctly, at what was then Andersen Consulting. She
was doing a project -- it might have been for them or for the
university where she was getting an advanced degree -- about
this "knowledge stuff" and interviewed me. she kept
using some terms in ways that confused me, and finally I stopped
her and pointed out that it was inaccurate to use "intellectual
capital" and "knowledge management" as synonyms.
She couldn't get it. I explained that this was a simple matter
of the meaning of English words. "Remove the adjectives,"
I told her: "Do 'management' and 'capital' mean different
things?" I went on "First, knowledge management is
something you DO. You can do it to intellectual capital. But
you can also do it to other things -- such as information [intellectual
working capital, in my schema] or to hard assets. Intellectual
capital, on the other hand, is something you have, it's a kind
of asset. And you can do many things with and to that asset.
Managing it via knowledge management is just one of them."
The woman never
did understand what I was talking about, and somewhere there
exists a document in which I show up as a querulous and curious
figure.
Her problem; knowledge
management's problem is related. The fad for KM was a case of
companies putting the cart before the horse. There it is, this
fancy expensive knowledge management cart, tying up capital,
filled with glittering baubles of best practices, expertise databases,
lessons learned, etc. -- standing there, going nowhere. Because
it lacks a horse.
Then I hope (and
not just for mercenary reasons, but certainly for those as well)
that everyone goes out and buys The
Wealth of Knowledge, because its purpose is to shown
how to put the horse in front of the cart. You do it in four
steps.
(1) You track, as
best you can, all transactions in your business where what's
bought, sued, and sold is knowledge. Basically, you make a ledger
-- what knowledge did we buy? When we did this work, what knowledge
did we call upon, and where did it come from? What knowledge
did we sell, and in what forms, to our customers. In other words,
before you can do any knowledge management, you have to find
the knowledge business.
(2) you identify
the assets associated with those knowledge transactions. What
produces, refines, shapes, and transport the knowledge in those
transactions you've identified. What is its structure (human,
customer, structural), etc.
(3) What is the
strategy we wish to take (a) to bring knowledge to market and
(b) vis a vis the knowledge assets involved in bringing knowledge
to market and then, and only then.
(4) How can we manage
knowledge (assets, data, information -- stocks and flows), in
accordance with the strategy we have chosen and the assets that
matter in the business we have identified? How can we improve
the productivity of knowledge work? How do we manage knowledge
bases? How do we improve the processes by which knowledge is
created or shared? What are the key leverage points? and so on.
Knowledge management
comes fourth. That's not to say it's trivial. But management
-- of anything -- becomes a pain in the ass and a waste of money
if it's not ionized by a business purpose, direction, and strategy.
I'd love to redeem
knowledge management's sorta good name. But the name matters
less to me than redeeming the process itself.
Roger
Wright, Take Hold Training:
The exchange between Mary Beth Thornton and Jerry Ash was like
a good courtroom drama. The first lawyer speaks and you shout
out, "Innocent!" Then the other lawyer gets up and
in five seconds you're sure it's "Guilty!"
Mike
Novak to
Jack Vinson and Roger Wright: The important thing to recognize
is that Six Sigma (I still haven't figured out what that is yet),
TQM, Business Process Reengineering, The Balanced Score Card,
Core Business Systems Analysis, Quality Circles, Quality Function
Deployment, Benchmarking, Hoshin Planning, Activity Based Costing,
etc., etc., etc., are tools, techniques and methodologies
for use in enhancing, improving, and enabling business
systems.
By contrast, Knowledge
Management -- like Financial Management, Project Management,
Human Resource Management, Quality Management, and every other
Fill-in-the-blank Management discipline -- is a business system.
As such,its function is to enhance the performance of the organizational
infrastructure which, in turn, enables and drives the organization
toward improved business results.
It is axiomatic,
therefore: Improve your KM program and you will (almost by definition)
improve your business systems, your organizational performance,
and your business results. But that's only half of the story.
There is a symbiotic relationship between KM and the components
of an organizational infrastructure (i.e., Leadership,
Strategic Planning, Customer and Market Focus, Data/Information/Knowledge-based
Decision Making, Human Resource Focus, and Process Management).
I think it's almost
obvious how KM impacts these components and how, conversely,
they impact KM. A simplistic example: A commonly cited characteristic
of highly successful organizations (e.g., Baldrige Award
winners) is that Senior Leaders encourage and -- more important!
-- reward continuous organizational and individual learning.
This drives the demand for more and better learning opportunities,
and compels the organization to provide and/or identify additional
learning opportunities. As learning opportunities expand, the
use of these opportunities expand, and the newly acquired (or
upgraded) knowledges, skills, and abilities acquired through
these opportunities are used on the job. The bottom line outcome
is that individual and organizational performance continuously
improve. Which reinforces the Leadership practice of encouraging
and rewarding continuous learning.
This is just one
example of how the Senior Leadership "system" of an
organization impacts KM and vice versa. Many more examples could
be cited. Also, many examples of interactions between KM and
Strategic Planning, KM and Customer and Market Focus, KM and
Business Decision Making, KM and Human Resource Focus, and KM
and Process Management can be imagined.
But I think you
get the picture.
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Whispering KM
Roger
Wright:
How can they both be right?
Mary Beth described
my own past experience in bringing knowledge management into
a corporate setting. As a Group Vice President charged with customer
service and training for a national organization that linked
15,000 collision repair shops with 300 insurance carriers, I
used KM every day.
Sometimes I would
whisper the words "knowledge management" amongst the
people charged with retaining a customer. But I would never say
it very loudly, never say it in front of a customer, and almost
never say it in front of my boss. I'm sure that if someone would
have asked him what knowledge management had to do with our employee
and customer retention rate, his answer would have been, "See
Roger." Meanwhile, rumblings of "knowledge management"
would bubble up out of MIS where a steady stream of software
vendors took possession of the term as has previously been described
on this post.
Then when I started
my own consulting practice three years ago, I decided to atone
for my silence on the body of work that had fueled my career
since before the term "knowledge management" was even
used. I proudly slapped that great quote, "Knowledge is
the only asset that appreciates with age" on the home page
of my web site. I sat in my office ready and waiting for the
world to realize what a smart guy I was because I had read the
books by the "stars" on this post. I had even put this
stuff into action.
And I found that
the market did not care. The market, in fact, cared less than
my old boss. In the vast and often brutally competitive marketplace
where we "little" consulting shops live and work --
knowledge management has not been a marketable commodity.
I am not talking
about the top line writers and practitioners in the field who
so graciously share their knowledge on this post. And I am not
talking about Jerry, who has brilliantly and directly sold knowledge
management to me and anyone else reading these words. Jerry is
the exception to this rule. I believe Mary Beth is the norm.
The reason they are both "right" is that Mary
Beth (in the language of what was once called "sales training")
is talking about benefits and Jerry is talking about features.
Now maybe the reason
I'm almost never able to sell knowledge management as knowledge
management is due to my own lack of sales skills. If there are
folks out there not on the "star" level who
have been successful in marketing what we do and still
remaining true to the term -- as Jerry advises -- I would be
most interested in hearing how you did it. I've kept that great
quote on my home page. I'm hoping someday it might matter. But
meanwhile, I've put what I really say to prospects on
my bio and client list page.
Nobody wants to
hear, "I can bring you knowledge management." What
they want to hear is, "I can help you retain your customers
and employees."
Both statements
are true. But the market seems to respond to only one of them.
Keith
De Le Rue:
Whatever name you give it, KM is a bit like the three blind men
and the elephant - some of us have a trunk, some a tail, and
some a leg, but we all have an elephant. I have no problem calling
it an elephant, but I do get concerned when some parts of our
company call themselves "Knowledge
Management" when they actually only have the tail and nothing
else! However, this is only really a problem if they then tell
everyone that the elephant is a long, thin, ropy sort of thing
and no more. Building on what you say, KM should include communications,
education/learning/training (yes, maybe some loaded terms here),
librarianship, HR processes and IT systems.
I am happy to call
it an elephant, but all the parts of the elephant need to be
able to work together. As you also said, this will work best
when KM is enterprise-wide and collaborative, with a broad vision
continuously broadcast. It may sometimes be a struggle to get
to this point, and from what I have seen over the last couple
of years, it may be better to start this process bottom-up by
stealth rather than top-down. However, I also believe that KM
will only be effective in the long term if it can also gain the
top level recognition and endorsement. To be recognised, it needs
some sort of a name - and KM is probably the simplest to use!
As I have written
here before, there is no problem using jargon, provided that
there is a clear definition provided and understood. Let's call
it an elephant, but let's make sure that everyone knows what
the whole elephant looks like, and what it does.
Jerry
Ash: Thanks,
Keith. You bolster my concern that hidden KM can lead to enough
confusion and chaos to quickly destroy the whole concept regardless
of name. This reminds me of my latest "elevator talk"
-- revised on the plane back from the AOK/Delphi Summit:
"What do you
do?"
"I'm in Knowledge Management."
"What's that?"
"KM helps people and organizations turn what they know into
ideas that make
a difference."
"Difference in what?"
"Personal growth, accomplishment and worth. Organizational
value, competitive advantage and success."
"Wow. That's big!"
Carol
Tucker:
I have been reading along appreciatively, nodding in agreement
now and then, shaking my head at other times . . . .
Oddly enough, even
though I am one of the more outspoken proponents of "stealth
KM" (spoke at the AOK/Delphi Summit on the subject), I have
to agree that there are real problems with operating below the
radar screen -- not the least of which is the danger of the initiative
being too closely identified with a particular area or silo,
or even with a particular person.
But, at the end
of the day, the question appears to be: can we make a living
"doing KM"? The answer is that there are a few who
can -- and there are lots and lots of us who cannot. But perhaps
that is the wrong question to be asking. Perhaps the real question
is, can we make a living without using KM in our existing positions?
No company is going
to allocate dedicated resources to knowledge management unless
there is a real, not perceived, need. To convince senior management
and refractory boards that there is a need, and that you have
the answer, is a function of talking in their terms -- and that
means lightening up on the jargon, folding it in with organizational
development [strategic planning] and emphasizing the deliverables.
Think of them as customers, or end users -- spouting off about
ontologies, learning organizations, conversing companies, narrative
repositories and communities of practice makes their eyes glaze
over, their ears close and their cognitive systems to shut down.
But start talking
about how you can do what needs to be done more quickly, more
effectively -- and you get their attention. To keep it, you have
to show the value added.
It was Tom's last
post that brought me out of the woodwork -- it is indeed the
way we work, the process we follow, not the label we use to make
a difference at the end of the day!
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