Reap the long-term rewards of knowledge management

Knowledge management is returning as a key issue, but questions remain. Computing reports from the KM Europe confernence in Amsterdam

Knowledge management has previously been a big disappointment for many companies. What's changed now?

The big problem with knowledge management (KM) has been lack of focus - lots of grand vision, little practicality.

KM strategies now need to built on more secure foundations, says leading expert Fons Trompenaars, of Trompenaars Hampden-Turner.

He believes that at the heart of knowledge management is a misleadingly simple question: 'How do you extract meaning from all the data around you?'

That's not just a technical task; it also takes in issues like company attitudes and multiculturalism. To create practical business policies is difficult unless you have clear objectives.

Trompenaars suggests companies look at tasks as business dilemmas to be reconciled: eg transnational solutions versus localised centres of excellence, or rewarding individual endeavours or collaborative teamwork.

'Companies need to ask what they can learn from mistakes and understand that erring and correcting are both part of the reconciliation process.'

Knowledge management is enshrining the process in business practice.

So is it an IT issue?

KM is a way of thinking and, in that sense, is emphatically not an 'IT issue.'

The most important element in any strategy is understanding the specific business tasks to be tackled.

But it's difficult to see a KM strategy that does not involve technology?

'The fundamental change over the last 20 years is that all business processes have in some way been enabled by IT,' says Carla O'Dell, president of the benchmarking organisation APQC.

The role of a specific IT department is to act as 'change agents' to make business strategies come to life.

'The starting point is always the customer,' says Ciaran McGinley, ' and maybe, if you're being more sophisticated, the customer's customer.

'Once you've sat down with the customer and brainstormed they need, IT becomes the facilitator.'

What does a KM 'toolbox' look like?

There are plenty of companies who market themselves specifically as supporting knowledge management.

Most strategies will involve some kind of intranet, portal, collaboration tools and search facility.

Sophisticated mapping tools are important to identify what knowledge is available, who the experts are, and where relevant data is kept.

But the truth is that the tools have to be decided after the business need has been identified.

Mike Moss, knowledge management specialist at Rolls-Royce says the priority for his business has been retaining expertise.

The world's second-biggest aircraft maker works in areas of rare specialisms with long-term engineering developments. The company has to 'capture' knowledge before it disappears to retirement or new jobs.

'Take the decommissioning of Concorde, for example. Rolls-Royce manufactured the Olympus engines and so our task recently has been to keep the knowledge for future supersonic engine design.'

Unilever, on the other hand, sees R&D as a particularly important beneficiary of KM.

Sam Marshall, Unilever's KM specialist, says there were easy savings for a giant multinational in day-to-day efficiencies.

But the sharing of knowledge in the long-term means unexpected new avenues can open up. The invention of moisturising lipstick, for example, was built on knowledge gained in the production of margarine by a completely separate arm of the company.

Finding where KM will benefit your business means preparation and patience.

'It's a process of observation, analysis and reflection,' says Matthias Gutknecht, director of Principal Domains Europe at Xerox Global Services.

'People fail because they are looking for quick wins but you have to look at the long term. You can't change company culture quickly,' he says.

How do you motivate people to buy into the idea?

The 'not invented here syndrome; has a strong hold on Western business culture.

We reward individual excellence far more than sharing. Sales targets tend to be about competing with others inside a single company.

Mike Moss, of Rolls-Royce says resistance to sharing often comes from management.

'I think engineers and many technical people believe their status comes from being able to show what they know. So they are motivated to share knowledge.'

Tony de Bree, KM specialist at ABN Amro says specific bonuses for KM can be counterproductive because you need to change the way people think all of the time.

Rewards should come through seeing the value the company puts on such work - through appraisals or promotions.

'The right example should be set at the top. The board needs to be a role model,' he says.

Knowledge management problems are often matters of culture, says Fons Trompenaars.

The communication and knowledge divide may be internal but often it's about differences on a global scale.

'Sharing knowledge is not part of Western culture,' suggests Trompenaars.

'We often recognise cultural differences and ignore them - and we call that globalisation,' he says.

Knowledge management offers a more intelligent way to reconcile differences.

How do you measure success?

There is no room for woolly targets. The value of knowlege management strategies can only be measured by the benefits to a specific task, says Carla O'Dell, president of benchmarking organisation APQC.

'You can only measure the return on investment (ROI) on particular initiatives that you are trying to carry out - to look at specific business returns.'

Given the exponential rise of data in every organisation over the last 10 years, there may be more defensive ways of looking at the value of KM.

'Data levels continue to grow every year and every company has a pain level,' says Iain Fletcher, international sales director of search company Convera.

'There are visionary companies but most act because the company is starting to feel the pain.'

Expertise can haemmorhage at hgih speed through redundancy, staff turnove and the virtual disappearance of the traditional apprenticeship.