posted 26 May 2009 in Volume 12 Issue 7
Case study: Tata Steel
Forging strong leadership
How Tata Steel’s long-term commitment to evolving knowledge maturity and performance has established it as a trailblazer in knowledge-leadership capability development.
Tata Steel demonstrates long-term commitment to evolving knowledge capabilities and social responsibilities (contributions to community learning and development). It has been persistent with its commitment to knowledge sharing and embedding knowledge capabilities into everyday practice over a long period. As the organisation progresses, it has continued to mature its processes and these efforts have improved its own performance, as well as that of the communities in which it operates. Tata Steel is a rapidly growing, agile business and has received industry recognition for knowledge excellence. For the past five years it has been an Asian ‘Most Admired Knowledge Enterprise’ (MAKE) award winner in at least one of the eight categories, including first place in the following: creating an enterprise knowledge-driven culture; creating an environment for collaborative knowledge sharing; and, creating a learning organisation and delivering value based on customer knowledge. In 2008, it was named as the overall MAKE Award winner.
It is also being selected as a best-practice partner in the American Productivity and Quality Center (APQC) consortium benchmarking study on ‘Leveraging Knowledge across the Value Chain’, and as a ‘best-practice partner in knowledge management’ (KM).
Tata Steel is a subsidiary of Tata Group. The business operations of the Group currently encompass seven sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals. The group’s 27 publicly-listed enterprises have a combined market capitalisation of some $60bn. Based in
The Group has always believed in returning wealth to the society it serves. Two-thirds of the equity of Tata Sons, its promoter company, are held by philanthropic trusts, which have created national learning-based institutions in science and technology, medical research, social studies and the performing arts. The trusts also provide aid and assistance to NGOs in the areas of education, healthcare and livelihoods.
Tata executives explain to their business partners, industry analysts and shareholders that they pursue a business strategy based on knowledge leadership because of the economic, social and competitive advantages it brings. They highlight the findings of the 2006 Indian MAKE study as evidence of the benefits being tangible and significant. The total shareholder return for the 2006 Indian MAKE Winners was 29 per cent, more than five times that of the US Fortune 500 company median of 5.4 per cent.
The KM programme at Tata Steel started quite small in 1999 and progressively grew to include the entire organisation through a series of evolutionary adaptations and growth cycles. Early knowledge activities were primarily focused around office-based personnel and a small number of supervisory staff. Focus areas in phase one (1999-2000) were around awareness of the value of knowledge and process design. Knowledge systems were developed, including a knowledge portal, and success stories captured and shared. The emphasis on KM was clearly demonstrated in this extract from the 1999 corporate vision statement:
“Tata Steel enters the new millennium with the confidence of a learning and knowledge-based organisation…”
Buoyed by the success of phase one, phase two (2000-2001) expanded to include communities of practice, additional functionality in the portal, and linking the KM system to other systems. During this period, the employees had input into new vision statements, resulting in KM being one of the key pillars in the corporate strategy. In addition to the traditional systems-focused activities, the knowledge programme included the people aspects of knowledge sharing and learning, such as capturing experiences from both successes and failures, and understanding the value in their tacit experiences.
Phase three (2001-2004) saw enhancements in governance, better systems, access to customer and supplier knowledge, and increasing human interactions with the addition of an ‘Ask the Expert’ service and increased community participation. Phase four (2004-2005) signified an increase in the use of knowledge right across the supply chain. Tata Steel had developed the view of how it wished to integrate knowledge exchange between itself and its strategic partners in the supply chain. The knowledge programme ‘Manthan’ merged some activities with other significant programmes, such as the Aspire improvement programme. Introduced in 2003, Aspire revolves around the philosophy of setting aspirations, which may be beyond the current capability, with a view of improving to realise those aspirations. This cooperative approach between programmes helped to embed the knowledge principles across the organisation and strengthen the links between knowledge and capability development.
The introduction of the combined ‘Aspire Knowledge Manthan’ programme in 2004, saw it expand much more widely across the organisation. The term ‘Manthan’ means ‘churning of knowledge’ and represents the desire to increase the flow of knowledge throughout, and especially across, the organisation. A significant part of the success of the programme was the leadership support it received. Dr. Mukherjee, deputy managing director (steel), launched the programme and has remained an active supporter throughout its evolution. The initiative targeted the capture and sharing of tacit knowledge directly from the grass-roots level, enabling reuse of this in other parts of the organisation. Knowledge Manthan sessions are facilitated discussions chaired by a knowledge champion and a topic expert. Every month selected topics, such as motor, levelling and alignment, lubrication, water treatment, and so on, are widely communicated and supervisors from all sections of the plant participate. They share and discuss their knowledge on the topic using various methods, including storytelling and case studies, to generate initial interest in the group.
Tata has continued to spread the knowledge sharing and capability development throughout the entire organisation. In 2005, it launched the MASS programme to promote horizontal deployment of available knowledge assets at the plant-floor operator level. MASS is an acronym derived from the Hindi name ‘Manthan Ab Shop-floor Se’. Supervisors from shop-floor level are selected from a variety of departments to participate in an eight-week knowledge discovery and sharing intervention. The entire experiential programme is facilitated by the core KM group, and carried out in the following phases:
Training and defining scope of work;
Searching of knowledge assets, harvesting with shop-floor employees and experts;
Identifying good practices; and,
Syndication with department and documentation.
The organisation’s leadership is happy with the tangible and intangible benefits from the programme. After running the programme several times, the listed benefits were:
Huge scope for horizontal deployment of available knowledge within the company;
Some of the excellent ideas remain confined to their shell due to inadequate thrust on proper knowledge transfer; and
Structured guidance for a desired goal and interaction with different departments and experts during the wave has helped a lot in changing the way our MASS leaders think, and has actually turned them into a real ‘change agent’ at shop-floor level.
They learnt early in their journey that they needed much more than just codification. They found, as did many other organisations around this time, that too much emphasis on capture and technological aspects was unproductive. It became monotonous and hard to sustain momentum. This lead to a multi-pronged strategy to balance the people, processes and technological aspects of the programme.
The three key strategic directions of Tata Steel’s knowledge programme have been:
Codification – the capture of tacit knowledge in explicit forms so it can be reused by others to create new tacit knowledge;
Personalisation – transfer of tacit knowledge and experiences between people;
Knowledge diffusion – the application of knowledge and intellectual assets in projects and improvement programmes. This strategy also incorporates novel methods, such as knowledge quizzes, facilitated knowledge debates on selected topics and the MASS programme.
Active participation in the knowledge programmes has been a significant part of the learning and development at Tata. The central, dedicated KM team facilitates interactions that involve employees from all levels of the organisation, including approximately:
Five hundred practitioners identified by the communities who validate the accuracy and reliability of all the good practices being submitted;
Twenty-five champions for the various communities;
Two hundred and twenty practice leaders, who lead the sub-communities;
Two hundred and fifty conveners who help manage the communities and sub-communities;
Two hundred experts who help others over the discussion databases to resolve problems;
Fifty KM coordinators; and,
One thousand plus part-time evangelists.
The exchange of knowledge between people at both face-to-face and virtual events contributes to the development of individuals and groups. Activities with communities and between related communities are a foundation of the knowledge sharing and contribute to innovation. The holistic and informal approach to learning is working well for Tata. In-house development and self-guided evolution is a strategy that has been sought from the beginning. Tata made limited use of external consultants, because it believes its own people are in a better position to understand the culture and workings of its business. It is of the opinion that by implementing the programme itself, it learns and is in a better position to adjust the strategy than external parties would be. As such, this path was an investment in the organisation’s own capability and strategic learning. There has, of course, been significant learning across the Tata Group of companies.
Tata entered its knowledge and learning journey as a means to an end, in that it was striving to deliver superior performance. The end, as such, does not exist. By the time it reaches its milestone (the previous end), it has learnt how to apply the new capabilities to progress beyond this to achieve even more in the future. Tata has proven this path to be highly successful in that it generates continuous improvement in both capability and productivity. It has taken the wealth of what it has learnt over the organisation’s history and is applying this to future pursuits to aggressively achieve its business goals.
In 1990, Tata Steel wasn’t ranked in the top-80 global steel makers. Since the year 2000, it has been in the top-five for performance and has been number one on several occasions. It is now acknowledged by many as the best and most efficient steel company in the world. Although many of the improvements were already in place with the plant revitalisation programme, through the 1990s the knowledge programme has helped Tata leverage its ‘learnings’, leapfrog its competitors and continue its remarkable growth. Ongoing commitment to this long-term goal has paid off both in economic performance and recognition. Tata Steel has continued to grow, reap high returns and expand well beyond
Rory Chase, managing director, Teleos, 2006 Indian MAKE Award ceremony.
This article is adapted from an excerpt of Ark Group’s Being a Successful Knowledge Leader: What Knowledge Practitioners Need to Know to Make a Difference, written by Arthur Shelley. For more information, contact Robyn Macè on firstname.lastname@example.org
Arthur Shelley is founder of Intelligent Answers Pty Ltd and author of The Organizational Zoo. He can be contacted via his website at www.intelligentanswers.com.au