Managing knowledge through targeted push

Feature

posted 1 Mar 1999 in Volume 2 Issue 6

Managing knowledge through targeted push

Ciba Speciality Chemicals is filtering, refining and channelling a new virtual product - knowledge. By building upon an existing foundation of customer networks, this valuable commodity is carried along the system with the aid of a customised ICT system. Adrian Nixon and Frederick Wheeler describe the distillation process for the elixir of sustainable competitive advantage.

A firm s communication infrastructure is fundamental to leveraging its knowledge resource. This resource comprises the distinctive knowledge held in the firm's proprietary technologies, procedures and its people. Knowledge differentiates firms, particularly in speciality markets, and leads to competitive advantage. In the past, the significance of human expertise to manufacturers of chemicals was often missed in the effort to maintain sales volumes. Although they valued the expertise that generated their intellectual property in terms of patentable processes or products, other expertise would be taken for granted, and generally speaking knowledge would be transmitted through informal channels. Today that picture is changing. The advent of reliable and standardised information and communication technology (ICT) now focuses the attention of firms in markets such as chemicals, on the use of internal and external communication networks to leverage their human resource.

Networked workers are often used to providing customers with a single point of call for service and advice. Some computer systems vendors offer diagnostic facilities through customer-support representatives accessing a knowledge base. Lank (1997) describes the example of ICL, where staff use an automated case-based reasoning system. Some of these staff have received basic training in knowledge acquisition and when a new problem arises, the individual responsible for maintaining the relevant knowledge domain determines whether the knowledge base requires updating.

Networks can be used in an automated mode to deliver software and other digital products, and many firms not in information businesses per se use their corporate World-Wide-Web portal to deliver information to customers. Sometimes this is information about services, products or procedures for applying products. For example, speciality chemicals producer Air Products and Chemicals gives product information, including safety advice to users in this way (see Dailey & McFarlan, 1996, on the development of Air Products Internet strategy).

Another variation is to offer an interface that combines automated and human responses. In the speciality chemicals industry, Buckman Laboratories was probably the first manufacturer to allow customers access to its experts through a bulletin board on its corporate Web site. (See Graham & Pizzo, 1997, for a description). Internet, intranet and Web technologies are opening up new opportunities to firms in industries that previously would not have been associated with advanced ICT.

Today's ICT (Information Communication Technology) not only allows messages to be sent locally or instantaneously across time zones but messages can be more permanent and complete. Unlike telephone messages that are hard to observe and impossible to measure, when experts deliver solutions using ICT the electronic messages are, to a greater degree, explicit and reusable. An e-mail message is written and recorded, so it is explicit (as opposed to tacit) and it is available for future use. However, the e-mail is only part of the communication. It captures explicit knowledge, but tacit knowledge will also have been exchanged (see Nonaka, 1994, for a discussion of the relevance of the distinction between tacit and explicit knowledge to organisational learning). Tacit understanding includes the commitment and participation in a shared background of concerns of the person who generated the e-mail and those to whom it was addressed. Although the background remains unarticulated, knowledge of it is necessary whenever explicit knowledge is reused, in order to avoid non-value adding or even dysfunctional outcomes. Thus, an important part of knowledge management is to create a meaningful context for communication.

Industrial context

In the speciality chemicals industry, customer concentration, and hence bargaining power, has increased through the consolidation of customer groups, global acquisitions and mergers, so manufacturers of speciality chemicals have few opportunities to increase margins beyond the development of new chemistry. However, the sale of physical product can provide a channel for the delivery of a virtual product-this is knowledge.

Specialty chemicals are used in other manufacturing processes to enhance production efficiency and improve product quality. Although bulk chemicals are largely undifferentiated commodities, information on how best to apply a speciality chemical is a value-adding service for customers. Once a speciality chemicals firm offers this advice, it finds itself at the hub of a network of users, and discovers much more knowledge about the use of its products than do individual customers. The firm strengthens its relationships with customers and grows its own knowledge; creating sustainable competitive advantage and adding value for all parties (see Kay, 1993, for a discussion of the generic strategic role of such relationships).

Organisational context

The industrial environment described above has stimulated the evolution of an informal network of contacts that has the purpose of taking customers' process problems and finding solutions through the application of the company's products. In this sense, the firm's "knowledge management" has been successfully functioning in an informal, self-organising mode for the past 60 years. Figure 1 describes the simplified view of this system.

If the industrial environment was unchanging there would be no need to change the way of working. However the nature of global business is such that decisions need to be made more quickly to respond to the increased pace of change in the world. One specific example would be the efficient assimilation of the knowledge of new recruits. It could be that a new employee has the knowledge to resolve a customer's problem on the other side of the world but he or she is unknown to the relevant field representative. There has not been time or opportunity to make the necessary contacts. In this situation the connection between a problem and its solution may not be made and an opportunity to enhance business with the customer will have been lost.

System philosophy

It was realised that the application of ICT could enhance the efficiency of the informal network to the benefit of the organisation as a whole and the employees as individuals. Rather than try to replace the existing informal system, the approach has been to develop a parallel ICT system that works in harmony with the existing method which has evolved as a successful business formula over the years.

A big advantage of using ICT was the ability to keep operating costs minimised through the use of automated functionality. The system was designed to function with minimum administrative overhead whilst maintaining the ability to respond to changes in the environment, preferably through a degree of self-organisation.

Rather than build the system around technology that was already available it was decided to spend time understanding the way the informal system supported the business and then critically assess the existing ICT solutions against our benchmark of what we actually needed to sustain a successful relationship with customers.

Potential ICT solutions

The available ICT solutions could be classified as either push or pull systems:

PULL SYSTEMS are those where content or contacts are 'pulled' by the user from some source. Examples include the following:

i) BULLETIN BOARDS: Most e-mail systems have bulletin board functionality where messages are posted and stored under a common theme. A problem that can arise with this type of system is that the experts must be motivated to log onto the system, open the relevant bulletin boards and scan the list of message titles to select messages that they may be able to answer. It becomes progressively harder for experts to navigate as usage increases. In effect, the system becomes a victim of its own success.

ii) DISCUSSION DATABASES: Essentially this is a more sophisticated form of bulletin board. The functionality is enhanced by the ability to 'slice and dice' messages based on a variety of criteria to improve the efficiency of selecting the important messages from the user viewpoint. These systems also have the useful ability to link together the original message and subsequent responses. Despite these improvements over bulletin boards, the discussion database system still requires the expert to spend a great deal of valuable time searching for problems to solve.

iii) INTRANETS: The principal example of a PULL type of system uses an intranet. An advantage of an intranet solution is the relative user friendliness of the technology. It requires only basic training to begin usage and is intuitive to operate. An intranet appeared to be the perfect solution until we began to critically assess its usefulness in relation to our business operation. Our organisation has a large number of employees operating in the field, actually meeting customers on a regular basis.

The current state of intranet technology appears to be designed around the office based worker rather than the field based worker. Downloading large amounts of information on a regular basis to and from remote users was a key weakness of the intranet solution as this challenged the assumptions that the marginal costs of installation and operation would be small. The intranet technology still has several years of development to meet our needs.

Another more subtle problem also became evident with the current intranet technology. An intranet can be viewed as a great big user-friendly filing cabinet where documents of all types can be stored for access. The principal problem that occurred to us in the design phase of our system was this: If a person requiring expert help is so unfamiliar with the problem, how can he / she begin to define the question so that the solution can be found? No credible answer was provided from the current state of intranet technology.

PUSH SYSTEMS are those where content or contacts are pushed to the user from some source:

i) E-MAIL: This is a primary example of a push system where messages about certain topics are sent to various users. The system can be automated or manual. In the case of the automated system the problem is deciding who needs to see what? When dealing in the realm of tacit knowledge it is highly probable that experts (employees who possess the skills and experiences necessary to resolve the problem) may not actually recognise themselves as being capable of providing the answer until they actually do it. The net effect is that potential experts are not identified as such and are missed out, or other experts are sent a wide range of messages, most of which are irrelevant and this results in information overload as the expert becomes swamped.

ii) BROADCAST: This web-based broadcast technology, automatically delivers URL information to the desktop in the form of news channels, as exemplified by screen-saver products produced by PointCast Inc. The broadcast approach was not sufficiently targeted at specific individuals for our purposes.

Creating an ICT solution around the Business

It became evident that there was no straightforward 'off the shelf' solution that would satisfy the business needs. A combination of the best elements of the Push and Pull technologies seemed appropriate and the linking mechanism was a systematic structure derived from a very clear understanding of the business need. The term 'Targeted Push' was coined to describe the solution.

i) System Platform: Rather than start from scratch, it was decided to build a system based on a Lotus Notes framework because the combination of replication technology and the ability to build bespoke software made this platform a practical choice.

ii) System Framework (knowledge mapping): For the system to function effectively, a clear framework was required to define what was important. The starting point was to recognise that this system was intended to support the business and therefore needed to add value. The next step was the fundamental understanding that not all knowledge adds value.

This led to a large project to define what value adding areas were important to the business. This process resulted in the creation of knowledge maps for a variety of industries ranging from papermaking to pollution control, from mining to textile chemicals. The mapping process captured the theme of value added in these diverse areas using the Porter Value Chain as the starting point. (see Porter, 1985, for a more detailed discussion of the model). The value chain represented above in Figure 2 was used to develop the description of value adding areas.

The mapping process concentrated on the sales and marketing and customer service areas for nine business units working in close consultation with business managers on three continents. This process took a year and a half to complete in a form that was not only generic but also allowed for dynamic management of the maps themselves to accommodate constant change in the external environment.

iii) Linking The Experts To The Maps: Once the mapping process was completed, the resulting structure was used as the value added language to define experts using a variety of methods. The link between expert and the map was possible because the system automatically associated areas of expertise as a result of the user working on the system. The more the system is used, the bigger the pool of identifiable experts becomes. Figure 3 describes the simplified view of the association between expert and value adding activity.

The operation of the targeted push system in practice

The system is called 'ACknowledge' and is integrated into a larger sales and marketing system in the organisation. The system operation is best described from the perspective of a user (a field representative) who has identified a customer's problem.

The user describes the customer's problem to the system both in terms of text and diagrams. The process involves classifying the problem in terms of the definitions employed by the value activity maps. This helps the user to define the problem in a standard context for the organisation even if the user is unfamiliar with the customer's particular industry area. Once the problem has been entered and classified by the user, the classifications selected are combined with the other information to form a search to locate experts who are working in similar areas. Direct contact is then initiated between the user and the customer and expert(s), who may be likely to have experience that can contribute to problem resolution. Figure 4 shows the simplified overview of the system operation.

In this way the problem is defined using a common framework and then released to experts who are selected on the basis of a match between the problem definition and their past activities. Because the identification of experts is based on the match with their activities, the system can identify probable experts who may not have considered themselves capable of providing the answer. The whole process from problem definition, expert activity classification and expert-user contact is totally automated.

Problem-solving activity can now be actively managed as a value generating process for the organisation. Representatives with customers' problems are brought into contact with internal experts who can provide solutions. Two important concerns have been addressed, namely helping representatives to formulate customers' problems in meaningful ways and finding experts, even when some of those experts do not recognise that they have relevant knowledge. ACknowledge is also capable of encompassing all the other value adding activities of the business and can be expanded to include Technical, R&D, HR and ultimately the production environment.

References

Dailey, M. and McFarlan, F. W. (1996) 'Air Products' Internet Strategy'. Harvard Business School Case # 9-397-3008, Harvard Business School Publishing, Boston, MA.

Graham, A., and Pizzo, V. (1997), ' 'Competing on Knowledge': Buckman Laboratories International'. Knowledge and Process Management, 4, 4-10.

Kay, J. (1993) Foundations of Corporate Success: How Business Strategies Add Value. Oxford: Oxford University Press.

Lank, E. (1997) 'Leveraging Invisible Assets: The Human Factor'. Long Range Planning, 30 (3) 406-412.

Nonaka, I. (1994) 'A Dynamic Theory of Organisational Knowledge Creation.' Organisation Science, 5, 14-37.

Porter. M.E (1985) Competitive Advantage: Creating and Sustaining Superior Performance. New York: The Free Press.

Adrian W Nixon is Market Information Manager at Ciba Specialty Chemicals, Water Treatments Division in Bradford. Frederick P Wheeler is a Lecturer in Management Science, University of Bradford.