posted 1 Oct 2003 in Volume 7 Issue 2
Leader of the pack
Despite changes in leadership and corporate strategy at Buckman Laboratories, the reliance on knowledge management as a key competitive advantage has remained constant. Recently named as a MAKE winner in North America, Melissie Rumizen says that the keys to success have been the value given to knowledge within the corporate culture, and how the company has developed and used knowledge throughout its history.
Creativity for our customers
“Sustained creative work together is the basis of the success we have enjoyed and the key to our future.” – Stanley J. Buckman, founder of Buckman Laboratories
At the end of World War II, Stanley J. Buckman left his position as president of Central Laboratories and started Buckman Laboratories. He chose the city of Memphis not only because it is on a great American highway, the Mississippi River, but because it is also near many pulp and paper mills – our target customers. Our first facility in Memphis was an old, remodeled duplex home. As one entered the building there were two laboratories on the left and four small rooms on the right, which served as offices and a library. The back porch had a stairway leading to the basement, the home’s manufacturing plant, and a small garage provided a storeroom. Buckman himself had a small office in a wing off the rear part of the building.
Despite the small building, the new company started with a strategic advantage. Prior to founding the company, a disturbing problem began to manifest itself in many paper mills in the US during the 1930s. The introduction of the recirculation of white water during pulp and paper processing produced significant economies. However, it also introduced a new challenge: the growth of micro-organisms in the water systems. The more efficient the water-recirculating systems became, the more suitable they were for the growth of micro-organisms that hampered production. Buckman Laboratories pioneered the use of biocides to control micro-organisms in this processing. This breakthrough gave the young company its impetus.
Within the organisation, our research and development department was the backbone of the company. A standard joke was that it took a PhD just to sweep the floors at Buckman. The R&D department provided the engine, technical expertise and innovation for our business strategy of product leadership. Our goal was to develop the finest, most innovative products that would bring in customers.
In contrast, however, we had a relatively small sales force. But as with our R&D department, our first sales representatives held PhDs (with the exception of one with a Masters degree). Buckman, himself a PhD chemist, felt PhDs had the best knowledge and expertise to present and explain our chemistry and its applications. Later we provided our sales representatives with mobile laboratories so that they could perform various tests right at the mill, rather than back at the home office. We also shared our technical expertise with our customers, often through seminars.
Dr B, as Buckman was known, is best described as an entrepreneur. In the words of John Pera, former VP of research and development, he had intelligence, creativity, a great scientific background, stamina, personality and business acumen. In addition to building the business, Dr B also stamped his values on the corporate culture. As author Edgar Schein noted, young organisations are, “the creation of founders and founding families. The personal beliefs, assumptions and values of the entrepreneur or founder are imposed on the people he or she hires, and – if the organisation is successful – they come to be shared, seen as correct and eventually taken for granted.”1
Dr B valued people with qualities similar to his – creativity, stamina and the ability to work as part of a team – who could do whatever was needed. One example in the early years was the designing and building of a new manufacturing facility to mercurate benzene in less than six weeks. A former VP, James Grannen, summed it up by saying, “If you needed extra effort, [Buckman associates] gave it willingly. If new ideas were important, they came up with them. If we needed to change directions, they got it done. Things got done, and they got done the right way.”
Across time and space
Sadly, in 1978, Buckman died, and his son, Bob, took over Buckman Laboratories. At the time the company was rigidly hierarchical with numerous heads reporting directly to Bob, necessitating much CEO attention. He made a decision to decrease the number of levels reporting to him and decentralise the company. He also recognised that although we had started to expand globally, relatively speaking we had yet to tap potential markets in many countries.
Bob instituted yet another key change in overall strategy: the dramatic increase of the sales force. The overall target initially was that the sales force would form 30-35 per cent of total employees. However, Bob understood that such a change had to be implemented gradually. Corporate sales in 1983 were $55.3m, by 2002 they were $335m; today our sales force and associated technical support personnel account for about 50 per cent of our workforce.
As we expanded globally into over 90 countries, the need to communicate and collaborate grew proportionally. Before the days of the internet and e-mail we sent our travelling PhDs to acquire and share quality practices. However, traversing the globe simply took too long. By the time the PhDs made it back to Memphis, some practices were outdated, or they might have learnt other practices towards the end of the trip that they hadn’t shared with the first companies visited. There was also the wear and tear on the PhDs to consider. On one such trip to South Africa, Bob and Dick Ross, former VP of marketing, were sitting in the hot sun when Ross said wearily to Bob, “There has got to be a better way.”
So, in search of the better way and to enable us to communicate more efficiently, we started implementing global e-mail in 1984. We did not succeed until 1988. The IBM global network we used was cumbersome; the laptop computers we gave our associates weighed about eight kilograms. However, we finally had global e-mail.
In 1988 we formed the Knowledge Transfer Task Force, whose goals were to identify knowledge requirements for our business goals, translate these requirements into IT projects, and evaluate the global opportunities and implications of these projects. In 1992, we decided to use Compuserve, which was then a service for private users, for our corporate e-mail. Finally, we launched what became our knowledge-management system, K’netix.
With Compuserve came several additional capabilities. One was instant messaging. No matter where they were in the world, we could see which other associates were online. This started to create a sense that we were one global organisation.
Forums, a bulletin-board application, were another bonus. If you posted a message on the bulletin board, everyone could see it, not just a few limited to receiving an e-mail. At that time Compuserve paid people to moderate discussion areas, but we decided that we would rather have our own employees moderate discussions about our business issues. We appointed section leaders for various primary industries, such as pulp and paper, leather, agriculture, industrial water treatment, and R&D.
Section leaders, mostly drawn from the then relatively few computer literate, met online at the end of every week. Their role was to create discussions in the forums, find answers to questions within 24 hours, check the daily activity and produce a summary of the weekly activity.
The head of our R&D department at the time, Wally Puckett, mandated participation by R&D. He made it clear that he expected everyone to contribute and that he knew the contribution of each person. This made R&D visible to our far-flung sales representatives and to our customers, as well as raising the visibility of our product evaluations at individual customer sites.
The results were more than just having access to global e-mail. Over time, the social networks in the company grew and increased in density. As people learnt who other people were and what they knew, direct contact via phone and e-mail skyrocketed. We began to not only have more face-to-face meetings, but also leverage the opportunities to meet in person. Our percentage of sales from new products, which we consider a measure of innovation, began to double. Other results included a 51 per cent increase in sales per sales associate and an increase of 93 per cent in operating profit per associate.
At the same time, in 1992, we realised that our strategy of product leadership was no longer viable. Much larger competitors were, as Bob puts it, eating our lunch. To survive and prosper we had to change. Consequently, we adopted the business strategy of customer intimacy. While we would maintain efforts in innovation, we decided to focus on providing customer-specific solutions that were the best solution for a reasonable price.
Improving output and quality
“We understand that no matter how well trained our associates are on an individual basis, they are not able to provide all of the solutions needed by our customers. However, these solutions either already exist somewhere within Buckman or the individual who can develop the solution is somewhere in our worldwide organisation. We can therefore link all associates together through a knowledge-sharing system and work to maintain a culture where the sharing of knowledge is encouraged and recognised.” Steve Buckman, CEO
In 1996 Steve Buckman took over the day-to-day running of the company as CEO, and in 2000 Kathy Buckman Davis became chairman of the board. While they honoured and built on the past, they also had a new direction for our future. They brought a new emphasis on business processes that were simple, easy to learn and easy to do. They clarified links to business strategy, and how our strategy and processes produced an ROI. They also insisted on the critical need for systematic approaches across the corporation to provide a uniform level of services to our customers.
As we applied our strategy of customer intimacy, we realised that we needed a new mission statement to reflect it. While working together in our forums, our global associates discussed (at times hotly) what the mission statement should be. The results were:
“We, the associates of Buckman Laboratories, will excel in providing measurable, cost-effective improvements in output and quality for our customers by delivering customer-specific services and products, and the creative application of knowledge.”
We also refined our purpose, stating that it is to foster customer loyalty, attaining and maintaining long-term, loyal customers for mutual profitability and growth. Doing this requires us to link our success with our customers, demanding deeper relationships. It also reaffirms the importance of having skilled, knowledgeable associates.
In 1997 we began developing a suite of knowledge-based business processes to deliver customer-specific services that meet common customer needs. These processes have become a critical competitive advantage. As a key decision maker at a large global customer said recently, “I want to work with Buckman so that we can work with your processes.” In essence we now have two types of products: physical or chemical products, and people products focusing on business processes. Doug Linn, current VP of marketing, says, “The emphasis at Buckman Laboratories is on the process and the results. This is the difference our own customers are seeing. We have become good at differentiating by delivering customer-specific results.”
These processes, also applied internally, are now part of everything we do. Over the years they have become an integral suite that we have developed as a learning path and a complete course for our associates, primarily our sales representatives. However, we are developing an approach to give integrated training of the entire suite to all of our associates, which we are piloting with our US customer-service group.
In 1997 we also started the Buckman Learning Center, headed by VP Sheldon Ellis. At first the emphasis was on training, with a particular focus on distance learning. The same circumstances that necessitate global collaboration also make traditional classroom training both expensive and usually impractical. We were one of the first to venture into e-learning. Over time, however, our role expanded to provide broader support. “The Learning Center will serve as a change agent within Buckman: it will drive change or facilitate a complete transformation process. This can be a transitory role as a company embarks on a new strategy or is in the process of making an acquisition,” says Ellis. To carry out this goal, we hone in on initiative-driven programmes. We define these as public activities that drive a corporate-wide initiative, business plan or project. This is often an initiative that the CEO or senior management is passionate about and is being cascaded throughout the company. The Learning Center supports and drives these activities.
One example of such an initiative is our TeamToolz process. Several years ago we realised that our aptitude with communities of practice had not transferred with similar ease and success to employing teams. In fact, our track record with formal teams was lacklustre at best. In 2000 we formed a team to develop a process, TeamToolz and we trained our first group of team facilitators to support it. An initial success in 2001 was our first global, co-ordinated launch of a new product line. The process this team established for new product launches has become the company standard.
The Learning Center is the process owner for TeamToolz. This autumn we will lead an evaluation of the first three years of TeamToolz and prepare to train even more facilitators around the world next year.
As more companies adopt knowledge management and distance learning, our customers have asked us to assist them in their KM and learning programmes. We view this as an ideal fit with our overall strategy of customer intimacy, as it deepens and strengthens our partnership with them. It is also a superb avenue for learning what really matters to our customers, both strategically and tactically. In 2001 we formed a consulting arm within the Learning Center that works with our customer representatives to support our clients. As we are a business, we also work with external clients such as Johns Hopkins University and Samsung.
Being a pioneer means we also have made our fair share of mistakes. It is part of our culture to be open about them so we will do better in the future. In line with that spirit, we can offer some lessons learnt about knowledge management and learning:
- Connecting people is more effective than building databases – Every paper machine in the world is different. Operating conditions at our individual customer sites vary enormously. We cannot rely on standard customer solutions. By connecting people we can provide customised, expert solutions that tap our collective knowledge and do so quickly;
- Leadership is necessary but not sufficient – KM is a participative sport; everyone needs to play. However, Buckman Laboratories has been blessed with multiple generations of gifted leaders who have understood the value of knowledge and walked their talk;
- Training must support change – Our associates need training in how to carry out their new requirements. We deliver such training worldwide and in multiple languages;
- Discipline often trumps brilliance – Our methods and approaches are mostly absurdly simple and we rely on the most basic of information technology. What makes it work for Buckman Laboratories is our discipline of carrying out implementations across the corporation and our insistence on following our own methods. As we expanded globally we learnt that what we provide for a customer in one location must be available in other locations. An extraordinary process that, if localised, hurts us unless we are able to transfer it globally;
- Plan on serendipity – A truism is that you will always have unanticipated results; but you may or may not have anticipated results. Just as important is that you capitalise on the positive unanticipated results. Some of our most effective practices were serendipitous, but we had the insight to capitalise on them;
- Forget the jargon – If asked, most Buckman associates could not define knowledge management. We do not use the term or any other jargon within the company. Instead, we talk about business strategy, drivers and results, and how we accomplish those. It is better to live it than to talk it;
- The new becomes the old – What was once innovative becomes antiquated, entrenched way of doing things. If you implement a change that is adopted and becomes part of the corporate culture, it becomes part of the establishment. If you want to change that, you are back to square one of change management. One solution is to stop after a pilot, evaluate and make changes while things are still new enough to be relatively fluid;
- Significant change surfaces renewed resistance – Even your early adopters may regress to old behaviours if there is considerable change in the system. Significant change requires change management so plan for disruption;
- Never celebrate success; celebrate accomplishments – Celebrating success can signal that you are finished. KM, like continuous improvement and six sigma, requires ongoing attention. If you rest on your laurels, they wither;
- People will reward you – With the right tools, a supportive culture and freedom, good people will accomplish more than you had dreamed. Hire them, cherish them and give them the environment they need. They will repay you infinitely.
1. Schein, E. H., The Corporate Culture Survival Guide, Sense and Nonsense about Culture Change, (Josey Bass, 1999)
Melissie Rumizen is knowledge strategist at Buckman Laboratories. She can be contacted at firstname.lastname@example.org.