Inside Knowledge Magazine /Knowledge Management Magazine Archive
Volume 8 Issue 6
After falling out of favour, company mergers are back in fashion. Last year was the most active for mergers and acquisitions (M&A) worldwide by value since 2000, and recent announcements from firms including Procter & Gamble and Gillette, and AT&T and SBC, for example, have fuelled impressions that the urge to merge is gaining strength. In the 1990s, a similar compulsion gripped the corporate world, with often disastrous consequences for the companies involved. But with record profit announcements seemingly now a daily event and corporate-governance reforms well underway, the hostility among investors towards M&A has abated. Thoughts are once again turning to expansion and diversification.
For knowledge-management practitioners, company mergers represent both an opportunity and a threat. The worst-case example is that of Clarica/Sun Life, which Jerry Ash discussed in the context of KM sustainability in these pages last month. Briefly stated, Sun Life’s acquisition of the much smaller Clarica resulted in the demise of a celebrated knowledge initiative, which was led at the time by renowned KM practitioner Hubert Saint-Onge. Rather than look to integrate the practices that Saint-Onge and his team had worked so hard to cultivate among Clarica’s employees, Sun Life allowed the programme to stagnate and eventually disintegrate. As Saint-Onge told Ash, “The new owner never really took the time to understand what was being done and why. Then and now, the knowledge and learning effort was seen as an unnecessary expense lacking in justification, pure and simple.”
The opportunity that M&A present, on the other hand, stems from the huge influx of knowledge, experience and creativity a company merger precipitates. Indeed, a McKinsey survey conducted in 2001 found that knowledge acquisition was becoming a prevalent reason for M&A in the first place. There is a caveat, of course: acquiring knowledge and ensuring it is integrated and accessible across the enlarged enterprise are very different. Aligning systems, processes and, above all, cultural behaviour is an enormous challenge. Likewise, valuable knowledge may easily slip out of the back door during a merger. But the potential rewards for the organisations involved are enormous. In one swoop, the combined enterprise is given access to an expanded pool of expertise and extended collaborative networks that have the potential to contribute immediately and directly to the bottom line.
All of which reinforces what most readers of Inside Knowledge will intuitively comprehend: the role of the knowledge manager, and the importance of KM-based principles and practices will only be enhanced as M&A activity gathers pace. Company mergers present a massive opportunity, but are likely to fail unless as much, if not more, attention is paid to integrating intellectual assets as is usually paid to integrating physical assets. It is perhaps no consolation to Saint-Onge that Sun Life is probably yet to realise the full cost of its short-sighted and misguided attempts to shave a few dollars from the combined organisation’s operating budget.
MASTERCLASS: Zen and the art of taxonomy maintenence part III
Part three of the masterclass covering the creation, implementation and maintenance of taxonomies in a corporate context. By Jan Wyllie
CASE STUDY: Burson-Marsteller
How Burson-Marsteller uses its corporate intranet to support the development of a dynamic, knowledge-sharing culture. By Vanessa Colomar and Andrew Sarnoff
CASE STUDY: Halliburton
A KM programme, founded on communities of practice, that ensures its long-term sustainability by building tangible, bottom-line value. By Jerry Ash
CASE STUDY: UNAIDS
Applying knowledge-management techniques to help combat the spread of the HIV virus. By Geoff Parcell
Death of a CKO: The evolving nature of knowledge leadership
As the knowledge-management movement gained momentum in the 1990s, organisations looked to the appointment of a dedicated chief knowledge officer as a means of preparing their organisation for the challenge presented by the knowledge economy. The role has since evolved, and though many companies remain loyal to the concept, others are questioning whether the limitations of the CKO model outweigh its advantages, and are exploring alternative models of knowledge leadership...
Thought leader: Flexible working
By Steve Ellis, founder and managing director of the Knowledge Doctor Consultancy (www.knowledgedoctor.com)
KNOWLEDGEWORKS: Damned if you do...
Balancing a focus on the bottom line with strategies that allow CoPs to develop organically...
KM TOOLKIT: Try anything twice
Despite the level of excitement early e-learning initiatives generated, online learning tools have since suffered a series of blows to their reputation. Recently, though, organisations have realised the medium deserves another chance, and several tools and approaches have emerged that promise to make e-learning a vital component of the KM toolkit. By Jessica Twentyman
PROFILE: Patti Anklam
Best known for her work with social networks and knowledge management, Patti Anklam has used her experience to write a practical guide to building organisational performance through collaborative communities, to be published later this month. Now focused on applying the principles behind complexity theory to the collaborative enterprise, she talks to Inside Knowledge about her career and work to date. By Sandra Higgison
TREND TRACKER: Lotusphere
By Chris Harris-Jones, research director, information management, Ovum
Book review: Collaborate to Compete
Collaborate to Compete: Driving Profitability in the Knowledge Economy, by Louis Stokes and Robert Logan, offers a realistic approach to fostering collaboration and provides the basis for developing a network that promotes knowledge sharing. By Daniel Myint