How refreshing…

Tony Wegewijs details Heineken’s constantly evolving KM strategy, which is based on the principle of ‘connecting knowledge… creating value’

For many, the word ‘Heineken’ will immediately conjure up images of a nice refreshing beer. Its core brand and its company – in fact, family – name are well established in the international beer-brewing industry. Heineken owns a global network of distributors and breweries and is currently one of the world’s leading brewers in terms of sales volume and profitability. Its principal international brands are Heineken and Amstel, but the group brews and sells more than 170 international premium, regional, local and specialty beers and ciders. Currently, the company employs more than 70,000 people in more than 65 countries around the world.

A learning journey
The need to capture critical knowledge gained at key points throughout the supply chain has been recognised at Heineken for more than ten years. This encompasses all business processes from the malting of barley and the brewing and packaging of beer, to the storage and distribution of the end product, including all quality and process control procedures.

Previously, a central KM function housing years of expertise, supported Heineken’s local breweries in the management and improvement of their businesses.

Key lessons learned from previously solved problems and completed projects where captured, archived and disseminated throughout the business using a globally accessible database. This helped against ‘reinventing the wheel’ every time an issue came up, a mantra which has long been considered a fundamental of effective KM. The motto at Heineken was ‘in case you have a question… look here first’. Staff could search the database and find documented explicit knowledge to assist with their query. Of course, even this system had some limitations, given that not all tacit knowledge acquired from operational problem solving and daily practices can be captured in this way.

Nevertheless, over a period of more than five years, a strong knowledge base was created, not just centrally but also in the operating companies. This resulted in the sharing of best practices, standards and procedures, guaranteeing the quality of our products on a global scale. Heineken still benefits from, and fosters, this knowledge heritage now.

Decentralising knowledge
Over the past ten years the organisation became more de-centralised, resulting in stronger regional responsibilities. Because of this, the need for central support changed as well. This led to a smaller central organisation supported by a strong belief in the (knowledge) potential within the operational companies (opcos).

The ownership of knowledge now lay with the people who had built it up through experience, learning and development. The question, however, was: ‘how do we unlock this potential, create synergies and use them across the global supply chain?’.

To respond to this questions, a new KM strategy – originally focused on the supply chain, but which now forms the backbone of all KM activities – was implemented in 2005. The main features of this strategy are outlined below.

Clearly defined knowledge domains, with individuals accountable for KM processes within and across each area This includes the responsibility to:

Set the ambition – provide direction to the organisation;
Prioritise and set focus – define the need for knowledge, based on the ambition;
Create or collect – by building and using internal and external networks;
Disseminate – provide the right knowledge at the right place at the right time;
Apply or re-apply – stimulate the application. This is where the real value lies; and
Evaluate – continuously reinforce the existing knowledge base.

This six-step approach is known as the ‘knowledge value chain’1, with each stage adding value to the individual process and the business as a whole. It is used to visualise and explain the value-added benefits of KM (see Figure 1).

Linking KM to core business process objectives and performance indicators, but also to improvement programmes, where new knowledge is generated in problem solving. Sharing the answers discovered increases problem-solving capacity.

Optimal use of the organisational potential. This means identifying a network of people to involve in concrete KM activities – for example, communities of practice. These people may not have worked together before, but by dealing with similar problems and working together to resolve such issues (sometimes remotely) they are able to come up with innovative new ideas.

The use of collaboration and repository tools on a global scale. Currently, our global KM system is used extensively (around 20 times more than ten years ago at the start of our KM journey). It provides validated and approved best practices and knowledge items.

Linking KM to the maintenance of the regulatory framework. This requires central and global expertise to maintain the solid knowledge base captured in standards and procedures, which is also accessible on the same KM system.

Linking KM to competence management, using the defined knowledge domains structure as a basis for individual development. This includes ownership and maintenance of the learning curriculum across each domain.

Top-down management support from the executive board has been crucial throughout the implementation of the KM strategy and will remain so in the future, to ensure ongoing ownership of knowledge and KM.

At Ark’s recent KMUK 2010 conference, David Snowden commented that knowledge managers must think about how to make KM strategic. When mobilising the organisation to contribute to KM, the best thing to do is focus on those activities that sit closely with daily practices – things that people are already thinking about. For example, Heineken integrated its KM strategy with a company-wide sustainable improvement programme, which has been widely communicated and accepted. This has resulted in focused activities and buy-in at all managerial levels, because the programme was already embraced throughout the organisation.

Therefore, one should not worry about how to get buy-in for KM if the activities are linked to business objectives and day-to-day activities that have already found their way into the organisation. We can even challenge the concept of ‘selling’ KM to the business. For selling, you need buyers and people will always buy if there is a clear need. Understanding the need is a key success factor for KM, which will bring you the buy-in independently.

Over the past four years, Heineken’s KM programme has produced clear and tangible results in terms of cost savings, changes to procedures, project evaluation and process improvements. In principle, an ROI calculation can easily be demonstrated, balancing the effort invested and the tangible, quantifiable outcomes generated. Intangible outcomes are also present, although not always easy quantifiable. The increased level of involvement, stronger networking, better problem-solving capacity and increased motivation to learn and share is paying off for the organisation.

True engagement in any KM activity can be seen as proof of the value of these intangible results and reinforces the people aspect of KM. When people see visible improvements in information accessibility, expertise ‘traceability’ and problem-solving capacity, they are motivated to use the available KM tools and participate in associated activities.

In the Heineken KM strategy, three aspects need to be treated as equally important: process, technology and people. One cannot do without the other – for example, having state-of-the-art technology in place, without having people who are inspired or motivated to use it does not achieve results. Or, on the other hand, you can lose people’s attention just as quickly as you got it when it takes 15 minutes to open a document. Finally, it is the business relevance of the content which is the fuel that keeps the KM engine running.

The KM journey continues
Now Heineken’s KM journey has arrived in 2010, it is adapting itself again to today’s business environment – in which speed of decision making, business alertness and innovative power is essential and can be a competitive differentiator. Ever since 2005, the ambition has been to increase the ‘learn-ability’ of the organisation. In 2005, I defined this as ‘the ability to continuously change the organisation’s work routines and behaviour, based on (re) application of knowledge from intentional and unintentional learning’.

The key elements of this definition are that:

Learning is a continuous process;
Learning will lead to change in work behaviour – one can’t change without learning and can’t learn without changing;
Change will take place if knowledge coming from learning is applied;
Knowledge will come from intentional learning – for example, from formal learning such as training; and
Knowledge will come from unintentional learning – for example, day-to-day learning in work situations.

Heineken will continue to work on its ability to learn, change and create value with its current KM processes and the activities derived from them, especially knowledge gained through unintentional learning. This type of learning, which any individual can experience daily, is maybe the most important source to be tapped, as it can hold unique knowledge that can make a real difference to the business of tomorrow.

In turn, this requires a shift towards the use of web 2.0 tools and ‘leadership 2.0’ competencies to apply them successfully. The strategy will remain but will be adjusted accordingly, matching today’s requirements and 2.0 characteristics2, such as:

Use of a wider range of channels;
Online facilitation of lateral discussion, rather than top-down communication;
Asking staff for honest insights;
Valuing everyone’s input; and
Using blogs for self-reflection based learning – blending knowledge sharing and individual learning.

The direction of Heineken’s KM approach will be strongly influenced by the need not only to be able to find the ‘what’, but also the ‘who’, and understand the ‘why’. Heineken’s KM slogan ‘connecting knowledge... creating value’ already implies the belief that connecting people – the knowledge carriers – is the way forward. That will definitely create value to the brand and Heineken’s global business.

Tony Wegewijs is the manager of the KM department for Heineken’s supply chain. He has worked for Heineken for 27 years and has a technical and technological background not only in production, but also as a training manager and a learning consultant. For more information, please visit http://nl.linkedin.com/in/tonywegewijs

References
1. Weggeman, Prof.dr.ir. M.C.D.P., (1997) Kennismanagement: inrichting en besturing van kennisintensieve organisaties, Schiedam, Scriptum, pp.29-37;
2. From ‘Innovation co-creation’, written by Bonnie Cheuk and published in the February 2010 issue of Inside Knowledge