Faros, the learning effect - Inside Knowledge

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posted 1 Jul 2000 in Volume 3 Issue 10

Faros, the learning effect

In the final article in the Faros series, Ove Rustung Hjelmervik draws together the lessons Statoil has learned over the last four years in developing the Faros knowledge management system.

“We must not be afraid of taking a big leap from time to time. One does not reach across the abyss in two short jumps.“
David Lloyd George

“There is no limit to the supply of money. The bottleneck is in the supply of good ideas and sound projects. That is what we need in order to sustain the ability to create value in our society.”

This statement was made by Percy Barnevik, at the time CEO of the Swedish/Swiss ABB Corporation, during his stay as our guest and keynote speaker at the first Norwegian Entrepreneurship conference in Stavanger, in 1988.

Knowledge management is not about quick fixes or mathematics. Both the head and the heart must be involved in the process of building a successful knowledge management system. KM has become a hot issue over the last year or two. When we started out searching for clues about how to proceed, in the autumn of 1995, I could find no Internet sites offering articles on the subject. Today, one University of Texas site alone has over one hundred articles on knowledge management. The concept has many facets to it. However, unless your system is able to assist the users in creating new knowledge, as well as in their ability to transfer and combine experience, draw out new knowledge, and disperse that new knowledge among the members of a community of practice, you don’t have a KMS. We must avoid the pitfalls of TQM, BPR, and many other good concepts that have entered the business arena, but which were hyped up to be ‘quick-fix’ solutions. Building a KMS takes time and effort from the people involved.

Knowledge management is not just about Information Technology, although IT is of course a vital tool. KM is something much more. If properly structured and used, KM has the potential to become a tool for unlocking the power of the brain for the benefit of global business. KM may become to the business world what the Manhattan project was to the Second World War. The possibility of being able to harness the power of the organisation’s collective brain, and combine the results in neural networks among the COPs is a simply mind boggling prospect.

But KM thinking is in its embryonic beginning, and the primary issue is how the company is going to benefit from such a creative avalanche; should it attempt to build a KMS? As the Austrian economist, Joseph Schumpeter(1), pointed out, any organisation should engage in creative destruction. If we don’t improve ourselves, our competitors will beat us to it. Make sure your organisation does not become an ‘also ran’.

Human beings, operating in airtight compartments, not talking to each other and minding their own business, has thus far been the established way of organising intellectual capital. The controller at the top of the pyramid is the one who sets the conditions, and secures the commanding height. Mistakes are made, and made over again without anyone reacting to them. The valuable asset of human capital is wasted, by not securing and converting tacit into explicit knowledge. Faros was born as a result of many frustrating episodes that took place in the company back in the early 1990s. The company’s structure was thrown in the melting pot, as were our policies and procedures. As a meta system for KM, Faros has been able to answer some of the needs identified by the users at the time.

While the original idea was to match visualised instructions to the actual work processes, and to train people to do a job right before carrying it out, we realised that this was not enough to create a comprehensive KMS. As we continued to develop the concept, new groups of employees saw possibilities in using it and offered their feedback. The demands on our work increased steadily. Creating Faros has certainly been a challenging process. We had to beat our own path, as nobody had been there before us. It was a steep learning curve, as the users always wanted to see results yesterday. Then we had to establish the arena and the local communities of practice – piece by piece. Finally we had to ensure the employees actually used the system, and then wait for their judgement. When it came, it was like an avalanche of happiness, and pride.

Basing our navigation on the intranet, as Statoil had no plans for introducing it at the time, was one of the more difficult decisions. However, had we not decided on the use of the web, we would not have been able to build the functionality we can offer today. Likewise, we had to create the symbolism for designing work processes, to be agreed to by other communities in Statoil. As we succeeded with one area, we moved on to the next challenge. We practised experience transfer as we created new solutions, through copying a solution made for one business unit over to the next. We also developed a feedback system for the communities to share experiences and develop new and smarter ways of working.

We had to develop a new vocabulary, such as the Knowledge Room, Work Process Navigation, and JIT-JE. This gave us a language of communication while we were developing the concept. We learned to use many techniques for quick results. There were so many things to be done, and we were constantly fighting the clock.

Focusing on the Faros Work Processes Navigation as the common structure, and the main arena for finding relevant information for the users, we were able to create strong user participation. This was due to the following aspects:

Policies and procedures became simpler, more accessible and easier to relate to.

Swapping experience, using a process map indicating the process you are in, became meaningful, and removed misunderstanding and NIH (‘Not Invented Here’) attitude.

Continuous improvement and learning became more relevant and understandable by offering a context – a job or process – to which users could relate.

The many databases, storing data relevant to work, became a non-issue for the users, as they did not have to relate to them any longer.

We created knowledge rooms for both operational and functional communities of practice, creating a seamless and transparent way of navigating for information between them. The value to the organisation, and the individual employee, has been confirmed by the feedback that we have received. Through this novel system of navigation we discovered how users could co-operate through a common concept, making it a fully integrated KMS. This has immense possibilities for a company with both functional and operational activities. That, of course, does not bar a company with only one community of practice from building a Faros-type system. We wanted our colleagues to be masters of IT, not servants to it.

During early experimentation with computer-based learning through the Internet, we linked the concept to the work process structure, and saw what creative powers developed in the intersection between this medium and the work processes. It will lead to the creation of new knowledge and give unlimited opportunities for life-long learning. The result will permeate the organisation for absorbing, sharing and utilising new information in the creation of a more competitive organisation.

While experimenting, we have also been building. As Faros has been tested and tried by the users, we have received positive feedback. This has encouraged us to persist with our work. Faros has been shown to people belonging to many categories, both inside and outside the organisation. When Faros is demonstrated to people outside our work environment, we encounter the following reactions:

They immediately understand and easily follow the work process structure and how the concept can aid its users in their work.

The observers obtain a good idea of how this can be applied within their own area of work.

This demonstrates a clear indication of a general, and generic, system that is not oil and gas industry specific.

Statoil, as most other companies do, has a jungle of Internet sites and thousands of web pages. Finding your way about is at times very difficult. Faros is the only system that has an embracing structure for easy retrieval of any information. We believe Faros’ novel method of knowledge mapping, capturing, creation, dissemination, and sharing, has enhanced the functionality of the virtual organisation. Based on Faros’ deployment and usage to date, it is possible to conclude that this has been achieved.

Nevertheless, we are at the very beginning of the journey exploring the matter of knowledge. I do believe our economic system will continue to prosper through some degree of specialisation. However, companies must not place themselves in the position where, like the dinosaurs, they specialise themselves to extinction. This is where the Knowledge Management System comes in. We have to stop talking, and start acting.

Implication and challenges

The experience drawn from the Faros case is of some importance to the implementation of knowledge management in organisations, both commercial and non-profit based.

Discovery of the web technology was a watershed in terms of being able to find relevant information. For KM, however, it turned out to be a double-edged sword. As more and more people got involved in the web, learning the technique of designing their own home page, they started to question the need for a knowledge navigator. Why should their business unit develop a KMS when all they had to do was to develop their own home pages, and in a couple of days create their own ‘knowledge system’? Did they really believe that linking thousands of home pages made a knowledge management system? KM is, after all, more than organising the existing repository of information stored in the corporate data banks.

I have divided the major issues to be addressed into two. The first issue is what a KM system is about: Intellectual Capital; web pages; data warehousing; ERP; these are but a few ideas of what people believe knowledge management to be. In our view, these examples are both shallow and incorrect. Another is technology. Is the present Information Technology standard sufficient to support the needs of the KM company?

1. KM’s human aspect: Concept, implementation and benefit

Creating a KM concept

Should a KMS be technology or user driven?

Can it be generic, or must it be company specific?

What standard functionality must/should it contain?

Operationalise KM

How do you get the responsibility out of the hands of IT or HR and into the hands of the business managers?

What effect/consequences can we expect?

Creating a soft structure for implementing a KM concept: The users’ agenda.

Find the key to tapping the Intellectual Capital of the organisation

Collaborative work practice; how can it be strengthened?

Exploiting the benefits of KM

Linking KM with bottom line results and job opportunities.

Growth/innovation issue:

How to organise corporate resources for: Organic growth; Paradigm growth; Innovation.

2. KM’s technology aspect: We must strive to embed IT without IT being seen by the user as a barrier

Do we have a technology today capable of realising the full potentials of the KM company? – Is modern network technology a balloon or a ‘Dakota’? (The Dakota superseded the Zeppelin for air transportation.)

Are we placing too much weight on technology, and if so, what alternatives do we have?

What technological paradigm shifts will we be seeing within three years that will enhance the learning organisation?

Further work

If I were to start a new project, what would I want to improve upon? Improvements must always benefit the user; it is, and must always be, the user who is the focus of any knowledge management programme. Room for improvements can be found in the following elements:

Technology

Methodology

Human relations.

‘Technology’ concerns IT’s technical elements, in relation to the template and technological platform, while ‘methodology’ relates to building navigational structures, meta systems and methods for implementation. But it is in the ‘human relations’ element, how the idiosyncratic web of human links, behaviours, opportunities and threats for the individual employee, and each community, is cared for in respect of the organisation, that we find the key to real success in tapping the intellectual capital of the business. Succeeding here will really mean prosperity.

If you cannot actively relate to a KMS, you are out of business! KM

Reference
1. Joseph Schumpeter, Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process New York, (McGraw Hill, 1939). See also James M. Utterback, Mastering the Dynamics of Innovation, (Boston, Harvard Business School Press, 1996)

Appendices

The Faros Team (Appendix 1)

The Faros project has been staffed by many people from various units within Statoil, as well as outside the company, for shorter or longer periods. Some of the Statoil employees have since left the company. Below is a partial list of the participants:

Project manager and initiator: Ove Rustung Hjelmervik (TEK).

From Statoil:
The user group: Kjell Erik Drevdal, (B&B), Per Bjørnland (Åsgard), Hans Petter Fredriksen (Troll). Later participants: Tor Hoås (Statfjord), Gunnar Kjærland (DVM), Hanne Lekva (S&P), Terje Palmesen (Mongstad), Jan Henrik Lund (DVM), Tore Husby (Åsgard).

Project members: Øivind Haugstad (IT), Dag Sjong (R&D), Irene Herigstad (TEK), Arild Risebrobakken (LOK). Svend Vihovde (IT), Arnt Vegard Espeland (IT) Marita Midthaug (IT), Knut Kirkemo (TEK), Morten Fredhøy (LOK), Ulf Eide (B&B), Tore Johnsen (B&B), Terje Stigen (LOK), Kjell Skjeggestad (DVM), Kjell A. Røysland (DVM), Per Arne Aasen (Åsgard), Jon Magne Jakobsen (Mongstad), Mona M. Leikvoll (Mongstad), Torstein A. Thorsen (Statfjord), Dagfinn W. Lorentzen (Statfjord), Anita Misje (Troll), Hans Dreyer (GT).

Financial support: Øyvind Johnsen (Troll), Ola Krumsvik (Åsgard), Mads Grinrød (B&B), Thore Langeland (TEK), Atle Grung Eide (LOK), A. Rune Johansen (TEK).

External participants:

From NTNU: Professors Arthur Aune and Rolf Lenschow, Associate Professor Dag Svanæs. Students: Kim Omar Johansen, Rune Hollås, Stig Owe Olsen, Thomas Nesser.

From the University of Bergen: Professor Kenneth Hugdahl. Students: Anne Marie Skjerven, Monica Gotteberg Hansen..

External consultants: AC: Christian Selmer, Mikkel Nielsen, Brita Kroslid, Paal Lysaker. PDS: Steve Daum, Robin Getty. CognIT: Richard Jones, Bernt Bremdal.

The Statoil family:

Hundreds of our colleagues in Statoil’s many operating and professional units have created the information making Faros into a visionary, cutting edge, knowledge system. Without our many colleagues, the Faros product would not have been built.

Thank you.
Ove R. Hjelmervik
Stavanger, November 1999

People who have influenced my thinking on Knowledge Managemen (Appendix 2)

When searching the Internet on Knowledge Management in the autumn/winter of 1995/96 I found few examples of computer based learning or knowledge management systems.

I learned of the emerging field of KM through the embryonic Web, and what caught my attention was not KM, but rather the works by thinkers such as Dee Dickinson "New Horizons for Learning", the UK/US 21st Century Learning Initiative led by John Abbott, Howard Gardner, Professor of Psychology and Neurology at Harvard University, Dr. Jim Botkin who had co-authored "The Monster Under the Bed" with Stan Davis, and Peter Senge, professor at MIT.

While attending a symposium at Stanford University in the summer of 1996, I had the good fortune to meet Xerox's chief scientist John Sealy Brown at PARC, where we discussed his futuristic views of learning and use of technology. Dee Dickinson is another visionary on learning. She was the primus inter pares behind establishing the US learning initiative "New Horizons for Learning". She also works with Peter Henschel at the IRL (Institute for Research on Leaning; see separate frame in this article). I met both of them during my visit to the U.S. in 1996. Ms Dickinson helped me get in touch with Jim Botkin, President of Interclass, The International Corporate Learning Association, a knowledge community of Fortune 500, and other international companies seeking to improve its members' organisational learning and enhance their knowledge assets.

During 1996 I had several meetings with Professor Tor G. Syvertsen, NTNU, where we discussed the knowledge concept. In November 1996, Professor Syvertsen introduced me to his partner at PACT, Professor Rolf Lenschow. He had been the Chancellor of Norway's University of Technology in Trondheim, and is currently Professor of Civil Engineering. He helped create Faros' virtual learning concept and is today in the process of building Norway's Learning Lab in Trondheim.

In 1997, I had the opportunity to meet Steven Denning, project manager for the World Bank's Knowledge Management programme, one of the few organisations that had started building a KM concept of great importance and social impact.

In August 1997, we organised a seminar at Statoil, Agenda 21, where we invited Jim Botkin and Leif Edvinsson of Skandia AFS. While Botkin talked about Knowledge and how to organise it, Edvinsson presented his work on the "Intellectual Capital" statements he had developed within Skandia. Later in 1997, and again in 1998, I was invited to the InterClass group meetings, where I met KM people from many world class organisations such as Albert Siu, Vice President of AT&T’s University, Mark Schleicher, Director for KM at Motorola University, and Kate O'Keefe, Director, Executive education, Honeywell Inc. Other comapnies in the association are GM Saturn, Los Alamos National Laboratory, and Volvo. In Jim Botkin’s is latest book appeares several promising KM initiatives, among them the Faros project in Statoil.

It was among these leading thinkers on learning and the creation of knowledge that we tested our ideas on the Faros Knowledge System, the Work Process Navigator and the Work Process Model.

Feedback From Users of Faros (Appendix 3)

A selection of comments received from employees in various Business Units:

1. Åsgard/Heidrun:

We didn't know how we worked. That’s why we sat down to work out the processes in order to have a common point of departure.

If nothing else, work processes represent a common ground for discussion, before you start looking for new ways to work.

I am certain Faros will be valuable for Statoil, although I am not certain of its percentages. When things go smoothly, everything works great. It’s when things go wrong that you find out that the information is nowhere in sight.

Several of the technicians tell me of the satisfaction of using Faros because they are working in self-managing teams. This requires them to constantly get hold of relevant information.

We both had Faros up when we discussed over the telephone the location of a link to a particular database.

2. Statfjord:

In my opinion, Faros is a superior system that can improve the company's utilisation of the experience and competence that is now "buried" in tonnes of policies and procedures. Even if this has now been made electronically available, it is not easier to find, and to understand. The way Faros has been structured, combining pictures of the work flow with different types of relevant information, is a superior way of following the management's intentions.

Faros will simplify the work of "composing" the work processes relative to what it is meant to explain and describe. From our own experience, this is where the company has one of its greatest potentials.... Think of its potentials when used in the network and spreading of "best practices".

When a new process is to be developed, a description of it will be distributed among users for a quick evaluation of its relevance, before it is completed and approved. This saves much time.

We at Statfjord have come to depend on Faros. It has a very user-friendly functionality, and is simple to use. It is important to have a simple and quick method of finding relevant information, externally and internally. This is considered a primary reason for improving the quality of our work processes. Furthermore, Faros represents a low user threshold, and an equally low threshold for updating of information as required.

3. Troll

We use Faros for retrieving all relevant information. It works very well at Troll.

4. Functional units:

This way of visualising work processes has given the employees a more overarching understanding of the company's activities.

Faros represents a major achievement in creating a benchmarking arena for development of "best practice" documents.

All we have to do is to take what we have developed in one operating unit and copy it for use into the other units we are providing a service. This gives us a unified method of operation.

List of acronyms (Appendix 4)

ABB: Asea Brown Bowery, Swiss/Swedish Technology company

AC: Andersen Consulting

BPR: Business Process Re-engineering

CD-ROM: Compact disc containing multimedia for use in computers

CEO: Chief Executive Officer

COP: Community of Practice

DVM: Statoil's professional COP for Operating, Maintenance and Modification technology

GM: General Motors

GP: Good Practice (Rather than "Best Practice" which to some can be "Bad Practice")

HES: Health, Environment and Safety standards

IC: Intellectual Capital

INSEAD: International School of Business Administration, Fountanbleu, France

IRL: Institute for Research on Learning

IT: Information Technology

JIT-JE: "Just in Time - Just Enough"

KC: Knowledge Community (The author considers COP and KC to be synonyms)

KM: Knowledge Management

KMS: Knowledge Management System

MIS: Management Information System

NIH: "Not invented here"

Norsok: Common standard protocol for the Norwegian Continental Shelf

NPD: The Norwegian Petroleum Directorate

NTNU: The Norwegian University of Technology and Science, Trondheim

QVR: Quick time virtual reality

RE: A Business Unit (in Statoil)

SAP: A German IT company offering ERP systems to organisations

Statoil: The The Norwegian State Oil Company

SWOT: "Strengths/Weaknesses - Opportunities/Threats" analysis

TQM: Total Quality Management

UB: University of Bergen

VR: Virtual reality

WEB: The electonic World Wide Web consept running on the Internet platform, making the Internet/Intranet/Extranet more user friendly

2-D/3-D: 2-dimensional or 3-dimensional

Ove Rustung Hjelmervik is project manager of the Faros knowledge management system. He can be contacted at: hjel@statoil.com