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Feature

posted 1 Feb 2000 in Volume 3 Issue 5

Faros, a light in the darkness

In the first of a series of three articles, Ove Rustung Hjelmervik sets the scene for Statoil's journey towards creating a practical knowledge management system. The Faros Knowledge Management System (KMS) was completed in July 1999 after close to a four-year development period. Throughout the process, the Faros multi-discipline team was closely integrated with the users. This was of particular importance when facilitating the mapping and verification of a Business Unit's 'as is' work processes - the heart of the Faros concept.

Brief history of Statoil

In 1972 the Norwegian Government decided to establish its own oil company in order to participate directly in the oil industry unfolding on the Norwegian continental shelf. The company's objective is, (either by itself or through participation in, or together with other companies), to carry out exploration, production, transportation, refining and marketing of petroleum and petroleum-derived products, as well as other business. In 1998 Statoil's share of produced hydrocarbons from own and partner operated fields was 148 million barrels of oil and 6.5 billion Sm3 of gas. With close to 19,000 employees, the company is present in several of the global oil fields, like the Caspian Sea, offshore Angola, and in Venezuela. In Norway it operates several fields, such as Statfjord and Troll, which are among the largest offshore oil and gas fields in the world. The company's net operating revenue for 1998 was USD 14.1 billion.

In this article, I will discuss the experience of building a KMS within Statoil. Our aim has been to create a system capable of managing a company's intellectual capital, leading to improved value creation in a changing environment. The core of all Knowledge Management (KM) initiatives is to create competitive advantages benefiting all stakeholders¹, not to introduce more information technology (IT). For a company to become a learning organisation, the management intention must be to treat all human capital as intellectual capital, and to make provision for meeting such an intention. By acting as a learning organisation, the employees will apply their intellectual capital in a continuing search for new, or improved value creating opportunities through investing in the relevant knowledge and capabilities needed for the company to succeed. A learning organisation will most likely avoid the Damocles' sword of re-engineering every time the market is in turmoil. Such organisations will continue to find ways for it to grow and prosper organically, as can be seen from the evolution of the Finnish rubber-to-mobile phone company Nokia.

KM is not an IT system to be bought from the local IT shop and dropped down on some employees for instant application. I hold that its users must build a well functioning system over time. The Faros meta system is the formula and recipe for engaging the Business Units' employees in shaping its own KMS, and securing a more robust organisation. The organisation's culture, and its senior management's backing, are two essential ingredients for KM to succeed. Unless the initiative is backed by management, the Machiavellian king-makers will start their scheming. The Faros example, therefore, is about building a long lasting competitive advantage through communicating, connecting, sharing, collaborating, transacting, accessing, capturing and improving value-creating activities. Through the system's navigational capabilities, integrated with the use of multimedia learning support, the company's employees will be able to create a learning organisation.

A company has to learn better than its competitors, and apply that knowledge throughout its business faster and more widely than the competitors do. John Browne, CEO, BP-Amoco

A cartoon depicts the Chief Dinosaur addressing his subordinates. The text reads: "The future looks bleak. The world is in chaos, and we all have a specialised brain the size of a walnut." This is exactly what happened to the retailing organisation Woolworth, founded 1879 in the UK. Its last store was closed in 1997 in the US. According to Professor Peter Williamson of INSEAD, Woolworth "had refined and polished its economic engine and deepened its narrow range of competence into almost perfect extinction".²

Archimedes believed he could move the world through a fixed point, given a stick long enough to get a firm grip. This is called levering. Although Archimedes may have been able to move the world, few other "world size" feats have ever been accomplished by a single individual. Most major achievements, barring individual competition, are a result of teamwork. The core of teamwork is co-operation and sharing of information, experience, etc., in order to reach a common goal while defending one's own territory. While Archimedes used a stick as a lever, learning organisations are using knowledge management for this purpose. The stick was to Archimedes as the knowledge management system is to the learning organisation. Leveraging your knowledge is the essence of knowledge management. It is the ability to lever one's knowledge that distinguishes the learning organisations from the 'also ran' . By using a knowledge management system as a lever, one secures an effective operation as well as strengthening the ability for innovation and growth. Unfortunately for the dinosaurs, they did not know of Faros. Faros (Pharos) comes from the Greek word Pyr, meaning fire. In 288 BC a more than 100 meter, and three-storey, high lighthouse was built on the island Pyr outside the Mediterranean Sea port of Alexandria. Pharos is considered one of the eight wonders of the world.) Faros purpose is to offer an empowering knowledge system, enabling the employees to build a learning organisation with the goal to strengthen Statoil as a leading, profitable, energy company capable of serving all its stakeholders in a more competitive environment.

The Faros concept

The purpose of all organisations is to achieve wanted objectives. If it is your desired goal to harvest the elk population in your area, then you set up a hunting party, with dedicated tasks for each member. The most experienced or best hunter gets to shoot. Before the shooting can take place, one has to retrieve information as to the whereabouts of the animals. The most intelligent information is that which leads you to achieving your goal faster than your competitors. The hunting party is organised as a flat network organisation for quick decisions towards securing the stated goal.

In today's international business community, information is trusted around the world with an escalating speed. The hierarchical structure is less applicable for today's business activities and has thus had to yield to a flatter structure. The progress of a business does not hinge on one man making strategic decisions, but on many smaller or larger decisions made by all of the employees along the company's value chain. For this to happen, it is crucial that the information reaches the right person, closest to where the decision will be made and implemented, without undue delays. The consequence of this is that added responsibility is given to the individual employee, resulting in more employees reporting to the individual manager. The need for a large middle management tier has been removed.

The self-imposed task of the Faros team, therefore, was to create a knowledge concept capable of delivering to the employees all information relevant to a given activity or decision. The concept should identify and develop core technology for easy access to information and multimedia elements, and a navigating concept for the information search. We wanted to combine the written word with a multimedia impact in order to create a stronger basis for improvement, innovation and learning. After debating these issues during 1996, we ended up formulating the following hypothesis:
'Learning takes place in the work process'

The hypothesis became Faros cornerstone for formulating Its vision, goals and product.

We ended up with the Faros "Knowledge Room", a starting point for navigation towards all required information. This created a generic and transparent knowledge structure where the knowledge repositories between the many Communities of Practices (COP)³ could be compared. Through many avenues, such as linking our multimedia learning lab to the work process, we wanted to secure visual support related to the task at hand. Furthermore, we wanted good experiences to be shared. An important part of a KMS is the ability to share experience. Through an experience transfer system we wanted to ensure that users' experience was sent, not just to a "data bucket" where it would be stored never again to be "touched" by a human brain, but to the responsible process owners for further kneading into Good Practice (GP) ⁴descriptions. Our experience transfer system was to result in the reuse of information, as well as a collaborative system for developing new GP based on information with the same relevance.

Building on our own experience of searching in vain for information, as well as discussions with experts, we decided that Faros needed more than one entrance for finding stored information. This reflects the brain's capacity to handle fuzzy concepts and the many alternative ways of remembering and retrieving specific data.

Furthermore, both searching for, and securing relevant information is a challenge for the operational as well as the professional communities (main process owners). Through combining the two communities in a seamless and transparent structure, we expected both groups to tap into each other's activities, and thus benefit by being connected into a unified system. Below is a list of challenges for both professional and operational COPs in Statoil:

Challenges of professional COPs

Communicate position, role and mandate within the Statoil community,

Visualise goals, tasks, work processes, responsibility and authority within the various process networks in Statoil

Entry point for finding expertise and best practice

Experience transfer across organisational borders

Develop GP based on experience

Continuous improvement and innovation based on cross border comparison with the various operating units.

Challenges of operational COPs

Work processes (SAP and Business Unit-specific)

Strategic, operational and procedural documents

Technical documentation

Learning and visualisation

Functional network connections

Systematic collection and processing of experience

Experience transfer across organisational barriers

Develop good practice from experience

Continuous improvement in cross fertilisation between the various operating COPs

The business situation in the functional networks (ability to supply JIT-JE services).

Organising information

Since the introduction of the WWW in 1994, we have learned to browse through information aimlessly, much like wandering around a huge shopping mall. The Faros team felt that the time had come for someone to focus on navigation. To navigate is "to steer, or direct.... or to plot the course for (travelling)" according to Webster's dictionary. Thus, while browsing is an aimless search, navigation is the purposeful search for information relevant to a given task. In our zest for IT simplicity we created the Faros Work Process Navigation⁵ concept. We believe that this way of applying the Web has formed a new school in utilising IT for a more effective execution of the relevant business goal.

We wanted to create an arena for capturing, sharing and dispersing knowledge creating information. We wanted the arena to be transparent, both for operational and professional Communities of Practice, in order to create a common ground for a co-operative work system. All relevant information for users needed to be only one or two clicks away from a work process. The work process, thus, became the focal point when seeking relevant information.

Employees, it turned out, often did not check for relevant information on a subject before executing a task, and thus risked failing to follow current policies, or GP. When we realised that not seeking information was the norm rather than the exception, we confronted the employees with their practice. Their explanation for not searching relevant information was twofold: Not only did they have problems using the data systems (IT) required to find such information, but also they did not know which data bases to search (out of more than a thousand!). An intelligent search could reveal the existence of a policy document, or a similar task that had been done before. Such a search could yield added value in the form of an improved GP, leading to reduced maintenance costs or even a value creating innovation.

The combination of not mastering IT and not knowing where to search for information created a major strain on our employees, resulting in information anorexia. Thus, it is not always a "Not Invented Here" problem that causes people not to benefit from others' experience or ideas. Despair, from searching in vain, can also be the result of not finding, and thus avoiding to seek relevant and new information. They felt victimised by the situation. To counter this we decided to turn the "burden of proof" from the employees' responsibility for finding all relevant information, to the company's responsibility for making available all data relevant to a specific work process. We called this burden of proof a philosophy for "Just-in-Time Just-Enough" (JIT-JE). In other words, the user should not be blamed for failing to find a relevant item of information, out there in cyberspace if the company had forgotten to inform them about it. The burden-of-proof element does not remove the employees' responsibility for looking up data they know exists. It does, however, secure a levelled playing field, giving all employees the same possibility for performing well.

Through this method of seeking information, the company has secured a vital relationship between the employees' work arena and all necessary information the company says is relevant to it. This way, we bring all known relevant information to the decision point, be it the written word, pictures, animation or sound.

We have two types of information, those being structured and unstructured.

Structure information

Running a platform requires structured work processes. One example is a process for preventive maintenance. In this job there are standard checkpoints for identifying wear and tear, as well as replacing soon-to-break parts. By building an operational work process in Faros, the Operator is provided with all relevant links to stored data, knowledge of the equipment to be serviced and the addresses of its suppliers.

The Faros Work Process Navigator makes immediately available all relevant corporate policies, good practices, visualised and textual learning elements, suppliers' information (Internet/Extranet), technical documentation, 3rd party information, and other information in a relationship which is seen as natural for the user in his work situation. By both securing information directly (hierarchical search) or indirectly (non-hierarchical), based on a 'natural relationship transverse' of the information silos, all bits of relevant information can flow naturally to the exact point in the process where the employee requires it.

Unstructured information

Unstructured information, on the other hand, relates to activities which cannot be anticipated in advance. Drilling a new production well requires the drilling team to analyse the geology and hydrocarbons structure, and from the analysis develop a strategy for producing the optimal amount of hydrocarbons. Having planned the well, set the drill, and submerged it halfway down into the geological structure the team runs into trouble. A shallow gas pocket is encountered. The drilling is stopped, and the incident requires new information. Information to solve the case can be anywhere, and must be sought based on the current situation. This then becomes a search for unstructured information.

Finding a methodology for searching unstructured information, we found, can have a great effect on the learning aspect of working with uncertainty. By giving predetermined links to relevant structured information, and an effective search engine, such as CognIT's⁶ Corporum, for searching unstructured information, we may be able to guide employees in the desired direction. Through a system of predetermined subscriptions for leading sources of knowledge, such as a university, Knowledge Community⁷ etc., the very source searched for should be well within reach. I will discuss this further in the next issue.

In the March 2000 issue of Knowledge Management, Rustung Hjelmervik will describe the evolution of the Knowledge Room and the various elements which make up each employee's 'work process' area, from value chain portals to the knowledge village.

The Faros Team
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. I would like to extend my thanks to the hundreds of colleagues in Statoil's many operating and professional units who have made Faros into a visionary, leading edge, knowledge system. Without the team, and our many colleagues, the Faros product would not have been built.

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