Feature

posted 26 Oct 2006 in Volume 10 Issue 2

Case study – HSBC Bank

The marriage of KM with flexible working

Dr Steve Ellis

Banking giant HSBC bills itself as ‘the world’s local bank’, a phrase no doubt intended to highlight the importance of local knowledge, combined with financial might, that businesses need in their banking partners today.

It is, of course, also consistent with a banking group rich in history – dating back to 1865 – that used to be better known as the Hong Kong and Shanghai Banking Corporation, but which is based in London and with operations in more than 75 countries worldwide.

However, HSBC has had a chequered background with knowledge management (KM). For example, in 2002 it established a specialist unit to drive through a newly established knowledge-management strategy. One year and one management re-organisation later and that unit had been disbanded in favour of a less centralised approach.

But it certainly did not mean an end to KM at HSBC. Far from it. In the past, HSBC has undertaken such KM initiatives as knowledge audits and knowledge-capture projects, which were intended primarily to identify and ‘download’ the knowledge, experience and wisdom of ‘wise old heads’ before they left the business.

Just as knowledge-capture projects make many members of staff feel valued (because such initiatives reflect the value that the organisation places upon their knowledge, skills and accumulated experience) so does the introduction of flexible working – if it is done correctly, for the right reasons and staff are adequately supported.

This article underlines the view that KM and flexible working need to enjoy an increasingly symbiotic relationship. It highlights the drivers behind this development, as well as the difficulties that such a marriage will inevitably encounter. The conclusion of the article offers a recommended approach to those seeking to support or create such a relationship in their organisations or for themselves.

Elements of this article were originally delivered to Ark Group’s Knowledge and Content conference in London earlier this year.

Driving forces

One of the main drivers behind many organisations’ flexible working initiatives – let’s be honest – is to achieve cost reductions and more efficient use of corporate resources. Such efficiencies can be wrung from using existing offices more innovatively and utilising, instead, less expensive work locations, such as temporary shared offices, coffee shops, hotel foyers, people’s own homes and so on. Often, these locations are also more conducive working spaces for staff, too.

But there are two major caveats that must be attached to flexible working, especially when cost-saving is one of the main corporate drivers. First, there are normally additional equipment and support costs that will be incurred upfront. Staff may need new laptop computers, for example.

Second, many organisations’ office costs are largely fixed. So having five desks out of ten empty because the people are working elsewhere does not actually save anything unless there are other uses that the spare capacity can be put to. For example, by selling or renting surplus office space or consolidating staff from other locations.

At the same time, as the internet and mobile devices enable organisations to extend their reach over employees’ working lives, there are increasingly loud cries for them to support a more equitable work-life balance.

While most organisations and their staff will undoubtedly be in favour, flexible working does not necessarily mean less work. It mostly means doing more, but enabling staff to do it more conveniently. Witness the hundreds, if not thousands, of people who use their daily commuting time to good effect now that they can ‘log on’ on the move. By combining good KM with the ability to operate more flexibly the priorities of work and life are already being combined more effectively.

A further driver of this development is the impact of traditional work patterns on the environment. More flexibility ought to lessen the environmental harm done by, for example, unnecessary commuting. HSBC prides itself on being the world’s first ‘carbon-neutral bank’ by monitoring the environmental impact of its activities and taking action to mitigate the cost by, for example, sponsoring tree planting to minimise its overall carbon footprint.

A challenge that is barely considered is rising demographic pressure. In the UK, especially, there are two main factors. First, in an increasing number of areas property prices are so high that two full-time incomes are essential.

On top of that, daily commutes in the UK are longer than most places in Europe and where is the time for all the non-work related activities that are required to support a family or household? Without some flexibly managed knowledge work this model simply will not work.

The second factor is related to the increasing lifespans of people in developed countries – a ticking time bomb when it comes to flexible knowledge work.

These drivers are all significant. However, I believe the most effective driver is about making employment more attractive to those elusive, but highly talented people who increasingly do not wish to be corralled into rigid nine-to-five working patterns.

Many organisations are struggling to coax more talented people to join, contribute more and become truly engaged. Flexible working, done well, is a way of demonstrating clearly that an organisation recognises that people have a life outside of the office and that they care enough to enable work and life to be combined.

Flexibility enhanced by good KM will also enable improvements to be made in terms of diversity by encouraging contributions from those with non-standard work requirements.

The final driver, one that should really near to the top of the list, is that customers in many areas are demanding flexibility from suppliers and the places that they shop. They want to interact 24 hours a day, seven days a week, if not in person, then by phone or over the internet. If your organisation cannot provide such a service somebody else will.

Relationship issues

Cultural issues dominate here. Many organisations suffer from an outdated culture of ‘presentism’, where people feel that they must show their face at work for as long as possible, but this often mitigates against flexibility.

Managers are often the worst at perpetuating this with their own behaviour, even while espousing support for flexibility. We need more role models for flexible working from middle and senior management so that those lower down can really believe that not showing their face in the office every single working day will not have an adverse impact on their career.

But first of all, some well known but not widely used KM working practices need to be ‘baked in’ to enhance the management of flexible working. The reason? A diffused workforce still needs to be pulled together. However, building on the KM experience of oil giant BP, we can apply what I call the ‘three-legged learning’ approach.

The first leg involves finding out who in a team has already got experience in a project or initiative, prior to its commencement. This is all about knowing the skills and experience of everyone in the team so that their expertise can be easily used, regardless of where they are working.

If a good KM recording system is present this can be largely automated, but in my experience this usually needs an excellent communication network so that people from inside and outside the existing formal team can be brought fully into the picture.

The second leg is the practice of ‘after action reviews’. More accurately in my experience, these should be called ‘during action reviews’ as this is the practice of holding short, sharp updates quickly – maybe even daily – at key times in projects. The objective of this exercise is to share knowledge and experience in a quick and timely manner so that effective learning is spread fast, and mistakes are not repeated.

The last leg in the model is the ‘lessons learned log’. This is the practice of reviewing when projects are completed or significant milestones are reached. The aim here being to squeeze true learning out of the work and log it for future use whenever similar projects are tackled.

There are no reasons why all of the three legs in this model cannot be done remotely using technology to set up, conduct and record the outcomes of such meetings.

There is also, for some people at least, the concern that flexible working will blur the psychological boundary between home and office. (For most knowledge workers the boundary between work and non-work has, I believe, long since disappeared.)

From a legal and human resources (HR) perspective this is a potential minefield. For example, does it matter that someone is ‘at work’ and therefore representing his or her employer when they might be working from home or a coffee bar? How far does employer’s liability (and the associated insurance) stretch? What about the health and safety aspects? Employers in non-flexible working relationships will find it much easier to comply with legislation regarding a ‘duty of care’ because the boundaries are naturally clearer.

Drafting employment contracts to cover all these – and many other – eventualities will be a draining and ultimately, I feel, futile exercise.

But there are many tangible benefits waiting to be scooped up if we get this right. HSBC has implemented a range of flexible-working pilots in recent years, but it has researched the area carefully before forging ahead.

In one of its offices on the UK’s south coast, initial surveys of the people involved, (all knowledge workers), suggested average desk-utilisation was 57 per cent and that only 44 per cent of staff were satisfied with their working environment. The same number felt they would be more efficient if they could work flexibly.

Post implementation, we achieved greater efficiency by running 85 ‘flexible jobs’ from 65 workstations per floor. This change liberated space for more communal activities, as well as a ‘quiet space’ and a ‘touchdown space’ for visiting workers. We also tripled the number of meeting spaces.

Three-quarters of the staff involved in the pilot project now rate the office space as ‘excellent’, while nine out of ten think that productivity has increased or at least been maintained. We also estimate that some 320 hours of commuting time is being been saved every month as a result.

This quick and simple example shows what can be achieved when KM and flexibility come together well.

Addressing the challenges

Flexible working offers many real potential benefits, but it poses significant challenges, too. The first of these is around how flexible knowledge-workers should be managed. We need to recognise that outputs or outcomes – not inputs – are what really matter. That is to say, it does not matter how, where or when you do something provided that the worker and the organisation meet the desired objectives, and work consistently to its beliefs and values.

In addition, our reward systems have to be fine-tuned to recognise new and valuable working behaviour, such as knowledge creation and, equally importantly, knowledge sharing.

This will challenge managers who demand conformity and control. They will either have to change or be forever satisfied with sub-optimal recruits.

Managing this flexible workforce will place a clear burden on the IT department, too. Staff working in disparate locations will need particular support. For example, the machines that they use to access the corporate network will need to be secured accordingly.

Connections will need to be encrypted using virtual private network (VPN) technology, while personal firewalls and anti-virus software should go without saying. Most important of all, the staff themselves will need to understand the need for such security and to ensure that it is well-managed – or, at least, not undermined – at their end.

The four Cs

The best way to move forward with flexible knowledge working, I would suggest, is to use an approach I have developed implementing a range of KM projects over the years. I call it the ‘4Cs’ approach.

The first ‘C’ is always ‘confusion’ as the project will need to have its objectives and priorities clearly defined and agreed upon so that all parties will know what is being suggested. The second ‘C’ is ‘convergence’, where we need to check that the development is aligned somehow with organisational strategy.

If this condition is not met it will not be so easy to sustain the required flexibility. The third ‘C’ is ‘commitment’, which will test the level of resourcing and management support. This is vital to find out if such an initiative will be given the appropriate level of support.

The final ‘C’ stands for ‘culture’. Introducing flexible working practices supported by KM will inevitably encourage a change in culture, management will have to increase the amount of trust afforded to employees, while staff will need to use this as an opportunity to shine and must take the resulting empowerment on board in a positive manner.

Finally dream for a minute. Imagine a work regime where:

· Key knowledge finds the right employees fast;

· Work has no real time/space boundaries;

· Employee engagement is high and growing;

· Doing business does not automatically damage the environment;

· Work-life balance is positively effected.

This is what a marriage of flexible working and KM can give us, we need to make it happen.

Dr Steve Ellis is the author of Knowledge-Based Working, Intelligent Operating for the Knowledge Age (Chandos 2005) and, with Dr John Stredwick, Flexible Working (CIPD 2005). To contact the author, please email steve@knowledgedoctor.com or visit www.knowledgedoctor.com.