posted 22 Jul 2003 in Volume 6 Issue 10
Forging ahead with knowledge management
Over the past few years, Tata Steel has developed a blended strategy to knowledge management based both on codification and on personalisation. The former approach is heavily dependent on technology and is used primarily for the deployment of knowledge, while the latter focuses on creating and deploying new knowledge within the organisation. Ravi Arora and Rajiv R. Sinha explain how the firm utilises a balanced-scorecard system and its uniquely designed KM Index to integrate and deploy these two approaches.
In the present turbulent and discontinuous economy, knowledge is an organisation’s greatest asset. The basis for growth in modern society has shifted from natural resources and physical assets to intellectual capital. It has become the source of innovation, development and value.
Organisations and their executives are grappling with several concerns relating to the management and institutionalisation of knowledge. They see the most pressing need as developing a structured and systematic approach to what is known as knowledge management. KM has gained increasing attention in recent years and has become more relevant in this fast changing, IT-driven world, primarily due to the following reasons:
- The lifespan of competitive differentiators in business is decreasing over time;
- Information overload, or so-called ‘infoglut’. A focus on documenting everything, creating and capturing all types of data, and making it available to all and sundry within the organisation has exacerbated this problem. It is a common tendency in organisations that everyone wants to capture all the data that is generated even if it is not relevant. ‘Information is power’ is still the predominant knowledge paradigm in many companies. So far we have seen all sorts of IT technologies that have facilitated the generation and dissemination of data. It is only now that executives have begun to realise that they need IT to facilitate in identifying the right knowledge to help them make quick and informed decisions;
- IT tools are now available that help combat corporate amnesia and facilitate knowledge creation, capture, organisation and transmission.
Knowledge management has provided some quite phenomenal benefits to numerous companies, yet at the same time has been a fiasco for others. Companies that follow a KM programme with a clear and well laid-down vision, objectives and approaches tend to be more successful, whereas those that jump on the KM bandwagon and focus solely on IT with a view to reaping quick rewards and without considering the human side of the discipline or long-term strategy usually fail. If organisations formulate well grounded KM strategies, backed up by suitable approaches to IT, and follow them closely, there will be many successes, which will further popularise KM and make it a necessary process for the future success of organisations.
KM in Tata Steel
The formal knowledge-management process started in our company when the firm’s vision statement was revisited in 1999. The new vision statement read, ‘Tata Steel enters the new millennium with the confidence of a learning, a knowledge-based and a happy organisation.’
The period beginning in 1999 was also referred to as a ‘modernisation of mind’. After spending a huge amount of money in modernising the steel plant, management wanted to focus on employee training, creating new avenues for learning and for restructuring the organisation as a whole.
The realisation that there was a need for a formal KM was triggered by a particular incident. A problem was referred to a consultant who, it turned out, had already developed a solution to the same issue over a year earlier. Understandably, this embarrassed lot of managers and executives and forced them to start an initiative to capture learning in a systematic manner. This in turn led to the implementation of Tata Steel’s ‘codification’ strategy.
Later, in accordance with the new organisational structure that was developed in 2000, the Steel Business Unit was divided into two profit centres, Long Products and Flat Products, and two cost centres: Coke, Iron, Sinter and Shared Services. This was done primarily in order to realise better opportunities for growth, cost reduction and improved efficiency. Some of the common services, such as maintenance, refractories, F&A, HR and M&S, were decentralised at the profit-centre level, and in some cases even at the department level. Again, this was done in the name of better control and efficiency. The decentralisation of these important functions, where knowledge is one of the most important inputs and differentiating factors, created multiple, small silos in every department and profit centre. It was felt that the knowledge of the people working in these special functions might become obsolete very quickly with the advent of new technologies and products, unless a special effort was made to prevent this from happening. Moreover, there was a possibility that the knowledge gained by a department about a new process, product or technology would remain within the boundaries of that department, rather than spreading to other interested user communities. As a result, knowledge communities (communities of practice) were created to mitigate this problem. Knowledge communities are all about expanding these silos in depth and breadth, and also making them permeable.
Since there is no accepted standard framework for KM, Tata Steel has evolved a framework in accordance with its needs and in line with its business vision. The company has conceived, developed and deployed internally an elaborate architecture for KM that aims to take the company to a ‘learn once, use anywhere’ paradigm. As such, there are two broad strategies being followed in Tata Steel, as shown below in figure 1.
Figure 1 – KM strategies at Tata Steel
This aspect of the KM strategy has been implemented through our corporate intranet and databases. Our typical KM-database flow is shown in the figure 2. Employees share their experiences learning from new experiments, both failures and successes, in the database. So-called ‘experts’ evaluate these contributions before adding their own evaluations to enrich them further. These experts may also be a member of a particular community of practice and will therefore have the responsibility to keep their part of the database up to date. They generate knowledge products in the form of FAQs, best practices and white papers, and add them to the database.
The knowledge database includes best practices, learning from failures, improved and new practices adopted, competitive intelligence, customer and supplier knowledge, and benchmarks of different parameters etc. These knowledge assets are in turn deployed and used in a corresponding area of work, resulting in predictable benefits. Some of the best contributions are instantly deployed across the organisation to all other interested employees via e-mail. Those employees who benefit from a contribution are encouraged to collaborate with the original authors, thus making the KM database even richer.
Figure 2 – a typical KM-database flow at Tata Steel
The challenge in the knowledge-repository process is to keep the database up to date and useful. As the knowledge database grows, it will become more of a challenge to effectively store and disseminate its content to potential users.
IT is assuming an ever-increasing role in this strategy. There are now umpteen tools (auto categoriser, summariser, similarity finder, etc) available that help us to manage the database in an efficient way. That said, our reliance on these tools is fairly minimal, as we have always felt that the success of knowledge management lies with the involvement of people. In Tata Steel, tools and technology are upgraded gradually, and only when we feel employees are ready to use them.
Detailed analysis of any product failures at the customer end is also part of the database. Customer knowledge, which is captured by our sales people, is available, too. Similarly, Indian standards and some of the product catalogues provided by suppliers are included in the database.
A snapshot of Tata Steel’s KM portal is shown in figure 3.
Solicited (Ask an expert)
In today’s economy, one of the other most challenging jobs is to initiate conversations between knowledge seekers and knowledge providers, ie, the experts. The fact that our organisation is so big makes this process more difficult, as individuals tend to be unaware of people located elsewhere in the organisation who might be able to provide a solution to their problems. Collaborating with experts through electronic media helps in capturing tacit knowledge in terms of expert insight and know-how. Codification of this know-how is an equally challenging job. Documenting tacit knowledge involves translating insights from the context in which they were generated into the context in which they will be used. Once codified, these insights form a rich pool of resources that can then be leveraged.
This is a process we are trying to realise through our ‘Ask an expert’ feature. This went live in the last quarter of 2001. In our ‘Ask an expert’ system, employees are free to log their work related-problem online. Already we have identified several experts across the knowledge domains who are involved in providing instant solutions to the problems posed. Employees who are not identified as experts may also respond to queries. Depending on the quality of their response and the response time, they may in turn be formally recognised as domain experts. All responses are stored for future use. The ‘Ask an expert’ environment is shown in figure 4.
The most important challenge in the codification strategy is to keep the repository lean, current and useful. This requires significant resources in terms of investment in technology and man-hours. It is also a challenge to show the returns of this strategy, hence the reason so many companies fail to secure management commitment on a sustained basis.
While it is becoming more important to design offices in a way that increases the socialisation aspects of daily work (an important means of transferring knowledge through so-called ‘knowledge accidents’), the concept of communities of practice (CoP) is gaining popularity as a means of turning these chance interactions into a more formal, organised process.
To encourage knowledge transfer across divisions and departments at Tata Steel, we have created 23 knowledge communities, which are actually groups of like-minded people who have come together to share what they know and to learn from one another regarding particular aspects of their work. The community meetings provide a forum to employees, allowing them the chance to discuss, debate and plan experiments and to share best practices, which are mostly tacit in nature. The communities are more of a knowledge-creating and sharing platform than a target-oriented task force aimed at solving specific problems.
Communities play a very important role in capturing experts’ tacit knowledge, improving the overall quality of the knowledge repository and encouraging usage of the repository. These knowledge communities incorporate several distinct roles, such as champion, convener, practice leader, lead experts and practitioners. The communities are formed not just around Tata Steel’s core business, but also around functions like HR. They are, in most cases, further divided into sub-communities depending upon the focus area and knowledge gaps that exist.
Communities in Tata Steel have various knowledge deliverables:
- Innovation: plan, conduct and learn from new experiments;
- Identify best practices, with regular updates;
- Identify new benchmarks, with regular updates;
- Share knowledge;
- Keep the database current and useful.
The discussion that takes place and the knowledge transfer that occurs in these communities is transferred to the rest of the employees in the department at lower levels, by way of knowledge-sharing sessions and via departmental homepages. In addition, IT-based tools are far less prominent in this strategy compared with their role in our codification strategy. Within the company, we use IT primarily to facilitate communication among community members before and after the meetings.
Various metrics are used to measure the performance, progress and benefits of the knowledge-management programme. These are depicted alongside various phases in the KM lifecycle in figure 5.
Deployment of KM strategy
Both the above strategies (codification and personalisation) are well supported by the IT and HR-based organisational structure. The knowledge communities are actually the driver of our overall KM process.
A unique index called the ‘KM Index’ has been developed to measure the performance of the KM system and ensure the involvement of all managers. This index is an item in the CEO’s balanced scorecard, which has been cascaded down to lower levels in the firm. The constituents of the KM Index are changed every year depending on the maturity of the KM process as a whole, organisational strategy and improvements in the IT infrastructure. Both the above KM strategies are in place at almost all the locations of Tata Steel, and close to 100 per cent of our managers are involved in the KM system in some way.
Rewards and recognition
Knowledge management forms a part of Tata Steel’s performance-management system. Rewards and recognition are given to those who perform well in the KM systems. These rewards take various forms, but all have a very high esteem value and low monetary value. They may be, for instance, an appreciation letter, public recognition from the CEO, the display of names on the intranet and so on.
It is a bigger challenge to involve supervisors and workmen in the KM process compared to managers and executives. This is primarily due to the fact that supervisors and workmen are not so familiar with the use of computers. Moreover, the density of computers within the firm is not high enough to cater to everyone. However, the knowledge of these frontline employees is critical for the organisation. As such, we have initiated a formal training programme for supervisors, designed primarily to train them on computers and also to sell the KM concept by communicating some of the success stories. As a result, a good number of supervisors and some workmen have actively and voluntarily started participating in the KM system.
The success of the knowledge-management programme in Tata Steel has mainly been due to the commitment of senior management and continuous communication about its importance for the future of Tata Steel. It was Dr T. Mukherjee, deputy managing director (steel), who initiated this process and who has been continuously nurturing the initiative since 1999. Tata Steel has been recognised as the leading knowledge-based organisation in the steel industry through the Most Admired Knowledge Enterprises study. The company was a finalist in 2002, along with two IT companies based in India.
But Tata Steel has a long way to go. We have learnt that the more we progress in our journey to effectively managing knowledge, the more we are able to see the road ahead that leads to Tata Steel becoming a better learning organisation. This is evident from the fact that our new vision statement, ‘To seize the opportunities of tomorrow and create a future that will make us an EVA positive company, and to continue to improve the quality of life of our employees and the communities we serve’, has managing knowledge as one of its most important pillars.
Ravi Arora is head, Knowledge Management, at Tata Steel. He can be contacted at firstname.lastname@example.org
Rajiv R Sinha is manager, Knowledge Management, at Tata Steel. He can be contacted email@example.com