Feature

posted 31 Oct 2005 in Volume 9 Issue 3

Security and silos

St. Paul Travelers discovers that it is better to leverage silos rather than lament them. By Jerry Ash

Fighting the establishment has been a typical battle for most knowledge management (KM) pioneers in companies dominated by an environment of corporate secrecy, need-to-know knowledge sharing, vertical silos, cliques and cultural barriers. In the early days, the architects of KM often sought to change everything, campaigning for a new business model that would better fit the shared responsibilities and shared decision-making ideologies of knowledge management. Over the past 20 years, the very idea of these changes made nearly everyone nervous from top to bottom of the organisational chart and few companies actually reorganised themselves to satisfy the wants of the knowledge wonks.

This case report tells the story of one company whose chief KM advocate skipped the axe-handle approach and looked for ways to work within the system. He looked for the good in security and silos and found it. The result is a knowledge-management programme that not only gained acceptance but also became the platform for two unlikely KM projects – a company-wide cost reduction programme and a corporate merger. These projects, in turn, became springboards for affecting change, not so much in structure as in the way the company works. Today, KM is at the centre of the company’s business processes.

On the other hand, it is also a story about a KM programme with ongoing hierarchical involvement, company-run communities, controlled access and boundaries – words and concepts that would make most open environment gurus shudder. Just the same, it will also command the attention of the many people who would not seek to change the world, but rather find happiness in an environment where security and silos serve important purposes. The situation
Erick Thompson, now second vice president, knowledge management at St. Paul Travelers, began his knowledge journey at the US-based St. Paul Companies in 2000. His challenge was to establish a KM function that enabled knowledge sharing focused on business issues. Otherwise, no specific guidelines were given.

“I began by meeting with key business areas inquiring about their business strategies and struggles as they related to sharing knowledge and information (K&I) to get work done,” Thompson recalls. “What I found was a common business need to more efficiently find and share knowledge and information across teams and functions. A business-owned online workspace was needed to incorporate all collaborative tools in one place to make it easy for business people to use. What was also needed was a process that enabled people to get work done and at the same time leverage know-how from other areas.”

Thompson was determined the system, tools and processes would:

Be easy for non-technical business employees to use and own;
Provide the business with direct control over the workspace, including publishing and security models;
Use a web-based application for interoperability and easy linking to other existing business systems and easily extend for customer (agent/broker) utilisation if needed;
Provide the flexibility to customise online web spaces to meet business needs;
And scale to an enterprise-wide scope without exponential cost increases due to additional technology support staff.

Within 90 days, Thompson had led the organisation to create and begin piloting what was dubbed the Knowledge Exchange system. Key business issues in those beginning efforts were to create a direct link to field underwriters to share business expertise, gain increased ownership across functions (underwriting, premium audit, risk control and claims), create the ability to post, move and edit information quickly, and foster a community spirit of working together to achieve business goals.

The growth of KM communities was rapid. Word of mouth spread the Knowledge Exchange programme to 40 communities in only 12 weeks.

The strategy
Thompson’s decision to work within the system was driven more by the needs of people than it was corporate initiative. Before and after the merger, the company was working in a highly competitive and regulated environment. “But security wasn’t so much about whether the information was top secret,” Thompson says. “It was all about people’s beliefs that knowledge and information should be kept within the confines of their own workgroups. In that environment, if you don’t have organisation and security, people can’t and won’t exchange the knowledge and information truly needed to make critical decisions.” In his view, security breeds trust and trust is essential for knowledge sharing.

“In such an environment,” Thompson concluded, “if the hierarchy allowed unsecured online collaboration, it would result in the shutdown of any deep tacit knowledge exchange.” It would choke the system with less meaningful information while inhibiting the open sharing of relevant knowledge among an audience of unknowns. Thompson uses the name of Inside Knowledge magazine to illustrate the existence of both ‘inside’ and ‘outside’ knowledge. “This boundary is the heart of the security framework that enables meaningful information sharing and the exchange of tacit knowledge for business value,” he says.

The issue isn’t so much a matter of need to know as it is getting the best use out of people’s purpose and capacity to know – the efficient exchange of knowledge with the right people for the right reasons. The St. Paul Travelers solution is built on the company’s human intellectual capacity, not technology.

“Information overload often results in a relentless pursuit of a technological silver bullet to deal with the exponential growth of information,” Thompson says. “The dream of a technology solution can be quite seductive to those unwilling to implement the discipline required to manage boundaries and execute good knowledge and information management.”

Still, limiting access beyond set boundaries sounds rigid and could raise the spectre of groups of employees trapped inside and outside ‘the know’. Thompson’s solution, however, presents safe and secure havens with boundaries but not barriers. Participation is controlled but not exclusive.

The approach
Like any other knowledge-sharing network, the resulting KM framework involves processes and systems designed to help employees find, create and exchange knowledge to maximise business and workplace performance. The approach is focused on assisting profitable decision making. Although it is touted as a ‘security model’, as a whole it provides a manageable system of knowledge sharing for all 30,000 employees of the combined St. Paul Travelers.

In brief, the system involves a combination of seven elements (see figure 1, p16): three KM platforms shown in the blue field above, supported by the three support functions in the gray field and driven by a knowledge-sharing culture.

Thompson refers to the library as an ‘open security model’ – open to everyone in the organisation but secure in that not all knowledge and information is dumped in the library. The library contains general business reference information and common information from a variety of units on a variety of subjects.

KX (the Knowledge Exchange) is a system that provides a network of secure virtual communities and learning centres governed by the hierarchy for the exchange of business-focused collaborative information and individual tacit knowledge sharing. Each of the 100 plus KX Virtual Communities is composed of accepted members only and governed by a leader called the ‘mayor’. KX virtual communities often link to references and open information sources found largely but not exclusively in the library.

The final platform is the corporate intranet called STArt (STA is the stock symbol for St. Paul Travelers), which houses general employee information and provides access to workplace portals and transaction systems. Like the library, it is an open security model, with open access but controlled content.

In the grey field, KM standards and guidelines, KM processes and information search provide support platforms. Culture in the middle provides the glue that bonds the KM platform and support systems together.

Private spaces
It is the Knowledge Exchange design model that features many elements that run counter to the collective wisdom of many of the early KM experts.

Communities are private spaces. They exist and have an identity defined around a work purpose. Membership is selective and determined by the mayor. The purpose of each community is clearly defined and contained by boundaries. These boundaries meet corporate security concerns for protection of company information as well as providing an environment where trust can be built to foster rich exchange.

Since the communities are private spaces, Thompson says, people are more inclined to be open to one another. “Without trust,” he says, “you are simply working with information. Without boundaries, you cannot work with trust. Some of the most valuable insights come from these trusting experiences.”

To encourage cross-functional knowledge sharing, however, the system features a company-wide Mayor Users Group CoP with lead mayors from each of the specialised communities.

There are five community types based on five types of business groups within the company:

1. A work group virtual community includes people from the same department who are responsible for a product or service. It usually involves functional areas of the organisation.

2. A project team virtual community consists of people, often from different functions, who are responsible for a time-specific deliverable.

3. A business centre of expertise virtual community is a business area that has revenue generating and P&L responsibility for the company. The group provides and is responsible for specialised knowledge to support fast and efficient decisions to achieve business goals.

4. A classroom virtual community is an online collaborative space enabling the exchange of ideas around a classroom session. It integrates the explicit knowledge learned in training classes with the tacit knowledge gained by discussing ideas with others.

5. A community of practice (CoP) virtual community is a group of people coming together voluntarily to further a common business discipline. It’s composed of people with experience in, and passion for, the subject. This is the traditional KM type community.

Governance
A defined business objective is required to obtain a KX virtual community. The process to obtain a virtual space starts with a 90-minute meeting with knowledge management staff leadership. If during the meeting process it is determined by both the business area and the KM staff that the business intent matches the virtual community system, one is created immediately and the business leader – the virtual community’s mayor – walks away with a fully operational virtual site.

The mayor reviews required qualifying processes and procedures for the role and first-time mayors undergo one-on-one basic training. They then choose the virtual community members, direct the creation of rooms and folders, and are ultimately responsible for assuring members follow security guidelines in the use of the community.

Corporate-wide responsibilities of the mayor include maintaining an up-to-date business purpose complete with key words available for viewing and searching by all employees. The mayor also assures daily monitoring of the virtual community mailbox for questions that may have come from employees outside the community.

The local governance process within a virtual community is determined and driven by the business area itself. The mayors are responsible for making sure their members are familiar with corporate security guidelines in the proper use of the online collaborative system, including the real-time screen-sharing web-conferencing tools.

The five virtual community types enforce business-defined group types and provide a consistent framework of navigation design. If an employee being a member of one virtual community in one area becomes a member of another in a different part of the organisation, the navigation does not need to be re-learned. Common tools and functionality are found in the same site location regardless of community type.

Supporting research
Forrester Research, Inc., headquartered in the US but with research and sales offices worldwide, has just released the results of a survey* conducted in June 2005 that supports Thompson’s point of view. Based on a survey of 69 North American and European professionals, the researchers learnt the biggest barriers to enterprise-wide adoption of team collaboration software are organisational, culture and security concerns. The survey respondents, largely IT people, said: “Collaboration software is an enabler and nothing more. It is a tool for implementing and automating collaborative processes and practices.” IT can help only so much, according to the report. The rest is up to management.

To get a feel for inter-enterprise collaboration issues, Forrester asked participants about how the business case, internal politics, security concerns, directory integration and support for external users affect collaboration. Security concerns emerged as the clear leader. In general, respondents said, team collaboration software products do not meet most organisations’ requirements for software that securely protects content shared with external parties. According to the report, in cases where the content is stored in a team workspace or is not proprietary or critical, security may not matter. But some uses of team collaboration commonly involved intellectual property and privileged information. In those cases, knowledge would not be shared in an unsecured environment.

Advantages of KX
St. Paul Travelers’s knowledge-exchange system addresses many of the critical issues raised by the recent Forrester report. The benefits according to Thompson are:

People take ownership for their information and actually open up for others to participate. This results in issues being resolved quicker and better decisions being made;
Reduced information overload is attained because boundaries are managed and the governance and security of the KX virtual community are carried out by a mayor who determines who needs to have access to what information. Therefore, the overall K&I environment is constantly being managed by the people who know most about the content itself, not a corporate or technology group that does not have the contextual knowledge necessary to make these decisions;
More efficient location of information and people helps people know where to go to find the information they are seeking. All communities must have a business purpose viewable by all employees. This is mostly accomplished by the company’s Community Tree, which allows people to quickly view or search communities by keywords focused on particular subjects;
The KX Community Tree is available to all employees. If an employee finds a community he or she does not have access to, the mayor can be contacted to obtain access;
With each community having a well-defined business purpose focused on that purpose, communities become the places to go for the most up-to-date knowledge and information;
More candor and faster results are the positive outcomes of managing boundaries. Community members share a common purpose, unhampered by casual or unwanted participants and protected from untimely flow of information to an audience of unknowns.

“The experience we have at St. Paul Travelers regarding conversations is that meaningful and frank dialogue only happens when trust and boundaries are in place for the people involved, exactly as is the case with the face-to-face interactions in which we all participate,” Thompson says. “Successful mayors manage security to enable frank conversations similar to when any of us ‘manage security’ around our own in-person interactions. Many conversations that happen within our virtual communities would not be appropriate to be shared outside the community boundaries, let alone at the corporate level. Mayors are responsible for managing the flow and, where communities converse with high levels of candor, they are respected and trusted to guard this confidence.”

In defence of silos
Although KM practitioners rarely have anything good to say about silo or stovepipe organisational structure, Thompson has found good in them. “I think silos serve an important function in getting work done and that’s the reason they continue to exist,” he says. “There are some tasks that simply do not need collaboration. You can’t turn a big ship by spending a lot of time collaborating on how best to do it. The efficiency of hierarchy and directives are and will always be necessary when running a large organisation in a highly competitive marketplace.”

Instead of trying to break down silos, the St. Paul Travelers system interjects the helpful elements of the community concept into the silos to help them work more efficiently. Introducing a governance model of communities into the established hierarchies of silos has been accomplished by empowering work groups, project teams or business centres to work more collaboratively and quickly to solve business problems. In a way, the communities are a mechanism for silos to reorganise themselves to be more effective.

Thompson contends this strategy does not exacerbate the existence of knowledge silos that exclude people. Any employee can search for knowledge sources across disciplines by searching the Knowledge Exchange’s ‘community tree’, and then contact a community and request access to it. The mayor decides. Although that means control, it also means access where it did not exist previously.

The ultimate success
Two events have helped secure the knowledge-sharing model for business processes at St. Paul and then St. Paul Travelers. In the first instance, the model had been so heavily used during a cost containment episode in 2003. Then, in 2004 it became the platform for exchanging information between St. Paul Companies and Travelers Property Casualty Corporation through a merger process.

Doing more with less
During the economic downturn following 9-11, all organisations were being forced to cut programmes and people that did not add to productivity and profitability. Business areas were continually required to justify their existence. From the chief executive to the manager of the smallest department came the same message – cut inefficiency, raise productivity and profits. Quality improvement and measurement results were in; soft value programmes like education during work time were out.

Because the primary objective of St. Paul’s KM programme was to focus on helping people accomplish business objectives more efficiently, it offered a natural platform for managers throughout the company to use in meeting the cost/productivity mantra. During the first year of the initiative, the number of virtual communities doubled to more than 90 because business areas were seeing the value in customising the ‘information set’ to facilitate work objectives and reduce duplication of efforts. And because education was one of those soft processes that could not quantify explicit benefits, managers were looking for ways to accomplish learning and productivity at the same time.

One example of such an approach is the KM initiative undertaken by the Underwriting Department where effective decision making manages risk and brings in profitable business. The speed and accuracy of decision making directly affects incoming premium dollars.

Underwriting teams need to communicate quickly and effectively with underwriters in four primary locations: the US, the UK, Ireland and Canada. But the teams had no internal resource for creating documents and an outside vendor was being paid $80 per hour to translate documents to HTML. Further complicating knowledge sharing, this widespread audience of underwriters had varying PC skills. Also, timely, cost-effective training to bring new hires up to speed was elusive.

To dramatically improve sharing, the director of internal operations for technology underwriting assumed the position of mayor for a KX virtual community named Wired.

The team then launched a training programme using Wired. A virtual meeting room inside the community now enables trainers and students, all seated at their computers in various locations, to share software programmes and screens while working through various exercises together. Simultaneously, verbal communication takes place via conference calls, one-to-one phone conversations, instant messaging, or combinations of the three.

Delivering training via the Wired KX community has proved extremely effective. Because training takes place on site and within the context of business information, and because it requires no travel by either instructors or students, the programme saves time and travel costs. In any single year, an estimated $60,000 per trainer in travel expenses is saved in addition to vendor cost reductions. In addition, the system eliminates the purchase of outside online meeting and web conferencing vendor services, eliminating costs in one year in one training programme alone by $113,000.

Beyond the cost savings, the use of the Knowledge Exchange approach enabled many sectors in the company to see the value in secure communities. “Members-only communities with clearly defined membership requirements operate more efficiently than open-member communities,” Thompson says. “The structure of the Wired Center of Expertise enables members to talk insider business freely.”

A KM platform for the merger process
Inside Knowledge has told sad stories of highly acclaimed KM programmes that suffered at the hands of mergers and acquisitions. Hubert Saint-Onge’s programme at Clarica Life dropped from the radar screen when it was taken over by the larger Sun Life (Inside Knowledge, May 2005). Kent Greenes’s KM programme at British Petroleum withered when BP and Amoco, both with mature KM programmes, were left in the dust of the rush to consolidate (Inside Knowledge, February, 2005). Erick Thompson’s KM programme at St. Paul Companies (14th largest casualty insurer) went centre stage during its merger with the larger Travelers Property and Casualty Corp. (fifth largest), even though the largest player had no formal knowledge-management function outside of some informal KM teams. There is no predicting what will happen to a KM programme under such circumstances. The level of KM leadership and quality of existing programmes seem not to be the predictor; rather, it is a question of whether the merging leadership sees the value of KM as the merger process takes place. It is a moment with both peril and potential.

The merger presented a daunting challenge: How would the two companies with the combined second largest commercial lines operations and 30,000 employees exchange information and knowledge during the merger? One thing was certain. The hybrid company would need to leverage tools and best practices found within both organisations.

“Prior to merger,” Thompson says, “it was important to keep the flow of knowledge and information contained to a small core team.” With that in mind, the Integration Core Team, comprised of senior management from both companies, chose St. Paul’s Knowledge Exchange virtual-community system and processes to provide a secure, separate environment for exchanging knowledge and information between and about the two companies. With the merger deadlines looming, speed as well as security was critical.

In the Knowledge Exchange model, the mayors were chosen to represent each company in a single virtual community and became central in determining access levels in this information containment period.

The merger process was also bound by legal and regulatory requirements and the KX virtual community security model allowed the right people to participate in the effort. The Knowledge Exchange system enabled people working on the merger to identify everyone involved and to specify the information to which they had access. This process was straightforward, efficient and provided proper access authority, significantly enhancing the progress of the merger process.

Face-to-face meetings were naturally required, but augmentation of those personal meetings were provided through the use of the KX model, including ‘Who’s Online,’ instant messaging and a virtual conference room called ‘Live Online’. These added processes brought deep knowledge and understanding across the companies in quick order.

“Although KX made significant inroads at St. Paul before the merger,” Thompson says, “not all employees used it. During the merger, the use of KX suited the company’s strategic picture for the future. Today, virtual communities are operational throughout St. Paul Travelers and employees of both companies have more deeply embraced the system. Our KM effort now has to think bigger and be more coordinated than ever before. In addition, now that KM is truly enterprise wide, we can make more effective strides faster.”

Conclusion
A little over five years since its beginnings, the St. Paul Travelers KM programme has become an integral part of the company’s business process, carrying it through cost containment initiatives and a major merger to become the accepted platform for work processes throughout the company. The system is currently made up of 105 active virtual communities, 75 of which have been requested, created and launched in the past 12 months, post merger. Virtual communities range in membership from three people to 1,500. Their uses range through simple document management, information transfer, project management, Q&A, synchronous and asynchronous collaboration, instant messaging, online meetings and a one-stop shop for knowledge and information online.

Significantly, the use of secure space governed by company mayors has not inhibited knowledge sharing, as convention might predict. Rather, such an environment has provided a spirit of trust and a system of efficiency that have earned the respect of people from top to bottom of the organisational chart. KM leaders have capitalised on the strengths of security and silos rather than fighting a losing battle against them.

Most significant of all, the KM programme at St. Paul Travelers thrives where others have suffered when faced with challenges to justify their cost and prove their strategic business values during times of corporate change. n

Jerry Ash is consulting editor and special correspondent for Inside Knowledge. He can be reached at jash@kwork.org