Overcoming corporate inertia

When creating and rolling out a knowledge-sharing initiative that would impact every part of the European Bank of Reconstruction and Development, Bruno Balvanera and Olena Koval had to address a number of cultural challenges to ensure senior-management supported their work and staff members bought into the overall objectives. Here they describe the key drivers that have enabled them to deliver successful knowledge-management programmes.

The objectives for the European Bank for Reconstruction and Development are to foster transition towards open-market economies and promote private and entrepreneurial initiatives in the countries of Central and Eastern Europe and the Commonwealth of Independent States. We are trying to achieve this by delivering projects – worth almost u70bn over 12 years – across the widest possible range of industries, in both public and private sectors in all 27 countries of operations. We accomplish this main task through a variety of additional activities that include policy dialogue, technical assistance, business-advisory services and environmental assessments.

Developing a successful banking project is similar to producing a piece of sophisticated hi-tech equipment. It utilises a very particular pattern of specialised research and development stages, involves a number of experts in various fields, attracts resources from auxiliary departments and, with time and after learning from its share of accomplishments and failures, it refines these experiences into corporate know-how.

For an institution like the EBRD, where our production lines are our people and their skills, and our raw materials are relevant internal and external information flows, you would expect know-how to be properly organised, structured, updated and, most importantly, accessible within a comprehensive institutional memory.

In practice, the process of knowledge transfer at the EBRD suffered for several years from difficulties due to two inherent factors. First, we did not carry out an initial assessment of our information needs and, second, the ‘knowledge is power’ approach has led to staff being unwilling to share information.
We had to come to terms with the fact that the scope and value of our institutional memory was not equal to the size and complexity of our institutional information flows. We recognised this imbalance in 2000 and launched a knowledge-sharing initiative. The initiative was widely based on our vision of the EBRD in the new millennium, which encompassed our organisation’s mission, strategy, objectives and core values.

The purpose of the initiative was to encourage a move towards a one-bank approach where business-related knowledge can be and is shared willingly across the bank. This would be through informal networks where staff members could make their expertise more widely known. From this we defined specific objectives to:

• Streamline the organisation – Responding faster to client needs and regional challenges;
• Foster client orientation – Promptly provide bankers with relevant information about clients and solutions;
• Promote sound banking – Assuring bank-wide acquaintance with the ‘lessons learnt’ and ‘good practice’ expertise;
• Help foster innovation – New initiatives will fail to meet objectives without an embracing business culture, and the value it places on knowledge and information;
• Increase the efficiency of bankers – Reduce information-search time, avoid blind alleys and re-inventing the wheel during the project cycle.

To achieve these objectives, the knowledge-sharing initiative had to embrace the bank’s achievements, advantages and lessons that it had gained in its ten years of operations in varying business and political environments. At the same time, the initiative had to incorporate the EBRD’s multicultural environment, with its 32 offices in 27 countries and representatives of more than 60 nations stationed in London headquarters alone.

First step

In March 2000, the EBRD’s Executive Committee created a working group that included the management of all EBRD departments, as well as the senior management of the bank. Within the scope of its tasks this working group supervised the implementation of the bank’s information assessment.

The information assessment (IA) was a necessary step towards determining the value, function and utility of knowledge resources in order to fully exploit the strategic potential of the bank’s knowledge base. It has been an obvious and essential first step to creating a solid platform on which to formulate an effective knowledge-sharing programme aimed at identifying, evaluating and managing the wealth of knowledge and experience gained from our staff.

The information assessment focused on the following elements and aspects of the EBRD’s information and knowledge circulation:

Knowledge and information stocks relevant to maximising business opportunities and functions;
Workflow processes for the flow of information and knowledge, and those in place for the creation, capture, dissemination, storage and retrieval of relevant knowledge;
The demand for knowledge and expertise (needs, gaps and duplications within the EBRD);
Knowledge flows and channels, data utilisation and barriers;
The EBRD with a common language and understanding as a starting point for the projects;
The infrastructure and how it supports or impedes all of the above.

The assessment also came up with some important observations on the barriers to knowledge sharing, which are common to many large financial institutions:

• Poor communication between and within units and groups – The lack of information and knowledge sharing between sector teams and country teams, and between different departments in the bank before KS initiatives were implemented resulted in wasted business resources from repetitions and re-inventing the wheel. This, in turn, undermined the bank’s effectiveness;
• Institutional memory residing in individuals rather than in groups or systems – Key people around the bank used to have control of the institution’s memory. People turned to specific individuals for particular information. The availability of relevant information was therefore not evident to staff members outside of certain personal networks. This led to the situation when isolated or new participants of the knowledge turnaround, such as resident offices in the countries of operations or newcomers to the institution, are deprived from the existing information pool;
• Reluctance of staff to change existing practices – Personnel in complex hierarchical cross-reporting institutions are naturally unwilling and resist the revision of established practices. The larger the group the more painful and resource consuming the change process becomes;
• No system to promote knowledge sharing in the institution – Until knowledge sharing is instilled in the corporate culture, staff should be actively encouraged to apply knowledge-sharing practices in their work through a system of rewards and recognitions;
• The unnavigable ‘sea of information’ – A gap exists between the information available and what people actually used. We had a lot of information, internal and external, formal and informal, but it was very difficult to locate and use.

Practical solutions

Based on the recommendations of the information assessment, the EBRD’s in-house experts designed and launched a number of practical solutions aimed at combining and maintaining the wealth of knowledge generated and gathered by the bank’s staff. The EBRD Knowledge Sharing Tools are user-friendly, web-based products (no training is required), accessible via the bank’s intranet.
There are three key KS tools in EBRD:

Project-features database

The project-features database (PFD) provides bankers with a tool that identifies which projects in the bank’s portfolio provide the most interesting examples of features they wish to replicate in their initiatives (or represent an interesting aspect or variation of that feature).

This tool also serves as an indirect expertise directory that provides leads and links to the leaders of the projects, lawyers and other experts involved. Users may also retrieve information directly about interesting projects from the bank’s other databases without performing any additional searches. The concept can be developed to include recorded oral presentations delivered by video streaming.

The PFD currently contains about 270 interesting examples of projects, organised by 70 project features.

Expert listing

By identifying the bank’s experts, we aim to help other users find their way around the bank’s existing pool of knowledge.

The expert-listing tool helps staff members find answers to their professional questions by contacting relevant colleagues in the bank. It is similar to an experts’ directory and is classified by country, sector, product and function expertise, allowing staff to find the necessary sources of first-hand information and experience from relevant EBRD professionals. The system also facilitates informal exchanges of information between our headquarters’ staff and employees in our regional offices, and helps the bank’s new starters discover who the experts are.

In addition, each department or unit lists its experts, which helps generate a complete picture of our scope of expertise.

Client-relationship-management database

To manage the bank’s client contacts (both existing and potential) we appoint client-relationship managers among the bankers. These managers take on the responsibilities for owning and maintaining relationships with relevant companies. The customer-relationship-management database (CRMD) will allow us to implement a unified, bank-wide approach to access, record and maintain all of the business-development-support unit’s contacts.

We launched the PFD, experts listing and CRMD in July 2002. They are the starting point for the development of the bank’s institutional memory as well as an essential aid to our collaborative teamworking. It should be mentioned that the availability of knowledge-sharing tools in the EBRD resident offices is considered an important prerequisite for the broad success of the KS programme. As a result, all our KS tools are developed to include easy access by the staff at our resident offices through the EBRD intranet.

The bank’s knowledge and information can be accessed by staff via the PFD, experts listing and CRMD tools, as well as via other knowledge-sharing mechanisms we have introduced. We capture knowledge via integrated day-to-day knowledge-sharing processes and events, most notably:

• Showcase-transactions workshops – Presentations about the most interesting project transactions provide bankers with the ability to capture information and knowledge on other projects, and facilitate cross-team discussions. Resident offices have access to these briefings via video-conference facilities;

• Operations-committee briefings – Short presentations on operational-committee meetings, which are routine, purely factual, not compulsory and open to all staff;

• Board-meeting information updates – Distributed throughout the banking department and resident offices by a member of senior management;

• Knowledge-sharing awareness workshops – Introduction to the bank’s approach to information and knowledge management. The workshops also give a brief overview of the kind of information available and how to find it.

Key drivers for success

We can say that the implementation of the knowledge-sharing initiative at the EBRD, which includes the introduction of our KS tools, embedding a knowledge-sharing culture and instilling relevant practices in our institution has been successful. In early 2004, each of our main KS tools was visited by an average of 120 bankers per week, which represents a significant share of our professional banking staff.

However, this success, and the future value of our institutional memory and further promotion of new corporate knowledge-sharing culture is closely related to several principal drivers:

Senior-management awareness and buy-in – This encourages knowledge-sharing behaviours and promotes effective use of knowledge-sharing tools within and across the organisation. We have and continue to achieve this buy-in through workshops for senior management. During these workshops we discuss a number of strategic, knowledge-sharing initiatives involving cultural and behaviour changes in the institution and develop a prioritised action plan. This has allowed us to achieve senior-management buy-in for the relevant initiatives, guaranteeing top-level support and endorsement for the recommendations of the information assessment.

Application of the Smart approach – Introducing the knowledge-sharing concept aims to make the organisation’s operations specific, measurable, achievable, relevant and timely (Smart). As knowledge resides in the practice we should develop our KS solutions on a case-specific basis. This also means that we should fully integrate our KS mechanisms into existing business processes, which we can only achieve by defining how KS fits into the existing workflow. Any knowledge-sharing process should therefore answer three questions: Who needs knowledge? Who possesses it? What is the nature of problem?

The other side to this approach is that knowledge sharing should affect our business processes and demonstrate quantitative benefits, which will allow us to measure and compare different tools and approaches.

Expansion of the team-culture concept – Cornerstones of the knowledge-sharing initiatives are making employees feel valued and trusted, and part of a community, which will transfer knowledge from a one-man domain to institutional use. We strongly believe in infusing team spirit from the top. This delivers the perception that people are part of a larger system and that we can achieve more together than we could alone.

The promotion of a team culture is also important for the self development of our staff as it generates peer recognition and improves internal mobility of personnel.

Rewards and recognition – We believe positive motivation is more effective than punishment. We have therefore introduced a system of rewards and recognition related to individual and team knowledge-sharing performance. This is an important element in promoting KS initiatives.

The practice shows that staff can be divided into three categories according to their attitudes towards institutional innovations like knowledge sharing: ‘affiliators’ (team players that count on peer support and recognition); achievers (employees that look for managerial recognition and material rewards); and influencers (senior management imposing its managerial will through innovations). Systems of rewards and recognition should also be adjusted respectively according to particular groups of users.

Technology – When implementing the EBRD knowledge-sharing initiatives we recognised that technology solutions are not the driver, but are tools that assist in knowledge creation, rectification and sharing. Our experiences also demonstrate that IT solutions for KS should be adapted and tailored to specific business needs; out-of-box solutions are not always suitable.

For a KS tool to generate real value its functions must be user-friendly and accessible to all intended users. Proposed technology solutions should deliver on these objectives.

Cultural and behavioural changes – Achieving changes in employee culture and behaviours is the highest form of acceptance of any KS initiative. By developing knowledge-sharing initiatives you had to address cultural issues. One of the first steps towards increasing awareness across the organisation is by unifying all routines, roles and expectations around one single mission.

Bruno Balvanera is head of the business development support unit at the EBRD. He can be contacted at balvanedb@ebrd.com

Olena Koval is information and knowledge manager at the EBRD. She can be contacted at kovalo@ebrd.com