Book review: Knowledge Management Case Book

TITLE: Knowledge Management Case Book - Best Practices in Siemens

EDITORS: Tom Davenport & Gilbert Probst

PUBLISHER: MCD Verlag & John Wiley

ISBN: 3895781592

There are some authors that grab your attention the moment you see their name. Tom Davenport is one of them. He is often controversial, always thorough and never disappoints. This book is true to form. Even though Davenport is a co-editor, his personal influence is clear. The book is clearly presented and easy to read, while still containing detail, depth and good theoretical explanations of the cases described.

The casebook covers the implementation of knowledge management across the whole of Siemens AG, the Germany- based multinational. The company has embraced KM principles throughout its operations. Activities began in an uncoordinated way with a ‘bottom-up’ programme driven from the ‘grass roots’ in the company. This programme was a runaway success and Siemens has now made knowledge management a core driver of its business strategy. It has now implemented a corporate knowledge management function to provide the glue for the various divisional activities and the work now has full top-down support.

The Siemens CEO has written the foreword to the book, and in this he makes it clear that the effective creation and utilisation of knowledge is at the heart of the company’s success. 60-80 per cent of the value now generated for shareholders is now attributable to knowledge-based activities. This proportion is growing yearly and the board now guarantees shareholders a superior return as a result. This brings a harder business edge to KM activities, not often seen outside consulting firms. Far from killing the programme, the book shows how this provides the means for selecting the best projects and driving more ambitious returns.

The casebook takes a vertical slice through the company, exploring all aspects of the KM programme it has implemented. This is particularly valuable for the reader. Many books and conferences give examples of isolated KM programmes and don’t take an integrated view of how the programme affects all of the company’s operations. Siemens has now implemented KM principles throughout its business and, indeed, it has a road map for building a ‘mature knowledge enterprise’. Its KM strategy covers corporate communications, ‘best practices’, customer knowledge, competitive intelligence, finance and staff development. The casebook takes a walk through all of these areas.

The authors have examined each of the cases in detail and the editors have then placed them into a well-argued theoretical framework. For each case, there is an abstract and some key propositions, which summarise the learning points for managers reading the book. There are also discussion questions, which are intended for students but also serve to drive home the key messages for all other readers. These are the nice structural touches that will make the book a valuable reference guide for years to come.

The casebook is divided into four easily digested sections:

1. Knowledge Transfer

This section takes a look at the mechanisms that Siemens uses to transfer technical and customer knowledge around the company. The importance of Siemens’ intranet is discussed in detail. Technical aspects are considered, but equal importance is given to the organisational and process issues that also made up the critical success factors.

2. Communities of Practice

Communities of Practice (CoPs) are at the heart of the Siemens approach to KM. The company’s KM activities all grew from spontaneously developed community activities. The first recognisable communities emerged in Siemens at the end of 1996 and it took less than two years before they became fully embedded in company operations.

In 1998 the KM CoP officially requested corporate level support and the formation of a corporate KM support office. This triggered the formation of a board level task force and in less than six months a corporate knowledge management function was approved, implemented and running. For a European hierarchical company, this speed was astonishing and shows the impact that KM was having on the company.

3. Added Value of KM

This section looks at the direct business impact of Siemens’ KM activities. This is clearest for Siemens Business Services (SBS), the consulting arm of the company. For SBS, knowledge and relationships are their only assets. Great care is being taken to drive up the value of both and the return they achieve by systematically applying a 10-step KM framework to all of SBS’s operations.

The second case in this section looks externally at a project in which Siemens was the integrated solutions provider. The International Neurosciences Institute was designed as a networked and filmless hospital, a perfect proving ground for a KM-based alliance of five Siemens business units. The interaction of these units and the knowledge inputs to the practical solutions highlight how the Siemens KM strategy is working in practice.

4. Measuring KM

Siemens is a hard-nosed, financially driven organisation, and the numbers matter. In the last section, the cases look at measurement of KM in detail. The difficult area of measuring knowledge networking is tackled by an addition to the Siemens balanced scorecard. There is also consideration of incentives and how knowledge transfer values can be measured across international boundaries.

This book was a rare treat to review. The quality of writing was excellent and it was well illustrated. The subject matter was organised coherently and gave a comprehensive holistic picture of knowledge management across a complete organisation. Siemens deserves much credit for sponsoring the book and Davenport and Probst should be commended for their editing.

Adrian Dale is head of knowledge management at Creatifica Associates. He can be contacted at: adriandale@creatifica.com