Flying high

By Jerry Ash

One of the arguments often used to convince people they should participate in the give and take of knowledge sharing is that ‘the shelf-life’ of knowledge is short. The point being that someone who hoards knowledge to assure their job security ends up with a dusty shelf, while one who shares knowledge replenishes their shelf continuously and thus assures personal growth and real value.

The same could be said for organisations. Collecting, capturing and storing existing knowledge for re-use may assure short-term survival, but it will not take an organisation very far. For an organisation to sustain itself in a rapidly changing marketplace, it must grow as individuals must grow and that requires continuous creation and dissemination of new knowledge.

Israel’s largest aerospace company agrees and is meeting its 21st century challenges with a knowledge management (KM) strategy that couples early generations of capture and re-use of existing knowledge, with creation and sharing of new knowledge.

The genesis

Israel Aircraft Industries (IAI) is Israel’s biggest military and commercial aircraft manufacturer, with more than 14,000 employees. It owes its position to more than half-a-century of designing, engineering and manufacturing for customers throughout the world – not just in Israel.

The journey toward KM at IAI actually began in 1987 when development of the innovative Lavi fighter jet was suddenly cancelled by the Israeli government, after some $6.4bn had been lavished on the project. The ‘hole’ this cancellation left in the company’s portfolio and plans delivered quite a shock.

In response, IAI’s CEO delivered an order to each of the company’s divisional general managers to go out, look for new business and to excel at everything they do. The results, in financial terms, were impressive but also led to a fragmented company where 23 divisions spoke 23 different ‘languages’ based on 23 independent corporate cultures.

By February, 2000, the aircraft industry was facing yet another cyclical downturn. As it happens, IAI was facing similar challenges to those confronting Northrop Grumman in the US (see IK, September 2005). A recession and a general decline in the general aviation business would affect IAI the same as any other aerospace company.

Once again, it was time for IAI senior executives to take the lead in overcoming corporate complacency and to look for innovative new strategies to keep their heads above water and to seize the opportunities of a changing marketplace. This time the strategy ‘One Company,’ a bid to reverse IAI’s fragmented structure in a culture change strategy that identified four main values:

Customers: the reason for IAI’s existence and the source of its growth;
People: the company’s most valuable asset;
Innovation and technology: the technological edge for satisfying customers;
One company: operating as a unified enterprise.

The values, components of a ‘Change and Behavior’ programme, were paired with various actions including KM which was soon viewed as having a role in practically all of the four values.

The people

The seeds of knowledge management had already been sewn at IAI by people who were aware of the KM movement and had already begun applying its principles, but in a somewhat informal manner. A team of consultants headed by Edna Pasher, an Israeli business advisor, had introduced the concept of KM to the vice president and general manager of the electronics group. His deputy was a student of KM – Rony Dayan, who had been mentored by Pasher.

Dayan had been deputy general manager of a division involved in missile development and space activity, where his operational responsibilities made him aware of the ‘re–inventing wheels syndrome’. He initiated a program at the engineering directorate to document design modules for their re-use. This is now part of the documenting procedure in the corporate-wide KM program.

At the same time, the electronics vice president was frustrated by the competition and lack of co-operation among his own group’s various divisions. Pasher was engaged to coach ‘knowledge cafés,’ gatherings of people from throughout the electronics group as a first step towards inter-group collaboration.

Thus, the combination of initiatives to stop the ‘re-invention of wheels’ and re-connect people in a fragmented organisation were already in motion when culture change became the theme of ‘One Company’.

Formalising KM

But the development of a formal, company-wide KM programme did not materialise until 2002, when the ‘Change and Behavior’ programme had already been in place for two years.

The four values had already been disseminated throughout the company and a unifying culture change project was already underway – a unique advantage for a start-up KM programme that would be launched because of a company-wide realisation that KM was essential to all four values embraced by the ‘One Company’ initiative. While this produced an ideal climate for the introduction of a formal KM programme, Dayan emphasises that the culture change was not yet fully assimilated – either then or now.

Nevertheless, the executive team of IAI was ready to capitalise on Dayan’s self-organised first steps by establishing a KM steering group out of which Dayan emerged as the company’s first chief knowledge officer (CKO).

Projects are the backbone of most IAI activities. To be relevant, KM had to relate to project management. “It was quite intuitive and straight forward to talk about re-using knowledge from previous projects,” says Dayan. “But on second look we realised information kept by the company’s product data manager was not complete.”

Design consideration, for example, was not of interest to project managers who care mostly about contracted document request lists or documents needed for the next development stage. Project knowledge, it turns out, does not cover all the knowledge flowing in and around the project team. The KM programme would have to reach into every corner of the company, but a significant part of knowledge capture and re-use was already in place.

Dayan and Pasher recall that they were not always in agreement on every detail of KM strategy. “Rony is an engineer who values process,” she says. Pasher sees KM as a social process. “So he and I sometimes disagree on what comes first – process or culture. Working together we have learnt to share our knowledge and I believe we have co-created a shared understanding of what works and what doesn’t at IAI.”

Rony Dayan admits he has learned that lesson from Edna Pasher. “Out of the three legs of KM, culture has to lead, closely followed by processes, and only supported as needed by technology,” he says. “In this I pay tribute to Edna who has advocated this approach ever since the beginning, while I was more for concentrating on the processes. One thing is sure and that is not to start with technology and stay stuck with it. Pretty soon it becomes an empty utensil and nobody remembers why was it acquired in the first place.”

Existing knowledge

“Coming out of our initial strategy, we realised that representatives of the first and second generations of knowledge management were already formulated. The first generation – the one caring for the organisation’s memory – was covered by the procedures populating this memory by capturing knowledge, documenting it, organising it in databases, and then retrieving it for re-use,” says Dayan.

He adds: “The second generation – the one where knowledge flow became more important than the knowledge itself – provided a natural home for such procedures as communities of practice (CoP); the generation and sharing of good practices (what the rest of the world calls best practices); and using the organisation’s portal as a sharing tool.”

There were, however, only two operating CoPs which had been established by interest groups. They were very different than what the KM team defined as CoPs; they had a common subject and they were meeting to discuss them, mainly due to the enthusiasm of the CoP leader. But it was thought that this structure would not be powerful enough in the long run and so a definition of CoPs with self-defined goals was developed. Only one of the two existing communities converted to the new CoP structure; the other refused to accept corporate goals and eventually dissolved due to fading interest.

The new CoPs are strategically created by the CKO, although some are originally proposed by employees. For moral support, a member of IAI’s management is assigned as a sponsor for each of the formal CoPs. The KM team provides support and if a CoP generates knowledge assets to benefit more than one division, Dayan (who reports to research and development) can provide funds for it from the R&D budget.

New knowledge

“Unfortunately,” says Dayan, “the first two generations deal only with existing knowledge.” To emphasise the importance of new knowledge, a separate chapter on the subject was written for the IAI KM handbook to present knowledge creation as another generation of KM.

“That doesn’t mean there is no knowledge creation through the procedure of sharing knowledge, which is a separate chapter,” Dayan says. “One of the new knowledge processes deals with the identification of good practices and sharing them across the company. Good practices will probably also be identified by the CoPs. Though these procedures are also part of the sharing chapter, it is clear they have a knowledge creation content.”

Dayan wants all divisional knowledge managers to pick a knowledge creation procedure from the handbook when establishing the division’s annual KM programme. One such procedure deals with processes not necessarily related to projects. “While reviewing existing processes we found that people continuously propose improvements to existing processes or come up with new ideas,” says Dayan. It is this kind of knowledge that does not always show up in project management data.

The IAI KM programme continues to focus on project management as a key location for knowledge work and has succeeded in pulling PM teams together to share knowledge across projects and professional disciplines. Beyond that, the KM team has established a dozen KM processes that reach across the entire company:

Disciplinary knowledge capture;
Knowledge extracted from lessons learnt;
Content management;
Fostering the knowledge of core competence centres;
Knowledge in the proposal preparation;
Establishing a business knowledge base;
Establishing a technological knowledge base;
Knowledge extracted from the innovation process;
Knowledge in the new product initiative process;
Communities of practice;
Generating good practices;
Using IAI-Net to share knowledge.

Outcomes

“The concept of knowledge management is now an accepted term in IAI,” says Dayan. “That doesn’t mean concrete dividends are yet at hand,” he adds. IAI is using scientific methods to measure the effectiveness of KM programmes and processes, but the best evidence to date comes from anecdotal data. There are plenty of positive stories.

Knowledge capture has been implemented in some IAI divisions in a methodical way. In more and more cases it is becoming customary to conduct debriefing sessions after projects to derive lessons learned from them.

Some divisions have adopted the established standard of information by content classification to contribute to the values of the One Company concept. Most divisions have identified their core competence centres and mapped their knowledge-enabling capabilities, closing the gap between existing and required knowledge.

More divisions are now managing their technical and price proposals in a manner connecting their content to the sources in the competence centres. In additional divisions, the established habit is bringing in knowledge from the external world and – rather than keeping it for oneself – publishing it on the IAI intranet for others’ benefit.

More than they have ever been, divisions are aware today about the value of the knowledge gained from the experience of performing projects (besides the mere performance of these projects). More than 20 CoPs have been organised at IAI, gathering people from various divisions who in the past either did not know about each other, or otherwise competed against each other. Good practices are now generated by divisions in IAI and migrating to others.

To the future

In the short term, Rony Dayan expects to improve, deepen and spread what the KM programme is already doing. In the longer term, he hopes to extend the effort to IAI’s suppliers in 2006 and to the customers in 2007.

“The number one key success factor at IAI is definitely Rony’s persistence and commitment,” Pasher says. “Sometimes against all odds, sometimes in spite of a strong resistance, sometimes by weaving very hot disagreements with me into co-created solutions. There is strength in the ability of an executive and a consultant to work together for a long time while maintaining the legitimacy to disagree.”

And so they provide the best example of living the dynamics of spirited collaboration.

Rony Dayan will lead an interactive discussion on ‘New Knowledge’ during the 17-28 April 2006 session of the STAR Series Dialogues, which are open to members of the Association of Knowledgework only. Join AOK at: http://www.kwork.org/explain_join.html

Jerry Ash is founder of AOK and special correspondent to IK. He can be reached at jash@kwork.org