denotes premium content | May 23 2013 Feature
posted 1 Nov 1999 in Volume 3 Issue 3
Rapid Expansion Control
A rapidly growing company needs support in order not to spiralling out of control. MTN, the leading cellular company on the African continent found that their estimation of telecom subscriber growth increased much quicker than their expectations since the company launched in 1994. They found the answer to this potential chaos in the KM programme of Celemi. Paul Norman tells the story of how the potential information storm was calmed.
The cellular industry boasts the most rapidly developing technology and is acknowledged as one of the fastest growing markets in the world. As such, it is unique even within the context of the new Information Age, in terms of the importance of its intangible assets and the need to manage and utilise to the fullest extent, the vast array of skills and the pool of expertise concentrated within it.
MTN, the leading cellular company on the African continent, has had to come to grips with the problems inherent in this situation very early in its development. The company was officially launched in June 1994, yet in the space of five years has experienced rampaging growth, seeing its staff complement alone increase from the original 20 founder members to its current total of 2400.
From its headquarters in Johannesburg, MTN has expanded into other African countries and now has operations in Uganda, Rwanda and Swaziland with the prospect of opening in several more locations. Business plans were developed to cater for estimates which set cellular saturation at 250 000 subscribers within ten years. The current reality, five years later, sees a market of almost three million subscribers with ever-spiralling sales figures as new products and services are consistently being introduced.
The rapid growth wrought havoc with the systems, procedures and processes in place, which had been designed for a significantly smaller and more slowly developing company. MTN quickly recognised that conventional management systems, following the traditional, hierarchical-type structures common to industrial societies, were completely inadequate.
Some of the most compelling problems focused on the acquisition and transfer of skills in this environment of constantly developing technology, products and services. Attraction and retention of high-calibre, skilled and professional staff demanded new systems and approaches. It was imperative that existing staff be trained to exploit the full potential of their own abilities by new ways of learning and solving problems. At the same time, the future of the industry had to be ensured by instituting training and individual development programmes that would form the managers and leaders of tomorrow.
All this needed to be accomplished within a highly competitive environment, where exceptional performance levels were considered the norm, customer service had to excel, shareholders had to be satisfied and prospective investors attracted.
MTN found the solution to these challenges in the knowledge management principles developed by world-renowned expert, Dr. Karl-Erik Sveiby. Working in close partnership with South African-based consultants for Dr Sveiby, KnowHouse, MTN's Human Resources department initiated the process of introducing management and staff to the concept of intangible assets and the optimum way of managing, developing and retaining them.
MTN has become a pioneer in implementing Dr. Sieve's concept of knowledge management - not only in South Africa, but also to a great extent, worldwide. The company has embarked on a comprehensive programme that will eventually affect every employee and every aspect of company life. MTN's goal is to become a knowledge company and to spread these principles to all its operations on the Continent.
The first step was the implementation of TangoTM - Business From Knowledge, a business simulation developed by Celemi. Starting with managers from a variety of different internal departments, MTN worked with James van der Westhuizen of KnowHouse 1
to run a series of workshops where teams of participants were required to run simulated businesses, competing with each other for market share, employees and customers. The programme focuses on the importance of managing, developing and retaining intangible assets, such as staff skills, image, and knowledge acquired from expertise or research and development. It demands that managerial teams exercise ingenuity, innovative solutions and lateral thinking.
For MTN, Tango provided managers with a different perspective on all aspects of running a company. It gives them a new dimension of business understanding and stimulates their acumen. It also impresses very deeply upon them the crucial need to look after the intangible assets? While still paying close attention to the traditional tangible assets. MTN plans to introduce all current and prospective managers to the Tango simulation.
Another Celemi learning tool, called Apples and OrangesTM is being attended by the main employee complement. This simulation provides participants, who operate in cross-functional teams, with a basic introduction to managing a knowledge company. They experience first-hand the importance of cash flow and the value of intangible as well as tangible assets. At MTN, we've found that team members leave with a new excitement about their own role in the company. They are stimulated to find different ways of accomplishing their tasks and obtain a new understanding about management's vision and how they can contribute towards achieving company goals.
Many departments have now started their own knowledge management projects, as they have realised the extent to which they can contribute to the transfer of skills and information to other areas of the company where it can best be utilised.
For example, the Customer Service Centre has embarked upon a programme that aims to bridge the gap between customer service and the rest of the organisation. The one-on-one contact between Customer Service agents and subscribers enables them to determine trends, needs, new ideas and problems. Passing these on in a timely manner to relevant departments promotes the development of new products and services and has significantly improved service levels and productivity.
One of the more immediate results of this new approach is evidenced in the proliferation of new products to market. Over the past year, over fourteen new products have been launched, to both niche and mass markets, which were the direct result of direct customer contact and listening to their needs.
The system of information and knowledge sharing has also led to the establishment of inter-departmental product development teams which, in turn, has fostered a shorter time-to-market period.
Other initiatives in the program include joint workshops and focus groups with employees, customers and suppliers where shared visions, values and objectives are discussed.
The implementation of knowledge management principles has led to changes in recruitment practices at MTN as well. It also demands that the company manage the development of its employees in new ways, plan career paths differently and adopt systems to enhance the intangible asset value of each employee. This includes a competence mapping programme. A case in point has been the development of the core trainers competencies for MTN's training staff, complete with an associated skills development program devised within and specifically for MTN.
Appropriate measuring systems are necessary in order to manage intangible assets effectively. MTN s Intangible Assets Monitor (IAM) is the method whereby intangibles are identified, monitored and encouraged, to ensure that targeted levels of competency are reached, customer/supplier relationships maintained and internal structures properly designed.
The IAM is a unique instrument that provides specific measures of value and indicators of the company's future positioning and profitability. Everyone within the organisation can use it as a learning tool. At MTN, we also use it as an important tool to demonstrate the effectiveness of the knowledge management programme to top management. At the same time, it shows employees that top management is supporting the programme and that their individual contributions are valued and important.
To ensure the success of the knowledge management transformation, MTN's HR department was instrumental in introducing cultural changes within the company. A 'cultural audit' was conducted to determine how employees perceived the company, management, the organisation's vision and mission, their own roles and the like, and to discover to what extent these reflected the values which employees would like to see embodied in the company culture. Where there was divergence between the perceived and desired culture, programmes have been developed to promote appropriate transformation.
This cultural approach is supported by research conducted internationally, such as the project commissioned by the UK Department for Education and Employment. Results of this study were reported in a South African magazine and established that knowledge management initiatives that failed had been put into practice 'without the necessary understanding of corporate culture and technology'. The three-year survey of 14 000 companies around the world also showed that many of the 'knowledge management' schemes were found to be IT projects 'masquerading as knowledge management'. Of the 14 000, the researchers concluded that only 140 companies had implemented successful KM initiatives.
The new focus on company culture and the effective management of intangible assets has already led to an improvement in staff retention, despite the very attractive offers made to highly skilled MTN staff by companies both locally and internationally. We believe that we have become more responsive to the needs and aspirations of our entire staff complement, and have instituted new programmes and systems to address these issues. For instance, call centre employees can participate in job rotation programmes within the organisation, which enables them to gain a perspective into other jobs while acquiring new skills.
As part of the process of sharing knowledge and information while developing company culture and preparing the leaders of the future, a 'Learning and Leadership Forum' was established whose participants are drawn from all over the company. An in-house designed 'Strategic Leadership Development' programme targets future leaders who are trained in different aspects of the business to prepare them for future top management and executive roles.
While our knowledge management programme is still in its infancy, early indicators already point to success beyond our initial expectations. Staff are clearly more motivated as they realise that their contribution is valued and that they, as individuals, are considered important to the company. In turn, they are stimulated to contribute even more effectively to company growth and productivity - and hence to the bottom line. This more positive attitude also affects our customer relationships favourably. Another spin-off is the rate at which new products are being developed and brought to market, which enables us to stay well ahead of the competition while increasing our market share.
Behind the Change, Effective Tools used by MTN
Theory does not work until it lives in the hearts and minds of the people, Knowledge management is not driven by one person or one department alone, but by pockets of evangelists in every department within the organisation.
A shift in organisational thinking was required to ensure effective implementation of knowledge management principles. To achieve this, MTN has adopted two business simulations, specifically designed to address key KM issues in a matter of hours, rather than the weeks and months which would traditionally be required when changing existing methods and approaches.
Celemi's TangoTM pitted teams of Mt.'s managers against each other in a business simulation where they were required to compete for market share, employees and customers. Participants had to calculate and record both tangible and intangible assets, including competency, image and R&D.
Some 2 000 other MTN employees participated in Celemi's Apples & OrangesTM workshops. Cross-functional teams ran a simulated knowledge company for a number of 'years', making decisions about employees, customers and internal tools and processes. They had to ensure that their choices supported corporate strategy to promote company growth. In the process, they learned to calculate the value of intangible assets while discovering ways to contribute to the success of a knowledge management strategy.
MTN cites several key benefits of these change-management tools:
Theoretical concepts are translated into real-life situations, enabling participants to gain valuable experience that can be applied directly to their jobs
Paul Norman is Group Executive of Human Resources, MTN. For more information visit http://www.celemi.com
