posted 25 Feb 2003 in Volume 6 Issue 6
The power of people
Woodside Energy recently embarked on a programme to embed its knowledge-management processes into employees’ daily routines. Khaled Chiri details the steps the company has taken to create an environment that is conducive to learning, sharing and collaborating, and reveals the progress Woodside has made to date.
Based in Perth, Western Australia, Woodside Energy Ltd is Australia’s largest independent oil and gas company by market capitalisation. The firm was founded in 1954, when it was known as Woodside (Lakes Entrance) Oil NL. Woodside’s core business is its operation of Australia largest resource development, the North West Shelf Venture, based in Karatha in Western Australia. The company employs around 2,400 people and has a market capitalisation of c.A$8bn.
Woodside’s recent success is fundamentally due to its people. Success is derived from a very experienced, skilled workforce who, through many years of training and operations, know their jobs inside out. Yet what the experienced workforce knows is currently not reflected in a repeatable, sustainable Woodside-wide system of business processes where knowledge, best practices and lessons learnt are captured and re-used. Therefore, past performance is no guarantee of future success. In fact, if Woodside loses the knowledge of its current workforce, it is likely the company’s performance as a whole will suffer accordingly.
Prior to 1994, Woodside operated within a relatively isolated but competitive local environment. Since then things have changed dramatically – Woodside now has a presence in many parts of the world. To compete in this global, dynamic environment successfully, Woodside has needed to foster the development of innovative solutions and modify the way it learns, including its ability to use and re-use existing solutions, thereby removing the wasteful duplication of effort and re-learning of old lessons. To meet these diverse demands, the company embraced the principles of knowledge management in an effort to bring about a change in the way it learns, shares, creates, uses and re-uses its collective knowledge.
The knowledge-management framework at Woodside
Knowledge management at Woodside has become something of a philosophy in terms of how we look at and evaluate business performance. The KM framework is focused on creating and supporting an environment where we connect and share what we know and apply this to the way we work. To create this framework, we have concentrated on creating a number of communities of practice formed around core business processes, providing technology that allows collaboration and sharing, and supporting people in developing their knowledge-management competencies and supporting behaviours, as illustrated in figure 1.
Figure 1 – the KM framework at Woodside
Embedding knowledge into daily business routines
While collaborating and sharing what we know and have learnt is important, sharing and learning needs to be done around a defined topic or within an established context; otherwise, we are left with valuable information but no knowledge or understanding of how, when and why we should apply it. A key learning from our first CoP pilot in 2001 was that, without establishing the essential foundations of high-level business processes, the seeds of knowledge sharing and collaboration across the organisation would be harder to plant in everyday work.
To be sustainable and deliver ongoing value, it’s important that knowledge-management efforts are aligned with daily business routines, ie, the way we work. In order to enable each and every employee to understand their own work and the work of others, regardless of business-unit associations, common daily routines or business processes need to be developed. Business processes are stable, continuous, cross-functional, cross-assets and cross-divisional, and therefore are the most robust platform upon which it is possible to create know-how and to continually improve the way we work (see figure 2).
Figure 2 - embedding KM into daily work practices
Investing in a single, common, process-based system would yield significant benefit, not only from an efficiency and cost point of view, but also in a host of other ways. These include connecting people together for better collaboration, reducing learning curves for new starters or for people transferring from one business unit to another, and creating a common language throughout the organisation.
Communities of practice at Woodside
Woodside has adopted an incremental approach to developing communities around business processes. Each community of practice is headed by a process owner and supported by ‘knowledge gladiators’. A knowledge gladiator is a fun name for a sub-community leader. The name appears to have generated more publicity for the project than anything else.
Knowledge gladiators are staff members who have dedicated a portion (up to 30 per cent) of their time to establish and guide their sub-communities for the duration of the community start-up phase. Their participation is critical to ensure that the changes made are those required by the business, with business people leading the way.
Knowledge gladiators’ roles and responsibilities include:
- Stimulating and encouraging learning and sharing behaviours across the community;
- Identifying and rewarding desired behaviours;
- Ensuring community processes are ‘fit for purpose’;
- Identifying process knowledge gaps and working to find solutions to these problems;
- Ensuring best practices and lessons learnt are captured and disseminated throughout the organisation;
- Identifying knowledge experts within the community;
- Organising exit interviews;
- Ensuring seamless interfaces with other processes/communities.
Participation in a community is voluntary, but strongly encouraged, and the business process is the glue that holds the community together. This approach combines functional learning and sharing, which can then be leveraged across the business. This means we can unlock knowledge and learning that has been harboured in various silos across the company and apply it to improving our business outcomes.
Information technology is, as you will have no doubt experienced yourself, a two-edged sword. On one hand, it is the vehicle that delivers information to the right person at the right time, and without it, business is harder to conduct. On the other hand, it could become a distraction if not managed properly.
Woodside recently acquired a collaboration tool that combines elements of e-mail, instant messaging, community spaces, bulletin boards, online meetings, as well as a discovery server (a powerful search engine that assists in the discovery of information from a variety of sources and matches expert profiles). This is supplemented by an expert yellow pages that we have developed in house. The yellow pages is a directory, in the truest sense of the word. It enables people to locate staff who have the right experience and competence to help with their queries or problems. For those who are not able to find an answer to their query through the yellow pages, there is an option to post their query in the community place using the collaboration tool.
The biggest advantage of an online collaborative approach is that when a person raises a question, they not only receive an answer in a timely fashion, but the rest of the community members also benefit from having access to the responses. In our experience, a knowledge-management project cannot rely on existing technologies like the telephone or e-mail, as these tools may not suit the way some people work or meet all business requirements – employees overseas, for example, cannot always rely on these devices for effective communication to workers located elsewhere around the world.
The system we have implemented at Woodside relies on a community of practice of between 50 and 200 people to share knowledge and information. This system enables someone seeking an urgent answer to a question to quickly consult with people who might be able to help without the need to know the individuals who may be able to assist. An example of this was a recent query posed by a Woodsider based in Italy. Not only was he able to access the community place from overseas and pose a question, he also received appropriate responses within 24 hours.
It goes without saying, though, that technology can only be part of a KM solution rather than being the solution in itself. It is technology in association with many other forms of community meeting and other face-to-face activities that enables tacit knowledge to be used to solve business-related problems. Knowledge cannot be separated from the communities that create it, use it and transform it. In all types of knowledge work, even where technology is very helpful, people require conversation, experimentation and shared experiences with other people who do what they do. This was another key learning from the pilot project we conducted in 2001.
Measuring the benefits of knowledge management
Benefits from KM programmes are real but most organisations, including Woodside, find it hard to come up with performance indicators to justify ROI, as there are many factors that affect organisational and individual performance other than the KM programme itself. Woodside relies on measures such as anecdotal evidence, including success stories and testimonies, growth in new membership, growth in the number of postings (open questions), growth in the number of completed entries in the expert yellow pages and the frequency with which the yellow-pages system is accessed. Also, gut feelings and a more general feel-good factor are also considered.
The onward journey for knowledge management at Woodside presents a significant challenge. However, the rewards for creating a knowledge-management capability will be reflected in the Woodside bottom line as we harness and exploit our knowledge assets. We have put in place a framework for institutionalising KM that uses our business processes as the primary basis for forming our communities of practice. These communities cut through traditional divisions, assets and functional silos.
The high-level benefits and justification for embedding knowledge management into business processes lie in the creation of a common language and in the provision, at all levels of the organisation, of up-to-date, easily accessible data, information and knowledge gained through years of experience. The acceptance of uniform practices into daily work activities lends further support to our efforts to increase the speed of competence development for our people. It helps reduce learning curves for new starters or for people transferring from one business unit to another and enhances knowledge transfer across divisions, assets and functions. The capture and exchange of information provides us with the opportunity to further build on existing solutions, as opposed to having to continually re-invent them.
It is our belief that knowledge management, when correctly implemented, will enhance value in two main areas. First, innovation will be encouraged, resulting in business benefits through improvements to processes and rapid opportunity realisation. Second, people will feel more connected, resulting in a reduction of individual non-value-add search time and a more productive and satisfied workforce.
Woodside’s ultimate aim is to create and implement a framework for organisational knowledge that will move the organisation from a position of not knowing what it knows (unconsciously unskilled) to a position of knowing what it knows (consciously skilled). So far, we have made good progress. Indeed, a tangible outcome of our efforts to date was our success in making list of 18 finalists in the 1st Asian Most Admired Knowledge Enterprise (MAKE) award for 2002.
© 2002 Woodside Energy Limited
Khaled Chiri is team leader, knowledge and management systems, at Woodside Energy. He can be contacted at firstname.lastname@example.org