Feature

posted 25 Sep 2002 in Volume 6 Issue 2

Punching above their weight

Funded by a number of public-sector organisations in the Netherlands, Syntens works to help enhance the competitiveness of small and medium-sized enterprises in the country. Paul Louis Iske and Janika Horvath describe the methods and results of a recent initiative undertaken by the firm aimed at generating awareness among SMEs of the value of knowledge-based assets, and at raising the profile of knowledge management itself.

It is generally accepted that knowledge should be considered a vital production factor, not only for large, trans-national organisations, but also for small and medium-sized enterprises. Among SMEs in particular, we have seen an increase in the knowledge intensity of corporate activities. It is the ultimate challenge for the entrepreneur to facilitate knowledge-based processes within their organisation. In the end, the handling of knowledge within a firm is the main driver of sustainable competitive advantage.

Both Syntens and the Ministry of Economic Affairs in the Netherlands are aware of the increasing value of knowledge to the SME market, and are working to try to stimulate the development of a knowledge-based economy in the country. In 1999, the ministry launched a workshop entitled ‘Data and knowledge systems: knowledge management’. The workshop members concluded that knowledge management is a key issue for organisations, and not just for those operating in hi-tech or service industries. In addition, Syntens had already started work on its own regional knowledge management projects in 1998.

Based on the workshop’s conclusions and on the regional experiences of Syntens, it was decided that a knowledge management project focusing on the working practices of SMEs in the Netherlands should be launched. The project was mainly introduced to increase the awareness among SME entrepreneurs of the importance of knowledge as a strategic factor, as well as to communicate the values embodied by knowledge management. The project started as a pilot in 1998. From 2000, it was introduced to a broader audience, before drawing to a conclusion last year.

In this article we will discuss the approach, activities and main results realised by the SME KM project in the Netherlands, as well as the role of Syntens itself.

Project outline

The main criteria for creating a new project within Syntens are:

It must be in relation to the company’s mission of ‘increasing the entrepreneur’s ability to innovate’;
It must help the SME entrepreneur develop more effective working practices;
The organisation and its activities must fit within the structure and environment of Syntens itself.

In this project, we used the following as a working definition of innovation: ‘The ability to create business opportunities and transform these into tangible action and competitive advantage.’

We divided the ability to innovate into three distinct elements:

Perception/awareness;
Attitude/culture;
Power, relating to all forms of capital, including financial, system-based, organisational, relationship-based and structural.

Knowledge in turn impacts upon all three elements, and as such the project was accepted as fitting with the definition of Syntens’s mission.

Project goals

The project goals were formulated as:

To demonstrate to the SME market the importance of knowledge management as a means to improve strategic and operational business processes;
To stimulate companies in the SME market to adopt KM practices.

To achieve these objectives, the following activities have been undertaken:

The formation of a national KM platform, as well as a number of regional ones;
The development of a so-called ‘Green Book’, which offers a kind of KM thesaurus;
The collation of a book of KM case studies;
The development of a Syntens KM website;
The organisation of more than 20 KM awareness training seminars;
The execution of KM advice projects (incorporating about 150 scouting projects, 28 analyses and 14 execution plans).

The target group

The target group of Syntens consists of approximately 80,000 SME companies that have some affinity with innovation. The number of companies that had the right profile for the project was estimated to be between two and five per cent of the target group, equating to up to 4,000 candidates. These were the so-called ‘early adaptors’.

Beijerse[1] has listed some of the characteristics witnessed among SME companies, of which the most important ones in the context of this project were:

Strategy – intuitive, improvising, niche marketing, know-it-all;
Structure – flat and polarised, informal, flexible, quick and lacking (staff) support;
Culture – personal, communicative, pragmatic.

We assumed that these characteristics also applied to the project target group.

Execution

In the execution strategy, we followed what is known as the AIDA concept (raise Awareness, generate Interest, create Desire and initiate Action).

Awareness

The main objective in this phase was to raise awareness about knowledge management in the target group. The associated activities had a national focus, and included:

The creation of a national platform for knowledge management;
The production of a project leaflet;
The creation of a case book, which became available after the project was completed;
Copying Allowed, another book that was released when the project was over.

Interest

As the companies involved had already demonstrated some basic interest in KM, the approach here was to focus on a more collective approach, based on the organisation and facilitation of:

Regional, round-table discussions;
Meetings;
A dedicated website.

Desire/Action

Here we were dealing with company-specific activities. The focus was on knowledge exploration and possible action plans within each company. The results from this stage of the project were documented in the case book and in the book A Sneak Peep Could Make Your Company Leap. We designed these books so that they could be used in the awareness phase of the project for the next batch of candidate companies.

In the remainder of this article, we will look at the KM awareness meetings and the KM consultancy activities in more detail. The meetings themselves were organised as an introduction to the advisory phase. In total, eight per cent of the participants in the initial meetings embarked on the advice phase.

The KM awareness meetings

The aim of the awareness meetings was to engage companies and to raise awareness of the need to consciously deal with knowledge. We decided to focus on the concept of knowledge and on ‘dealing’ with knowledge, rather than on knowledge management per se. The term ‘knowledge management’ had actually put off a number of entrepreneurs. In order to keep the potential barriers to the success of the project to a minimum, no jargon was used.

Guest speakers were invited to tell participants about their practical experiences in the field. Cases were used to illustrate the subjects that were discussed. Typically, a meeting was organised as a one-time event, or as one element in a series of meetings focused around a broad theme, with one meeting dedicated to knowledge management. The meetings lasted a morning, an afternoon or an evening.

The KM advisory phase

Based on the goals and work practices of Syntens, we developed a KM methodology, the ‘knowledge analysis methodology’ (KAM). The KAM consists of three steps:

The KAM explorer;
The KAM analysis;
The KAM plan.

The KAM explorer is a KM ‘quick scan’. Developed jointly by Cibit (www.cibit.nl) and Syntens, the quick scan provides an insight into the role that knowledge plays in a company, where it resides and how it is used. The explorer serves as a discussion tool and the results are documented in a standard format. It allows for a structured approach to discussing the mission, objectives, product/market combinations and the primary business processes in the company related to knowledge. The KAM explorer focuses on the ‘as-is’ KM situation. Its main purpose is to increase the entrepreneur’s awareness and to make them consider their company in a way that may be entirely new to them.

The next step is the KAM analysis. In this phase, the consultant conducts interviews with employees within the company. The focus is now not only on (strategic) management but also on operational factors. The picture given by management will be validated and adjusted to reflect the way things really work in the organisation. Management is primarily concerned with how things should work, whereas employees concentrate on the reality of the situation. Based on the improved insights as to where potential bottlenecks exist, improvement plans can be developed.

The final step is the KAM plan. Based on the results of the previous steps, the consultant is able to create a list of the most important areas that require improvement. This list then serves as the input for a cross-company workshop, which in turn results in an improvement plan that can be used for immediate action.

We chose the KAM methodology for the following main reasons:

It is SME-oriented. The KAM translates abstract KM concepts into understandable and concrete terms;
It is pragmatic. The questions, solutions and actions associated with the methodology are closely connected with the day-to-day issues faced by the entrepreneur. Any improvement points can then be directly implemented. The terminology used and subjects addressed are those put forward by the entrepreneur;
It does not act as a benchmark. There is no ‘norm’ – rather, the KAM methodology focuses on the subjective opinion of the management and the employees who work in the company;
It is focused on change. The KAM concentrates on those factors the entrepreneur is willing and able to change. The role of Syntens is to stimulate this change and innovation.

Project results

The output of the project can be divided into two categories. The first category deals with the direct quantitative output, while the second relates to the less tangible effects that have been achieved within the SMEs involved.

In addition to the results shown in figure 1, and as mentioned above, the project led to the creation of a case book, a dedicated website and to the publication of A Sneak Peep Could Make Your Company Leap. The case book details the stories of 14 entrepreneurs who have followed the entire KAM process. They share their KM visions and the reasons why they became involved with the project in the first place. A number of Syntens consultants also describe their visions and experiences. Similarly, A Sneak Peep Could Make Your Company Leap details the problems and associated solutions thrown up by the project. In all, the study resulted in approximately 800 individual problems, as identified by the entrepreneurs involved, and around 400 solutions that were subsequently applied in practice. The book divides the list of problems into 12 generic areas, and the solution into seven. The book was written in such a way as to directly reflect the way the entrepreneurs involved in the project acted: thinking in terms of problems and focusing on the appropriate solutions. More than 500 copies have been distributed to those entrepreneurs who have requested a copy.

Aside from these concrete results, it was important to consider the extent to which the project activities, in particular the meetings, contributed to an increased awareness of the issues relating to knowledge management. Three specific areas were considered: KM policy, focusing on the strategic aspects of KM; knowledge types, focusing on the identification and classification of knowledge (eg, strategic and/or operational); and, KM processes, relating to how best to mobilise knowledge in the execution of business strategies[2].

The main inputs for the evaluation were the results from a questionnaire answered by SME participants, together with information that emanated from interviews with Syntens consultants. The results are presented in figure 2, and can be summarised as:

KM policy – the vast majority of entrepreneurs said that, following the project, they wanted to deploy KM as a company-wide policy. About 86 per cent favoured a structured policy rather than a more ad hoc approach. However, their comparative lack of experience may make a structured approach less realistic;
Knowledge types – in the application of knowledge management, it became clear that SME companies focus primarily on operational aspects relating to knowledge, and on the solution of problems linked to the management of knowledge. The nature of the problems themselves varies a great deal. The KAM methodology was therefore used to solve problems based on particular types of knowledge. As shown in figure 3, about 59 per cent of the respondents indicated that they wanted to focus on core knowledge. 19 per cent started by addressing issues associated with base knowledge, in turn relating to problems in the supporting processes. Finally, 22 per cent focused on ‘promising’ knowledge. This in turn suggests that most companies no longer consider the management of base knowledge a real problem. In addition, those companies that focused on promising knowledge were also strong in managing knowledge around the primary and supporting business processes; when companies have solved their basic knowledge needs, they are better positioned to start focusing on new knowledge, relating to new opportunities. As such, having the right knowledge (management) capabilities is clearly crucial to the innovation power of a company.
KM processes – the sharing and application of knowledge were usually conducted in a combined fashion, whereas the development of knowledge is often considered to be a separate activity entirely. Only 24 per cent of companies indicated that they would use knowledge management to support better strategy development and to increase competitive power. In the survey, most respondents said that they wanted to focus on the realisation of more tangible, achievable and operational goals, such as increased process control and better understanding of the markets in which they operate.

The final analysis

The main conclusion drawn is that, in the SME segment, knowledge management is very much oriented towards problem solving. For many, the use of KM as a means to achieve structural and strategic improvements is still rare. However, the most positive result of the project is that awareness of the benefits of KM has increased substantially. About 60 per cent of entrepreneurs expect higher profits or an improved competitive position through implementing KM. In fact, the majority of those involved had expectations that were too high – we believe that, based on the problem-solution and short-term focus, the strategic objectives raised by many of the participants are not feasible for the time being. Nevertheless, by emphasising the value of applying KM at an operational level, a number of positive effects can be expected. From the entrepreneurs who have implemented KM processes, 80 per cent expect to improve their firm’s handling of operational knowledge. The actual level of improvement will depend on the type of knowledge focused on, but as around 60 per cent have chosen to focus on core knowledge, significant improvements can be expected in the primary processes of the company.

More generally, the project has clearly increased awareness of KM, as well as understanding as to the strategic value of knowledge in an organisational setting. In addition, participants have developed a better insight into the operational aspects of how to deal with knowledge within their companies. Yet whether these firms will start to manage knowledge in a more structured and strategic way in the future remains to be seen.

References

1. Beijerse, R.P., Kennismanagement in het Midden- en Kleinbedrijf: Een State-of-the-Art Studie, (EIM, 1997)

2. Sipma, H., Bedrijvigheid in Kennismanagement (RUG-afstudeerverslag, 2002)

Factfile: Syntens

The Dutch Ministry of Economic Affairs is committed to developing the competitiveness of SMEs within the Netherlands. Together with a number of other public-sector organisations, the ministry finances Syntens in order to help the company achieve its goal of supporting SMEs in their efforts to improve and strengthen their ability to innovate.

Syntens is a national organisation, with more than 400 professional employees located in 15 regional offices, and with a central office in The Hague. The central office has close contacts with the national government and with industrial associations, while the regional offices help maintain a nation-wide presence and a comprehensive understanding of the areas in which they operate. It is by pooling these national and regional strengths that Syntens is able to offer an effective, country-wide network.

Paul Louis Iske is chief knowledge officer at ABN Amro Corporate Finance. He can be contacted at paul.iske@knocom.com

Janika Horváth is a consultant and project manager for Syntens. He can be contacted at jfh@syntens.nl