posted 14 Jan 2005 in Volume 8 Issue 4
Unilever: Leveraging community value
Building organisational value through communities of practice that help to generate efficiency, increase innovation and improve risk management. By Anita Pos, Klazien Linse and Manfred Aben
Unilever is one of the largest consumer goods companies, with corporate centres in
Having recognised the importance of knowledge as a key differentiator and the source for sustainable competitive advantage, Unilever has made significant investments in IT over the past decades. But the company soon realised that this was only part of the solution and that it was becoming more important that the investments the firm was making in knowledge contributed to top-line growth and profitability.
Most knowledge in the organisation is not explicit, but tacit, residing in the heads of its employees. In light of continuous restructuring, it is this tacit knowledge that is most under threat. Trying to capture or transfer this tacit knowledge is not easy, as it stems from personal experience and individuals are not always aware of the value of the knowledge they hold. Moreover, knowledge is not static. In fact, it is the continuous creation of new knowledge and learning, rather than static knowledge assets, that will produce a sustainable advantage.
From knowledge workshops to communities of practice
Taking this learning-organisation perspective as a starting point, Unilever has put numerous knowledge-management initiatives in place across the company. In order to capture what was known and identify what was not (knowledge gaps), knowledge workshops were organised. Key experts and practitioners from around the world discussed, in an interactive and structured way, a specific, strategically relevant knowledge domain. The aim of the workshops was to come to a common understanding about the knowledge strengths and weaknesses of the company as a whole. Existing good practices were captured and rolled out to the wider community. At the same time, innovation and R&D programmes were put in place to address the knowledge gaps that were identified.
From these workshops, communities of practice emerged – groups of experts acting as the custodians of a specific knowledge domain. However, it soon emerged that the most strategically relevant communities were not necessarily the most active ones, primarily because the experts that worked in an area that was of high strategic value were also in high local demand. To their own frustration, they found it difficult to keep the community of practice alive, given their day-to-day pressures.
Networks have been interwoven with Unilever’s organisation for many decades, both on a personal, informal level and on a more structured, organisational level. However, as the organisation becomes leaner, and bottom-line improvements bear fruit, it has become apparent that communities of practice depend on careful management and the appropriate allocation of resources if they are to survive. For this reason, the Knowledge Management Group (KMG) has put in place a more formal framework to help ensure the effective and efficient operation of the firm’s communities of practice.
The Unilever CoP framework
The communities framework advocates certain principles within which Unilever CoPs operate in order to ensure added business value. These principles can be organised into four pillars: deliverables, people, operations and leverage.
A clear distinction is made within the firm between communities of interest and communities of practice. Communities of practice are defined around a knowledge domain that is core to the company’s strategy. Therefore, clear, ongoing deliverables are identified that contribute to Unilever’s business results. These deliverables can be knowledge deliverables (such as improved insights, training programmes, good practices and so on) and business deliverables (such as increased speed of implementation of business-improvement projects, roll-out of specific innovations, safety improvements and the like).
The people pillar is about the roles and responsibilities of CoP members. Members themselves are key experts, recognised as such both inside and outside the community. They should represent the right mix of background, geographical representation and local versus corporate resource. Equally important is the role of the activist. The activist ensures continued strategic alignment in the activities of the community. Typically, the activist position is a rotating role that all members can eventually fill. The people pillar also addresses the stakeholders and sponsors external to the community, but necessary to validate its existence and free up resources for the members.
The operations pillar is centred on the way the community functions. It forms the basis for creating an open and trusting culture in which members feel safe to share and create. As part of its launch, each community defines these ground rules itself, including the ICT support needed to ensure effective ongoing communication and knowledge sharing.
In order to prevent a community becoming isolated within the organisation, the outcomes generated by the community need to be communicated to the rest of the organisation. Likewise, inputs from the wider network need to be able to flow without restrictions. These challenges are addressed by the leverage pillar. The CoP identifies the broader network of stakeholders and ensures effective two-way communication is maintained. Another aspect of this pillar is the effective branding of the community within the organisation.
Leveraging community capabilities
The Unilever Knowledge Management Group has designed community guidelines and training for CoP activists. The training course is aimed at raising awareness of the general benefits offered by communities and building an understanding of CoP terminology. The course offers practical insights about communities of practice and hands-on experience in tools and techniques in establishing and sustaining a community. Acting as a profit centre within Unilever, the KMG also works outside of the company. For instance, and as testimony to the quality of the way CoPs are set up in Unilever, the KMG has also provided training to ABN Amro and other multi-nationals.
In addition, the KMG works closely with activists and champions who are in the process of setting up a community of practice. A champion identifies the need for networking and knowledge development in their part of the business. The next step is then to clarify what the objectives are, and whether setting up a CoP is the most effective way of realising these objectives.
When this has been clarified, the champion looks to appoint an activist for the CoP. An initial brief is then specified, outlining the broad objectives of the community and the relevant stakeholders. This brief is further refined by the champion and other stakeholders. Potential community participants are suggested and invited to join. A first proposal for operational procedures and leverage of results is drawn up, the community kick-off meeting is planned, and the agenda and process for the meeting are carefully designed, based on a standardised approach and guidelines.
During the kick-off meeting, which lasts between two and five days, CoP participants discuss the deliverables and potential ways of working within the community.
The constituent elements of the four pillars described above are specified and tailored to the needs, focus and spirit of each community. Sessions on defining the role of the CoP are interspersed with team-building activities aimed at building trust and relationships between the participants.
The KMG works closely with the activist to prepare them for their role, such that during and after the kick-off meeting they are confident in their ability to energise their community and help it to deliver results. However, the KMG also maintains contact with the activists, and the training material used by the KMG is adapted continuously according to the learnings and needs of the activists and their communities.
Once a CoP has been up and running for some time, a health check allows the company to assess whether the community is still on track. It could be that, due to changes in the organisational environment, a CoP needs to shift focus or include new members. A health-check questionnaire and the recommendations that result can help to identify strengths and gaps in the sustainability of a community. For example, after a number of years, one of Unilever’s communities is looking to broaden its focus from sharing knowledge and good practices to generating new knowledge. Knowledge visioning, one of the KMG’s other offerings, can help the community to identify which areas of knowledge have the most potential value. The company also recognises that, once a CoP is no longer adding value to the business, it should be allowed to disband. However, it is important in such instances to recognise and celebrate the community’s achievements. A debrief workshop can be a useful tool to ensure that lessons learnt will be captured and transferred.
Communities require substantial levels of investment, and as such should be seen to add significant value to the business. Therefore, valuation of community activities is embedded in community processes from the beginning, and is a continuous process that lasts from conception of a CoP to its closure. Various valuation approaches – ranging from gathering success stories and quotes of satisfied CoP ‘customers’, to causal tracking and balanced scorecards – are used to help a community of practice to continuously manage (identify and exploit) the added value of the its activities. Each recommendation a CoP makes requires appropriate resources and is therefore treated as an investment decision. The valuation results provide the basis for the business case underpinning the resulting recommendations. Two examples of communities of practice that have resulted in quantifiable value to the business are the Agronomy community and the NPI Buying communities (see sidebars).
Seven years and counting
Walking the fine line between the empowered ‘anarchy’ of a purposeful network, and the structure of a focused and result-oriented business team, the flexibility and speed of CoPs have resulted in very impressive results for Unilever over the past seven years. Ranging from efficiency improvement, increased innovation and improved risk management, the payback is many times higher than the investments in starting up and operating the communities.
Currently there are several dozen CoPs in Unilever that are highly active. Communities originated in areas such as supply chain, technology and innovation – sectors in which the value of knowledge is explicitly recognised, and resources tend to be scarce. More recently communities have also emerged in areas like marketing and consumer insights, where knowledge is of a more tacit nature. Due to a high turnover and the tacit nature of knowledge, the urgency of sharing and leveraging knowledge in these areas is higher than ever. As such, communities of practice are an essential element in Unilever’s organisational culture, and will continue to be as the company strives to satisfy its customers’ needs, now and in the future.
Anita Pos is a KM consultant in the Knowledge Management Group at Unilever. She can be contacted at email@example.com
Klazien Linse is a KM Consultant in the Knowledge Management Group at Unilever. She can be contacted at firstname.lastname@example.org
Manfred Aben heads the Knowledge Management Group at Unilever. He can be contacted at email@example.com
- As CoPs bring together the most highly talented people in their area, it is often difficult for them to balance community participation with the demands of their day job. As such, it is critical to be clear about the investment needed and the resource implications;
- Successful CoPs do not just happen; they need to be carefully designed and supported, with clear and measurable objectives and roles, and a solid operational plan;
- Training CoP activists provides them with an understanding of CoP terminology and a common framework that can be applied across your organisation. Training helps to impart practical insights about communities, specifically about what makes them work and how to generate the most business value;
- You get only one chance to launch a community, so a carefully designed kick-off meeting is essential;
- It is crucial that you maintain a balance between the benefits for participants, their departments and the broader organisation;
- Balance longer-term projects with quick wins. A quick win can help in motivating your participants (and their stakeholders) in the short run, but longer-term, high-value projects are required for the company to benefit from the step-change improvements a community can deliver;
- Avoid single-leader dependency. Stakeholders and champions will change, and the CoP needs to be able to survive these changes;
- Do not sell communities as a separate, knowledge-based initiative, but as a more effective way of achieving tangible business results.
SIDEBAR: The Agronomy community
Unilever is one of world’s largest processors of tomatoes. With products such as Ragu Pasta Sauces, Chicken Tonight, Knorr soups and sauces, and many more, Unilever’s tomato-processing plants are spread across the world. Seven years ago the Culinary division organised a knowledge workshop, bringing together experts in the field of tomato production and processing. Participants came from all over the world. Management, and indeed the experts involved, felt it was so important to exchange and share knowledge in the area that they decided to establish a community. The CoP that was formed remains active today. The following section offers an example of the value that the community has generated.
The regions where tomatoes are grown and processed for Unilever are located in North America,
In countries where water was scarce, Unilever worked with the local growers to develop highly sophisticated and efficient drip irrigation systems. Instead of spraying the fields overhead, the water was brought to the plants through a web of tubes, dripping water, pesticides and herbicides close to the plants. Besides water, pesticide and fungicide savings, the additional advantages turned out to be higher yields and less chance of disease. However, in areas where water was plentiful, over-irrigation led to moulds and the prevalence of bacteria.
Information exchange between the experts in the Agronomy CoP, in addition to local technical support in Brazil, allowed Unilever to overcome these difficulties, and to the introduce drip irrigation systems across its tomato-growing network. The relatively high investment costs could be quickly paid back owing to the return on investment generated by significantly higher yields and the lower costs of fighting diseases. The fact that different experts from across the world had formed a CoP, developed professional trust and respect, and were fully empowered by the organisation, resulted in a rapid and effective implementation, and the realisation of considerable business benefits.
The Agronomy CoP meets twice a year, each time in a different country. During each meeting, which lasts a couple of days, the CoP invites local growers to discuss cultivation problems and plans, often locally in the field or in the grower’s own business. Both the local growers and the Unilever agriculture managers appreciate this exchange of knowledge and experience. Both groups make grateful use of the tips and experiences they exchange in order improve the quality of the tomatoes and increase the yield.
SIDEBAR: The NPI-Buying communities
Within Unilever, Global Supply Management is divided into Production Items (eg, raw materials, packaging materials) and Non-Production Items (NPI) (eg, lease contracts, travel contracts, IT supplies, office supplies and market research). NPI is currently organised regionally, with regional targets. In the summer of 2002, a workshop was organised where representatives of all regions attended to discuss key issues and to identify must-win battles for global NPI. From this workshop, one of the global initiatives that emerged focused on communication, knowledge sharing and collaboration. One can easily imagine the enormous potential of savings that can be reached by aligning and standardising the global buying programme of a company the size of Unilever.
To encourage global collaboration and leverage cross-regional opportunities, the company decided to establish three global CoPs. Each community was to bring together a core team of NPI professionals to share expertise and good practice. As some activists had yet to be trained, the project consisted of two steps: first, training the global activists and potential regional activists-to be; second, launching all three global CoPs in parallel with each other.
The CoP course was tailored to the specific NPI context and needs, with specific attention on the tools and techniques for a kick-off meeting that would follow straight after the course. After the course, the participants of all the CoPs arrived at the venue and the launch event began. The NPI CoPs were set up in three key areas: Engineering & Technical, Travel and Marketing.
The CoPs are very active, both internally and in sharing with other communities. The NPI communities have since contributed to significant cost savings, not least in creating a common terminology. What’s more, new communities within NPI are emerging and being integrated with the global initiative.