Vital for a vision, Corporate transformation

Feature

posted 1 Sep 1999 in Volume 3 Issue 1

Vital for a vision, Corporate transformation

Evangelists within companies will make the difference in changing out-of-date behaviours and encouraging knowledge sharing. They are intuitive dynamic people who see beyond the red tape and existing cultures to a different and better future of communication. Jane Sheridan is the dedicated resource within Caltex Corporation, and here she shares her insights about the needs and changes within the company.

Mark Twain once said, "It's not what you know that can hurt you. It's what you think you know that isn't true."

In 1998, Caltex Corporation took a giant step forward by challenging our traditional way of thinking. For many years, our vision was to put 'Customers first'. We knew that our geographically-based organisation had allowed us to do this well for over 60 years.

However, as we began to look at our organisation in a new way, we quickly realised that this structure was actually a barrier to being truly customer-focused. It was difficult to efficiently and effectively move knowledge and best practices across the system. With operations in over 60 countries, our corporate headquarters was based in Dallas, Texas, even though we didn't sell a barrel of oil in the U.S. The structure was very hierarchical, both at headquarters as well as in our operating companies - a common practice in the oil industry at the time. The management structure within each country often reinforced the not-invented-here syndrome - 'we're different' was a phrase we often heard. We also had a large infrastructure of technical and administrative support staff in Dallas and internationally.

The economic crisis in Asia, along with continued depressed oil prices dictated that we needed to challenge our traditional structure in a rigorous and structured manner. The Organisational Effectiveness Study (OES) team was formed last year to do just that.

Although we hadn't read the following quote from Peter Senge, it could have been the mantra for our entire work. 'Creative tension comes from seeing clearly where we want to be, our Vision, and telling the truth about where we are, our current reality.'¹ Defining where and what we wanted to be helped us understand that the status quo was insufficient to meet our customers' and owners' needs as we approached the new millennium.

So, what did we do? We...

Restructured from a geographic to a functional organisation

Re-defined the role of the headquarters to a 'corporate core' concept, focused on strategic and governance issues

Relocated the core and most business units (BU's) to Singapore to be closer to our customer base and to make timely and more effective decisions

Reduced management layers

Eliminated/outsourced certain non-customer focused activities

Repositioned remaining support activities into a Business Support Group whose staffing and service levels are determined by the BU's.

Most of the new organisational structure has been in place since the beginning of this year. However, certain structural changes will continue over the next 12-18 months. While going through the restructuring, we recognised that these organisational changes would have a profound effect on our people. So, from the beginning of the OES study, human resource and change management resources were involved in the process. This has continued as we've implemented the new structure.

During the study, we also identified knowledge sharing as an opportunity for improvement. Although we had areas in which knowledge and best practice sharing worked well, in general, this was done inconsistently across the business. Our operating area ranges from East and Southern Africa, to the Middle East, across Asia and through to Australia and New Zealand. The lack of infrastructure in many countries makes electronic communication difficult, particularly via the internet/intranet. The implications of the new structure, particularly as our technical support division was largely eliminated, made it imperative that we find new ways to foster knowledge sharing.

Although moving to a functional structure would encourage sharing within functions, we recognised the possibility that functional silos could develop. Therefore, a decision was made to add a senior level position in the area of KM - to act as a catalyst for the entire organisation. I was appointed to fill this role. Since the beginning, I've been working closely with our Change Management group - to ensure that our objectives are aligned, and also to leverage the impact of our collective work. We want to convey a consistent message to employees - so that they see our work as part of the overall corporate transformation process rather than as separate and potentially confusing initiatives. Given budget constraints, we decided to focus our knowledge management (KM) efforts on two business units - (Refining and Lubricants), and to leverage the impact of quick wins to demonstrate the value of KM with other parts of the business.

Although we have only one dedicated resource, (me!) I am cultivating a team called 'GUST' to help lead the work at the BU level. 'GUST' stands for the GUS Team, which is a play on our working name for KM, GUS. It means Getting, Using and Sharing Knowledge - an acronym I borrowed from one of our parent companies, Texaco. As we've begun to use this term in knowledge-activities, we've confirmed that GUS is something which is easy to remember and to understand in the disparate geographies in which we work. The 'GUST' is like a 'Knowledge Wind' which is stirring up interest and enthusiasm for knowledge sharing across the company.

For Caltex, KM isn't an end unto itself. As we move further into the Knowledge Age, we intend to use KM as a vehicle for improved performance. Recently, we began our first major pilot project which will incorporate most of our KM tools. Our objective in this project is to use the KM tools to help improve decision-making and execution. Since we're at the inception of our efforts, it is too soon to measure the impact on our results.

We developed a decision-making matrix for potential KM applications based upon 'do-ability' versus impact. This allows us to focus on the areas where we can demonstrate quick wins. It also helps us identify 'lessons learned' which have broader based application across the businesses. The writer Arthur Clarke once described cave dwellers who froze to death on beds of coal. But, they couldn't see the coal, mine it or use it. There is knowledge and expertise in many companies like Caltex that we currently can't see, find or use. We want to use our KM process to help us get, use and share that knowledge. Two components of our working mission for KM are critical to our transformation process. We want to focus on developing a culture in which knowledge sharing is the norm, and we must integrate KM into the way people work - to help them make better decisions. To maximise value, 'GUS' must take place at the grassroots level. People must see that the KM tools help them do their jobs more easily and more effectively. People can and will change their behaviour if they see what's in it for them! Our new organisational structure presents challenges and opportunities. Most people are now part of a virtual team, with team members across the globe. They often report to someone in a different country, and may not know other members of their team. Thus, they are not sure where to find expertise.

Many BU's are in the relationship-building phase - getting to know other members of the team. Until relationships are built, lack of trust is an issue which can be a major barrier to sharing knowledge. This will take time and effort to overcome. In addition, the emphasis on performance management and increased accountability can create a focus on short term results. On the positive side, we are conducting alignment workshops across the company that include employees at all levels. This is helping to create a shared sense of purpose, as well as an optimistic, 'can-do' attitude and commitment to making the new structure work. The workshops themselves are part of the relationship building process and are instilling a greater emphasis on teamwork. As a result, an atmosphere conducive to 'GUS' is developing. The shared vision and new ways of working are positioning Caltex to grow as the Asian economies rebound.

As our transformation process evolves, we want to move away from a culture in which 'Knowledge is Power', a culture which has been a way of working in our industry for years. We are working to create a culture in which 'Sharing is Power'. We want to put 'Powerful Knowledge' in the hands of the people who need it to serve their customers. This culture change will require us to modify our performance management process. Initially, it's important to recognise people who not only share their own knowledge, but also seek out knowledge from others. Over time, it will be important to incorporate the desired behaviours into the formal reward and recognition process.

In Total Quality Management, people say, 'What gets measured, gets done'. The same is true in KM. Employees will be watching to see who gets promoted, rewarded and recognised. They will be looking to see that 'knowledge sharers' rather than 'knowledge hoarders' are coming out ahead. Positive examples will help accelerate the cultural changes.

Implementing a KM programme at a time of organisational transformation is difficult. But, I don't think it's ever easy. People are already stretched just implementing the new organisation. They may see KM as something extra, rather than a tool box and process that will help them do what they already are trying to do. The focus on short term results makes them ask, what is the impact today, and not next month or next year. People can also only cope with so much change. For some, one might be asking for more than they can handle. There's comfort in staying with the familiar, particularly if it worked for them in the past. It will take time before they see that the old behaviours will no longer produce the results they want or need. Finally, the 'not invented here' syndrome needs to be addressed. This has been a major issue for Caltex, as well as for others. While cultural issues can't be ignored, a successful KM plan must find ways to develop an effective 'GUS' process that can be adapted to work across geographies.

Will this all work? Ask me in a year. I go back to the Mark Twain quotation at the beginning. "It's not what you know that can hurt you. It's what you think you know that isn't true." From benchmarking best practices, I think I know some of the answers. (See below). Only time will tell if the tools and processes will work in our culture. But, like the children's story, 'The Little Engine That Could', 'I think I can, I think I can, I think I can...' A positive outlook and determination will take us a long way on our journey to corporate transformation.

The Top Ten List for overcoming KM obstacles

10. Don't waste time with non-believers! Look for people who see the value in KM.

9. Help people jump on the KM bandwagon. Find pilots that can demonstrate quick wins. People want to be part of a winning team - so help them do so.

8. Blow your own horn. Tell success stories - initially from outside examples, preferably in your own industry, and as quickly as possible from internal examples.

7. Give people KM spectacles! Help them see 'What's in it for me?'. Use a tool like Caltex's 'GUS' workshop, which shows people how knowledge sharing can help them solve business problems.

6. Find one or two executive 'Believers'. Leverage your work with them and don't wait to engage your entire leadership team. (You'll never convince everybody anyway - so why wait?).

5. Leaders don't all wear suits. Identify change agents at all levels in the organisation. Support at the highest levels helps, but the real value occurs where the rubber meets the road.

4. Use the grapevine or bamboo telegraph to get across your message. It's usually faster than official channels, and often as accurate.

3. Learn to 'ride the waves'. Corporate transformation is not a smooth process. There will be ups and downs, so be prepared.

2. If you want to fail, position KM as 'another initiative'. People are always looking for the new 'flavour of the month'.

1. Take vitamins! The knowledge champions must maintain high energy and enthusiasm, (and we, too, can only deal with so much change!)

Jane Sheridan is General Manager for Knowledge Management in Caltex Corporation. She can be contacted at:jesheridan@caltex.com

¹ Peter Senge, 'The Leader's New Work - Building Learning Organizations'