Country focus: Germany

Sandra Higgison talks to Oliver Schwabe, managing director at Eurofocus International Consultants, about the evolution of knowledge management in Germany.

As one of the super powers of the Western world, it is not surprising that knowledge management is a well established practice across many of Germany’s businesses and organisations. Knowledge management’s multifaceted background makes it difficult to trace a specific development path in the country, but Oliver Schwabe, managing director at Eurofocus International Consultants, describes the overriding trends, pinpoints the thought leaders that have emerged and makes predictions for the future.

The development of knowledge-management programmes by many German organisations has woven a rich tapestry of examples that illustrate the country’s relationship with KM. As Schwabe says, the very depth of this picture makes it difficult, if not impossible, to identify a clear history. For example, a simple search for ‘knowledge management’ on Amazon’s German website reveals over 400 books on the subject, with 33 published in 2004 alone. However Schwabe does refer to three distinct phases in KM’s development, two of which Germany is said to have already experienced. “The initial wave was technology based, as in many other countries, and focused on information rather than knowledge,” he says. “The second wave leveraged KM thinking to improve organisational communications and the use of ‘soft’ resources.” Recent economic difficulties, though, have effectively ground this wave to a halt as organisations revert to major cost cutting in headcount reduction. Finally, Schwabe considers the third wave to be innovation, which is explored later in greater detail.

Schwabe describes three figures from the research side of KM that have influenced the development of the industry. “Hans-Jörg Bullinger is head of a globally renowned research organisation, Fraunhofer Gesellschaft,” says Schwabe. “He is a key researcher and writer in the area of people and technology, and co-authored a knowledge-management study, Pretension and Reality: Results of an Enterprise Application Study in Germany in 1998 of over 300 organisations. It found that knowledge is generally considered a key factor in developing and maintaining competitive advantage, as 96 per cent of the organisations believed managing their knowledge was important, but only 15 per cent were satisfied with their efforts in this sphere.”[1] The second thought leader is Péter Horváth, who holds an academic chair at the University of Stuttgart. Schwabe considers Horváth to be particularly influential in the areas of controlling, accounting, and integrating tangible and intangible controlling instruments. “His consulting organisation gives him close links to the commercial sector, while his intense activity in the European Accounting Association provides solid links into related international research.” Horváth is also co-editor of a German knowledge-management magazine, Wissensmanagement – Zeitschrift für Innovation.

Gilbert Probst is Schwabe’s final choice. Probst holds the academic chair for organisation and management at the University of Geneva and is head of its MBA programme. He has close ties to other business schools, such as the University of St Gallen and the Institute for Management Development in Switzerland, and Wharton in the US. “Probst has contributed significantly to KM in Germany and other German-speaking regions,” says Schwabe. “He co-founded the Geneva Knowledge Group, a research body that supports commercial organisations, and has co-authored books, such as Bausteine des Wissensmanagements, and Wissen Managen – Wie Unternehmen ihre Wertvollste Ressource Optimal Nutzen,[2] that are considered drivers of the KM movement.

Returning to the broader picture of KM in the country, Schwabe believes there is a need to differentiate between groups. “For one, we have major global companies, like Deutsche Bank, Siemens, Bosch, BASF, Volkswagen and BMW,” he says. “These organisations have institutionalised knowledge management in both research and the deployment of world-class practices. Their view of KM is characterised by high levels of maturity and operational leverage.” He then defines the large, mainly national players as another group that understands the principles of KM but has a heavy focus on technology. “These companies run dedicated projects that are usually targeted at operational areas such as customer care and sales,” he says. He points to consumer goods companies Aldi and Schlecker, Sparkassen Verbund in banking and MVV, a transportation company, as good examples. Finally, Schwabe describes KM’s development within the German mittelstand: national small-to-medium-sized enterprises. “These companies are usually still in family ownership and have been practising the principles of knowledge management since they began, albeit tacitly,” he says. These companies tend to have a general distrust of technology for organisational communication and development, and often resist experimenting with new approaches. But, as Schwabe says, it must be noted that these companies undertake tacit knowledge management. “Overall, I see a mature industrial landscape for knowledge management, although the levels of explicitness vary greatly. The softer or less technical KM efforts face the most resistance as the measurable bottom-line impact is still given high priority,” he says.

The German national and regional administrative authorities have also developed and implemented a wide range of KM-related initiatives. Schwabe sees a parallel with private-sector trends, and particular success in the way KM has been linked to the development of solid e-government services. “Recent studies indicate that while about 30 per cent of the German population appreciates the transparency generated by e-government and actively use the services, over 80 per cent feel that this online interaction is insecure,” he says. Schwabe relates this finding to the integration of KM programmes. “While soft KM efforts can be embedded implicitly within a corporate culture, the introduction of technology instantly creates distance with the individual, which gives rise to feelings of insecurity,” he says.

Indeed, the contrast between German and Anglo-Saxon cultures has had a significant impact on the development of knowledge management in Germany in terms of general levels of understanding and associated areas of thinking. The first point Schwabe refers to is the difference in language. “Although English is widely spoken, there is a natural tendency to work with German literature rather than the works of recognised KM authors in English,” he says. “This has created German schools of thought around Probst, Heinz Mandel, chair of education and educational psychology at the Ludwig Maximilian University of Munich, Peter Schutt, director of knowledge management at IBM Software Services in Central Europe, and work at St Gallen, for example, which have established a firm position within our KM market without encountering major competition from abroad.” Similarly, as these centres of thought leadership have not established themselves outside of Germany, they have a specific understanding of the cultural issues at play in the country. The second point he makes here is the research-focused nature of German organisations. “Contrary to the Anglo-Saxon attitude of simply trying out new ideas, there exists a heavy emphasis on conducting primary research, analytical evaluations and careful prototyping,” says Schwabe. “This means that it takes a long time for new ventures to be introduced and generate new value.”

Comparing Germany’s KM experiences to those of other countries, Schwabe believes that the German industry has generally followed US developments but trails by about three to five years. “On the conceptual side, there are signs of insular research focusing on German-speaking regions and organisations, but little thought is given to external, especially Anglo-Saxon, work. For example, the works of Karl-Erik Sveiby, Verna Allee and Dave Snowden are not well known in Germany,” he says. On the implementation side, Schwabe notes that the troubled economy and traditional cultural attributes have resisted the changes required, especially to the values ingrained in organisations and individuals who refuse to acknowledge the disruptive changes in the global economy.

As Germany moves into the third wave of knowledge management, Schwabe asks whether today’s efficiency drives and steadfast focus on the bottom line signify a return to viewing KM through a single IT lens. “It should not be interpreted this way,” he says. “While many companies are leveraging elements of KM, the term itself has weakened due to the plethora of consulting companies in the field, the continuing efforts of organisations in many sectors, and a risk-adverse management culture. We are in a cooling-down phase, where KM terminology is becoming mainstream and part of the ‘normal’ organisational toolset.” According to Schwabe, industry players and the government are heralding the ‘innovation’ third wave as the solution to all ills. However, this rallying cry to innovate is more a revival of continuous improvement and quality-management thinking than a radical break from tradition.

Before companies begin reaping these rewards, Schwabe believes there is lots of work to do to stabilise existing efforts and ensure that technology remains only a part of knowledge-management initiatives. “The major challenge is to re-interpret and re-instil respect for the human role in organisations,” he says. “As the mittelstand, which makes up about 70 per cent of German economic production, does this intuitively, we may see more organisations de-layering into smaller units and network structures.” Schwabe admits that this will be a long and hard process that can only expect limited success if economic conditions fail to improve over the next decade, which is uncertain due to national development, EU expansion and developments in the US and Asian markets. Placing these difficulties to one side, German companies can take comfort knowing that they have already made considerable headway into deciphering the knowledge conundrum and, if conditions permit, are on the right track to take a leading role in the world’s maturing knowledge economy.

Knowledge-management resources

Associations and working groups:

Gesellschaft für Wissensmanagement e.V.
www.wissensmanagement-gesellschaft.de

Institut für Knowledge Management e.V.
www.ikm-ev.de

Knowledge Warehouse
www.knowhouse.org

The Fraunhofer Competence Center Knowledge Management
www.wissensmanagement-competence-center.de

Fraunhofer-Institut Arbeitswirtschaft und Organisation
www.iao.fraunhofer.de

Institut für Allgemeine und Industrielle Betriebswirtschaftslehre der Technischen Universität München
www.tu-muenchen.de

Industriearbeitskreis Wissensmanagement in der Praxis
www.wimip.de

Community of Knowledge
www.c-o-k.de

Wissenskapital.de
www.wissenskapital.de

Consultancies

CSC Ploenzke
www.cscploenzke.de

T-Systems
www.t-systems.de

Roland Berger
www.rolandberger.com

EDS
www.eds.de

Business schools offering KM programmes:

Ruhr-Universität Bochum
www.ruhr-uni-bochum.de

Technische Universität Chemnitz
www.tu-chemnitz.de

FH Darmstadt
www.fh-darmstadt.de

University of Kaiserslautern
www.uni-kl.de

Universität Karlsruhe
www.uni-karlsruhe.de

FH Köln
www.fh-koeln.de

IHL Lindau
www.ih-lindau.de

Ludwig-Maximilians-Universität München
www.uni-muenchen.de

Die Stuttgarter Fachhochschulen
www.fh-stuttgart.de

FH Eisenstadt (Austria)
www.fh-eisenstadt.ac.at

Technische Universität Graz (Austria)
www.tugraz.at

Johannes Kepler Universität Linz (Austria)
www.uni-linz.ac.at

Universität St Gallen (Switzerland)
www.unisg.ch

References

1. Bullinger, H.R., Warschat, J., Prieto, J. & Wörner, Pretention and Reality: Results of an Enterprise Application Study in Germany (Fraunhofer Institute of Industrial Engineering and Organisation, 1998)

2. Probst, G. J. B., Raub, S. & Romhardt, K., Wissen Managen (Gabler, 2003)

Oliver Schwabe is managing director at Eurofocus International Consultants. He can be contacted at oliver.schwabe@euro-focus.com