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Feature

posted 1 Jun 2000 in Volume 3 Issue 9

Faros, the learning effect

As the Faros series approaches its conclusion, Ove Rustung Hjelmervik continues his explanation of the lessons Statoil has learned over the past four years in developing and implementing a comprehensive knowledge management system.

Collaborative systems 

'We didn't know how we worked. That is why we sat down to work out the processes, in order to have a common point of departure.' 

'If nothing else, work processes represent a common ground for discussion, before you start looking for new ways to work.'

Externalising tacit knowledge is of the utmost importance for the organisation to benefit and prosper from each individual's knowledge and experience. Being able to share, one-to-one or one-to-many, is fundamental to the Faros approach.

Faros is a concept built around a collaborative form of interaction. This includes recording experience in a way that encourages communication and shared results. This communication is aimed at a two-way interaction between sender and recipients. Furthermore, through a COP's work process, the entire COP, as well as other COPs, can enter opinions derived from an experience in using the process. You know that your experience, recorded and forwarded to the process owner, will be part of creating a new good practice, benefiting the team, the COP and, ultimately, the company.

In addition, we have seen and heard how Statoil employees have worked collaboratively and shared experience while building Faros; how people have learned while doing by referring to learning elements; how colleagues talked on the phone to each other, discussing a given work process; and how employees have discussed with suppliers sets of drawings connected to a Faros process map. It seems that Faros offers a basis for creative, collaborative thinking.

The recording of experience must be accommodated by a work environment that makes it easy to do so. If users cannot share their experience from the position they are in, the likelihood of them ever sending any message is substantially smaller. Any user who has to go an extra step to record knowledge will not do it. This is in accordance with studies conducted in the early 1980s, revealing the frequency of visits between colleagues in research laboratories. If the distance was more than 10 metres, the frequency would drop from once a day to once a week.

Having observed both employees and managers using Faros for purposes of sharing information in ways not done before, and making a point of it, I maintain that Faros satisfies the need for a collaborative work environment. One example is an employee and his boss, sitting in different locations, viewing a drawing linked to a work flow activity, and discussing changes to the drawing that have significant ramifications, then agreeing on a joint approach for further work.

The life-long learning organisation 

'Several of the technicians tell me of their satisfaction when using Faros, because they are working in self-managing teams. This requires them to constantly get hold of relevant information.'

'Faros represents a major achievement in creating a benchmarking arena for development of 'best practice' documents.'

'Over 80% of the employees repeat mistakes made earlier by themselves or others.' Survey by Unilever Ltd, by David H. Smith

We wanted to combine the written word in a process with a multimedia impact in order to create a stronger basis for improvement, innovation and learning. The concept that 'learning takes place in the work process' has now been tested and found workable. Thus, hypothesis became reality. We believe the Faros concept supports the life-long learning ambitions of modern organisations through its work process navigation, and through offering visual examples. Faros offers the framework for integration, participation, engagement and empowerment, all vital ingredients in creating a learning environment, as proposed by Peter Henschel at IRL. Our hypothesis-cum-vision is angled directly at the employer's Achilles heel - how to secure a life-long learning focus for his intellectual capital; his employees.

Another learning-related project - computer based distance learning between Statoil and NTNU, a project we started in the winter of 1997 - did not succeed according to plan. Two caveats can be mentioned:

• We observed that there has to be room in the work place for socialising while learning. This relates to the human behaviour pattern
  
• Even if everything was working (the technology and linkage to the university were in place, a top expert team was at hand and the study material was ready) there was one side of the equation that was not complete: The 'students' had not yet fully accepted the idea of distance learning through a computer. It was like preparing for a party without a host.

We learned a lot from that experiment.

The challenges on distance learning will of course be reduced with the falling threshold of technology. However, the question of technology will, in my opinion, fix it only partly. If distance learning is to become part of an organisation's life-long learning programme, other mechanisms must be put in place. The most important of such mechanisms is management's commitment to and understanding of the issues. In the future, we will see an organisational structure that is more capable of learning, through its repository of intellectual capital. In a flatter, network-based structure, teams will work together, and intrapreneurship will lead to competitive advantages for the company. The members will find the openness refreshing and engage themselves in the business of business, rather than the business of politics. (Operating units will continue to use a more hierarchical structure than professional units, partly due to the repetitive work pattern in an operating unit.)

It is in this setting we can see the idea of life-long learning being formed, benefiting both the employee, regardless of age, and the company, regardless of past performance. Once such a vision takes hold in the company there can be no question of turning back to the old hierarchical structure with one person taking decisions and the rest acting accordingly.

Tacit to explicit knowledge 

'All we have to do is to take the Faros we have developed in one operating unit and copy it for use in the others; we are providing a service. This gives us a unified method of operation.'

'Experienced people with or without expert knowledge wish to build into the processes more relevant information, for example process flow, turbine/generator systems and so on. Such personnel have a great deal of information available, which they use daily, and wish for it to be made available for training purposes for other personnel.'

Volunteering knowledge as part of day-to-day work is the most fundamental task in facilitating the support of KM. Having received the feedback quoted above, the knowledge sharing capability of Faros becomes clear. In addition, it shows how practical externalisation of knowledge can be achieved. With this response, Faros meets some of the fundamental challenges identified by Ikujiro Nonaka and Hirotaka Tekuchi. In their ground-breaking book, The Knowledge-Creating Company(1), Nonaka and Tekuchi point out five basic conditions required at the organisational level to promote the knowledge spiral:

• Intention (reaching  a goal)
  

These enabling conditions are, according to the authors, introduced into their model for the knowledge-creating process in the organisation. Nonaka and Tekuchi demonstrate for the reader how it is possible to transfer tacit knowledge into explicit, which in turn is used to create new knowledge.

Jim Botkin argues in his latest book Smart Business(2) for two types of knowledge. One is inside a person's head, and cannot be managed; the other is implemented in goods and services, and can be controlled. That is, once you have been able to document knowledge, it is manageable and made explicit.

Towards system thinking 

'This way of visualising work processes has given the employees a more comprehensive understanding of the company's activities.'

'This way of presenting work processes has given the employees a more holistic understanding of their roles in a larger system. Earlier they used to focus more on their own functions and departments, and had a tendency to forget that they were part of a larger process.'

All business is about total involvement. You have to use both heart and brain to succeed in building involvement. Systems thinking entails a holistic understanding and involvement on the part of all employees.

Since Faros maps out processes pertinent to the individual as well as the whole organisation, it provides the individual with a good understanding of his role with respect to operational targets or goals. This map is also applied as a grid for all information, making it possible for them to distinguish between what is pertinent to each user, and the goals that all are working towards.

According to Peter Senge(3) learning organisations are set apart by their openness, systems thinking, creativity, empathy, and feedback. He calls such organisational learning 'generative', in that it emphasises continuous experimentation and feedback in an ongoing examination of how they go about defining and solving problems. Through the building and implementation of Faros KMS, the process owners and their teams have been involved in the business process mapping. Through this process, they have acquired a better understanding for the company' s business practices, management systems, job definitions and organisational structures. But they have also acquired an insight into how the job can be done more effectively in order to produce greater value for the company. Through the Faros Feedback function, and the arena for discussion, the employees gain experience with co-operative work to the benefit of all involved.

KM is too important to be left to the directors. It must be an integrated part of every employee's work-day. The focus is on involvement. This is not only smart business, it is crucial if the company is to husband its intellectual capital, to the benefit of all stakeholders.

Information Technology and user threshold 

' Faros seems to cover the need for simple and fast search of user information, given its user interface structure. Also, in terms of future requirements for upgrading or modification, the concept will satisfy this need, as little competency is required to operate Faros. Dynamic upgrading of Faros by the process owners requires special IT tools.'

' ...furthermore, Faros requires a low user threshold, and an equally low threshold for updating information as required.'

Faros is built on Statoil's standard IT platform, using an intranet and the web. Many IT solutions, including data warehousing, data mining, infobases and so on, are all part of the vast assortment of meta-bases, which Faros can link into for in-house information, or go outside the organisation for external information.

IT systems have not been discussed in this paper, as they are product suppliers to a KMS. However, one of our objectives was to create a system with a threshold so low that the novice could use it. We believe we have built a benign user interface structure, and thus have achieved one of our goals.

Infrastructures and costs

Faros has been built through an evolutionary system development plan, starting out with a pilot concept, then expanding as we experienced and learned; this has been part of the Faros success. As we have gained momentum, we have also expanded the infrastructure. Today, both whole modules as well as individual pieces can be copied in order to create a new business unit module. The cost can today be estimated with certainty when copying an existing module. This makes the dynamic usage of Faros predictable, at a low cost.

Benefits

A report on 'Measuring the value of knowledge' (4) by Business Intelligence Limited recognises the ambivalent problem of measuring the benefits of a KMS. "Many managers sense that knowledge management is important, but face the dilemma that they have difficulty in demonstrating the value of knowledge. Philip M'Pherson, emeritus professor of systems engineering and management at the City University, London...wrote in 1994: 'The status of information management is undermined in practice because it is difficult to ascribe value to information and knowledge in conventional accounting terms.",

Below is an account of the experiences in operating Faros, based both on feedback and actual observations. The points have been organised into two groups - quantitative and qualitative advantages. Of course, in the end all advantages can to some extent be translated into a single, quantifiable figure, representing profit. However, what is profit to one company may be an expense to another. Thus, I have tried to separate what I consider ' hard facts' from 'soft facts'. Through our experience and observation of operators and process owners using Faros, we can list the following reflections of potential value creation for the company:

Qualitative advantages

Quantitative advantages

In July 1999, the Faros project was completed according to schedule. The operational responsibility has now been transferred to the business units. Compared to other projects, we believe Faros has had a favourable cost curve. The project can be divided in four groups of activities:

As the concept can now be copied by other business units within the company, and adjusted to their specifications, the unit cost of Faros will drop considerably.

References

1. Ikujiro Nonaka and Hirotaka Tekuchi, The Knowledge-Creating Company (OUP, 1995)

2. Jim Botkin, Smart Business - How Knowledge Communities can Revolutionise Your Company (New York, The Free Press, 1999)

3. Peter Senge, The Fifth Discipline, (MIT Press 1990)

4. David Skyme, 'Measuring the value of knowledge', Business Intelligence Limited, (London, 1998)

Ove Rustung Hjelmervik is project manager of the Faros knowledge management system. He can be contacted at:hjel@statoil.com

The final part of the Faros series will be published next month.