Cultivating a knowledge culture

Using experience derived from his work as a KM practitioner within HSBC, Steve Ellis outlines the key tactical and operational problems faced when introducing knowledge management in traditional, often highly hierarchical organisations.

Like many organisations, HSBC has always managed knowledge, it just does not call it that. However, being able to capitalise on the technological capabilities now available to capture, develop and share knowledge globally is only half (maybe only a quarter) of the problem. Effective and intelligent working in the new ‘knowledge enabled’ environment is as much about the mindset of employees and their managers as it is about software tools that offer state-of-the-art collaborative working. KM has not found much success in infiltrating the hard-bitten world of financial services, where bottom-line justification for any business initiative has to be clear.1 This is why KM work in such organisations can still be called pioneering even though the principles are no longer new.

The longer knowledge-management practitioners are largely unable to prove clear links between effective KM and improvements in performance, the bigger the danger that it gets tossed into the ‘yesterday’s fad’ bucket alongside, management by wandering around, business-process re-engineering, total-quality management, investors in people and the learning organisation.

In 2002, HSBC created a small specialist KM unit located within a newly re-organised human resources function. Remember, HSBC is a true giant in the financial-services world occupying the number two spot after Citigroup, employing over 250,000 people in 80 countries, with a grand and highly successful tradition dating back over 150 years.

Unlike some of the recognised ‘greats’ of KM, (BP and Buckman Laboratories, for example), HSBC is not an organisation in crisis looking to KM to dig it out of a hole. Knowledge management has a more difficult remit in HSBC: it must improve an already very well-functioning machine that delivered $6bn pre-tax profit at the last count. Any company the size and power of HSBC will nonetheless have tremendous potential to harness the collective wisdom and ability of its global workforce, an area where KM should have a major contribution.

One year down the road and the KM unit is no more, the victim of a further re-organisation. This is not to say that the organisation has stopped working on knowledge management or that the need for improving knowledge-related activities has passed. The need to effectively connect those with problems to those with solutions continues, but the strategy of driving KM through an autonomous unit is dead.

Successes achieved in the short time that the knowledge-management unit was fully up and running included the introduction and development of a group-wide e-directory, pioneering the introduction of an electronic expertise-location tool. We also conducted the first ever knowledge audit, and introduced several knowledge-acquisition projects to minimise business risks and capture expertise. All of which led to significantly raising the profile of KM issues.

The knowledge-audit process adopted was interview-based and involved careful knowledge mapping and subsequent logging of key knowledge gaps in a particular business unit, from which a prioritised development and recovery programme was created. The real secret of the success lay in the integration of a KM approach and process with an all-too-stark business need. As a consequence this project did not require a lengthy campaign to gain support; it just had to be done.

Knowledge-acquisition projects (Kaps) continue to be used to effectively download experience and wisdom from ‘old heads’ before they leave the business, into an accessible database format so that our organisational memory remains current and fresh. I have strayed a little into knowledge management ‘consultancy speak’ here and this should really be avoided. I believe that the success of Kaps is down to one thing: the desire that people – particularly, it would appear, wise old hands – have to tell their story. In an organisation as vast as HSBC, the very act of asking a senior person to ‘download’ the nuggets of learning they have picked up during their often outstanding careers makes them feel valued. And if that were not enough, it might actually help those left in the organisation to learn faster.

On a negative side, the unit was unable to translate the sparkling array of KM tools and techniques into sufficiently well-understood concepts that the conservative (although some might say overtly cynical) culture of a traditional organisation could grasp. In particular, efforts to instil a need for intellectual-capital measurement and reporting fell on deaf ears, with most executives believing they had enough to measure already. In addition, the pressure felt in most commercial organisations to deliver or achieve beneficial results this quarter, not in three years’ time, is a real impediment to large-scale KM projects where the gestation time can typically be three to five years.

Restrictions for large organisations

There are a whole range of restricting factors to be dealt with by the pioneering KM practitioner, here I will detail the ones that really hindered me.

The first problem often surrounds high degrees of suspicion and even a lack of understanding on the part of non-KM-literate senior managers. Any new knowledge-management function will have to spend most of its energy in the early stages explaining what it is and does before it can get on and do it. We published an internal KM brochure to get around this problem, which was a big success in raising awareness. Be ready with answers to the following typical question from those uninitiated in KM practices:

Isn’t KM just about doing the same stuff as always, but better?
KM is all very well, but whose budget does it come out of?
Knowledge management seems to mean doing more work, where are we going
to get the resources to deal with additional workloads?
What are the guaranteed savings in full-time equivalent employees you can deliver if we implement KM in this department?

The second restrictor is the short-term perspective that currently pervades many commercial organisations. This means that many major investments in KM programmes fail to get through the starting gate as they do not meet the criteria that requires them to show a positive return on investment within one year (however spuriously calculated).

The final typical and all-encompassing obstacle for KM in large organisations is the ‘big C’: culture. In traditional organisations – financial services in particular – a general culture of compliance to the established and highly respected hierarchy and procedures predominate. It is here where the potential results of good KM practices can fundamentally clash with the environment in which they are trying to operate. Good knowledge management should unleash knowledge and the ability to make decisions based on it. In traditional organisations, the power to act is restricted to those who are considered to have earned it, often those who are known to be a ‘safe pair of hands’. Michael Lewis gives some clear examples of how the internet age has made virtual experts of anyone who wants to offer themselves to the market.2 If this situation is translated into hierarchically dominated organisations, knowledge management can quickly become a cancer – I like to think a benign one – that eats away at established, often hard-won positions of power.

If you think about it, why would those in positions of power, who are astute enough to see knowledge management as a potential threat to their position, ever actively support its development? Surely it would be better to keep the knowledge from which they derive significant power to themselves and crush any attempts by their colleagues to share. In this kind of culture KM will find little nourishment.

Handling restricting factors

Each symptom requires a different prescription. If you encounter the ‘we don’t understand it’ problem you could potentially have a major communications project on your hands. You don’t want to be deflected by this, so before you start drawing up the Powerpoint presentations, work out for yourself how much people really need to understand about knowledge-management principles. I don’t, for example, understand how my PC works but I know it is an incredibly useful tool. This is the key: make sure people understand the benefits of knowledge management and what makes it so incredibly useful.

Overcoming the problem of short-term perspectives is going to need some cute thinking because you know the hard benefits of KM are unlikely to show through in this year’s figures. You need to find some agreed spin-off indicators that can be used to show progress along the way. Typical good examples include testimonial feedback from customers (real or internal), information on new initiatives undertaken or costs savings directly attributable to knowledge management. Also, don’t be tempted to measure your KM project through the staff-satisfaction survey, this is too risky as it can be influenced by all manner of things outside anyone’s control.

The final blocker is the real killer. If the culture is KM-unfriendly life is inevitably going to be tough. You will not be able to change the culture of a large organisation quickly enough to save you, so work with what you have. In financial services, for example, we are understandably very concerned with risk, so I used the way that KM could be used to minimise business risks as a hook for securing support for a range of activities. Knowledge management and business risk are sometimes convenient bedfellows as the better we manage the knowledge of our business and customers the less risk we are exposed to.

The relationship between these two disciplines is actually a bit more complex as knowledge management is not just about risk minimisation. All businesses take risks every day, where KM can help is through raising risk awareness, which makes risk-taking a far more conscious act.

Another technique for addressing a KM-unfriendly culture is to identify a piece that is close enough to be helpful and work with the people in that part of the business. In most large organisations the culture will be varied and some departments or functions will be better prepared for knowledge management, you just have to find them. Although I have said that technology is a fraction of the knowledge-management whole, one tip could be to start looking in the IT department, if these guys are not up for it then you really have got problems. An additional benefit is that they probably have access to some resources you can also utilise.

The culture of my organisation continues to evolve. Our marketing material is correct when it says that says that we ‘value local knowledge’. But we still have a way to go to unleash the full potential from taking local knowledge and using it to enhance an already winning formula.

The knowledge-friendly culture

The number-one feature of a KM-friendly organisation has to be trust. If I don’t trust you I won’t share my knowledge with you, and I certainly won’t act on the knowledge you share with me. In a culture where fear pervades and scapegoats are found for each and every failure, the chances of putting together logs of lessons learnt or encouraging sharing of good practice is slim.

Hand in hand with trust is a willingness to ask for help. We found a good supply of people who were willing to help answer questions, but a lack of willingness to ask the questions that would actually save a hard-pressed executive real time and effort. Again, the culture has to support people that are willing to admit failure and ask for help when they need it.

A real indication of a KM-friendly culture is when HR rewards are tied into knowledge-management activities, such as sharing and building knowledge. This happens in some consultancies but that is the only place I have experienced it. In traditional organisations you are more likely to be rewarded (indirectly) for keeping key knowledge to yourself. The final character of a knowledge-friendly culture is one where change and not continuity is accepted as normal operating practices. For me, really effective knowledge management is not just about sharing knowledge, it is also about performing tasks in different ways as a result of the knowledge shared. An organisational culture that welcomes change and innovation is vital.

Achieving knowledge friendliness

There are no easy steps here, but some things that have helped me include:

Secure board-level sponsorship for some KM projects;
‘Hard wire’ knowledge behaviours into new processes;
Look at companies that are considered to be knowledge-management leaders in your industry and copy them;
Look at companies that are leaders in KM in other industries and copy them;
Grab all the headlines for KM success, even when you weren’t directly
responsible – people love to be associated with a winning philosophy;
Get the human-resources department on board to offer some KM-based rewards.

Essential success factors for KM

If you can’t change the culture and you have identified some KM-unfriendly traits, you need to secure senior-level indulgence – and don’t worry if they don’t understand. There will be days when you wish you took that secondment to marketing. Don’t be put off, if you believe in KM, you know it will work.

Don’t worry about setting yourself targets for knowledge management, (nobody really cares how many hits your intranet gets), set business-related targets that are agreed up front with the project sponsors.

When you describe what you do, as you will inevitably have to do, use established words from the corporate vocabulary. We used ‘collective management’ which was one of the chairman’s buzzwords to frame some of our KM communications. This way you can effectively ‘disguise’ KM. However, balance your ‘blue sky’ stuff with real nuts and bolts issues that people can relate to.

Don’t be fooled by the technology, some of the best KM I have seen and achieved is not technology based, it is behaviour based. Technology might make it look sexy and give it scalability but it is all about people after all.

A final word

KM is no longer able to claim it is a new phenomenon, if it ever was. We are fast approaching the delivery phase. Some companies are moving beyond KM into ‘intelligent working’ and they are the ones that have recognised that the key to success is behaviour not technology. However, in organisations where the predominant culture is stacked against effective KM, the battle goes on to unleash the potential and creativity that has been captive for so long.

But a word of warning to my fellow practitioners, we can’t keep predicting that KM is the future without delivering real benefit. The rubber has to hit the road at some point.

I used an analogy at a recent conference presentation I gave where I suggested that a pretty girl does not have to advertise widely for dates, (I quickly asked forgiveness for being sexist), yet KM is not being as widely adopted as we had all hoped and expected. After the conference a delegate stopped me and said, actually I had got it wrong and that really pretty girls do find it hard to get dates because they intimidate their potential suitors. Herein lies a real lesson for KM practitioners. If we continue to offer everything to everyone we will scare off the rightly sceptical business heads who simply won’t believe the hype. KM has to be framed as an effective business enabler and possibly a business accelerator by working alongside, not independently of, the challenges faced.

References

1. Dore, L., ‘Special report: knowledge management in financial services’ in Financial World (The Chartered Institute of Bankers, 2002)

2. Lewis, M., Next: The Future Just Happened (W.W. Norton, 2001)

Steve Ellis is manager, knowledge management at HSBC. He can be contacted at steveellis@hsbc.com and via his personal website www.knowledgedoctor.co.uk