posted 25 May 2010 in Volume 13 Issue 7
Reasons to be cheerful
A recession doesn’t just exacerbate existing issues, it raises new challenges altogether. But for KM, there appears to be a light at the end of the tunnel, says Caroline Poynton
The recession has presented some unique challenges and opportunities for the practice of KM. Most companies, for instance, have bought into the idea that knowledge sharing supports business decision making. As a recent Economist Intelligence Unit (EIU) report reveals (detailed later), nor has the recession significantly harmed this outlook among senior management. There are areas, however, where the recession may have caused conditions for KM to deteriorate, especially at the individual employee level.
Surviving the paranoia
At a time when many companies have been forced to implement some level of redundancy programme, knowledge management (KM) could play an important role in ensuring that essential know how isn’t lost when people leave the business. In January 2009, Jason Rathbone, vice president of SaaS enterprise collaboration company GroupSwim, posted a blog entitled ‘Layoffs send people and knowledge packing’.1 In it, he wrote: “When people leave, either by choice or not, what inevitably happens is that the company and its future employees are forced to relearn [the lost knowledge] through trial and error. The cycle repeats over and over again. The scale of this problem is huge in the current environment.” He then recommends some key KM steps organisations can take to tackle the problem including: using tools and process to “encourage, or force, employees to share information”; measuring the level of internal collaboration; rewarding employees for sharing knowledge; and focusing on informal information, which is “often where the best information resides”. It is all potentially good advice for companies facing the prospect of redundancies – although for many it will of course now be too late. What is more surprising are the comments that the post received. One said: “The problem I see with [Rathbone’s] argument in this environment is that collaboration tools will not be viewed as empowering knowledge workers to make the firm more agile or robust but enabling the firm to downsize more easily.” Another post read: “...Employees would be complete suckers to participate in the schemes described here. The knowledge that employees hold is their only bargaining chip in a brutal economy. The last thing they should do is hand that advantage over to unpredictable employers.”
No evidence could better demonstrate the particular dangers that KM has faced in this recessionary period. From the top down, every incentive might still exist for pushing KM activities in order to get the most out of reduced resources. But from the bottom up, the picture may be very different. Here, where employees have been fearful for their jobs, the joys of knowledge sharing may just have hit a massive depression, as protectionist tendencies return and people become resistant to any form of knowledge sharing (we will look at a shift in employer-employee relations in more depth in the next chapter). The recession may also be timely proof that underlying all KM initiatives remains ingrained self-interest – a self-interest that dictates the actions of every individual in a firm, in both good times and bad. Only when KM practitioners can align self-interest with an open knowledge-sharing culture will they be really successful in promoting the ideals of KM. And while paranoia reigns, the truly collaborative enterprise may forever be a chimera.
With an upturn in the market, such fears may be quickly forgotten and a knowledge-sharing enthusiasm, or at least equilibrium, restored. But the challenge is unlikely to go away, especially as generational differences increase the likelihood of a workforce that is both less loyal and more eager to move on to other jobs. For organisations that are increasingly losing staff and yet do not know where their essential knowledge lies, the future could be very precarious indeed. In the face of all these difficulties, however, the case for KM is perhaps stronger than ever. Even if the recession has caused increased cynicism in the workforce, senior management will need to break through that barrier as quickly as possible, if the business is going to make a speedy recovery, in which employees are engaged and collaborating effectively. KM may be one the few disciplines with the tools to actually achieve that.
Cause for optimism
In fact, despite all the challenges facing KM, evidence suggests that it will come out fighting from the recession. It may do even more than that – redefining itself as a business critical asset that management boards can clearly understand, value and even measure. Kieron Champion, outsourcing and knowledge management strategy lead, Capability Development, at Accenture, is typical in finding that the recession has forced a review of KM practice within his organisation2, but in a positive way that has made it central to business development. “The recession has had a relatively profound impact in that we have focused KM on business priorities,” he says. “Previously, we might have taken a more liberal approach, following up on projects where we had interest or sponsorship. The recession has made the team leaner and more focused on where there is a business need – starting with identifying business challenges, then looking at the KM tools that can help with those.” He adds that projects have necessarily moved to a more short-term focus – for example, six to nine month projects, rather than long programmes that previously might have gone on indefinitely. But what has been lost in terms of long-term planning has been replaced with a commercialism that can only impress leadership. “Now when working with business sponsors, we really look at what they are challenged with,” says Champion.
Rosemary Gray, group head of knowledge management at offshore law firm Ogier, has experienced a similar development. “We are looking very closely at improving our existing ROI,” she says. “We are chopping away any products that are low gain – or that do not have an appreciable benefit. We have also deferred some projects and reviewed activities that are less effective than they should be.” Gray describes a familiar process in that the KM team is trying to do more with the resources that they have. “It’s quite a difficult juggling act because there’s the view that we should run a lean ship at group and local KM service level but we’re still expected to deliver a range of projects, spearhead new initiatives and liaise on all the areas of responsibility that KM has,” she says. In the long-term, though, she views it as a positive change-management experience. “We will come out of the recession with a much more commercial slant as to what we do in terms of value for money and meeting clients’ needs, with much more emphasis on knowledge networking and just-in-time delivery rather than devoting all of our efforts to traditional knowledge capture, indexing, storage, etcetera.”
Being forced to prioritise essential KM activities, while aligning them to business goals, may be challenging, but there is an advantage borne of that: potentially easier measurement enhanced by KM projects that are confined to shorter time frames. At Accenture, the Capability Development (CD) team devised the use of a ‘maturity model’ as a means to manage and improve KM capabilities. The aim was not only to better assess historical KM effectiveness but to use it to better plan for the future, with a focus on continuous improvement.
The model came about to address typical KM challenges, including stalled initiatives and lack of engagement/buy-in from business leaders. The KM programme, according to a case study written by Champion,2 was “characterised by inconsistencies that created a confusing landscape for users, as well as our CD team”. The KM maturity model was introduced not only to measure and monitor KM projects, but also to ensure they were addressing ongoing and even future business priorities with best-practice solutions.
The model works by identifying specific measures of maturity for each KM programme across three dimensions – people to content, people to people and content to people. First using a clear vision of what a ‘mature’ KM programme might look like, the CD team then works with the firm’s business leadership and the KM strategy lead, to agree specific goals and desired outcomes in each individual project, some of which might have less or more sophisticated KM outcomes than others. Champion goes on to write: “The maturity model makes clear what will be required by way of sponsorship and buy-in, and can assist in identifying resources and defining roles and responsibilities to take the next logical steps.” Most importantly, the model provides clarity to business leadership, giving them confidence that KM proposals can and will be delivered within the specified framework.
Such a model is perfectly in tune with the recessionary and immediate post-recessionary needs of businesses. While such a framework might be more difficult to manage over very long periods involving projects of particular complexity, it is ideal for the shorter six to nine-month initiatives firms are commonly engaging with just now. It also provides much-needed clarity to KM practice; while it may not be a tool designed for demonstrating value, its application to ongoing projects will no doubt create a value proposition for KM projects that will be easy for management to understand and even direct. Most of all, the tool only works with input and buy-in from business leadership – it is aligned to their business priorities. Although not designed specifically to deal with the challenges of recession (it has already been in place for 12-18 months), it naturally deals with some of the KM obstacles arising from recession – taking KM firmly out of any existing silo, proving its applicability, and putting it right at the heart of business development.
This kind of commercial KM development may little reflect the huge academic breadth of KM, with its complexity of thought and knowledge analysis, the study and practice of which is a lifelong endeavour, not something to be broken down into bite-size quarterly chunks. But it makes it relevant at a time when KM needs to demonstrate value more than ever. Aligning KM to specific and often shorter-term business projects also enables KM to support the most pressing priority of businesses today: to be more flexible.
According to a recent survey by the Economist Intelligence Unit (EIU),3 a huge majority of executive respondents (88 per cent) cited organisational agility as the key to success. In addition, it found that more companies have adopted a ‘back to basics’ mentality, with half of respondents focused on “driving down operating costs”. Far from merely cost-cutting, however, the report suggests that companies have been keen to avoid ‘knee-jerk’ reactions, and have equally been looking at tailoring strategic investments to meet rising customer demand. In listing their priorities for the next three years, 47 per cent of respondents pointed to retaining high-value customers; 43 per cent to creating superior customer value; and 41 per cent to accelerating product innovation. Most importantly, within the context of this report, as many as 34 per cent of respondents cited that “the ability to access the right information at the right time” would be key to “nurturing an environment in which innovation and customer-centricity can thrive” (although this remains a challenge given that 52 per cent of survey respondents also acknowledged that they often have to spend valuable time hunting for key information). Most of all, as many as 80 per cent of respondents said that knowledge management and collaboration systems would go “the furthest in spurring innovation”, thereby enabling business agility.
The report, sponsored by EMC, clearly has a technology focus and hence points to systems and technology in breaking down ‘information silos’ and so nurturing innovation. Nevertheless, its findings are significant in demonstrating the extent to which information and knowledge management have become acknowledged as key to transforming business fortunes in recessionary times (and beyond). This is even more the case given that the survey was not directed at KM practitioners, but at global ‘business executives’.
Combined with the increasingly business-focused measures that KM teams have taken to their projects, the report hints at a fundamental change in the KM paradigm: that far fewer KM projects will be undertaken without a clear and measured focus on the desired business outcomes. Of course, there is still the issue that at an employee level, all such efforts might fall flat, if they feel that knowledge needs to be guarded to stave off redundancy. But if we are right in assuming that we are now making our slow way out of recession and that the worst of the recession has indeed passed, such fears may in themselves be far more manageable as businesses can start communicating to employees more positive forward planning, based on better collaboration.
The power of communication
This communication point may, in fact, be one of the most crucial aspects of KM endeavours in the immediate future. In the interviews for this report, it was striking how many knowledge managers highlighted their current communication efforts, not only to demonstrate the value of KM to senior leadership, but also to engage the workforce in continuing projects. “I’m optimistic of success that comes from keeping an eye on quick wins, opportunistic projects, low-cost initiatives, incremental improvements and a much more aggressive and focused PR within the business in terms of our KM communications – that is, making them more prevalent and obvious,” says Ogier’s Gray.
For many, the recession will mark a breaking point from which we hope will emerge a real desire for restructuring and innovation. In the light of this, there has never been a better time to review what it really means to be a KM professional.
1. ‘Layoffs send people and knowledge packing’, ReadWrite Enterprise, http://www.readwriteweb.com/enterprise/2009/01/layoffs-send-people-and-knowledge-packing.php.
2. 'Evolution not revolution', pp51-55, Delivering Business Critical Knowledge Management, Poynton, C., 2009
3. ‘Organisational agility: How businesses can survive and thrive in turbulent times’, Economist Intelligence Unit, March 2009. The full report can be downloaded at: www.emc.com/collateral/leadership/organisational-agility-230309.pdf.