posted 30 Apr 2004
Interview: Verna Allee
Sandra Higgison speaks to Verna Allee about KM’s pitfalls and successes
Please describe your overall impression of today’s knowledge-management industry? Is KM viewed in a positive light or is it greeted with scepticism?
In most cases, knowledge initiatives have been undersold. Where this has occurred people tend to be sceptical of the return they are getting from a knowledge-management effort. Where an expanded ROI is appreciated, people tend to be happy with the results. Let me explain what I mean by being undersold.
The basic questions that KM is trying to address are important for any company or organisation. I cannot imagine any manager or leader not caring about the competence of their people, their ability to improve their work and gain efficiencies or build better relationships all across the organisation and beyond.
Although these are supposedly the intangible assets and competencies that KM is concerned about, in actual practice what is often sold is a technology solution or a suite of tools that will realise a financial or traditional ROI. In other words, the KM initiative is ‘sold’ as a way to reduce costs, increase revenue or improve productivity, all of which can be calculated in financial terms. But when you think about it, that is an incomplete picture of the value return for something as complex as a knowledge initiative.
Traditional ROI is important and needs to be part of the picture, but if you are only measuring for traditional ROI then that is all you get. Financial measures only tell you about past performance – they say nothing about your ability to be successful five years from now.
The bigger picture is about how knowledge can improve the underlying intangibles asset base of the organisation – where you are building capacity for the future. If you want to build capability for the future, you must be able to understand and tell stories about the return on intangibles investment (ROII). The larger story is in how a KM initiative improves human competence, supports innovation in infrastructure and operations and builds trusting relationships with stakeholders. Most vendors and consultants do not know how to tell the story of ROII for KM and undersell what they are doing
Where the KM story has been expanded to include building capability for the future, people tend to be much happier with their KM initiatives and have a positive view of KM. The people who understand the bigger story just see KM as a rather complex and expensive way to improve productivity.
How much hype still exists around knowledge management? Has it died down over recent years?
The hype is dying down – but not the interest. Most of us who take this work seriously hope and believe that knowledge management will go the way of total quality and process re-engineering. When we look back to the 1980, the management practices were the biggest thing going and really changed the way people work. There were new technologies and tools, such as process diagrams, decision trees, benchmarking and statistical quality control. There was the social innovation of teams in the workplace. There was a new business model innovation of the value chain.
These innovations did not disappear; they were integrated into everyday management practices. They are all useful tools when applied to the right questions, but are inadequate when applied to the knowledge questions. The innovations around knowledge are not going to replace these; they are going to expand the toolkit.
Knowledge strategies and tools are being assimilated in the same way as process tools. Eventually communities of practice, collaborative tools and portals, intangibles scorecards, and value-network analysis will become common management practices. People will have courses on these in regular business degree programmes, not just the special knowledge-management track. Knowledge tools and methods are expanding the repertoire for managers. Collaborative tools are becoming everyday tools of production, there is broadening support for expert communities, and value-network analysis will be used for everyday project management and contracting.
The case for knowledge management
How has knowledge management’s value proposition changed over the years?
The value proposition has clearly evolved from a focus on efficiencies to a focus on relationships. Early wins were about developing a technology platform to create and share codified knowledge. There was emphasis on documentation and accessing information. These were crucial for companies to address. Filing systems were migrating from banks of filing cabinets to computers. Word processing and computers became the norm in the workplace. We tend to forget just how radically different this kind of work environment is from the workplace of the 1980s. There were a lot of basics to master to get comfortable with the new tools of production.
Now the value proposition is shifting to collaborative environments for innovation. Again, a new generation of technology tools are supporting this, but the tools are much less daunting than those first computers. More importantly, we have discovered that there is a big payoff in innovation and performance from pooling and sharing knowledge across workgroups. This is part of the current picture.
Also, particularly in the US and Europe, the post World War II generation is reaching retirement age. Talent and experience is going to be hard to come by. In some organisations, 30 to 40 per cent of the workforce will be retiring in the next five years. Suddenly we are discovering the value of communities of practice, mentoring and knowledge networks for getting new hires up to speed and improving the overall competence of the workforce. So the knowledge-value proposition in this environment is rapidly turning to leverage knowledge and intangibles to be a stronger player in one’s value network.
Another shift in the value proposition is occurring as people realise that the workplace is evolving from the notion of organisations to networks of more autonomous business units or companies. Relationships are the hot new topic. We hear about stakeholder relationships, transparency, Shoshana Zuboff’s support economy, social responsibility. But relationships are fundamentally built on the exchange of knowledge and other intangibles, more transparency of information and more collaboration. Relationships based solely on business transactions are fragile. Those that are built on genuine knowledge exchanges and helpfulness are stronger and more resilient
What elements of KM have had the most success (eg collaboration, knowledge sharing, innovation processes, information management, etc)
There can be no sweeping answer to this question because there is no generic KM solution. Every initiative is a response to a particular goal or objective. Sometimes the goals are simply to improve access to knowledge resources around the company. That would probably require an information-management approach. In the case of a product development group, however, collaborative tools and processes and knowledge-sharing activities with research partners might be more appropriate. One must always begin with the business question and objectives first. That is what shapes the initiative.
What do you believe are the key factors behind a successful initiative?
Given that there is no generic initiative, there are clearly a lot of elements that come into play when a company decides to get serious about organisational knowledge. Melissie Rumizen did a superb job of outlining these in her book, The Complete Idiot’s Guide to Knowledge Management, which I believe is the best general guidebook out there. The basics are pretty straightforward: support from the top, a clear value proposition, get the right talent on the team, culture work, measuring results.
The critical factor, however, is whether people actually change the way they think about the business. KM is a key part of the new business fundamentals that are required for success in this emerging economy. It is different out there and any company that is not questioning its assumptions on a regular basis is doomed to miss the mark. People have to grapple seriously with themes such as the knowledge economy, sustainable economy, transparency, risk, ethics and values, collaboration, learning and value networks – as well as what is really required of leaders and managers in this type of environment. If people are not willing to engage in reflection and dialogue about what is happening in the world – and evaluate their role and behaviours – then KM will not be understood well enough to be truly supported.
The case against
If we were to put the knowledge-management industry as a whole on trial, what failings would you find it guilty of?
The greatest failing is the mechanistic thinking that pervades a lot of the practice. The default business model is the value chain and the most common analysis tool is still the process diagram. These are linear, mechanistic approaches based on the industrial age production line. We should know better then to bring them to bear on knowledge questions. People are the active agents in organisations – not processes. Intelligent workers are always tinkering with the process and modifying how they work together. Support the people in the right way and the processes will work out just fine.
Our business and economic models are also based on old thinking. The idea of diminishing returns still drives the practice in economics. Knowledge as a resource is slippery and connected to everything; it multiplies and replicates faster than rabbits. Business thinking based on resources that get used up, such as natural resources, and on trying to find chains of causality simply won’t work. We must move to more organic ways of supporting the enterprise as a complex, adaptive system – as a living system.
Who or what is responsible for these failings?
We are all responsible. I frequently catch myself falling back into mechanistic jargon and thinking. It takes constant effort to hold that edge. Also, I am astonished at how many people working the knowledge question are waiting for their managers and leaders to suddenly realise how important these questions are. If we don’t educate them into this way of thinking – who will? If we don’t educate ourselves into the radically new business thinking that underlies the knowledge question, then we will not be able to guide our organisations or educate others. We will fail to realise the true potential of the field to effect transformation in organisations and in society.
Do you believe the term ‘knowledge management’ adequately describes the various practices it involves or is it considered a buzzword that is nothing more than new label for old ideas?
It is a real misfortune that we are saddled with the label ‘knowledge management’. It is an awful term for describing the questions that people are trying to address. It is too big, too vague, and the word ‘management’ is loaded with connotations about control and ownership that are in direct opposition to the way the knowledge economy is playing out. Further, the early days saw a huge rush into the market by technology companies that repackaged information-management systems and e-learning products as knowledge-management solutions. Consequently, many people think knowledge management is just the newest term for information-management systems.
The problem is everybody agrees about this misnomer and the perceptions, but we can’t seem to get beyond it. It also doesn’t help that most of the books and journals in the field continue to replicate that term. We saw the same thing happen with re-engineering where some useful tools and methods were encumbered with an industrial age label.
What do we do about it? Personally, I try to avoid using the term knowledge management. In fact, I have never called myself a knowledge-management consultant or practitioner. I am a business and organisational consultant. Of course, relationships, knowledge, and intangibles are clearly at the forefront of what managers should be concerned with. More importantly, these are strategic questions. Any company that does not know how it converts knowledge and other intangibles into value will never achieve its full potential in this current economy. When I work with companies, I use terms such knowledge strategies and initiatives, or establishing knowledge leadership.
What do we do about it as a profession? Educate, educate, educate. One approach I have found useful is to explain that a knowledge strategy should address three levels of innovation:
- Ensuring operationally that people codify and share the knowledge they need to get their work done;
- Tactically creating the environment and conditions for people to collaborate, create and share knowledge, and learn together;
- Strategically leveraging knowledge and other intangibles to create value and assure success.
What are the most common factors leading to the failure of KM initiatives within organisations?
We can learn a lot from initiatives that fail. There are of course the usual pitfalls of not enough support in terms of leadership, time and resources. However, I see a clear pattern in the cases where a knowledge initiative didn’t take hold. The three levels of innovation that have to be addressed – the operational, tactical and strategic – are basically technology, social and business innovation. In almost every case of failure, the organisation only addressed one level well and the other two poorly if at all.
Many companies do fine on the technology needs for knowledge sharing but do nothing to support the social innovations of collaboration and communities of practice. In other cases, people focus solely on communities of practice and don’t budget for the supporting technology and business infrastructure that is required. The most common failing is on the business side where intangible assets and conversion of knowledge to value are simply not taken seriously. If it is just business as usual with the same old business models and metrics (stretched a little to include KM), then support erodes rather quickly.
How, if at all, are these being addressed?
People are beginning to realise that the knowledge question is much bigger than it might seem at first glance. The consulting community seems to have made great progress in trying to bring a larger, more holistic and systemic view into the practice. Vendors are much slower – and unfortunately seem to have a louder voice in the marketplace than consultants. Academia tends to park KM programmes in technology, or science and engineering (think computers and internet).
There is also a wider realisation in the business community that we have to learn to do things differently. We need to do a better job of sharing knowledge with our partners and stakeholders. We need to learn from each other to prepare the next generation of workers. We know that happy employees mean greater business success. We are realising that our methods of valuation are way off kilter and past indicators of business success can be misleading in this economic environment. So the mindset is changing. Those who are leading knowledge initiatives must learn to demonstrate how their efforts help their organisation be more flexible and responsive and get better business results.
Who do you believe has benefited most from knowledge management to date (for example, software vendors, consultants or practitioner organisations)?
It seems as if the vendors and practitioner organisations are about even in that regard. Vendors tend to do very well in the early stages. It is easier for managers to buy a solution rather than think about those difficult ‘soft’ issues around culture, trust and learning. Also, don’t forget that technology purchases show up on the ‘asset’ side of the balance sheet. Consulting and training show up as an ‘expense’. That makes a difference in what people buy. I have seen people spend millions on technology yet cringe at paying a few thousand to a consultant who could potentially show them a more cost effective way to get results – or even reframe the question.
Practitioner organisations have benefited greatly. Even large global companies can usually gain from relatively few dedicated resources. The core internal KM team can be quite small, ranging from one or two people in small organisations to perhaps 100 or so scattered across a large global company. Once the internal consulting or support group learns the new questions to ask and has a few new tools, there isn’t much need for outside consultants specifically for KM. Implementation is actually straightforward once the shift of thinking takes place.
Consultants haven’t fared that well, which I think is a good thing. The basic questions and change work needed to improve knowledge sharing really aren’t that difficult to address if the company has good internal consultants. Consultants are in demand in the educator role to coach executives, help develop strategies and teach people some of the new skills, tools and behaviours. But it isn’t necessary to send in teams of consultants to do KM. I have never been a big believer in that type of dependency model. If it isn’t important enough to be a core competency of the organisation then it should probably be outsourced.
How do you view the role of IT in knowledge management? Please describe the most harmful and positive uses of technology for KM.
Technology is the backbone of the intelligent organisation and I am a big believer in having the appropriate technologies. The operative word here is ‘appropriate’. Technology is essential for communicating and sharing knowledge artefacts. Not having the right technology is like trying to drive a car without the tyres. People need good computers, and current software and tools to be effective. Things like e-learning and documentation tools are extremely valuable for work activities that are routine and happen frequently. They are also quite useful when there are a few variations that can be accommodated.
Technology is less helpful when there are unusual situations or when something new is required. In those situations learning happens through conversation, storytelling, and peer networks. They can be supported by technology, but only as an enabler for spontaneous and unstructured interaction and learning to happen. Sense making is a social activity requiring ‘soft’ technologies, such as collaborative processes, conscious conversations and dialogue. The best technology in the world cannot assure a good decision.
What are the biggest dangers and opportunities facing KM’s development in the future?
Max Boisot reminds us that whenever something radical and new appears on the horizon there are several possible responses. First, it will be ignored. If it still won’t go away then people make fun of it (KM is just a fad). If it still won’t go away then it gets attacked (KM is the wrong question, it is too expensive, it takes too long. Where is the ROI?). Then, around the time that it starts to be accepted, a strange thing happens. People take it seriously but they try to pull it back into what is familiar. They take this new idea and try to address it or explain it using the old language. That is our greatest danger because that is exactly where we are in the knowledge field. The hype is diminishing and people are beginning to find new tools and practices to support the knowledge questions that must be addressed in any successful company. But there is also a tendency to pull KM back into the old mechanistic linear thinking that has dominated business in the industrial age. We have to be alert as we begin to settle into the core methods and tools that are supposedly KM. Are we holding the edge? Are we modelling and changing behaviours and infrastructure to support new social innovations and ways of working? Do we address the hard questions of ethics, risk, transparency and relationships? Are we challenging ourselves to learn the new economic language of intangibles and value network dynamics?
The most critical opportunities lie in making a serious contribution to the transformation of human society. If our work is not leading us to a more hopeful future then why are we doing it? I believe the knowledge questions are helping us build essential skills for living in a more connected and interdependent world.
Across the globe, people are formally and informally building alliances and partnerships to affect social change in a positive way. The number of NGOs in the world has exploded with an increase of 40 per cent in the last few years. Groups of people with a passion for social and environmental good are finding each other, and we are coming together in global and local network organisations that signal an important evolution in the way people work. We have much to learn from this phenomenon and much to contribute. What are we learning about knowledge sharing, transparency, collaboration, trust, communities of practice and knowledge networks that can contribute to this positive emergence? How are we using our own knowledge about knowledge to make a contribution to the greater good?
I believe these are important questions. As a species we are collectively addressing the complexity of transitioning into a truly sustainable global economy. What we learn from our knowledge questions is essential as we evolve into a global intelligence that can meet the challenges of the future.
Verna Allee is president of ValueNet Works. She can be contacted at email@example.com
1. Rumizen, M., The Complete Idiot’s Guide to Knowledge Management (Alpha Books, 2001)