Leading the knowledge enterprise -- CIOs, CLOs, CKOs, and beyond

Rebecca O. Barclay
Managing Editor, KM Briefs and KM Metazine

If, as Sir Francis Bacon asserted in 1597, "knowledge is power" and as Peter Drucker claimed in 1993, knowledge is "the only meaningful resource today," businesses are well advised to manage knowledge as effectively as possible. And many businesses are doing just that by drawing on the abilities, insight, and skills of a new category of professionals -- information, learning, and knowledge officers -- to increase organizational competitiveness and enhance the productivity of all employees.

KM Briefs recently asked several executives to describe their firms' knowledge management programs and to discuss why they are successful. The responses demonstrate a rich diversity of ideas and opinions based on individual and corporate perceptions of the business problems associated with managing knowledge.

The term "knowledge management" may be of recent origin, but many of the ideas and practices associated with it have been evolving for years in firms like General Electric, Buckman Laboratories, and, more recently, the Monsanto Company. Each firm has its own approach and methodology for managing organizational knowledge, but all share comparable goals and a remarkably similar understanding of the issues and the importance of knowledge management.

GE -- bringing good things to life through continuous learning
Spokesperson Ted Meyer described the General Electric Company's approach to knowledge management as one that focuses on continuous learning for all employees. Chairman and CEO John Welch and his corporate staff set the pace for the 12 independent Fortune 500 businesses within GE by sharing their knowledge of "the best and the worst of what people are doing in each business." Chief learning officer Steve Kerr "takes our expertise and methods to help develop best practices that we can share throughout the company."

Meyer is quick to point out that GE abandoned the "not invented here" point of view long ago. "We try to learn from other companies what they do best and teach employees within GE how to use it. Academicians and outside consultants regularly visit Crotonville [GE's leadership development center] to help identify and adapt research and methods for managing organizational knowledge."

The foundations of learning
GE's commitment to lifelong learning dates to the 1950s and the creation of a corporate educational facility at Croton-on-Hudson, New York. Establishing CLO Steve Kerr's position was a logical progression. Kerr joined GE in 1988 as a consultant on the Work-Out program, which focused on "doing more with less." Kerr developed Work-Out to flatten the organization and put decision making in the hands of people who actually deal with data and information.

Meyer notes, "We knew we needed smart people to run the company and we knew good ideas were out there, so we've evolving a good system to spread ideas and get people the knowledge they need to do their jobs." But "knowledge" can be defined -- and measured-- in many ways. "At GE, it is whatever helps us work better." For a production worker, it may be process-related, for example, knowing how to build something, the right parts, the "how to." For an executive, it may be understanding how business works, how to interact with customers, or the government. Meyer summarizes GE's approach to knowledge as "the ability to process information into knowledge to do a better job."

GE's approach to knowledge management -- CLO + CIO
In April 1996, GE appointed Gary M. Reiner the company's first chief information officer. Reiner, who earned an MBA at Harvard, "will use information technology to provide competitive advantages and growth opportunities for all of GE's businesses." GE Information Services also reports to Reiner, who spearheaded the development of GENet -- a corporate intranet, which is viewed as a primary vehicle for managing knowledge and encouraging the "boundarylessness" of information exchange on which GE prides itself.

Tying together the global nature and the diverse product lines of GE's 12 businesses through effective human communication is important to the company. And, according to Meyer, GE employees have readily embraced GENet to share what they know with their co-workers. "Technology is making it easier to stay tight, stay cohesive, and bring people together." It complements learning by making specialized knowledge readily available to those who need it and can benefit from using it.

Meyer expects that knowledge and learning supported by technology will be increasingly important for GE. "We spend half a billion dollars per year in training, and we are looking to spend more on information technology. I think people will start seeing the value of this approach. Technology will be an enabler that will help GE to `do it right.' Doing it right is a four-step process. Step one is recruiting and hiring and retaining the best people, Two is developing their talent as leaders. Three is giving them the power to make decision that benefit the company and their business, and four is giving them the tools to do their jobs."

Managing knowledge at Buckman Laboratories
Knowledge management activities at Buckman Laboratories, Inc., a family-owned specialty chemical company based in Memphis, Tennessee, are being benchmarked by firms like AT&T, US West, 3M, and International Paper Company. Victor Baillargeon, Vice President of Knowledge Transfer at Buckman Labs, credits their interest to his firm's decade-long commitment to building a knowledge culture. As Baillargeon points out, "The edge came from our moving sooner than a lot of companies. We were doing it while other companies were studying it."

Baillargeon, who earned a Ph.D. in chemistry at Colorado State, came to Buckman to improve the use of computers for communication among scientists in the company's research and development division. "The R&D scientists understood the number-crunching abilities of computers but did not see beyond that to how computers could help them in communicating about their work." Using a least common denominator approach to creating a technological infrastructure, Baillargeon had computerized Buckman's R&D division within 18 months.

In March 1992, after a year as visionary CEO Robert Buckman's assistant, Baillargeon was appointed Vice President of Knowledge Transfer. The Knowledge Transfer Department (KTD) consolidated the separate IS and telecommunications departments, which had reported to Buckman's chief financial officer. The technical information center, originally the technical library established to support the lab scientists, was also merged into the KTD. K'Netix, the Buckman global knowledge transfer network that allows employees to engage effectively with customers worldwide, completes the picture.

Knowledge management at Buckman Labs
Baillargeon explains his role as "a combination role of director, CIO, and all-around bottle washer. A lot of my time and energy is spent running a department and dealing with people issues and budget concerns. I'm involved with technical decisions and directions although I seek to use input from staff and managers. I oversee the systems for knowledge transfer and try to facilitate knowledge transfer within the organization by helping to manage the systems in a way that lets the brains in the company talk."

"Bob Buckman had a very strong vision of knowledge transfer. Knowledge is not information. Just as data is to information, information is to knowledge. Data is at the empirical level and is usually a measurement. One must interpret and analyze data to make it information. To get knowledge out of that, you need to look at a collection of information, analyze it, and assess the trends. The magic ingredient is allowing a person to apply intuition and instinct and bring new understanding to it to convert it to knowledge. People have to be involved to change something into knowledge."

To manage or not to manage? That is the question . . .
Baillargeon contends that that one cannot "manage" knowledge per se because the real power of knowledge is found in allowing it to assume a life of its own within an organization. "If you try to manage knowledge, you take away some of the essence of it and choke it. Bringing value to an organization is letting it go."

Baillargeon finds many of the principles embodied in Alvin Toffler's Power Shift (1990) useful. Toffler points out that knowledge, having become the ultimate resource of business, reduces the need for other resources. Baillargeon also points to Margaret Wheatley's Leadership and the New Science, which examines knowledge management from the perspective of chaos theory. Wheatley equates knowledge to a chaotic system that, if allowed to "do its own thing," approaches a living organism.

Buckman Labs' knowledge management environment
Baillargeon credits his mentor, Bob Buckman with the foresight to have managers "thinking ahead 5-10 years rather than 60 days." Buckman Labs became involved in transferring knowledge 10 years ago, when a core group began traveling the world to Buckman's 22 sister firms to share best practices. The evolution of the PC and global telecommunications has been instrumental in moving Bob Buckman's vision forward.

Why has Buckman Laboratories been so successful? "We have a code of ethics that is the firm's cornerstone and that contributes to building a climate of trust and respect. You need this to build a company based on knowledge transfer," emphasizes Baillargeon. "We have tried to put systems in place so that everyone can participate. We can bring to bear the collective knowledge of 1250 people across the world to serve our customers, who are our reason for existing."

Baillargeon is candid about the challenges involved in developing a knowledge transfer environment. "There has been a huge learning curve in getting all employees to participate. The first year they think you're crazy. By the second year, they begin to think it can work, and in the third year, they buy in."

"I advise companies contemplating it to take a bite and get started. As you prove it works, you can grow it and migrate it into other parts of the company. You need a unifying technology that will be a good tool for your people." Baillargeon urges companies preparing to undertake knowledge management initiatives to expect a technological learning curve, but he warns that the ensuing cultural change is the more painful and difficult part. "Eventually you need the buy-in of the top brass to make it work. It takes clear leadership to set the culture and change it, and the leadership must remain involved. It's an ongoing battle. The challenge is to make it so that there is value in participating."

Managing knowledge at Monsanto
Last year, an article in Barron's described the St. Louis, Missouri-based Monsanto Company as tired but on the verge of change. Bipin Junnarkar, Director for Knowledge Management, notes dramatic changes thanks to an organizational transformation begun by CEO Robert Shapiro in 1995. Among the changes were establishment of a Knowledge Management Architecture (KMA) in which Junnarkar plays an important role. Creating global learning centers and systems for stimulating growth were other key projects.

Shapiro's plan called for making Monsanto small and connected. The company went from 4 to 14 business units, relying on the use of information technology to support the connections. To maintain decentralization, several information repositories were created to help Monsanto do business more effectively. Junnarkar points out that enterprise-wide capability rather than separate IT systems capability became the focus of development, because systems are considered a means to an end and "capability" includes the dynamic capability of people.

From information to insight -- Monsanto's knowledge culture
According to Junnarkar, Monsanto's KMA addresses knowledge management from the perspective of creating value. "From the standpoint of a classical value-creating model, we would create goods and services. However, we bring in information and create insight as a way of adding value to our goods and services. Our goal is creating insight that manifests in the ways we provide goods and services. And we are working to get a better handle on how people convert information into insight."

Junnarkar finds that Monsanto's KMA differs from most information technology groups "because we are trying to leverage off IT in a radical way. We're evolving a knowledge management methodology for Monsanto based on the three-step, three-spiral model developed by Nonaka and Takeuchi in The Knowledge-Creating Company." As Junnarkar explains, the KMA adaptation of Nonaka and Takeuchi's model includes a learning map that identifies questions to be answered and decisions made, an information map that specifies the kind of information that users need, and a knowledge map that explains what users do with specific information. The knowledge map represents the conversion of information to insight or knowledge.

Once the three maps have been developed, a "balanced scorecard" evaluation is performed to assess what types of IT tools will be effective for leveraging the information repositories, and an information technology map is created. Junnarkar finds this "the easiest part of the whole puzzle. It's very logical to see how to bring information in and make it visible to people across the company. We understand how it will change its form and shape at this point of the process."

"We focus is on the sense-making capability of people. As Nobel laureate Murray Gell-Mann has noted, people and computers differ in their ability to make sense of incomplete information. People can make sense (construct and interpret meaning) of fragmentary and incomplete information. Computers can't. We learn from people what they are doing and what they need."

The challenge of changing organizational culture
How does Monsanto ensure that information is converted into insight? Junnarkar cites the importance of defining the roles that people play in self-directed teams. He notes that clearly defined roles for members of self-directed teams, particularly the team leader's role, are critical for the successful conversion of information into insight. The leader must ensure that the components of knowledge creation as defined by Nonaka and Takeuchi --socialization, combination, externalization and internalization -- are occurring. The team leader must also champion the mapping of "lessons learned."

Junnarkar admits that the job isn't easy: "Our people are still learning. It is a very new concept for the entire organization. We look at creating value at the level of the individual, to improve the capability of each person. And we're attempting to change organizational culture by sharing and learning from each other so that the core values of individuals and organizations overlap, which represents a change from the classical way of interacting."

Junnarkar believes that understanding and optimizing the interaction of people and information, and people with people is where progress will be made in managing knowledge. "The real challenge for people practicing knowledge management is being able to engage the collective intellect of your people. Our expectation for Monsanto employees is that they will become analysts and thinkers with the KMA. Realizing those expectations will yield tremendous competitive leverage."

Connecting people with people and people with information, encapsulating it, and enabling the conversion of information to knowledge are Junnarkar's goals at Monsanto. Formalizing the roles of people who make sense of information and ensuring the conversion of information to insight in an ongoing upward spiral are critical factors in realizing these goals.

The future of knowledge management
Although specific approaches to knowledge management vary from firm to firm, key themes and common concerns emerged from our discussions with knowledge management experts. Knowledge management requires a major shift in organizational culture and a commitment at all levels of a firm to make it work. Initiatives in place at General Electric, Buckman Labs, and Monsanto focus on people and methods to enhance learning and improve communication, both locally and globally. A strong technological infrastructure, customized for the needs of each organization, provides the tools necessary for ensuring the success of knowledge management efforts.

Although formal measurements and metrics for knowledge management appear relatively unimportant to the executives with whom we spoke, they do agree on a standard measure of success for knowledge management efforts -- improved productivity at the individual and the organizational level. They recognize that managing and leveraging a firm's intellectual capital is a key component of an organization's success. Further, they consider the need for continuous on-the-job learning to be a fact of life within a knowledge-based culture.

Joel Koblentz, managing partner of Egon Zehnder International in Atlanta, Georgia, suggests that companies are just beginning to explore the value of knowledge management and knowledge officers. "Whereas CKOs were once considered back room people, they are becoming frontline. They bring an ability to bridge the information requirement strictly as a CIO sees it. They can express true informational content" And the skills they bring to the workplace are changing the organization of people, work processes, and supporting technologies. Koblentz notes that "operating people have begun to rely on them on marketing calls because they are able to bridge the gap between information, knowledge, and a firm's customer base. And, because of their value, they are increasingly being asked to interface with boards of directors," a rare request for most executives but one that today's CKOs appear to be taking in stride.