Managing Knowledge, Even in Bad Times Abandoning KM during an economic downturn is not the solution.

By Jason Compton From Knowledge Management Magazine
August 2, 2001

Many of the nation's largest enterprises have announced four-figure layoffs and are leaving the door open for more. Smaller companies and startups, which counted on the patronage of these staggering giants, are also downsizing. The potential for knowledge drain in organizations of all sizes is growing--and some companies are considering cuts that will impair their ability to succeed with less. But both the evidence and the experts suggest that knowledge management initiatives and tools should not be among the cuts. Processes that extract and save knowledge and make it available to other employees--even if there are fewer of them--can ease the impact of contraction on a company.

"With effective knowledge management and information sharing tools, you'll find that if you do end up with fewer people, they generally are folks who know where to get information," says William Glover, leader of the high-growth strategy practice at Cap Gemini Ernst & Young in Boston. The viral nature of effective collaborative environments, which expose employees to more skills and expertise than they would encounter in isolated project environments, can pay significant dividends. "Even if there are cuts, someone will be left who has collaborated on a particular concept and can readily get to the information," he adds.

In contrast, stripping away access to enterprise knowledge hurts those who need it more than ever during an economic slowdown. "The sales force [for example] is going to have to be better informed, brought up to speed at a much faster pace and have more in-depth information," says Cate Quirk, research associate at AMR Research Inc. in Boston. Otherwise, the team may fall behind in understanding new products or market approaches that have appeal during a period of decreased spending and longer sales cycles.

Successful companies continue to depend on their knowledge even when their stock takes a hit. "At least within my groups and other groups I've worked with, you are evaluated on how much knowledge or thought leadership, by quarter, you actually commit or give back," says John Sifonis, managing director of Cisco Systems Inc.'s Internet business solutions group in San Jose, Calif. "So, whether our stock is at $82 or $22, your objective is to produce X number of knowledge pieces.

Short-term shifts

Having a flexible KM program can help when a company has to change direction to accommodate economy-driven market shifts. That flexibility is important because it allows companies to alter the focus of knowledge sharing to address short-term demands. "In good times, we get innovative and try to create new knowledge, but when times are difficult, you go for standardization and low-risk replication," says Stan Kwiecien, best practice replication deployment manager at Ford Motor Co. in Dearborn, Mich. "These are not the times when you want to think about risk, but the times when you want to minimize waste."

Responding to economic pressure, Ford management called on the company's 25 communities of practice and the standards-building process that Kwiecien oversees to add a new procedure. It allows content gatekeepers to designate certain critical innovations or process enhancement discoveries as standards. Adopting them is not mandatory, but "their replication is encouraged," Kwiecien says.

Dar Wolford, Ford's manager of best practice replication, credits the first two months of the "encouragement" program with creating nearly $4.5 million in benefits for the company. Various facilities within Ford have declared 48 new standards and have listed them for implementation or further investigation. One such process, involving a device called an "eco-bell" that lessens waste in paint application, is expected to save $883,000 in paint material costs at the five plants gearing up to adopt the system.

Kwiecien says that shifting emphasis from general knowledge sharing to immediate payback and standards setting has produced a cultural benefit as well. "The communities were a place to show off, but there may not have been a lot of value," he says. "Now we're focusing on the right thing to do. There's a little less bragging and more getting down to what really is helping move the business."

Making the best of it

Cisco Systems Inc. of San Jose, Calif., is responding to current pressures by connecting its various knowledge assets more closely. Its intranet holds approximately 15 million pages, so Cisco is creating a universal system of metadata to unify its content and streamline the process of finding knowledge. "In a rapid-growth environment, you end up solving individual problems for the purposes of time to market," says Bill Souders, IT director of global e-learning technologies. "While we have lots of stovepipe KM solutions available only to certain groups, the focus in the next six months is to drive toward better integration, with the end result being improved navigation, improved productivity and a better-informed workforce."

Doing more with less

Although the World Bank and its roughly 100 communities of practice are not directly affected by the industrial slowdown, its KM staff has been operating under strict conditions for a couple of years. In 1997 the bank, which provides loans to developing nations, established a strategic compact that called for a temporary spending increase to expand field operations and knowledge capabilities. Since then, however, budgets have returned to pre-increase levels.

"With the tight budget environment we have known over the last couple of years, knowledge management is aimed primarily at organizational effectiveness, to make sure that services are delivered as quickly as possible, that quality is being kept high and that staff coming into the organization can learn quickly from the knowledge base we have," says Bruno Laporte, coordinator of the World Bank knowledge sharing program in Washington, D.C.

Part of the expansion was aimed at changing the image of the World Bank as an ivory tower by putting more experts in the field. At the same time, keeping the estimated 30 to 40 percent of traveling or field-based staff linked with other experts is crucial. In one recent example, field operatives working with the government of Madagascar were asked to formulate policy recommendations on the taxation of medicines. Through the World Bank's online communities, the team was able to assemble a list of examples of how other countries had addressed the issue and present a set of recommendations.

"In the past, the bank would say we're going to get back to you and send a study group to look at options. Instead we have, in a couple of days, a very quick return on what the experiences are in other parts of the world," Laporte says. It's the international finance equivalent of providing better customer service with fewer resources. The communities give bank consulting teams access to knowledge from other bank employees as well as academic experts, without spending tightly controlled funds to organize formal studies or fly in subject experts.

The World Bank's Africa section has a pilot group testing the effectiveness of videotaped discussions as part of its postproject debriefing process. Used as an alternative to traditional reporting methods, the videotaped meeting is published on the bank's intranet so other teams can view it. "It's not a back-to-office type of report but a reflective one, asking why did things work or why didn't they work and what can we learn from it," says Nicolas Gorjestani, CKO and CLO of the African region.

Silver lining

When the uptick begins, companies that have managed their knowledge will be ready to grow again while others are still thinking about it. "Most economic conditions are cyclical: when the upswing begins, you need to go through hiring and add people who don't have knowledge that your workforce has," says Scott Tannenbaum, president of the Group for Organizational Effectiveness, a consultancy in Slingerlands, N.Y. "Having invested in sustained knowledge management during difficult times, you are in a better position to bring people up to speed when the inevitable upswing occurs."

Tannenbaum points to a knowledge sharing system his group built with a jewelry concern during happier times that cut the preparation time for new field sales representatives by 60 percent. Having that structure and information in place before staffing expands will expedite new hires' contribution to the expansion and provide faster returns on ongoing KM investments.

Even when prospects open up, a slowdown-inspired focus on investment in short-term knowledge priorities will pay off. "Most of the employees we hire in the next few years aren't going to be with us for 20 or 30 years, only three to five years," says David Near, director of business excellence growth for Dow Chemical. "We have less time to extract, codify and create value from the tacit knowledge we hired them for, so we have to reduce training time and extract intellectual capital value in the short time we're going to have it."

Abandoning a knowledge sharing culture just because times get hard is no way to use an investment that has considerable expense behind it and long-term value ahead.

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