Though Europe’s efforts to become the world’s most competitive knowledge economy by 2010 can be described as insufficient and lacklustre at best, for some time many companies around the world have been using their organisational knowledge to boost competitive advantage.

From public to private sectors, and small and medium-sized enterprises to multinationals, organisations are using knowledge management (KM) programmes to meet business goals. These programmes create environments that facilitate the exchange and reuse of knowledge, and connect people to people, and people to information.

Advertisement

Tangible impact

By pulling together and sharing the full weight of their knowledge and intellectual capital with employees (and often partners and clients), companies are having an incredible and tangible impact on areas as diverse as client satisfaction and loyalty, innovation, profitability, employee motivation, and risk management. Such collaboration ensures that no matter where in the firm an employee sits – be it in the US headquarters, the new office in Beijing or on an oil rig in the North Sea – he or she can access and draw on the gamut of experiences, knowledge and value that the company offers.

The journey towards these results, however, is rarely smooth. Getting local initiatives off the ground can be challenging enough as people may resist change and hold on to what they know, believing that the power of knowledge comes from keeping it to themselves.

For multinational companies, an enterprise-wide, cross-border approach to KM will encounter additional obstacles in the form of differing organisational and regional cultures, hierarchical issues and operational concerns.

Stay positive

An early challenge is to see past the negative associations ascribed to KM. As its popularity grew in the 1990s, IT companies jumped on the bandwagon and touted document or content management systems, intranets and portals as the ‘silver bullet’ solutions to managing their clients’ knowledge. By ignoring the crucial fact that KM is a people issue and that a system cannot merely suck knowledge out of employees, millions of pounds have been wasted on IT-based KM programmes.

That is not to say technology should be ignored; used in the right way, it is invaluable. For example, wikis (online tools for collaborative working) enable users who are geographically dispersed to work on, create, edit and re-edit reports, policies or documents. Changes can be tracked and viewed easily, and the outcome tends to be more dynamic and satisfying for the team.

Project teams or individuals can communicate their latest developments or findings through a web log (‘blog’), a site that displays their posts in reverse chronological order. Groups of people can use web conferencing tools to meet, hold presentations and work on documents without having physically to be in the same place.

For companies that have learnt the technology lessons, KM has simply become part of the way they work.

Oil field services giant Schlumberger can trace its KM roots back to the 1930s. Peter Day, director of operations support and knowledge management, explains: “Conrad Schlumberger, one of the founding brothers, worked out how his rudimentary electrical survey tool could be adapted to see oil-bearing rock deep in the subsurface. From Paris he communicated the idea to his 34 field engineers around the world, urging them to experiment. Three months later he received the results of their tests, which opened a new era in oilfield technology.”

Mr Day says that two simple factors enabled this success: a common language and the technology to communicate directly with field operations.

With 52,000 employees in more than 1000 distinct locations, in over 80 countries, and in mobile service units operating 24 hours a day on drilling rigs and producing wells, Schlumberger’s KM activities are far-reaching.

“For us to succeed, we must make a good job of connecting people to people and people to knowledge, which requires investment in people and process,” says Mr Day.

Online solution

To provide global operations with technical support, Schlumberger created InTouch, an award-winning online system. InTouch helps make connections by enabling field crews to share new ideas, best practice and lessons learned, all of which speed up the process of capturing, sharing and validating knowledge.

Since launching the system, response times for resolving technical queries have improved by up to 95%, and by 75% for deploying engineering modifications around the world. The company calculates that benefits from InTouch amount to more than $200m a year.

To help people communicate directly, Schlumberger has linked its scientific world through a series of communities that represent distributed virtual teams of people working on similar problems. There are 19 key communities that host 98 special interest groups in areas such as geophysics, well engineering and IT. They are global, involving 5000 or so specialists in more than 85 countries, who are largely self governing and have network tools to interact effectively. Members participate in archived discussion forums and have access to their community’s knowledge repositories.

“Using these resources and pools of experience, experts validate and share best practice, spot problems and find solutions,” says Mr Day. By putting people at the centre of its KM initiatives and using technology simply as an enabler, Schlumberger has set an example.

In the same vein, international law firm Freshfields launched Athena in 2005, a proprietary web-based KM tool that gives lawyers access to the firm’s know-how and helps them share knowledge.

Better efficiency

“Athena has already demonstrably streamlined internal processes and has enabled us to respond to clients faster and more efficiently,” says Julia Randell-Khan, director of knowledge development. “In addition, the reduction in the time our KM staff spend on administering our KM systems allows them to use their legal expertise on higher value work.”

For Simon Levene, global head of knowledge management in PricewaterhouseCooper’s performance improvement practice, helping practitioners work at the top of their game is an important aspect of his job. “Part of PwC’s promise to its clients is that while you work with an individual, behind him or her are the skills and experiences of our 100,000 practitioners,” he says.

To ensure employees have easy access to this knowledge, Mr Levene is helping to build standards around language and data. “While you can’t standardise human processes, common data architectures and controlled vocabularies, or taxonomies, allow you to capture, slice and dice information to your particular needs. Knowledge management in our practice supports the development and implementation of a common global consulting approach, language and mind-set,” he says.

The KM success of these companies at a global level is dependent on local engagement. As Mary Lee Kennedy, former director of the knowledge network group at Microsoft, says: “Local KM initiatives can benefit from global approaches. The key is to focus on areas of joint interest.”

This interaction is also important to Schlumberger’s work. “Our approach has been to nurture local KM into truly global implementations. InTouch and our network of communities both started as local projects,” says Mr Day. “‘Little KM’ must be viewed as a tremendous source of innovation to ‘big KM’.”

Gaining buy-in from local groups to wider initiatives requires collaboration. “A joined-up approach requires a shared objective,” says Ms Kennedy. “When that exists and a partnership is established, there is opportunity for buy-in.”

Mr Day agrees and explains how Schlumberger achieved this collaboration. “We looked carefully at the value statement from an individual’s perspective and ensured we were not only helping them get access to information and people but also providing real benefits. We were then relentless in the ongoing delivery of value. Our work in knowledge management must answer the question asked by each person: ‘What’s in it for me?’”

Of the many hurdles that multinational knowledge-sharing programmes must clear, cultural issues are perhaps the most interesting, if potentially explosive.

Cultural issues

Ms Kennedy recognises it is not only cultures of countries that companies must be sensitive to, but also disciplines, organisations and leaders. “Culture is evidenced by behaviours and actions that reflect values and beliefs,” she says.

“Within multinational organisations, the common cultural challenges of hierarchy, disciplines and time in the organisation are compounded by regional and ethnic beliefs and values. One way to view these behaviours in organisational practices is to identify how and what the unit cherishes, celebrates, prioritises, asks, leads by, recruits for and organises as. Each of these affects how information, ideas and expertise will be exchanged.”

Larry Prusak, a researcher, consultant and KM pioneer, also pinpoints issues that must be addressed here.

“Cultures of individualism, which are especially prevalent in the Anglo-American business world, make knowledge sharing a somewhat unnatural activity. If people are rewarded for their own individual activities and accomplishments, why should they share? An organisation has to take active steps to counteract this,” he says.

Mr Prusak suggests giving bonuses to groups rather than individuals and he encourages companies to provide space and time for networks and communities to form since knowledge sharing is a social activity. Finally, he recommends rewarding good knowledge behaviours and spending time trying to establish social norms of co-operation rather than competition.

Ms Kennedy’s experience with multinational KM projects has taught her that there is no easy solution to cultural challenges, although she has advice to offer.

“Successful knowledge management initiatives have established levels of trust,” she says. “While it may sound idealistic, companies should recognise that differing degrees of knowledge will be shared with an individual or group according to the level of trust established, which is often informed by a perceived sense of common understanding. Organisations must encourage behaviours and actions that help create trust so individuals and groups feel safe sharing what they know.”

For companies pursuing a crossborder approach to KM, Ms Kennedy suggests:

  • Starting on something small that has high energy behind it and can demonstrate a quick win;
  • Engaging those intended to benefit from the initiative to define success early on;
  • Ensuring a multicultural perspective is achievable, and managing expectations within the various cultural contexts.

Taking a KM programme to all corners of your organisation is a formidable undertaking. As PwC’s Mr Levene says, all companies exhibit natural levels of KM; the challenge is to build on those tendencies and facilitate knowledge sharing to benefit both individuals and the company as a whole.

Timely investment

Cross-border knowledge sharing requires investment in time, money and people and an appreciation that cultural differences relate to how the very concept of knowledge is used and applied.

“This is a very important issue that can, and often does, trip up a global organisation,” says Mr Prusak. “If you don’t put energy into working with your knowledge, your company will slowly die and you will never understand why.”

If such definitive statements are not proof enough of the power and potential of knowledge sharing, a glance at the list of leading knowledge-based companies, including those highlighted here, shows that it pays dividends.

Mr Prusak praises the work of, among others, BP, Shell, Goldman Sachs, the World Bank, Intel and Microsoft. They have dedicated resources to cross-border KM and are reaping and often shouting about the results.

Indeed, many firms now refer to their KM work in their annual reports. Becoming part of the global knowledge economy where borders are no longer barriers and competition is stronger than ever requires us to draw on everything we know. Colleagues and partners must be prepared and able to share what makes them and their organisation unique.