Unlocking Value: KM as a Strategic Management Tool

Unlocking Value: KM as a Strategic Management Tool EDITED BY FIONA PROWTING

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Unlocking Value: KM as a Strategic Management Tool EDITED BY FIONA PROWTING

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Contents Executive summary.............................................................................................................VII About the authors...............................................................................................................IX From traditional to dynamic knowledge management – Why KM is more necessary today than ever before........................................................................................ 1 By Klaus Jochem, IT manager, Bayer Technology Services Introduction........................................................................................................................... 1 What is dynamic knowledge management?............................................................................. 2 The KM life cycle in dynamic KM............................................................................................ 4 Challenges............................................................................................................................ 5 Associated traditional KM life cycle......................................................................................... 6 Conclusion............................................................................................................................ 7 Understanding the power of narrative intelligence – Energising organisational learning and strategic communications............................................................................... 9 Madelyn Blair PhD, speaker and consultant, and Denise Lee, director at Pricewaterhouse Coopers Introduction........................................................................................................................... 9 Organisational learning......................................................................................................... 9 Strategic communications....................................................................................................... 9 Story................................................................................................................................... 11 Narrative............................................................................................................................. 11 Narrative intelligence and organisational learning.................................................................. 12 Energising strategic communication through narrative intelligence........................................... 13 Closing and conclusions....................................................................................................... 13 Problem solving, multitasking, and management decision-making..................................... 15 By Stephen Bounds, director and principal consultant, knowquestion Models of decision-making................................................................................................... 15 The centrality of context........................................................................................................ 16 The problem solving pattern................................................................................................. 16 Problem solving methodologies............................................................................................. 17 Problem solving for management.......................................................................................... 19 Action items are not multitasking........................................................................................... 20 Multitasking concepts........................................................................................................... 21 Applying multitasking concepts to management..................................................................... 21

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Innovating with the knowledge you have........................................................................... 25 By Rob Bogue, author, speaker, strategist, and consultant The meaning of innovation................................................................................................... 25 Innovate differently............................................................................................................... 26 Innovation as change........................................................................................................... 26 State of the industry and state of the art................................................................................. 27 From knowledge to innovation.............................................................................................. 27 The buzz about social.......................................................................................................... 28 Applying what you know....................................................................................................... 29 Summary............................................................................................................................. 30 Promoting knowledge management as core business........................................................ 31 By Shelda Debowski, senior consultant, Higher Education Development Identifying ‘core knowledge’................................................................................................. 32 Capturing and managing core knowledge............................................................................. 33 Promoting the integration of core knowledge......................................................................... 35 Cultivating consistent knowledge application across all business units...................................... 36 Building organisational capacity and learning........................................................................ 37 Implications for leaders promoting knowledge as core business............................................... 39 Not managing knowledge – A knowledge management strategy....................................... 41 By Steve Moore, business strategy and change consultant Organisational knowledge stores.......................................................................................... 41 Exposing organisational knowledge....................................................................................... 42 Matching business and knowledge management strategies..................................................... 43 Developing a knowledge management strategy...................................................................... 45 Summary............................................................................................................................. 47 Knowledge is the business................................................................................................. 49 By Katrina (Kate) Pugh, academic director, Columbia University Information and Knowledge Strategy Masters programme, and Thomas A. Stewart, chief marketing and knowledge officer, Booz & Company Framing the lesson: the strategy process................................................................................ 50 Knowledge-based strategy.................................................................................................... 52 Knowledge-driven strategy.................................................................................................... 52 Three cases of knowledge-driven strategy.............................................................................. 53 How can you ‘take knowledge to market’?............................................................................ 54 The new work of knowledge leaders...................................................................................... 57 Toward the new skillset for knowledge-driven strategy............................................................. 59 Social interaction – Beyond compatible goals.................................................................... 61 By Albert J. Simard, knowledge manager, Defence Research & Development Canada Introduction......................................................................................................................... 61 Sharing............................................................................................................................... 64

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Collaboration...................................................................................................................... 65 Negotiation......................................................................................................................... 69 Competition........................................................................................................................ 71 Conclusions........................................................................................................................ 74 Case Study: Capco – Information matters – How are you managing yours?....................... 75 By Monica Danese-Perrin, global knowledge manager, Capco Intellectual property – our best asset yet................................................................................. 76 In the know – strategies and frameworks................................................................................ 76 Cultivating communities....................................................................................................... 77 Jack be nimble, organisations be quick................................................................................. 77 Innovation culture................................................................................................................ 78 Game face.......................................................................................................................... 78 Recipe for successful KM...................................................................................................... 78 Case study: Creating and sustaining a culture of innovative collaboration at FMC Technologies............................................................................................................. 81 By Kim Glover, manager of knowledge management, FMC Technologies Senior management sought global collaboration.................................................................... 81 Knowledge management starts with The EDGE...................................................................... 82 The WELL provides a home for best practices established in the edge...................................... 83 Empowering new employees to share starts on their first day................................................... 84 Governance, metrics, and change management make a difference......................................... 84 A corporate university expands the knowledge-sharing cycle................................................... 87 In summary – Cultivating continuous improvement................................................................. 88 Case study: Knowledge management on the front line at the National Audit Office...................................................................................................................... 89 By Nicky Gibbs, head of knowledge and information, National Audit Office Setting the scene.................................................................................................................. 89 About the NAO................................................................................................................... 89 Why do we need to change?................................................................................................ 89 What will be different?......................................................................................................... 90 KM in the new operating model............................................................................................ 91 Benefits of a champions network........................................................................................... 92 Planning the pilot................................................................................................................. 93 A plan for knowledge .......................................................................................................... 93 The pilot so far.................................................................................................................... 95 What we have learned......................................................................................................... 95 More about SharePoint (2013).............................................................................................. 95 What’s next?....................................................................................................................... 95

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Case study: Royal Air Force – Knowledge management as a strategic asset in defence......................................................................................................................... 97 By David Woods, data protection and information policy, Royal Air Force Introduction......................................................................................................................... 97 Network Enabled Capability and knowledge management...................................................... 97 MODIS and knowledge management.................................................................................... 99 Information policy and knowledge management.................................................................... 99 Workforce and knowledge management.............................................................................. 101 How Defence can introduce effective knowledge management.............................................. 101 Progress in embracing knowledge management................................................................... 102 Conclusion........................................................................................................................ 103

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Executive summary DESPITE BUSINESSES being part of an increasingly knowledge-based economy, the value of knowledge management (KM) is not always recognised. In the 2013 Bain and Company ‘management tools and trends’ survey, knowledge management was no longer listed within the top 25 management tools.1 However, many of the tools which were shortlisted are underpinned by a need for knowledge sharing behaviours, as are the realisation of many commonly held business objectives. The articles and case studies within this report illustrate that KM should not be considered as separate from these objectives, but rather as a pervasive management tool which, when used correctly, has the ability to add value across businesses processes, and have a meaningful impact on strategy and the realisation of business goals. One expert contribution suggests that, contrary to the findings of Bain and Company, the role of KM is actually becoming more important, and what can actually be observed is the rise of ‘dynamic KM’ replacing the more traditional model, in part as a result of big data technologies and increased interactions between internal and external processes. KM is pervasive in nature and its influence can, and should, be felt at all levels of the business, and throughout the business’ strategy. For example, with the rise of social media and ‘un-strategic communications’, fundamental components of human interaction and knowledge sharing

need to be re-examined in order to stay ahead in strategic communications. One article addresses this by looking at the way in which knowledge management processes, which have always involved developing a balance between policy, security, governance, and uncensored knowledge sharing should influence this aspect of a business’ strategy. Another discusses the role KM has to play in improving decision making (in particular management decision making) and problem solving using both agile and lean methodologies, in order to increase organisational effectiveness. Another article considers the connection between KM and innovation. Innovation is a key element of business strategy and an example of a popular trend identified within the Bain and Company survey which is underpinned by knowledge sharing behaviours (74 per cent of organisations believed that ‘innovation is more important than cost reduction for long-term success’).1 The contribution discusses the importance of retaining the knowledge that an organisation has about problems, solutions, and successes to improve its ability to apply old solutions to new problems in creative ways. Part of the reason knowledge management may not be considered a key management tool, is the notion that it does not deliver critical business value. One analysis explores how this idea can be effectively challenged by pragmatically considering the knowledge requirements of the organisation, and focusing on the

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knowledge that is fundamentally linked to its strategic and operational requirements. This will allow knowledge management to be refocused as a critical business practice that will protect these knowledge assets to ensure business survival and growth. In order to achieve such (re)focus, it is vital to ensure that an organisation’s KM strategy aligns with, and is capable of supporting the delivery of, the organisation’s business strategy; this is discussed within one contribution. Another builds on this idea to suggest that knowledge may not only inform strategy, but it may actually also be the strategy that is taken to market. This contribution uses case studies to show how some companies have used knowledge to transform their businesses and establish competitive advantage, and explores how using KM techniques and thinking can deliver new insight into traditional strategy questions and the realisation of organisation-wide goals. However, within an organisation it is very common for different components to have numerous smaller and conflicting goals. As a result, it is necessary to ensure there is effective knowledge transfer across organisational boundaries so that the wider business objectives and strategy can be realised; this report therefore includes an article presenting a framework illustrating how KM can support knowledge work in this environment. This report also includes case studies which profile different instances of KM being used to inform and drive business strategy. A contribution from business and technology consultancy Capco discusses KM techniques and frameworks, and the way in which these can be used to achieve long-term organisational goals and objectives such as improved profitability, efficiency, and increased agility. The case study from FMC Technologies, a leading global provider of

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technology solutions for the energy industry, discusses how KM is used to facilitate faster and more agile communication and decision-making, create demonstrable business value, and help the company deliver on its corporate objectives. KM has long been an explicit part of the corporate strategy of the National Audit Office (NAO), and the case study included within this report explains the way in which KM is being used to assist with the refocusing of teams around six common strategic issues that affect the whole of Government. The case study from the Royal Air Force shows the way in which knowledge management can be used as a strategic asset, and the steps being taken by the Ministry of Defence to deliver improved and more effective decision supremacy. The introduction to the Bain and Company survey asserts that businesses are ‘using fewer tools to pursue revenue and profit growth, but using them more strategically’.1 This collection of expert insights and case studies emphasises the need to consider KM within this refined selection of tools, as its influence, and the value it adds, can be seen throughout all aspects of business management and strategy. Reference 1. See www.bain.com/publications/articles/ management-tools-and-trends-2013.aspx.

About the authors Madelyn Blair, PhD is a speaker, author, and senior consultant to management. Her emphasis is in working with individuals and groups to bring them to another level of accomplishment. Her specialty is organisational learning and the approaches that support it. She has particular experience in narrative, knowledge management, knowledge retention, and information management from strategic planning to competency definition. She is the creator of the Information Flow Analysis and the Riding the Current™ systems. Dr Blair is a Taos Institute Associate and a member of the Associates Council to the Board. She is a founding member of Goldenfleece, and co-moderator of Worldwide Story Work. Dr. Blair received her doctorate in organisational psychology from the University of Tilburg, The Netherlands, and holds an MBA from The Wharton School. She is the author of Riding the Current: How to Deal with the Daily Deluge of Data, Riding the Current Workbook, and Essays in Two Voices. She is a contributing author of Lessons from the Field, Wake Me Up When the Data Is Over, and Making it Real: Sustaining Knowledge Management – Adapting for Success in the Knowledge Based Economy. Her blog is ridingthecurrent.com. Robert Bogue is the owner and principal consultant of Thor Projects. Robert’s goal is to make the intranet a trusted tool, connecting all associates to the organisation, which assists in transforming the organisation from a collection of disparate groups to an integrated team leveraging the knowledge from every associate in the enterprise to drive productivity. To achieve this goal, Thor Projects delivers facilitation, elicitation, and project planning services to support their clients in the development and implementation of SharePoint solutions. Robert is a ten-time Microsoft MVP for his work with Windows Server Networking, Commerce Server, and SharePoint. He is the author of 23 books and is a nationally recognised speaker. Robert has been recognised as a Microsoft Patterns and Practices Champion for his work with Microsoft developing the SharePoint Guidance to help developers build successful solutions on SharePoint. As the SharePoint Shepherd, Robert creates tools to support SharePoint end users. Guiding end users to increased adoption of SharePoint through easy to access and follow step-by-step tutorials, Rob has developed the SharePoint Shepherd’s Guide for End Users, available in book and wiki formats (www.sharepointshepherd.com/sharepointtutor2013.aspx). For more information about Robert, the SharePoint Shepherd, and other end user tools, please visit www.SharePointShepherd.com and www.thorprojects.com/blog. Stephen Bounds is an information and knowledge management specialist and founding director of knowquestion Pty Ltd. Stephen provides strategic management consulting services along with a hands-on approach to help organisations successfully develop and implement highly-functioning systems and processes.

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With over 16 years of experience in delivering knowledge management, information management, and information technology solutions, Stephen combines a sophisticated knowledge of technology development tools and application platforms with a keen awareness of how to work within an organisation’s culture, manage its process maturity, and leverage informal knowledge networks. He has worked with a range of organisations including the National Museum of Australia, NBN Co, the Australian Communications and Media Authority, and the Grains Research and Development Corporation to provide strategic guidance on organisational and project-specific outcomes. Stephen holds a Masters in knowledge management and undergraduate degrees in computer science and arts. He is an active contributor to actKM, Image and Data Manager, and other knowledge management and information management forums. You can read more of his thoughts about KM and IM on his blog at http://bounds.net.au and on Twitter handle @smbounds. Monica Danese-Perrin is the global knowledge manager at Capco. She is a KM professional with more than 15 years’ experience in helping companies achieve cost savings and increase innovation through knowledge sharing. She has successfully delivered knowledge solutions, from creating and implementing knowledge management strategies using change management and communication techniques, to developing and rolling-out intranet portals and knowledge repositories that seamlessly integrate with internal systems. As Capco’s global knowledge manager, she is leading the KM approach across Capco to help maximise the value of their information and make it easier to create, capture, find, and share expertise. Monica holds an MSc in KM and is fluent in Spanish and Italian. Capco is a global business and technology consultancy dedicated solely to the financial services industry. It employs over 2,200 people and has 20 offices around the world. In 2013, Capco ranked 27th in The Sunday Times 100 Best Companies to Work For list. It employs over 2,200 people and has 20 offices around the world. To find out more contact Monica at: [email protected]. Dr Shelda Debowski is the author of Knowledge Management (2006), Wiley Press and The New Academic (2012), Open University Press. Shelda has published widely on the development of knowledge capabilities and leadership. She works as a consultant in organisational learning and development, has conducted knowledge audits of organisations, and has considerable expertise in guiding the development of learning and knowledge services in universities and businesses. Her experience in leading knowledge communities and building effective knowledge environments has been honed over many years as a Professor of Higher Education Development and as a senior university leader and scholar in the field. She can be contacted at [email protected]. (See Shelda.Debowski.com.au for more details on her background and expertise.) Nicky Gibbs is the head of knowledge and information for the National Audit Office (NAO), where she has worked since 2011. She has been working in knowledge management for more than fifteen years, and started her career at Ernst & Young in their UK consultancy practice, before moving to Carphone Warehouse to be the head of knowledge for the group. Whilst there she implemented a very successful pilot, saving the business £350k in a matter of months, that led to a group-wide implementation. After a couple of years living and working in Portugal doing something entirely different, she returned to the UK. Following a global role at a small design agency, Fitch, part of the WPP group, she then joined the NAO.

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Her areas of specialism are in developing knowledge strategies and programmes, the influence and engagement of senior stakeholders and using SharePoint (2010 and 2013) to support knowledge and information sharing activities. Kim Glover has 25 years’ experience in communications, marketing, project, and knowledge management, and is the manager of knowledge management for FMC Technologies. In this role, Kim has quickly established an expanded set of knowledge management solutions and is leading the standardisation of processes to standardise support for the business and technical networks. Prior to April of 2013, Kim was the knowledge architect for AspenTech, the world’s leading supplier of process optimisation software and the company with ‘The Most Valuable Intranet of 2012’, according to the Worldwide Intranet Challenge. She spearheaded AspenTech’s knowledge management office (KMO) in 2001 and has led global initiatives enabling continuous improvements. Skilled in the deployment of knowledge management and communications processes and tools to achieve business benefit, Kim is a frequent presenter at knowledge management and quality conferences, including APQC in 2012 and 2013, Taxonomy Boot Camp at KMWorld in 2013, ASQ Service Quality in 2013 and the upcoming ASQ World Conference in 2014. Klaus Jochem joined Bayer AG in 1989. For over twenty years, with a few stints in IT infrastructure projects, he worked on developing and enhancing engineering data warehouses and CAE systems within the engineering department. Whilst basic and detailed engineering information and knowledge management is of major importance for safe, efficient, and economical plant construction, it is a very interesting challenge to develop IT systems for supporting information and knowledge exchange in engineering teams working across organisations and regions. In 2008 Klaus became head of the CAE and CAPE development and support group within Bayer Technology Services GmbH. Today KM and organisational learning play an important role. When software engineers retire after working for years on highly sophisticated programmes, it is crucial to start the knowledge transfer process as early as possible to ensure business continuity, especially in small development groups. Before joining Bayer, Klaus worked for Siemens AG and Apollo Domain Computers. He can be contacted at [email protected]. Denise Lee is a skilled management professional with more than 20 years of experience, with a focus on strategic communications, talent management, organisational learning, succession planning, and knowledge management. A demonstrated subject matter expert in projects that assist organisations in creating a knowledge-centric culture based on leveraging knowledge and human capital resources to achieve the mission of the organisation. Ms Lee has led the development of comprehensive communication strategies that have enabled effective communications across the enterprise. A specialist in leveraging innovative practices such as designing knowledge retention and succession programmes that identify, capture, share, and embed lessons learned and unique practices into business processes and organisational programmes through tools such as MS SharePoint. Ms Lee is the federal knowledge officer for the PwC Public Sector Practice in addition to her client service responsibilities. In this internal

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role Ms Lee is leading the government practice response to the PwC global KM strategy focused on self service content management and social networking. Ms. Lee has extensive teaching, book, and article contributions, as well as public speaking experience. Steve Moore is a commercially focused business strategy and change management consultant with extensive experience, having worked in the public sector as well as with charitable trusts. He engages with people at all levels, ensuring their voices are heard and compelling needs for change addressed. Having started his career as a research and development electronics engineer he was later influenced to focus attention to the impacts of technology upon its users. Throughout his consultancy career he has developed and implemented business focused solutions delivering sustainable change in areas including: knowledge management, organisation development, people change management, business improvement, and organisational learning. Married with a grown family, Steve gained his MBA from Oxford Brookes University, and completed The Open University’s post graduate courses; Managing Knowledge and Managing Systemic Change. He is currently exploring new opportunities to share his experiences and continue new learning challenges. Having previously worked with the Prince’s Trust as a volunteer business mentor, Steve is currently a volunteer with the National Trust. Katrina Pugh is academic director of the Columbia University Information and Knowledge Strategy Masters programme and president of AlignConsulting, specialising in knowledge-based transformation. Katrina has 19 years of consulting and seven years of industry experience in the healthcare, energy, information technology, and financial services sectors. Before founding AlignConsulting, Katrina consulted with Monitor Group, Oliver Wyman, PwC Consulting/IBM, and Dialogos, Inc. She held leadership positions with Intel Corporation, JPMorgan, and Fidelity Investments. Katrina is the author of a book on conversation for knowledge-sharing, Sharing Hidden Know-How (Jossey-Bass/Wiley, 2011). She has published in the Harvard Business Review, MIT Sloan Management Review, Ivey BusinessJournal, NASA Ask Magazine, Journal of Digital Media Management, and The Review of Economics and Statistics. She has lectured or held workshops at NASA, MIT Sloan School of Management, George Washington University, Babson University, the Center for Business Intelligence, the KMInstitute, and KM World. She is on the boards of the Knowledge Management Institute of Canada and Mitokine Bioscience, and she is a member of SIKM Leaders (International and Boston Chapter). Dr Albert J Simard is the knowledge manager for Defence R&D Canada, Directorate of Knowledge and Information Management. As a forest-fire scientist and project leader, he worked on complex problems, such as evaluating air tanker productivity and predicting the occurrence of large forest fires. He also led development of two award-winning, state-of-the-art automated National Forest Fire Information Systems. His experience with complex systems led to developing knowledge management projects, programmes, and strategies for the Canadian Forest Service and Natural Resources Canada. These include an access to knowledge policy and a knowledge services framework for government S&T organisations. Internationally, he developed strategic plans and frameworks for two global information networks related to disaster management and forestry. He recently developed a regulatory modelling framework for the Canadian Food Inspection Agency. He co-authored a book and published four book chapters related to leading-edge knowledge management concepts. He

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has also published more than 200 scientific and management articles and given 300 presentations on forest fires and knowledge management. Currently, Dr. Simard developed a knowledge services best practices framework and is developing an architecture that integrates social, business, and technological structures to support the strategic goals of Defence R&D Canada. Thomas A. Stewart joined Booz & Company as the chief marketing and knowledge officer in 2008, and leads the firm’s marketing, intellectual capital, and knowledge management efforts. Stewart had previously served as the editor and managing director of Harvard Business Review. Before that, he served as the editorial director for Business 2.0 magazine and as a member of the Board of Editors of Fortune magazine. He is the author of two books, Intellectual Capital: The New Wealth of Organizations, and The Wealth of Knowledge: Intellectual Capital and the 21st Century Organization, published by Nicholas Brealey in 1997 and 2001, respectively. Stewart is a member of the Industry Advisory Board of the Information and Knowledge Strategy programme at Columbia University and of the Advisory Board of Adriadne Capital in London. He is a summa cum laude graduate of Harvard College, and holds an honorary Doctor of Science degree from Cass School of Business at City University, London. David Woods is currently employed within the Data Protection and Information Policy team based at Royal Air Force High Wycombe. A Squadron Leader, David is responsible for, amongst other information-based responsibilities, the generation and development of the Air Information Transformation Programme which has the intended outcome of transforming how the Royal Air Force uses its considerable information stores to best effect. David is in the Engineering Branch of the Royal Air Force and has specialised within the role of information services and strategies; he also provides support to the information governance of the Royal Air Force and is a stakeholder in the development of the Ministry of Defence Information Strategy. For the last four years he has also been involved in behavioural change of Royal Air Force employees to use new collaborative tools and promoting the sharing and assurance of information throughout the organisation. David, as a member of a military fighting force, enjoys competitive sport such as hockey and squash, and has recently taken part in a number of medium-distance adventure races such as the Spartan Beast 2013 and Xtremestrom 2013 raising money for numerous charities.

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