Chapter Fifteen
Knowledge Management Involves Neither Knowledge nor Management
The death knell for knowledge management (KM) as a concept was sounded with a Wall Street Journal article chronicling McKinsey & Co.’s failure to manage its “knowledge” successfully. The article quotes from an internal McKinsey report that says despite having the requisite systems in place, “the ability of our consultants to tap into and effectively leverage our knowledge is poor. . . . Our knowledge base is mixed in quality and poorly structured. It takes much too long to find the right knowledge, and in many cases, the best existing knowledge is not identified and brought to the client.”1 If the world’s most prestigious consulting firm could not successfully wrangle information, what hope was there for anyone else?
The failure at McKinsey was not its inability to categorize and retrieve the volumes of experience from its legions of Harvard-trained MBAs but rather the widely held Pollyanna-like belief that knowledge can actually be managed. Even though McKinsey had published numerous articles outlining the secrets to successful knowledge management,2 it too missed the underlying truth. The sheer concept of knowledge management is fundamentally flawed—it involves neither knowledge nor management and therefore cannot be expected to succeed. Though KM seemed like a great idea, it’s time that we relegate it to the dustbin of history and focus instead on helping organizations truly share the intellectual capital their workers possess.
Before you cite the example of Company X having improved productivity when workers in Singapore explained a new way to machine a widget to workers in Seattle, let’s define some terms. The sharing of “best practices,” a potentially dangerous sport of its own, doesn’t constitute managing “knowledge,” just sharing procedures. Similarly, training one group on a skill learned or improved by another group is exactly that, training, not KM. By putting my latest presentation on CEO succession into my firm’s database, I have not managed any knowledge, merely posted information, making it accessible to a larger population.
To use a tired but in this case helpful device, the dictionary defines knowledge as “the fact or condition of knowing something with familiarity gained through experience or association.”3 This makes it impossible to acquire “knowledge” without either experiencing something yourself or interacting with someone else who has. What the cheerleaders define as KM is most frequently just information sharing, which certainly has its role but doesn’t achieve the original intent of its proponents.
The fundamental, undeniable fact is that knowledge is intrinsic to human beings and is gained only by participating in an experience or having contextual understanding of that experience. The typical definition of KM as an information technology (IT)–based process run by chief knowledge officers to enable global sharing of best practices is nothing more than a string of threadbare consulting clichés. Knowledge exists only in people. However, all is not lost. The billions of dollars spent on consultants, IT systems, and training courses may still yield some small return if we’re willing to take a very honest, even brutal look at the core truths about why KM doesn’t work and how organizations must behave if they truly want shared knowledge.
WHY KNOWLEDGE MANAGEMENT DOESN’T WORK
It’s not much of a challenge to think of a slew of clear reasons why KM is a failed concept and why organizations have not realized its lauded benefits despite the multiple billions of dollars being spent annually on the effort.4 I can easily think of nine of them. These nine nails should keep the lid on the KM coffin so that the beast never again threatens corporate-kind.
1. There’s No Accountability
If knowledge is adequately managed in an organization, who gets rewarded? If it’s not, who gets penalized? Those questions define accountability but cannot be answered by those who promote KM. Although everyone wanted a piece of KM when it first emerged, no one ended up with clear accountability.
The early battle for accountability pitched human resources (HR) against IT as HR fought to claim KM as its own. Jack Fitz-Enz of the HR benchmarking Saratoga Institute, stated, “The open door for HR is that KM is not a technical issue. It is a human issue. This is HR’s chance to be at the heart of the most important force in the 21st century—information.”5 Yet HR had then and still has today enough challenges managing other employee data. HR was not prepared to take accountability for the information residing in every employee’s head. Likewise, IT’s approach to classifying and storing data, albeit potentially very efficient, ignores the fundamental human aspect of actually transferring knowledge. In the end, no one has been accountable, so little has been accomplished.
2. There’s No Quality Control
To paraphrase from George Orwell’s Animal Farm, “All knowledge is equal, but some knowledge is more equal than other knowledge.” As a veteran of knowledge database experiences at a Fortune 20 bank and a leading management consulting firm, I know that all too frequently these databases become nothing more than filing cabinets for every project that the professional staff completes, regardless of quality. Although we all do great work, some of that work is, by definition, our “best,” and some is the firm’s “best.” Without a knowledgeable human to review and screen for quality every piece of information going into a database, you’re asking the rest of the organization to fish for information in a polluted pond. Let’s not even start with the question of who reviews all this information as it ages to ensure that it’s still fresh and still represents the current best thinking in the organization.
3. It’s Not Really Knowledge
As I stated earlier, knowledge cannot be stored in a database; only information can. In case you think that this is just a semantic argument, consider this: if I search a database for key success factors in implementing succession planning, I’ll likely get a raft of reports and presentations on succession planning—information. It will be my responsibility to guess at the context and nuances that generated this information. However, if I ask Bob from down the hall, who has done twenty of these projects, I’m just about guaranteed to get something closer to knowledge, thanks to the context he can provide. Even the KM experts agree with this. According to George Bailey, PricewaterhouseCoopers’s North American leader for innovation, “Everybody goes there [to the database] sometimes, but when they’re looking for expertise, most people go down the hall.”6
4. It’s Push, Not Pull
Information gets into a database only if people put it there. It’s difficult even for those with the best of intentions to remember to do this on a regular basis, and sometimes people don’t have the best intentions. According to Robin Giang from the technology consulting firm International Data Corporation, “Knowledge is power, and to publish your knowledge is to relinquish it.”7 This long-acknowledged information-hoarding issue is still not adequately addressed at most companies. One highly intrusive way around this challenge is found in new “sifting” software that mines companies’ e-mails to identify content expertise that isn’t being shared. If I’ve sent ten e-mails on succession planning, I might be flagged as a knowledgeable source, whether accurate or not. Aside from the ethical questions that this technology raises, it leaves open the question “Are you getting better information or just more of it?”
5. There’s No Incentive to Share
We’re all team players who believe in the benefits of cooperation. We’re all also very busy, and convincing busy professionals that sharing their information should be a priority must involve either a carrot or a stick. Most firms implementing KM made the false assumption that professionals would prioritize their time around stocking the database instead of pursuing the other dozen objectives that they would actually be rewarded for achieving. I know of no major corporation that measures and rewards employees’ contributions to their “knowledge database.”
6. The ROI Is Difficult to Prove
In a period of dramatic cutbacks in corporate discretionary spending, multimillion-dollar KM investments haven’t proved their worth. Unlike customer relationship management software in which the financial benefits of improved customer relationships can be measured through traditional financial metrics like revenue per account, KM has no tangible measures of success. “Most of the benefit of [KM] is anecdotal,” says Charles Lucier, Booz Allen’s chief knowledge officer. “I can’t prove it, but we do better work.”8 That level of proof might not be sufficient for today’s CFOs.
7. There’s Nothing for the CKO or CLO to Do
The hiring of a chief knowledge officer (CKO) or chief learning officer (CLO) in a company provides the other corporate executives with a greater sense of job security. They now know that they won’t be the first person let go in the next round of layoffs. More than 25 percent of Fortune 500 companies had CKOs at the peak of the KM craze, but less than 20 percent of them have one today. A recent Wall Street Journal article chronicled the profession’s challenge to define its worth to corporate America.9 An industry consultant says that “CKOs are like a vitamin pill. They make you feel good, but in a bear market the only thing that really sells is painkillers.”10 The CKO or CLO position implies that it’s possible (or desirable) for an individual or department to “manage” the knowledge of others. This is the same flaw that we saw in the beginning of the quality movement, when corporate quality departments arose to preach and teach continuous quality improvement. It wasn’t until leaders like Larry Bossidy of AlliedSignal (now Honeywell) and Jack Welch of GE established Six Sigma as a way of doing business, not just a department, that many firms finally saw sustainable benefits from the exact same quality tools introduced years earlier.
8. It’s Cultural
To overcome the barriers to sharing information, a company has to modify its corporate culture to overcome the natural aversion to doing this. Carla O’Dell, president of the American Productivity and Quality Center, says that of the companies trying KM, fewer than 10 percent have succeeded in making it part of their culture.11 Even companies with strong information-sharing systems fall into this trap.
At Ford Motor Company, the Best Practices Replication Process has delivered “billion-dollar benefits for the automaker.”12 However, this sophisticated system didn’t allow Ford to spot the issues in the Firestone tires it placed on its Explorer SUVs. “Why did no one know about the [Firestone] tire problem? Two reasons. First, knowledge is best shared within communities. People with something in common talk more than strangers do. . . . Second, the more widely dispersed knowledge is, the more powerful the force required to share it.”13 Even the most sophisticated systems can’t overcome the fundamental cultural behaviors in an organization.
9. It’s a Fad
Not that all fads are bad, but it’s important to recognize when that label rings true. KM as a concept rose and fell in lockstep with the dotcoms. It was fueled with the same excited type of “if we could just put information at people’s fingertips!” naiveté. One great measure of when the KM bubble burst is the number of books published on the topic. According to the Knowledge Management Resource Center, that number fell from a high of fifty-seven in 2001 to a low of fifteen in 2002. That sound you hear is that last nail entering the KM coffin.
HOW KNOWLEDGE MANAGEMENT CAN WORK
Despite this dreary landscape, the potential remains to actually manage real knowledge in organizations and realize the financial benefits from doing so. What it takes to do this right, however, involves more than a new Web server and a fat consulting contract. It means paying attention to how people actually acquire knowledge and how they can most effectively transfer it to others.
The definition of knowledge stated earlier provides the key to how organizations can improve their capability in this area. Knowledge is gained through experience or association, something no database can give you but your experienced peers, superiors, and subordinates can. True knowledge management means acknowledging that increased person-to-person contact is the only sure way to improve the shared level of knowledge in an organization.
1. Realize Its Limitations
Although KM may marginally improve your firm’s capabilities, it is highly unlikely that it will revolutionize your business. An example of this is the promising field of data mining in which large amounts of data are sliced and diced looking for heretofore unknown and potentially profitable correlations. As Michael Schrage of Fortune puts it, “Just because [you find that] single, left-handed, blond customers who drive Volvos purchase 1,450% more widgets on alternate Thursdays than their married, nonblond, right-handed, domestic-car-driving counterparts does not a marketing epiphany make.”14 Set realistic objectives for what you hope to achieve. Better to underpromise than to underdeliver.
2. Hold On to Your Best
One stated reason for developing KM is that the valuable knowledge stored in employees’ heads could walk out the door tomorrow and never return. Since that’s true, it seems like the most obvious solution is to retain that employee. You know which employees hold the most knowledge on key subjects. Make sure you use all the fundamental levers of employee engagement to keep them around: great developmental opportunities, a strong sense of purpose, and above-market compensation. To leverage their knowledge, set up interaction-based forums where they can share this knowledge with their peers and other interested parties. Tried and true venues, such as “lunch and learns” (or video “lunch and learns”), in which the expert presents the latest and greatest knowledge and discusses how this knowledge was gained, are likely more effective at sharing real knowledge than a search of the company’s database.
3. Use Apprenticeships
It’s difficult to argue that there is a more effective way to transfer knowledge than through an apprenticeship. You study, quietly observe, and practice your craft under the gaze of an expert until you’ve become skilled enough to actually do the job on your own. Although this may seem more applicable to coppersmithing than corporations, the structure of work in most corporations provides plenty of opportunities for apprenticeship experiences. Staff junior people on projects, task forces, committees, and the other machinery of corporate life. Let them interact with the experts to gain knowledge from their more experienced colleagues and exposure to a broad range of experiences. Make them accountable to listen and learn and to participate where warranted. Provide them with clear objectives for what they’re supposed to learn, give them the time to do it well, and measure whether the requisite knowledge has been acquired.
4. Anoint Experts and Set Expectations
Some people know more about certain things than others. Recognize that people like having a “go to” person, and hold your subject matter experts accountable to serving as this resource. Let everyone know who has expertise in certain areas (finally a good use for that database!), and include the responsibility to proactively share this information in the expert’s performance measures. If the experts can convey their knowledge face to face, then actual knowledge, not just information, gets managed.
5. Rely on Human Interaction
You know all those company conferences and sales meetings you so efficiently moved to videoconferencing? It’s time to start getting people back together, face to face, to actually share knowledge. The highly predictable answer you get from professionals evaluating nearly any conference or group get-together they have attended is that the unscheduled, interpersonal “networking” time was the most valuable. It’s the interaction at venues like these that actually results in knowledge being shared.
6. Put Accountability Where It Belongs
Managing knowledge is a fundamental part of managing an organization, and accountability for it should rest with those in line management. Though HR or IT may install the computer system, line managers must be held accountable for getting quality information into the system. Line managers must also be held accountable to ensure that their team gets the experiences they need to acquire knowledge. In Hewitt Associates’ “Top 20 Companies for Leaders” study, the use of development assignments to build capabilities differentiated the best firms from the also-rans.15
7. Sure, Have a Database
It’s easier than paper for keeping track of information that supports knowledge. However, along with all the other conventions for storing and retrieving data, two key components must be in place for this database to be effective. First, you must have a live, knowledgeable human being screen every piece of information that goes into it to ensure that only the best work is accessible. While costly and bureaucratic, there’s simply no substitute for this. Second, there must be incentives in place for sharing information. This means that you must have a method to track who is submitting information to the database for consideration and have a meaningful part of employees’ annual incentive based on that sharing.
Is this a lot of effort? It probably is, but who ever said that trying to extract and categorize every piece of company information into a searchable database religiously serviced by your entire professional staff was going to be easy? Your challenge is to cut through the consultants’ hype, take a hard look at the numbers, and realize that knowledge in an organization can only be derived from people.
Marc S. Effron is vice president of talent management at Avon Products, Inc.