Knowledge management: time for HR involvement

Theories about knowledge management and its practice have gained ground in recent years. But HR professionals remain sceptical.


Key points

  • Knowledge management (KM) has gained considerable ground in the UK in recent years.

  • HR professionals tend to be wary because so many KM processes are IT-led, and tend to downgrade or even ignore the people management issues.

  • KM processes are likely to be ineffective if they are not linked to an understanding of what motivates employees to obtain and share knowledge.

  • Intellectual capital is the key to, and the basis of, most firms' competitive advantage, and the majority of assets a firm has are based on knowledge.

  • HR has an important role to play in KM through developing organisational and individual behaviours, skills and knowledge.

    • Knowledge management (KM) has become a fast-growing subject for postgraduate study, and many large organisations have created director-level knowledge managers whose role is to transplant knowledge into the minds of employees.

    Government ministers talk enthusiastically about KM. Knowledge transfer was one of the four cornerstones of the Third Way, New Labour's manifesto for achieving consensus between employers and employees and tackling the productivity gap, while elevating the skills of the UK workforce.

    The HR community is sceptical about the value of much of the literature devoted to KM. Many are also wary because of the number of examples of KM processes that are IT-led and tend to downgrade or even ignore the people management issues that are so critical to the success of KM initiatives.

    It will inevitably be a serious problem for any organisation if employees do not know what others are doing, or if what they do know results in unnecessary waste and duplication of effort. .

    Technology is only part of the solution

    The idea of managing and transferring knowledge has its problems, because there is no easy way to increase the knowledge of individuals or to share knowledge effectively. Even so, one would be forgiven for thinking that, in the new global economy, knowledge is something that can be programmed into the employee. On the face of it, the employment relations connotations of knowledge transfer resonate with George Orwell's 1984, where Big Brother censors everyone's thoughts.

    A major stumbling-block with the idea of knowledge management and transfer within companies is that, traditionally, the acquisition of vocational skills and ability to succeed in a job are driven by the availability and quality of vocational education and training, combined with the inherent human desire to learn and progress. In general, knowledge is regarded as something individuals will, or will not, be motivated to acquire for themselves during the ongoing process of learning the necessary theory and practical skills for their jobs.

    Many in HR suggest that the concept of KM is flawed, believing that most of what passes for KM is no more than the provision of information and data, while the people management issues are ignored, resulting in the failure of many expensive KM initiatives.

    Diane Sinclair, the CIPD's lead adviser on public policy, argues that organisations should think in terms of managing processes that lead to the development of knowledge where it is needed. While agreeing that the sharing of knowledge is a major source of competitive advantage, Sinclair says that KM processes are ineffective if they are not linked to the psychological contract - an employee's mental model of the contribution he or she is expected to make to the organisation and what is provided in return.

    Sinclair is concerned that, invariably, KM initiatives are led by IT people and not the HR function, and therefore an understanding of how to motivate employees is ignored. "Organisations can't just establish technology designed to manage the KM process and assume that is enough," Sinclair says.

    Máire Kerrin, an HR specialist and consultant with the Institute for Employment Studies (IES), has worked on the development of knowledge management processes with a number of large organisations. She says that, in general, when she first speaks to people about KM, their concept of it is very IT-driven. But, when introduced to the notion of KM processes, they quickly begin to understand that the way knowledge is shared and transferred within their organisation is based on cultural norms as much as technology.

    Starting point for HR

    One might think that HR would be a natural home for KM, but only some employers see HR as having a key role. According to Kerrin, the simple fact is that most HR directors do not have a budget and therefore can't get involved. Also, the KM terminology - for example, GEneral Networked Training and Learning Environment (GENTLE) and computerised knowledge (CK) - puts HR people off.

    Kerrin believes there is a huge, as yet untapped, remit for HR within KM in terms of influencing and developing employee skills, knowledge and abilities.

    The idea of getting people to share knowledge is, sometimes inadvertently, discouraged in some organisations. For example, sales people may keep information to themselves while those in research and development are enthusiastic about sharing it.

    The trend in many large organisations is for KM to be led by a "knowledge champion", who may be a knowledge director or officer, and there tends to be a grand KM launch with confident speeches and workshops to follow. Unfortunately, Kerrin says, the grand launch does not change behaviour, and initiatives quickly run out of steam.

    KM, and particularly knowledge sharing, is creeping into companies' key performance indicators and extending performance appraisal criteria. But many managers struggle with the task of how to evaluate an individual employee's commitment to sharing knowledge. Kerrin has documented instances where employees have reciprocal, but insubstantial, knowledge-sharing arrangements with friends in other departments. They get away with it because KM is difficult to measure as an output.

    Problems with the organisation of KM systems were highlighted in a recent CIPD report on the management of knowledge workers1, which suggests that employers need to be more systematic in the way they capture staff knowledge. The authors argue that employers should not just be capturing individual knowledge, but should be encouraging an across-the-board attitude to sharing throughout the organisation and ensuring that know-how isn't lost when workers leave.

    The report says that knowledge workers need autonomy, challenging work and a share in the creation of organisational values. It also looks at how firms have taken a more inclusive approach to knowledge workers, stressing employee willingness to solve problems as a precondition (see document extract).

    In the past, the authors argue, there has been a focus on the ability, rather than the incentive, to share knowledge. This led to an emphasis on IT, rather than on the people dimensions of KM.

    However, for many organisations, almost everyday occurrences can provoke an upsurge of interest in KM. These include:

  • a consciousness of knowledge loss through turnover or downsizing;

  • the effect of a takeover or merger, change or readjustment;

  • awareness of increasing difficulties in retaining key staff or attracting suitable recruits;

  • a new stage of business development or development in production technology; and

  • developments in the IT field.

    Some new approaches to encouraging the development and sharing of knowledge outlined in the report include:

  • "communities of practice", which are groups formed by common interests, not functional areas;

  • intermediaries between those who create and develop knowledge and the users of that knowledge; and

  • the importance of creating a good physical environment to encourage communication and knowledge transfer.

    Serious business

    KM is a serious issue for many large organisations, hence the considerable spending on initiatives. Companies often express their approach to KM in soft terms, but their real motivation is a justified obsession with competitive advantage, driven, in part, by the growth of business information and the high cost of vocational education and training. What many HR professionals argue is that an approach to knowledge requires the creation of a performance-driven culture.

    According to Bernard Marr, a researcher and leading thinker in the field of KM and intellectual capital at Cranfield School of Management's Centre for Business Performance, companies invest so heavily in KM either to gain advantage or to ensure survival.

    Marr defines KM as the collective phrase for a group of processes and practices used by organisations to increase their value by improving the effectiveness of their intellectual capital. He believes that no two KM implementations will be the same, because cultural factors differ so much between organisations, and people with different perceptions and philosophies are central to all KM applications. Marr says that KM is not just a fad and is taken seriously by companies and governments.

    Marr and his colleagues have assessed the impact of knowledge management systems on the strategic capabilities of e-business companies, including Lycos2 (see box 1).

    Marr's view is that intellectual capital is the key to, and the basis of, most firms' competitive advantage, and that the majority of assets a firm has are based on knowledge.

    In their work with companies, Marr and his colleagues have identified a set of seven KM processes:

  • knowledge storing;

  • knowledge mapping;

  • knowledge sharing;

  • knowledge transfer;

  • knowledge generation;

  • knowledge qualification; and

  • knowledge application.

    Rather than implement all seven processes, Marr says clients are encouraged to select just a few processes that are appropriate for their specific purpose.

    Companies must stop equating KM to IT systems, he says, because knowledge and knowledge-based firms have a tacit component that IT cannot accommodate. According to Marr, many organisations have burnt their fingers by investing in large KM systems that don't work, because the company doesn't have the culture that can support knowledge sharing. Marr says that without trust and a performance culture, KM will never work, and to make it work means moving from a command and control culture to a performance culture.

    1.Managing knowledge workers: the HR dimension, Phil Beaumont and Laurie Hunter, CIPD, tel: 0870 800 3366, or www.cipdpublications.co.uk , price £50 (£20 to CIPD members).

    2."Assessing strategic knowledge assets in eBusiness", Bernard Marr, Giovanni Schiuma and Andy Neely, International Journal of Business Performance Management, vol. 4, 2002.


    Document extract: effective knowledge management

    Organisation A

    The vast majority of the workforce (1,100 in total) provides technical support services, which are mainly telephone-based. These technical support teams comprise agents who are supervised and supported by team leaders responsible for evaluating team performance, and full-time coaches who support them from a skills perspective. All team members, including the leaders, are evaluated according to a "balanced scorecard" approach, which uses both quality and productivity measures of performance.

    As well as the on-the-job coaching, the organisation has a strong commitment to systematic training leading to industry-recognised qualifications. Indeed, there is a dedicated training function and facilities in the centre, with expenditure on training being substantially in excess of both the national and industry average, at three times the average industry figure. The training function delivers in the region of 13,500 days of training per year, which equates to approximately 10% of operating costs.

    These working arrangements and training, together with a range of recreational facilities and benefits package including healthcare, pensions, life assurance and educational assistance, have resulted in a level of workforce turnover that, at less than 35%, is well below the average for such centres. Furthermore, an analysis of turnover figures has revealed that few employees have left to go to rival centres, and some of those who have left have gone to work in other parts of the same company.

    This below-average turnover figure is particularly interesting in view of the relatively low average age of the workforce, and the mix of nationalities involved, with many individuals working outside their country of origin. The organisation has also invested heavily in a KM system, namely an online sharing between employees and customers of proven solutions to typical or unusual problems and solutions generated by the engineers or technical support team. This has produced three main benefits to the centre.

    1. The system helps new recruits to come up to speed quickly, and shows them how to respond professionally to customer queries.

    2. By recording proven solutions, the agents can resolve customer problems much faster than going through a traditional problem-solving process relying on problem elimination.

    3. The knowledge gained by each agent through their training and work experience is effectively trapped in the organisation and is available to the organisation for as long as is necessary. Therefore the effects of attrition on the whole organisation knowledge pool are restricted.

    Organisation B

    [Selected knowledge-related aspects of competency framework for personal review.]

  • Proactively seek opportunities to share relevant information with your manager, colleagues and staff.

  • Consistently demonstrate that you are aware of the communication requirements in everything you do.

  • Use internal and external networking to gain new contacts.

  • Create a learning environment in which change is used as an opportunity to improve and develop new skills.

  • Regularly benchmark your operation against best practice both internally and externally to explore where change would be helpful.

  • Proactively share information across teams.

  • Create internal standards for the production and use of information which maximises sharing of information between teams, ensures consistency and avoids duplication.

  • Use internal and external networking to discover where problems have occurred elsewhere and effective solutions already exist.

  • Monitor the ways in which problem scenarios are handled once they have been identified and share lessons with others.

    • Source: "Managing knowledge workers: the HR dimension", CIPD.


    Box 1: Lycos UK - doing it by the book

    Lycos UK is part of the multimillion dollar Lycos Network. It provides internet services including search tools and navigation resources, personalised services, online shopping and email. Lycos was launched in 1995 as a search engine and since then has steadily expanded to include chatrooms, home-page building tools and many other services.

    Teamwork is seen as a key asset by Lycos, as is organisational culture. Within the company, operational processes used to be performed in one office, which allowed sharing of knowledge and the creation of a team culture. Having moved to large offices in central London, the company is determined to preserve its culture.

    For Lycos, as for other successful e-businesses, the brand name and the registered URL can be their most important asset.

    Lycos produced an internal document, the "Brand Bible", which explains the company brands and their objectives. It provides precise guidelines on how to manage the brands and functions as a knowledge base for all employees in Lycos.

    The fundamental idea behind Lycos's Brand Bible is that, by broadening the understanding of its various brands and of the intended communication among its entire staff, Lycos is better able to achieve its overall objectives of brand recognition and subsequently market-share growth.

    The Brand Bible is a database in which the knowledge about how to communicate and manage the brand is continuously collected, codified and reinforced. It ensures that everyone within Lycos understands the requirements and rules of communicating the brand and the intended perception and brand image the company wants to create. The database includes not only the brand managers' own knowledge but also best practices from external partners.

    The plan is to generate new knowledge by continuously acquiring knowledge from external sources such as marketing agencies and by benchmarking. The Brand Bible is owned and maintained by the brand managers but is accessible to everyone for learning.

    It is also used by Lycos as a knowledge base for discussions among experts to define new business developments or improve the current ones. This allowed Lycos to develop a knowledge database of best practices that can be consulted by each employee on the organisation's intranet.

    Lycos uses focus groups to monitor whether the message it communicates remains consistent and whether it gets the right message across among the various target groups for its different brands. According to Marr, the results of the focus group discussions have shown that, since the implementation of the Brand Bible, Lycos has improved the consistency of the communication of the brands and significantly raised its market share.