People and knowledge management

The most important knowledge resides in people's heads. Because knowledge can only be surrendered voluntarily, getting the people aspects of knowledge management right is most important part of establishing a knowledge-sharing and creating organisation. Yet, despite a growing range of tools and practices available to firms to encourage staff to share their knowledge, many are finding it difficult to extract tacit knowledge.

The KPMG 2000 survey of knowledge management reported that half the respondents had experienced difficulty in capturing this kind of knowledge.¹ Likewise, a joint Cranfield School of Management-Microsoft survey of knowledge management in UK industry reported that in reality "getting people to collaborate" rarely matched best practice expectations.² In fact, out of the 23 best practices highlighted by the survey, organisations tended to rate themselves as performing less well in this area than in any other.

Several studies have attempted to explain why employees resist knowledge collaboration. Psychologists at Birkbeck College, who studied 1,000 people working in the IT industry, a pharmaceuticals business and a media production company, found that a large minority were "hoarding knowledge".³ The researchers identified the end of the "job-for-life" culture, and the accompanying increase in short-term contracts, as being the main reason behind employees' unwillingness to share knowledge. The annual Bain & Company survey of management tools in 2000, which reported a high abandonment rate of knowledge management initiatives, concluded: "Employees don't have the time or motivation to share their knowledge. Special knowledge can be the path to fame and fortune in today's economy. This hampers employees' readiness to share valuable information."⁴ A similar point was made at the eighth Human Resources World Congress in Paris during May 2000 by a Dutch consultant who explained that: "Staff think knowledge is power and sharing knowledge is not something most people want to do. They think that knowledge sharing will lower their individual benefits."⁵ Laura Empson of the Said Business School in Oxford, who has studied mergers between consultancy and accounting firms, found that while such a union aimed to pool knowledge, staff tended to fiercely resist sharing knowledge with their new colleagues.⁶ Empson reported that professionals in such organisations are driven by "two fears: fear of exploitation (their knowledge being taken and used by others) and fear of contamination (their reputation being sullied by association with others)."

OVERCOMING BARRIERS TO KNOWLEDGE TRANSFER

A common reaction to a managerial exhortation to staff to share knowledge is "what's in it for me?" Even when people do share knowledge, the recipients often adopt a "not invented here" mentality and do not make use of it, preferring instead to retain their existing approach (see Mobil in previous chapter for example). Some organisational cultures reinforce employee scepticism of knowledge collaboration. In some working environments, for instance, people may be averse to sharing and using knowledge that already exists, seeing it as a sign of weakness or an admission that they could not do it themselves. The delayering and downsizing that firms have resorted to over the past decade in order to adapt to changing business conditions has not only reduced employees' willingness to transfer knowledge but also led to the loss of important corporate knowledge with departing employees. The staff that are left often have increased workloads as a result, reducing the amount of time they can devote to knowledge activities. Indeed, research into knowledge management has consistently identified "lack of time" as one of the main obstacles to effective knowledge exchange. For example, the KPMG survey referred to earlier reported that 62% of respondents with a knowledge management programme suffered from this problem - the second major barrier to success after information overload (65%).¹

Aside from establishing the right cultural conditions (see previous chapter), organisations that face staff resistance and other barriers to knowledge initiatives need to be innovative if they are to challenge, and overcome, them. Installing groupware or some other collaborative software and expecting staff to make use of it will not work. Knowledge sharing is rarely that simple. People are unlikely to divulge something of personal value - in this case knowledge - without something in return. This was the case at IBM.⁷ The US computer giant found that unless people were given compelling reasons as to why they should share knowledge, they treat it as a valuable possession and resist efforts to make it widely available.

There are two other major factors that influence individual decisions to share knowledge. They are: whether the new knowledge tools and practices will make life easier for them; and whether they are given the time and space in which to pursue knowledge creation and sharing.

Direct exchange

There are various solutions firms can employ to overcome the barriers people erect to stifle knowledge initiatives. Staff will want to know that their contributions to the firm's knowledge bank will be recognised and rewarded. Thomas Davenport and Laurence Prusak have suggested that a market for knowledge has emerged, in which people will only part with their knowledge if they get something of value in return.⁸ Rewards can be both financial and/or non-financial, although many knowledge management experts insist that the former sends the wrong signals and will have little impact on individual behaviour. Knowledge writer Karl Erik Sveiby, for example, believes that in knowledge organisations intangible rewards, such as peer recognition, learning opportunities and greater autonomy, are much better at motivating people to share knowledge than financial incentives (see recognition and rewards below).¹⁰

Usually, inducements to share knowledge are a mix of extrinsic and intrinsic rewards. Buckman Laboratories, the US biotech company, has a clear policy on rewarding staff for sharing knowledge. It states: "We will not promote anyone who does not share knowledge." Although financial rewards are occasionally given to Buckman employees deemed to be the best at knowledge sharing, other means of recognising their contribution are preferred as the company's vice president has explained: "We do not use a lot of cash payment incentives because it is hard to track the quality of interactions. And we do not want to pay out on quantity necessarily. The rewards, recognition and incentives are that people will be able to expand their sphere of communication, their sphere of influence in turn, and potentially their sphere of responsibility through promotion."⁹

Knowledge exchange may be a better way of referring to knowledge transfer, especially the sharing of highly personal tacit knowledge. It suggests that something is received in return, rather than a one-way process. Generally, the benefits are reciprocal knowledge to supplement and expand a person or team's existing knowledge base. Nancy Dixon, author of Common knowledge: how companies thrive by sharing what they know, says that knowledge transfer based on a "one-way dissemination" of knowledge (expert model) - extracting what they need from a expert repository, for example - is "much less vigorous" than a system of reciprocal knowledge sharing.¹¹ The latter, which Dixon calls the distributed model, is more successful in overcoming the "not invented here" syndrome that often accompanies the expert model. Dixon believes that teams were more willing to accept and use knowledge developed elsewhere when they observed that the creators were also applying the ideas. She concludes:

"The distributed model, then, provides considerable advantage to an organisation that is designing a knowledge transfer system by facilitating a more dynamic exchange and by reducing resistance to reuse."

Other knowledge writers and practitioners have testified to the importance of direct contact between knowledge providers and consumers. Davenport and Prusak, for example, "strongly advocate knowledge transfer through face-to-face meetings and through narratives".⁸ Similarly, the US Army, which has made extensive use of knowledge management, believes that direct connections between people are the key to better knowledge transfer. Although virtual knowledge-sharing tools, such as intranets, can enable knowledge transfer, the "connections between people may become too tenuous to support meaningful collaboration", concludes a report on knowledge management by The Conference Board.¹² This reflects the view that communication is most effective in person because it enables interaction, a two-way dialogue. Face-to-face communication has the advantage of directness. There is far less likelihood that the message will be misunderstood or wrongly interpreted in situations where the receiver can see the communicator and ask questions to clarify what is being communicated. The communicator benefits too by also being able to ask questions to determine whether the message has been understood, and seeing the reactions of individuals to what they are being told. This enables the communicator to judge how well (or badly) people have responded to the information. Importantly, personal contact engenders trust - a key factor in getting people to share personally valuable knowledge.

While face-to-face knowledge sharing is recommended where practicable, such as in relatively small organisations or between teams, larger companies require alternative means of transferring knowledge, but which retains aspects of direct collaboration. BP Amoco, with more than 80,000 employees worldwide, has attempted to solve this conundrum by giving staff access to a raft of electronic enablers, including video conferencing, multi-media e-mail, application sharing, shared chalkboards and video clips, described as a virtual team tool kit. The aim is to enable BP staff to talk to each other, rather than codify their expertise. It is a network of people, not a warehouse for data, information or knowledge. The different software and hardware was deliberately chosen to duplicate as much as possible the "nuances, variety and human dimension of face-to-face contact".⁸ BP's approach and the knowledge management principles on which aspects of the Virtual teamwork programme are based can be found in figure 3.1 . The Ford Motor Company's "Best Practice Replication" (BPR) database system - spreading best practices among its 37 vehicle assembly plants worldwide - relies in part on frequent face-to-face meetings of production engineers from across the firm for its success.¹¹

Figure 3.1: The knowledge principles which underpin BP's Virtual Teamwork programme

Source: Working knowledge: how organisations manage what they know, Thomas H Davenport and Laurence Prusak (1998), Harvard Business School Press, Boston, Massachusetts, ISBN 0 8758 4655 6.

Ground rules

Personalising knowledge by being selective about what knowledge is transferred - for example, only knowledge that is directly relevant to the individual's job or role - is one method of overcoming the common problem of time constraints and the growing dilemma of information overload. It also recognises that technologies designed to support knowledge transfer have one major failing: they standardise, categorise and communicate knowledge, with little regard for how it will be of most use, and how different people collaborate. Knowledge management implies a formal structure for filtering and disseminating knowledge. Yet the power of knowledge often resides in its specificity - that is the unique, and often complex, situations in which it is generated. Retaining its distinct attributes requires balancing the need to make knowledge accessible to others through a common terminology that does not lose the context in which it was formed. Rigid rules covering how knowledge is placed in data repositories and documented for collaborative networks can also be time consuming. Time-poor employees are often reluctant to share their knowledge in this way, seeing it as an additional burden in an already stressful working environment. However, knowledge transfer will ultimately reduce the time pressures on staff by helping them to do their jobs without continually "reinventing the wheel".

A few simple, flexible guidelines for knowledge-sharing activities are better than step-by-step instructions. One report recommends that the framework should "enable different groups to share a common ground for knowledge exchange and collaboration. At the same time, these structures must be flexible enough to adjust to the idiosyncratic nature of knowledge, while accommodating individual differences among people."¹² Ford's "information life cycle" attempts to overcome this dilemma by acting as a "guide" rather than an instruction manual. In this way, it "provides a framework for coordinating work without locking it into a mechanical procedure."¹² Similarly, the US Army's After Action Reviews (AARs), which are defined as a "professional discussion of an event" and enable "participants to discover what happened, why it happened and how to sustain strengths and weaknesses", are not rigid structures but are governed by the need to reach a common goal. They are a non-hierarchical learning forum - everyone involved in the action attends regardless of rank - with clear rules and facilitation which encourage openness, honesty and the collective pooling of knowledge. The five simple rules that govern the US Army's AARs are: (1) no sugar coating; (2) discover ground truth; (3) no thin skins; (4) take notes; and (5) call it like you see it.¹¹ The goal in the US Army's case is to preserve life in hostile or threatening situations.

The rules and structures governing knowledge sharing will largely be determined by the type of knowledge being transferred. Strict standards are much more applicable to the transfer of explicit knowledge than the exchange of tacit knowledge, which requires more flexibility and greater freedom. BP Amoco's Peer Assist programme, which enables teams working on a project to meet face-to-face with another group that has had experience in the field to gather assistance, is seen largely as a way of transferring tacit knowledge. BP took the decision to establish Peer Assist without too many rules. Nancy Dixon explains: "It is left up to the team asking for assistance to specify who it would like to work with, what it wants help on, and at what stage in the project it could use the help."¹¹

Pilot project

The previous chapter suggested that managers should cultivate "change agents" - small groups of staff that are eager to share and use knowledge, and who can act as a catalyst for a much wider uptake of knowledge transfer and use - to overcome the wider problem of employee reluctance to make use of knowledge systems. Organisations adopting the "change agent" approach can improve the overall chances of knowledge sharing becoming the norm. These employees are pioneers and their experiences will impact on the silent majority who tend to adopt a "wait-and-see" approach to new management initiatives. There will always be a small minority who are unflinching in their resistance to anything new. Research has suggested that a maximum of 80% of a workforce will adopt a collaborative approach.¹³

Knowledge writers such as Davenport and Prusak claim that one of the key knowledge management principles is to begin with a pilot programme (see BP Amoco example, figure 3.1 ). Individuals who already collaborate and who can act as agents for change can provide the most favourable location in which to mount a pilot knowledge management project.

Enterprise Oil took the pilot project route to establishing its knowledge management programmes (see case study 3, Chapter five ). The company decided on four pilot projects, which consisted of developing four communities of practice (see below). The key criteria in deciding which areas of the business to focus on were: the level of commitment of the key player or "minder" of the community and the strategic value of the project. The four communities eventually selected for the pilot scheme were multi-disciplinary and multi-locational. This crossing of traditional boundaries represented a challenge that could bring immediate results for knowledge management within the business. "On the one hand, it meant that people were working together across national boundaries, with the logistical problems, such as communication, that inevitably causes," explains John Keeble, head of knowledge management. "But if the projects were successful, the ideas and new ways of working implicit in a knowledge management approach would reach more people more quickly."

Getting the message across

Karl Wiig, a knowledge management writer, suggests that: "Employees must be motivated to act intelligently - 'to do the right thing' - by being provided with understanding and emotional acceptance of how their actions will be of value to stakeholders, the enterprise and, most importantly, themselves. This factor is the most important, and difficult to effect. It requires approaches to effective and active communication that will be new to most."¹⁴ The previous chapter highlighted the importance of communication in generating support for change, including acceptance of knowledge activities. Several firms have highlighted the bottom-line benefits of knowledge sharing to get their message across to employees and encourage participation.

At BT Global, for example, staff attending a knowledge management training programme were presented with some figures outlining the costs and inefficiencies of not sharing knowledge (see case study 1, Chapter five ). The company's knowledge management team estimated that 80% of employees spent 30 minutes a day seeking information and that 60% spent one hour a day duplicating the work of others. Adopting a knowledge management strategy would reduce that inefficiency by 50%. Taking the argument a step further and applying the calculations to Global Business Markets business unit with around 2,000 employees, this could translate into savings for the unit of £2.5 million for seeking information and £3.75 million for duplicating work.

Ford's managers reinforced the company's commitment to knowledge sharing by meeting face-to-face with 25,000 employees over a six-month period to explain the value of knowledge transfer.¹²

Knowledge support

Aside from information technologies, companies can aid knowledge transfer and encourage staff participation by establishing support systems, such as a dedicated knowledge management function. APQC found that Price Waterhouse (now PricewaterhouseCoopers), for example, greatly improved collaborative behaviour and the circulation of information after it formed a central group to capture and document knowledge.¹² The KPMG 2000 survey of knowledge management reported that 42% of respondents with knowledge management programmes in place had appointed knowledge officers or established what are described as knowledge "centres".¹ A study of knowledge management by the Conference Board found that 25% of surveyed firms had appointed a chief knowledge officer (CKO), although most companies had no annual dedicated knowledge management budgets and almost half (47%) reported no full-time knowledge management staff.¹⁵

Nonetheless, the Conference Board found that where they exist most CKOs focus on the "strategic aspects of knowledge that can be enabled through new ways to work in collaboration. Some CKOs focused on the design of workplace and social environments - more informal meeting places, retreats, learning events and innovative development experiences - to encourage and facilitate knowledge creation, sharing and innovation."

The main aim of knowledge officers and knowledge departments is to overcome the typical functional and departmental barriers that inhibit knowledge transfer across organisations. As such they act as champions of knowledge exchange. Among our case studies, BT Global, Enterprise Oil, ICL and Linklaters all have a designated person to nurture knowledge exchange throughout the business. Other companies have appointed individuals with responsibility for developing corporate knowledge. At the consultancy Ernst & Young a "knowledge steward" acts as a monitor of knowledge activities, while teams at both McKinsey and Bain & Company each have an "historian" whose role is to document work.

HUMAN NETWORKS

It is worth remembering that tacit knowledge becomes useful only through social interaction. Organisations generally establish units or groups to specifically generate knowledge; research and development departments are the most common example. The basic premise of R&D is to provide researchers with the time and resources to explore new ideas and generate new knowledge largely free from the constraints of profits and deadlines. Some of the mechanisms that knowledge management has created to support sharing among employees are based on this assumption. These knowledge-sharing vehicles, including communities of practice and specially designed knowledge gatherings, are discussed in detail below. Teamworking, a way of organising work and staff which has grown in popularity since the early-1980s, is also examined as it is good way of transferring knowledge among a small group of employees. It is also worth acknowledging that where such collaborative working is in operation, a good deal of knowledge is probably already being exchanged informally between group members as part of their day-to-day activities. The after action reviews established by the US Army - which involve transferring knowledge gained from performing a task and applying it in a future situation - and replicated by BP Amoco and the international engineering group Bechtel, among others, are a further example of human networks that are designed to share knowledge (see above). Mentoring, which involves experienced staff helping less knowledgeable or experienced employees to learn, is an excellent way of transferring tacit knowledge on a one-to-one basis. Figure 3.2 compares the different human networks that are found in many firms.

Figure 3.2: Comparing different human networks

Source: "Communities of practice: the organisational frontier", Etienne C Wenger and William M Snyder, Harvard Business Review, January-February 2000.

The American Productivity and Quality Centre (APQC) has emphasised the importance to knowledge transfer of human networks, such as communities of practice:

"Human networks are one of the key vehicles for sharing knowledge. These networks are typically composed of colleagues who share insights on topics they care deeply about. Frequently they lead to the development of close personal relationships through which people feel invited and obliged to contribute to each other's thinking and development."¹⁶

The APQC's research found that:

As was acknowledged earlier, knowledge transfer and innovation will not prosper in a rigid structure. There needs to be a balance between providing the common standards for sharing knowledge combined with enough space and flexibility for people to be creative.

The informal channels of sharing knowledge that already exist in every firm can provide the building blocks for a more structured exchange. As BT Global's Marc Auckland has put it:

"Organisations need to allow people the space and freedom to learn, to share ideas and knowledge in both formal and informal settings."(see case study 1, Chapter five )

The previous chapter noted that casual conversations can often be the best way of sharing knowledge. It outlined the approach taken by Celemi which has involved the introduction of a specially designed communal refreshment area, with newspapers and magazines, to encourage staff to spend time there to talk and share ideas and elicit advice (see case study 2, Chapter five ). Another example was the Japanese company Dai-Ichi Pharmaceuticals, which requires its researchers to spend 20 minutes each day in specially created "talk rooms", discussing their ongoing research with whoever is in the room at the time.

A further study of knowledge management by the APQC reported that existing formal and informal structures can provide the foundations of systematic knowledge transfer.¹⁷ It found that rather than building new networks, the companies studied - including Ford, Lotus and PricewaterhouseCoopers - built their knowledge-sharing processes on existing ones.

For example, American Management Systems (AMS) operates two kinds of networks: knowledge centres and special interests groups (SIGs). Both networks have their origins in existing communities, but enable people who are already sharing knowledge about a topic to engage a wider audience and have access to more appropriate knowledge transfer tools. Knowledge centres have their own budgets and internet location and members are selected to participate. These groups focus on issues of corporate importance. SIGs are informal, loosely structured groups and can be formed by anyone in AMS. As their name suggests, SIGs examine issues of special interest. These groups allow existing knowledge-sharing activities to receive funding and gain recognition.

The Document Company - Xerox has also recognised the importance of retaining as far as is practicable the informality of existing knowledge transfer among employees.¹⁸ Xerox found that service engineers would often have their own informal systems for exchanging knowledge. These were usually a get-together before work at which they would swap stories, ideas and know-how, raise problems and offer solutions. As a result of their socialising, the engineers had developed a "collective pool of practical knowledge that any one of them can draw upon". In order to transfer the know-how that small groups of Xerox engineers share among themselves, the company established Eureka, a database to disseminate globally the knowledge created during these social gatherings. The current Eureka database contains around 300,000 "tips", which, unusually for this method of knowledge transfer, are submitted, vetted and refined by the engineers within business units before they can be accessed by Xerox's global population of service engineers.

Communities of practice

According to David Snowden, director of IBM's Institute of Knowledge Management, communities of practice lie at the heart of knowledge management practice.¹⁹ Communities of practice are defined simply as groups that share a common expertise. Etienne Wenger and William Snyder, writing in the Harvard Business Review, offered a more detailed description of what they are and how they function:

"They're groups of people informally bound together by shared expertise and passion for a joint enterprise - engineers engaged in deep-water drilling, for example, consultants who specialise in strategic marketing, or front-line managers in charge of cheque processing at a large commercial bank. Some communities of practice meet regularly - for lunch on Thursdays, say. Others are connected primarily by e-mail networks. A community of practice may or may not have an explicit agenda on a given week, and even if it does, it may not follow the agenda closely. Inevitably, however, people in communities of practice share their experiences and knowledge in free-flowing, creative ways that foster new approaches to problems."²⁰

Yasmin Merali, director of information systems research unit at Warwick Business School, suggests the following three elements are necessary to develop a community of practice:

Because communities of practice are informal networks they tend to resist supervision and control. And people cannot be mandated to join one. Nonetheless, organisations can cultivate communities of practice by helping to bring the right people together and by establishing a supporting infrastructure (space to meet and collaborative technologies, for example). The Conference Board recommends that executives should "foster such communities and explain their value, but avoid getting in the way".¹⁵ Michael Burtha of Johnson & Johnson, the healthcare products business, has spelled out the common characteristics of a successful community of practice.¹² They are:

Johnson & Johnson's communities of practice consist of people in the same location, and geographically dispersed employees who collaborate via electronic means.

The KPMG 2000 survey of knowledge management reported that 27% of participating companies had nurtured communities of practice in their organisations.¹ Examples include: BT Global uses communities of practice, which are described as "people brought together by similar goals, interests, beliefs or activities" (see figure 5.1, Chapter five ). The company believes communities of practice, which were first established in its Global Business markets unit, will facilitate the sharing and use of knowledge across the business unit; Cap Gemini, one of Europe's largest IT consultancies, which operates several communities of practice to enable experts from different parts of the business to share and create knowledge;²² Enterprise Oil, which sees them as ideal knowledge sharing vehicles for its 700 mainly expert staff (see case study 3, Chapter five ); legal firm Linklaters also adopts its own version of communities of practice. As part of an emphasis on networking, Linklaters encourages small groups of information officers and professional support lawyers who work in the same practice areas and whose disciplines overlap to meet regularly (see case study 5, Chapter five ).

KNOWLEDGE GATHERINGS

Knowledge fairs and other corporate gatherings enable employees to congregate and network with their peers and other company personnel. These forums are a good way of transferring knowledge across business units and departmental boundaries. They permit participants to talk and make contact with employees in other parts of the organisation who they usually do not get the opportunity to meet. Knowledge forums, such as fairs which bring together people from across the business, work best when they are unstructured and individuals have the freedom and time to explore what is on offer and to make their own contacts.

 Davenport and Prusak contrast the approach the consultancy Ernst & Young (E&Y) and the Australian research business CSIRO took to the establishment of knowledge fairs and that taken by a large hi-tech company.⁸ Whereas E&Y and CSIRO gave employees ample time and space to follow their own agendas and create their own networks, the hi-tech company arranged a highly structured three-day conference for its 300 senior managers. No time was set aside for people to talk about the conference sessions or their work. Feedback from participants rated the conference a failure. "The lesson to be learned," according to Davenport and Prusak, "is not that fairs are good and conferences are bad, but that in any gathering there needs to be room for choice and time for conversation."

Celemi, the Swedish-owned consultancy specialising in developing business simulation tools, holds regular gatherings for staff from its offices worldwide (see case study 2, Chapter five ). For example, development days - usually held at the head office in Malmö over two days - are frequent. This forum is designed to encourage knowledge sharing by giving employees from around the world the opportunity to discuss with each other what they are doing and which companies they are working with. There is also the twice yearly "discovery" sessions in Malmö to which potential customers are invited - a recent event attracted 200 people from 90 companies - to learn from satisfied clients and to gain hands-on experience of Celemi's products. Again, this is seen as a good way of building contacts and of sharing knowledge.

TEAMWORKING

Teamworking relies on cooperation and collaboration for success. Under such circumstances, knowledge transfer will occur naturally as group members share their know-how and experience to achieve common objectives. As two learning theorists have explained: "Experience at work creates its own knowledge and, as most work is a collective, cooperative venture, so most depositional knowledge is intriguingly collective - less held by individuals than shared by work groups."²³ A Conference Board report on knowledge management found that almost a third of organisations participating in the study believed teamworking was either "great" or "good" way of transferring knowledge.¹⁵ A further third rated it as average.

Teams are generally small, which, together with the close working relationship of group members, aids knowledge transfer. The principle "small is good for knowledge sharing" has been adopted by the Swedish company WM-data.²⁴ No work unit at the computer software and consultancy business has more than 50 employees. WM-data takes the view that relatively small units create a sense of "family and belonging, which enhances trust and knowledge sharing.

The management principles at the Swedish consultancy Celemi owe much to those developed by Karl Erik Sveiby after he purchased the weekly business journal Affärsvärlden in the late-1970s (case study 2, Chapter five ). In order to generate better sharing of tacit knowledge among the editorial group at Affärsvärlden, articles were written by teams. This action reduced the traditional competition between journalists and so aided knowledge transfer.

Other companies that regard teamworking as a good method of knowledge transfer include the US steel manufacturer Chaparral Steel.²⁵ Its mini steel mill in Texas, reinforces collaboration and cooperation through team goals rather than individual performance. Employees work in teams, with team leaders rotated frequently, and operations are closely integrated to overcome barriers between departments. Also, teams collaborate to improve operations and develop new working practices. There is no blame culture and experiments to improve efficiency are tolerated.

THE ROLE OF HR

Whether it is the promise of a financial or non-financial reward, or whether there are other tangible benefits, such as greater know how or a process that makes the job easier, from spending time and energy on knowledge sharing, self-interest permeates most individual decisions about knowledge collaboration. The importance of human interaction in transferring tacit knowledge indicates a significant role for the human resources function.

The goal of a knowledge management initiative is to make knowledge sharing part of the organisation's day-to-day processes. This requires a connection between sharing knowledge and the corporate vision and strategic business goals. Performance management systems and competency frameworks can provide the means of establishing clear knowledge-sharing goals for teams and individuals that are linked to corporate objectives.

PERFORMANCE MANAGEMENT

One study of knowledge management asked participating companies to rate the effectiveness on knowledge sharing of different HR initiatives.¹⁵ The best initiative, rated either "great" or "good" by 44% of firms, was 360-degree feedback. One commentator has claimed that 360-degree feedback is the only means of "comprehensively revealing how successful an individual is in all their important working relationships."²⁶ This form of appraisal is becoming increasingly popular and is an integral feature of current performance management practice. And it is performance management systems that many companies have turned to as a formal means of establishing behaviour that regards knowledge sharing as a key feature of work.

IBM highlights the role its performance management system, which includes 360-degree feedback, plays in getting staff to share knowledge in the following statement: "When we introduced our new performance management system a number of years ago, teaming was introduced as an essential part of our personal business commitment, which included 360-degree peer input. How well people share with others and mentor others is measurable. Successful execution, however, requires managers to fully understand the importance of teaming and setting well-defined goals to take advantage of it."¹⁵

BT Global has introduced a new element to both staff appraisals and performance management plans that recognises knowledge sharing. Questions that employees may now be asked as part of their appraisal include "when have you used the knowledge management system?" and "what information have you shared with colleagues?" (see case study 1, Chapter five ). Linklaters has also attached knowledge elements to its performance appraisal system. Although the spread of "know-how" has been pursued at Linklaters for a number of years, it was only in 1998 that it was formally included in the appraisal of lawyers. According to Juliet Humphries, director of legal information and know-how, this has helped to put the importance of know-how more firmly on the agenda and into people's minds (see case study 5, Chapter five ).

Not only can a performance management system encourage staff to share knowledge, it can also ensure they use what they learn and enhance their own knowledge base. Because the best learning takes place when people are actively engaged in a task, setting stretching goals during the performance review process can have a positive impact on spreading and developing knowledge. People will be required to actively pursue solutions and to acquire the necessary competence etc to achieve their goals. Performance management systems can also encourage wider membership of knowledge-sharing forums, such as communities of practice.

The performance review process at Cap Gemini, which has been revamped to support knowledge sharing, also includes objectives related to other knowledge management activities.²² All staff have knowledge management goals and this component consists of following five key criteria:

Competency frameworks

Competencies - these are the personal characteristics that make an individual effective in a given role, including behavioural attributes, such as whether they are a reliable team member, and specific job-related skills - have grown in popularity in the UK over the past few years. Most companies introduce competency frameworks to improve individual performance and to support their core corporate values and business priorities.²⁷ Many assess the development of competencies as part of the annual performance review process for employees. Adding knowledge competencies that are linked to business goals to an individual's personal objectives can support greater knowledge sharing and creation. It makes staff aware of the knowledge behaviours they must demonstrate

The competency frameworks of several UK companies feature knowledge-sharing components. These include: Baring Asset Management, the financial services company with 1,500 employees, which includes "sharing knowledge and experience with team members" as part of its "working in a team" competency framework; and Sema Group, the IT services provider, employing 6,000 staff, which refers to "actively shares information/knowledge with team" at level two of its teamwork competency framework.²⁷

Enterprise Oil has also adopted the competency approach. A new competency-based performance appraisal system was deployed at the same time as the company's knowledge management project, so it made sense to include a specific competency focusing on knowledge sharing. This is included in every employee's performance appraisal and all staff have at least one objective relating to this area. "By linking knowledge sharing to every employee's work in this concrete way, it becomes a much more integral part of the company's day-to-day business," says John Keeble, head of knowledge management at Enterprise (see case study 3, Chapter five ).

RECOGNITION AND REWARDS

As was acknowledged earlier, financial incentives for knowledge sharing are rare. Celemi's Gideon Berntö is adamant that knowledge-sharing activity should not receive a financial reward (see case study 2, Chapter five ). Financial inducements to exchange knowledge are unlikely to have any lasting impact on behaviour. The Conference Board study of knowledge management referred to above, and which rated the effectiveness on knowledge transfer of different HR initiatives, placed "compensation for knowledge sharing" bottom of its list of 22 such HR tools, with 36% of participants rating it "poor" or "very poor".¹⁵ Nonetheless, 55% of the companies in the study did use financial reward to support knowledge transfer. A similar figure was reported by the KPMG 2000 survey of knowledge management.¹ It found that 49% of companies with a knowledge management programme rewarded knowledge working, although it did not specify whether these were financial or non-financial rewards, or a mix of the two.

Evidence suggests that many organisations do provide a mix of financial and non-financial incentives to staff to share knowledge. One firm that offers financial incentives for knowledge sharing as part of a range of rewards is PricewaterhouseCoopers. The accountancy and consultancy company awards "spot bonuses for exemplary knowledge-sharing efforts".¹⁵ Other rewards at the company include promotions and peer recognition. Another organisation that takes a similar intrinsic and extrinsic approach to rewarding employees for knowledge activities is the DERA, the Ministry of Defence's technical support agency.²² It finds that peer recognition is a "key enabler" among its mainly scientific community, although small financial awards are also paid.

Other firms have also recognised the power of peer group recognition on an individual's decision to share knowledge. Returning to the Xerox example referred to earlier, the engineers decided to attach names to the tips submitted to the Eureka database because of the social capital that would result. John Seely Brown and Paul Duguid, writing in the Harvard Business Review, highlight this.¹⁸ They retell the story of the Xerox engineer who received a spontaneous standing ovation from co-workers at a meeting of Xerox engineers in Canada out of respect for his tips. While heightened social capital is a significant inducement to exchange knowledge, a further benefit from developing a reputation for sharing is career advancement.

Career progression

Traditionally, people are promoted on the basis of the knowledge they hold. This reinforces the "knowledge is power" syndrome and reduces the likelihood of people sharing what they know. However, if career progression is based on how well a person transfers knowledge this will become the norm. Promotions based on this principle send a clear message to staff about the value to the company of knowledge exchange and that an employee's contribution to the expansion of the corporate knowledge base will be recognised and rewarded. Employees who earn a promotion on the back of their willingness to share knowledge will receive a tangible benefit in the form of a higher salary.

Several companies have opted to link career opportunities to personal knowledge activities. Aside from the Buckman Laboratories example earlier, knowledge sharing is also a feature of promotions and partner admissions at PricewaterhouseCoopers. A further example is building supplies merchant Jewson. The company, which has around 550 outlets in the UK, established a monthly workshop for managers from its top-performing stores to share best practice. Participants share experiences and benchmark their performance against that of their peers. Involvement in the workshops has become an aspiration for managers across the company because it is regarded as a valuable personal development opportunity. Several participants have been promoted to regional management as a direct result of their involvement.²

1     Knowledge management research report 2000, KPMG Consulting, www.kpmg/consulting.com

²     Releasing the value of knowledge, Cranfield School of Management/Microsoft, survey of UK industry 2000, www.microsoft.com/uk/knowledgereport

³     Reported at the British Psychological Society annual conference, January 2000.

⁴     "Digital economy diminishes usage of management tools", Bain & Company, press release, 3 May 2000, http://www.bain.com/marketing/insights/toolspressrelease.html

⁵     Jean-Yves Prax, speaking at the eighth Human Resources World Congress, Paris, May 2000.

⁶     Report on knowledge management seminar held at St Anne's College, 1999, in Said Business School News, issue 3, Michaelmas 1999.

⁷     Managing knowledge for business success, Don Cohen, David E Smith, Larry Prusak and Richard Azzarello (1997), The Conference Board, report 1194-97-CH, ISBN 0 8237 0643 5.

⁸     Working knowledge: how organisations manage what they know, Thomas Davenport and Laurence Prusak (1998), Harvard Business School Press, Boston, Massachusetts, ISBN 0 8758 4655 6.

⁹     Quoted in Beyond knowledge management: new ways to work and learn, Brian Hackett (2000), The Conference Board, report 1262-00-RR, ISBN 0 8237 0711 3.

¹⁰    The new organisational wealth: managing and measuring knowledge-based assets, Karl Erik Sveiby (1997), Berrett-Koehler Publishers, San Francisco, ISBN 1 5767 5014 0.

¹¹    Common knowledge: how companies thrive by sharing what they know, Nancy Dixon (2000), Harvard Business School Press, Boston, Massachusetts, ISBN 0 8758 4904 0.

¹²    Managing knowledge in the new economy, Don Cohen (1998), The Conference Board, report 1222-98-CH, ISBN 0 8237 0671 0.

¹³    "Assessment of the state of intellectual capital in XY Corp", Karl M Wiig (1999), working paper KR1, 1999-3, Knowledge Research Institute, http://www.knowledgeresearch.com

¹⁴    "Comprehensive knowledge management", Karl M Wiig (1999), Knowledge Research Institute, http://www.knowledgeresearch.com

¹⁵    Beyond knowledge management: new ways to work and learn, Brian Hackett (2000), The Conference Board, report 1262-00-RR, ISBN 0 8237 0711 3.

¹⁶    Creating a knowledge-sharing culture: consortium benchmarking best practice report, American Productivity and Quality Centre (1999).

¹⁷    "Overcoming the 'cultural barriers' to sharing knowledge", Richard McDermott and Carla O'Dell, American Productivity and Quality Centre (2000), http://www.apqc.org/free/articles/km0200/

¹⁸    "Balancing act: how to capture knowledge without killing it", John Seely Brown and Paul Duguid, Harvard Business Review, May-June 2000.

¹⁹    "Liberating knowledge", in Liberating knowledge, Confederation of British Industry/IBM Global Services, Caspian Publishing, London, ISBN 1 9018 4413 7.

²⁰    "Communities of practice: the organisational frontier", Etienne C Wenger and William M Snyder, Harvard Business Review, January-February 2000.

²¹    "Self-organising communities", Yasmin Merali, in Liberating knowledge (2000), Confederation of British Industry/IBM Global Services, Caspian Publishing, London, ISBN 1 9018 4413 7.

²²    Developing the knowledge creating culture, Christina Evans (2000), Roffey Park Institute, Horsham, www.roffeypark.com

²³    "Organisational learning and communities of practice: toward a unified view of working, learning and innovation", John Seely Brown and Paul Duguid, Organisation Science 2, 1991.

²⁴    "What is knowledge management?", Karl Erik Sveiby, updated April 2000, http://www.sveiby.com.au/KnowledgeManagement.html

²⁵    "Successful knowledge management: does it exist?", Karl M Wiig, European American Business Journal, August 1999.

²⁶    Quoted in "A rounded view ", IRS Employment Review 705, June 2000.

²⁷    Competency & Emotional Intelligence annual benchmarking study, 1999/2000, IRS/Eclipse, London.

²⁸    "Creating a give and take culture", Erika Lucas, Professional Manager, May 2000.