Knowledge is a fleeting element within organizations. It takes years for workers to cultivate expertise. But those workers come and go, tempted by new opportunities elsewhere or by the beckoning of retirement, leaving gaping holes that have to be refilled by less seasoned talent.
As a former head of Hewlett Packard once described it, "If only H.P. knew what H.P. knows, think of how much more successful we would be."
Indeed, imagine how much more dynamic any corporation could be if it could just get the right information to the right people at the right time. That sentiment lies at the heart of "knowledge management." KM, as it's called, is an organizational concept that seeks to turn raw information into the far more valuable commodity of knowledge at a community level.
According to Dr. Carla O'Dell, president of research firm APQC, knowledge management has come of age, driven by societal shifts and the onset of the digital world, allowing companies to organize their business model around shared knowledge.
O'Dell sat down with Business Finance to discuss the new playing field for KM, strategies companies are employing to maximize shared information, some of the myths associated with it, and her book, The New Edge in Knowledge: How Knowledge Management Is Changing the Way We Do Business , co-authored with Cindy Hubert.
Business Finance: How far back have companies been using the concept of knowledge management?
Dr. Carla O'Dell: You can answer that question in two ways. Since it's been called "knowledge management," and its various incarnations in the modern business age, 1993 would be the first instance in the use of the term. But the other way to think about it is people have been doing this ever since they developed language and began sitting around the campfire.
BF: You write that knowledge management, as we've come to know it, is driven by two major forces: the information age and the societal changes of an aging workforce.
CO: It's true. But I don't think those two are unrelated because a generation of people born since 1975 or later never experienced any other way of networking with other people and getting information than through the worldwide Web. If they do, they don't remember it.
So the generations and the technology evolved together and I think this concept was created to help people get the right information at the right time from the right people so they can make good decisions, which is certainly what finance people care about. The new technology just makes that a little more frictionless.
BF: What are some of the myths associated with knowledge management?
CO: One myth is that since most of us now are so comfortable with new media, such as social networking, you would think that if you throw up some social networking application inside your organization, you don't have to do anything to get people to share what they know. That's absolutely not true and it won't do any better than any other boring website you ever put up that no one ever came to. The myth that it's viral and will spread like wildfire internally is not true. Susan Boyle on "Britain's Got Talent" is viral or Puppy Cam on YouTube is viral.
People only share information and knowledge with people they already know and trust. They have to have a reason to do so. Creating that reason and energy to do it is still the challenge that requires responsibility and ingenuity inside an organization.
BF: What are some other myths?
CO: Another myth is that it's more insecure and more risky than other kinds of transmission. Again, not true. It's only true if it's happening outside your firewall. It's not any riskier than what people already say around the water cooler. If you have good business rules and you've taught people what's appropriate and what's not appropriate to say in the workplace and via email, they're not going to do any differently within any other corporate-sponsored site.
The third myth is that only young people are early adopters of technology and new ways to communicate. The data just doesn't support that. It's the people over 40 who have the money and who were buying the iPads first. The fastest growing group on Facebook is over 65 years old. Most of the technologies being purchased in organizations are being purchased, sanctioned and used by people over 40. That whole thing about there's a generation gap in usage, there's absolutely no data to support it.
BF: What are some of the costs associated with technology to help spur knowledge management? What is the level of concern among executives on those costs?
CO: Most executives have already spent so much money on technology that all they're interested now is getting an ROI on what they already spent. Our mantra is just to leverage what you've already got and try not to add any additional hardware or software cost. There are some software costs associated. If you already have SharePoint, I would just use that.
The costs are not in the technology. They are in human enablement, in generating community leaders, encouraging other people to participate, and finding a way to share the information in a way that's easy. Those are people tasks. The Holy Grail is getting the people to take the time to share what they know.
BF: What are some other elements a knowledge vision should incorporate?
CO: Once you've laid the pipes and create the connections, the money is going to come from the transfer of best practices. But once you've connected people, the trick is to then make sure what people are sharing is best practices and that the adoption rate is high.
Information alone isn't enough. We've always found in our research a four-to-one difference in the productivity in finance organizations with multiple sites that practice transfer of best practices. That tells me that if you look for best practices outside and you try to transfer those, you're going to get on average an even bigger payoff than just doing it internally.
BF: What are some of the top best practices examples that you saw in your research?
CO: Good examples of what we call world-class, results-oriented knowledge management programs are Conoco Philips, for example, whose ability to connect with people around the world has led to literally billions in cost savings in revenue opportunities. They have documented thousands of those, signed off by the CFO, so that they're not considered vapor wear.
IBM has built their business model around it, with their ability to deliver integrated solutions worldwide, not just hardware, but systems integration. The auxiliary sourcing is a function of their ability to share their knowledge among individuals and teams quickly so people can do that no matter where they're located. Twenty years ago, IBM used to stand for I've Been Moved. Today, it stands for I'm By Myself. Most people don't go to an office. You could shoot a cannon at an IBM headquarters and you wouldn't hit anybody.