Nick Milton: The Business Value of Knowledge Management. VidenDanmark. 30 maj 2012

Business Value
of Knowledge
Management
Nick Milton
Knoco Ltd
www.knoco.com
www.nickmilton.com

© Knoco Ltd – all rights reserved

Knowledge and
Performance

Apply

Knowledge Performance

Learn

Copyright Knoco Ltd, all rights reserved

A story

John Henderson, Boston
Speaking at BP, 1997


The rationale behind KM
 Get A from B to C
 As effectively and efficiently as possible

 Where A is the critical knowledge that decision makers at
all levels need
 B are the decision makers
 C is the source of the knowledge

Copyright Knoco Ltd. All rights reserved

Transfer of practice
from one site to another


Demonstrating
the value Using all
knowledge
and best
practice

With no
knowledge


AAR – Jwaneng mine
Knowledge Opportunity
190h for VALUE add

Additional Upgrade
TIME / COST

Project At Same Time

70h

GA GB GC GD GE GF GG

Main Treatment Plant - Double-Deck Screen Replacement Project

What’s different about
knowledge?
Data
A pressure reading,
in one place, at one
time

Information
Data structured in
such a way as to
“tell you something”

Knowledge?
What does this
mean? What action
should I take?


Where knowledge comes
from

Data Info

knowledge decision action

experience

Reflection/
Performance
Analysis


How does KM work?


A series of
knowledge-focused roles

Provide KM Leadership
Acknowledge experience sharing
SENIOR
Setting clear expectations
MANAGER

Maintaining the “knowledge bank”
for their practice – up to date, useful
PRACTICE accessible material
OWNER

Ensuring use of, and sustainability of,
the KM Framework
KM TEAM

Building the experience-sharing
networks, managing the
COP LEADER conversations

Planning and coordinating KM
activities at project level
PROJECT K
Copyright Knoco Ltd. All rights reserved MANAGER

KM processes embedded
into the working cycle
FEL1 FEL2 FEL3 Exec Start-up Ops

Lessons Learned
Mandatory Reviews
activity

Create KM plan, review at each new stage

Peer Assist
Optional
activity

After Action Review


A suite of Technology
For Community of For knowledge
Practice (Open capture and re-use
discussion) (Written Document)
Knowledge
Library
• Guidance
documents
• Best Practices
• Working Examples
Company lessons
management
system
• Lessons applicable
to region/function
Project lessons
management
system
• Lessons Learned From
projects

Governance Clear KM
expectations.
Policies and
Standards for
Experience
Management

Support, including
training, reference
and coaching

KM performance metrics,
linked to recognition and
reward

What Knowledge?
 Three Questions to
deliver business value

© Knoco® Ltd.

Q1 What do we need to
be able to do?

© Knoco® Ltd.

Q2 What do we need to
know?

© Knoco® Ltd.

Q3 – how do we manage
it?
 Answer – it depends on the knowledge


Knowledge end-members
Basic, static Improving, evolving
 Basic process  New knowledge, tips,
knowledge hints, improvements
 Standard practice  Best practice

 Training, supervision  Knowledge sharing

 Classroom or e-  Learning from peers
learning and experience
 Manuals, instructions  CoPs, wikis, lessons

 Traditional role of L&D  Traditional role of KM

Four cases
New,
Improving

Low level of High level of
knowledge in knowledge in
the business the business

Basic, Static
© Knoco® Ltd.

Innovation and
Knowledge Acquisition
New,
Improving


Basic, Static
© Knoco® Ltd.

Develop and build Networks
to develop “best practice”
New,
Improving


Basic, Static
© Knoco® Ltd.

Protect against loss,
standardise and deploy
New,
Improving


Basic, Static
© Knoco® Ltd.

Outsource and Quality
Assure
New,
Improving


Basic, Static
© Knoco® Ltd.

Example 1
 Mars, new markets
 Strategy – Growth
 What do we need to know? – how to
distribute and sell “impulse goods” in
the 3rd world
 The knowledge – new/improving,
dispersed, relatively few people know it


Mars New Markets
“In 2004, the Mars, Inc Presidents identified a
challenge in our newer markets in the
developing world.

These are markets where the bulk of consumer
spending occurs in small local shops.

We wanted to achieve a step-change in the
number of small retail outlets which sell our
products, and so drive a rapid increase in sales
in these markets.

The challenge covered 12 markets, in which there
are approximately 12 million shops, and 3.5
billion potential consumers of Mars products”

Linda Davies of Mars, writing in “KM for teams and projects”,
Nick Milton


The solution
A Knowledge Sharing Network – the New Markets
Global practice group
meets every 6 months, face-to-face, hosted by one
of the markets.
The meetings are focused on sharing, learning
lessons, and discussing


Meeting structure


The results
In the 5 years this network has existed, sales in the
small retail channel in the 12 markets have trebled
and the percentage profit has more than doubled,
adding around $250 million to the bottom line.

“Whilst it would be unfair to claim this was entirely
due to knowledge sharing, the GPG members
themselves clearly point to the ideas and lessons
they have gained from others as fundamental to
their success”.

Linda Davies of Mars, writing in “KM for teams and projects”,
Nick Milton


A systematic framework

Learn
during

Leveraging
People
$
Learn Learn
Goals & Using Results
before after
Knowledge
&
Teams

Framework 2

Knowledge
Bank Knowledge Assets

Learn
during

Leveraging
People
$
Learn Learn
before after
Knowledge
&
Teams

Framework 3

Knowledge Assets

Communities of
Practice
Learn
during

Leveraging
Business
$
Learn Learn
before after
Knowledge
roles

Example 3 – cautionary
tale
 Boeing
 Strategy – maintain and grow sales
 What do we need to know? – build and
deliver planes
 The knowledge – basic knowledge,
held by ageing workforce


Early Retirement at
Boeing
 When Boeing offered early retirement to 9,000 senior
employees during a business downturn, an unexpected rush of
new commercial airplane orders left the company critically
short of skilled production workers.
 The knowledge lost from veteran employees, combined with
the inexperience of their replacements, threw the firm’s 737
and 747 assembly lines into chaos. Overtime skyrocketed and
workers were chasing planes along the line to finish assembly.
 Management finally had to shut down production for more than
three weeks to straighten out the assembly process, which
forced Boeing to take a $1.6 billion charge against earnings and
contributed to an eventual management shake-up.
Press and Journal Scotland, 1/9/2008


Questions?

 nick.milton@knoco.com
 www.knoco.com
 www.nickmilton.com


Introducing KM
A change-focused approach

© Knoco Ltd – all rights reserved

The culture shift - a
change in emphasis
 “We know”
 “I know”  “Knowledge is ours”
 “Knowledge is mine”  “Knowledge is inter-personal”
 “Knowledge is personal”  “Knowledge is shared”
 “Knowledge is owned”  “Knowledge is collective/ community
 “Knowledge is personal property” property”
 “Knowledge is personal  “Knowledge is company advantage”
advantage”  “I am open to better knowledge”
 “I defend what I know”  “Invented in my community”
 “Not invented here (i.e. by me)”  “New knowledge improves my
 “New knowledge competes with personal knowledge”
my personal knowledge”  “Shared knowledge helps me"
 “Other people's knowledge is a  “I will share whether I am asked or
threat to mine“ not”
 “I won’t tell if I’m not asked”  “Asking is the first step to learning”
 “Asking is a sign of weakness”  Sharing and learning is High Priority,
 Not a priority to share and learn for me and for the company

Copyright Knoco Ltd. All rights reserved © Knoco Ltd – all rights
reserved

How big is the culture
gap?

20 cm

reserved

So how do we change
the culture?

20 cm at a
time!

Photo from Flickr under a creative commons
licence, originally uploaded by
AndYaDontStop

The personal balance

KM takes Time.
KM helps me do my job
KM takes Effort.
KM helps the company
KM takes Thought.
KM gives me a higher
KM is Exposing.
profile
KM requires Change.
It’s easy – I’ve been
I don’t know how.
trained
Nobody else is doing it.
My peers are doing it
My manager doesn’t
My manager expects it
care about KM
KM is rewarded
I can get away with not
If I don’t do it, my
doing it
career will suffer

reserved

A Change Program


Your strategy

laggards Introduce
% performance mgt
change

The majority
Introduce
framework
First followers
Introduce pilots
Time

reserved

Change factors
 Logic
 Emotion

Expectation

Peer pressure
reserved

First followers

 Apply KM Pilots
 To key business problems
 Where you find the first followers

 Introduce the elements of KM
 Deliver value
 Recognise the followers
 Publicise the results
 Be visible – be easy to follow
 Appeal to EMOTION
reserved

Be Visible

Be Easy to Follow


The majority
 The majority will “do KM” if it is part of the job
 So make it part of the job!
 Develop and roll out a framework for managing
knowledge
 Embed it into normal processes such as project
management, performance management,
customer management
 Appeal to EXPECTATION

reserved

Standards, expectations,
accountabilities
 Each project will do the following minimum
 ……
 ……
 ……
 Lessons will be identified as follows ……
 Each key knowledge area is owned by ........
 The KM team will ........
 Corporate Knowledge will be retained as
follows ……

reserved

The laggards
 Measure the use of KM
 Publicise the results
 Use PEER PRESSURE
 Get tough with the people who don’t
comply

reserved

KM Metrics and reward
– Conoco example
 Metrics gathered on an annual basis and reported to steering team and sponsor
 Community activity
 Community Maturity
 Community Value Added
 Annual awards program for Knowledge Management – “Archimedes Awards”
 SUCCESS STORY OF THE YEAR
 NETWORK OF YEAR
 GIVE
 GET
 GATHER
 GUTS

http://www.conocophillips.com/
EN/about/company_reports/spiri
t_mag/Documents/spiritMagazin
e1Q10.pdf

Link to career
progression
“If you are not willing to contribute or participate, then you
should understand that the many opportunities open to you in the
past will no longer be available”
Bob Buckman, Buckman labs, memo to associates,
quoted in Journal of KM

“Our approach is far more Stick than Carrot. We say “Sharing
knowledge is your job. Do it! As a reward, you may keep your
job”

Melissie Rumizen, Buckman Labs Knowledge strategist

Copyright Knoco Ltd, all rights reserved © Knoco Ltd – all rights
reserved

Staged approach
to implementation

System
Strategy
Assessment Testing and Roll-out Operation
Development
Piloting

Do we have an Is the model Is roll-out
agreed plan? robust? complete?


Change process

5

Laggards
Apply and monitor
the framework

4
% Involvement

Neutral
Roll out the
KM framework

Assessment 3

Supporters
and Strategy
Test, pilot,
prove the concept
1 2
Time

Nick Milton: The Business Value of Knowledge Management. VidenDanmark. 30 maj 2012

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