Karpuramanjari: Knowledge Management in Organizations: III

We have seen that knowledge management essentially deals with acquisition, construction and transfer or sharing of knowledge among the members of the organization, so as to facilitate better accomplishment of organizational goals. Research findings also indicate that the organizational culture and the communication strategy adopted to facilitate free dialogue among the team members are the two critical elements that were found resulting in effective knowledge sharing. The very fact that knowledge is collated from and, in turn, shared among the members of an organization and the role of culture in facilitating smooth sharing of knowledge, only highlights the criticality of human resources in the management of knowledge.

Learning in the organizations mostly occurs within groups. Social learning may be defined as the process by which knowledge and practices built in the system are transmitted across different work situations and across time and procedures that facilitate generative learning. This, in turn, enables an organization to react creatively to unanticipated developments. Research findings also indicate that effective social learning in the organizations calls for empowerment of staff to seek and experiment with new knowledge; trust and mutual respect among the members; a culture that encourages employees to take risks; ‘forgiving culture’ of mistakes that encourages knowledge construction based on the lessons learnt; cohesion among the team members that encourages sharing of knowledge and goals; and transparent decision-making across the organization. The scope for social learning is found to be enhanced with the usage of ‘dialogue’, which involves “going beyond individual consciousness into mutual communing to perceive reality correctly and to learn of a larger reality”. The value of dialogue to knowledge development can be appreciated from the fact that dialoguing facilitates generation of new meanings through collaborative thinking and mutual communing. All this only highlights the importance of human resources in the entire gamut of knowledge management.

Box 1: Knowledge Workers – Characteristics

· Technical abilities

Information technology skills – to be successful, knowledge workers should develop three capabilities: one, information technology literacy – understanding about computer and telecommunication technologies, so that one can use it as a resource to solve business problems and issues; two, information technology competency – ability to use IT for meeting information needs, and three, information literacy – ability to find, manipulate, analyze and interpret information that enables better business decisions.
Academic background – highly qualified, with technical skills and expertise within a specific discipline.
Technical ability – they should possess teaming skills, communication skills, project management skills and decisionmaking skills. They should also know their importance in the organization so that they could keep themselves updating their knowledge in the areas of business’ demands.

· Cognitive abilities

They should have creativity and intuitive thinking. They must be independent, resourceful, innovative, enterprising, cooperative, and versatile persons who learn new things throughout their life, for they have to convert information into knowledge using their own competence as a tool.

· Emotional abilities

It is a fundamental characteristic of the knowledge worker. Lynn lists five essential factors: self-awareness and control, empathy, social expertness, and mastery of purposefulness. Acquisition of self-control is essential for a human being to survive. A person sans self-control is like a kid – unable to control one’s own desires and fashions.

Source: Adapted from “Characteristics and Necessary Abilities of the Knowledge Worker” by Regina Negri Pagani, Luiz Alberto Pilatti and Hélio Gomes de Carvalho, The Icfai Journal of Knowledge Management, Vol. IV, No. 3 (September), 2006.

6. What HRMD should do for Better Knowledge Management?

Research findings indicate that Human Resource Management Department (HRMD) must strive to create essential social learning enablers in an organization to ensure effective knowledge management. Some such critical enablers are:

Positive communication climate – where people can freely approach the manager and say, “Hi! I don’t understand this. It might be stupid, but would you please help me figure it out?”;
Effective leadership – that depicts accessibility to their staff, non-judgmental approach to the staff and the issues that they bring to the manager;
Goal alignment – that ensures cohesiveness between the leaders and the team and within the team members; that enables everyone to know where the other is heading, and listening to everyone’s problems and making everyone understand what and why changes are happening;
Constructive performance management – that sets realistic goals before every member and the performance is rightly recorded and measured;
Valuing skills and reward and recognition strategies – the very fact of being valued makes an individual willingly engage in a dialog with team-mates, learn and share knowledge with others resulting in team cohesiveness; in short, it is simply practicing the common axiom ‘praise is better than money’;
Enabling workplace design – workplace design that fosters physical proximity ensures better communication among team members resulting in good engagement in dialog;
Team-based morale – learning in organizations is basically a social process of interaction which is facilitated by dialog and unless high morale prevails among the team members, dialoging cannot take place freely;
Socializing – feeling good about the colleagues in the team is a great motivating factor to generate a sense of belonging to the group; such identity results in awareness about the expertise possessed by team members; healthy social relations build trust, make people learn faster and make them more creative and productive; informal socialization leads to better and easy sharing of knowledge; and
Timely induction programs – induction programs conducted for new recruits well in time provides ‘foundation knowledge’ to the raw members; such programs minimize the scope for misunderstandings; pave the way for better working relationships by reducing anxiety; also improve the efficiency of new members by letting them know as to what is expected of them.

These enablers are likely to develop a suitable architecture for effective management of knowledge in the organizations but are also potent enough to pose challenges to knowledge management, if not effectively used.

Box 2: Knowledge Management @ Tata Steel – A Case Study

In 2003, Tata Steel was chosen as one of Asia’s Most Admired Knowledge Enterprises (MAKE). It was the only company in the manufacturing sector in India, and the only steel company in the world to receive this award. The award was in specific recognition of Tata Steel’s Knowledge Management (KM) initiatives, which were started in the late 1990s.

It made it compulsory for all its employees to participate actively in its KM program. The company based its new performance assessment program on the participation of each individual employee in the KM program through the introduction of a “KM index”.

Tata Steel’s KM initiatives were successful and the number of hits at KM sites of Tata Steel in 2001-02 was 1100 compared to Shell’s (the second most admired company in Europe) 1000 hits, even though Tata Steel had only 3000 registered users as compared to Shell’s 10000 registered users. Through Tata Steel’s KM initiatives, expert skills became available to the organization, and productivity increased. As employees were encouraged to come out with innovative ideas, their job satisfaction increased, and another benefit was a reduction in the R&D (Research and Development) expenditure.

KM Initiatives at Tata Steel

The KM program at Tata Steel was started in 1999. The KM process was started by bringing together a group of people with exposure in different fields, but completely inexperienced in implementing KM. The company felt that KM was a cultural transformation rather than a project. Thus, involving a group of people from within the company with the support of the top management was likely to be more effective in implementing the KM strategy, than hiring people from outside.

The next step involved establishing a knowledge repository, where all the employees would participate actively. This repository was placed on the corporate intranet and all the employees shared their experiences of successes and failures in implementing projects. Employees were encouraged to participate actively in the knowledge management program through a Knowledge Piece (KP) or query on the KM site through the intranet. After verification by an expert, their contribution was posted on the site. If there was query by any employee, the author responded and the process was closed only after the person who inquired was satisfied with the answer (Refer Figure). For more effective KM, Tata Steel integrated the knowledge repositories at the division/department level with the main KM repository.

After the creation of knowledge repository, the next step was forming knowledge communities (Refer to Exhibit I). Knowledge communities were formed one year after the knowledge repository was established. Knowledge communities gave a forum to like-minded people to meet and share their experiences. Knowledge communities were not problem-solving platforms, but groups of people who came together to share their knowledge and to learn from one another through their experiences. Sometimes, knowledge communities took up a problem and solved it by brainstorming. Knowledge communities were not aimed at short-term gains, but were an investment for the company’s future.

Exhibit I: Phases of KM @ Tata Steel
Phase – 1 (1999-2000)	Phase – 2 (2000-01)	Phase – 3 (2001-02)	Phase – 4 (2002 Onwards)
Create Awareness	Knowledge Communities Kick-off	Design KM Index	Involvement of Supervisors
Design Processes	Security System in KM Portal Introduced	Design Community Index	Focus on Knowledge Creation by Communities
Design Systems		Deploy KM Processes across Organization	Virtual Communities
Launch of KM Portal		“Ask Expert” Launched	Customer and Supplier Knowledge
Create Success Stories		Recognition System Introduced
Adapted from www.tatasteel.com

Revamped Strategy

Though Tata Steel did make a good beginning in KM, there were some problems which were not addressed. Connectivity was still poor and access technology was not standardized. Many irrelevant contributions were being continuously made to the knowledge repositories. Said Ravi Arora, Head of KM at Tata Steel, “Worse, there were cultural problems with technology phobias and attitudes such as, ‘This is another method to downsize’ and ‘Why should I share my precious knowledge?’”

In May 2000, Tata Steel adopted a refined strategy for KM. It started organizing seminars on KM, and identified and recognized some successful KM efforts made by employees in the organization. In the same year, the company hired McKinsey consultants for advice on communities of practice. Communities of practice were established to work towards capturing the tacit knowledge of experts, improving the quality of the knowledge repository and encouraging usage of the repository. These communities included members playing five important roles viz., Champion, Convener, Practice Leader, Lead Expert and Practitioner. The communities focused on 21 areas, including iron making, steel making, rolling, maintenance, mining, waste management, cost engineering, and energy management. Employees were free to join any of the communities, irrespective of the area they belonged to.

Exhibit II: Factors Required for Successful KM Implementation

1. Connectivity

KM practice can be successful only through the best use of technology. Technology provides the infrastructure for knowledge sharing, and this KM architecture should be available throughout the organization.

2. Content

The internal and the external knowledge bases of the organization must be assessed before launching a formal KM system. This way an organization can assess the knowledge content available within the organization.

3. Community

Communities of practice or groups of people with similar interests contribute in a major way to the success of KM system.

4. Culture

Support and vision from top management, a shared sense of direction, trust, openness, excitement, and a willingness to continually learn from peers are key components of KM culture.

5. Cooperation

Cooperation is a key success factor, especially in order to overcome cultural, linguistic and other barriers that arise in companies operating across the globe.

6. Capacity

In addition to having a willingness to share and learn, an organization must have the “intellectual capital governance” capacity to take KM to a higher stage. This governance capacity must be deployed to build the necessary skill sets and systematically executing a KM strategy. Sometimes, the in-house capacity for KM needs to be assessed by an outside KM consultancy.

7. Commerce

Commercial and other incentives to embrace change in a knowledge economy must be implemented, and systems of appraisal and rewards for outstanding contributions through the repository and user answers in a KM system need to be introduced.

8. Capital

All the above need a huge capital investment by the company. The capital to be deployed is decided on the basis of the returns expected, which is computed using appropriate investment metrics.

Source: www.destinationkm.com

In spite of all these changes, only 240 users in 2000-01 felt that the available knowledge was useful and could be applied in their area of work, and in 1999-2000, only 100 feedbacks were received. Company officials were of the opinion that these numbers were too small for a company of the size of Tata Steel. The need of the hour was to improve the quality of knowledge available and to inculcate in the employees the habit of browsing so that they could acquire the knowledge stored, and use it.

With this objective in mind, in January 2001, Tata Steel introduced an index called the “KM Index”, to measure the performance of the system and reward successful KM initiatives taken by any employee. Each officer of the company was expected to score a minimum of 130 points on the KM Index. The scoring system would change, as the company evolved towards using knowledge proactively. In 2001-02, 70 points were assigned for making a valuable contribution to the Knowledge Repository, 30 points were assigned to one-time feedback, interaction or collaboration with the author of another KP, and another 30 points were assigned for the application of a KP from the site. In 2002-03, the scoring pattern was to be revised, and it was decided that by the time the organization became a true learning-organization with free flow of knowledge and information sharing, the points system would be done away with.

In early 2002, Tata Steel introduced a stringent monitoring system for KM activity. Employees started browsing the knowledge management pages more frequently. On the cultural front, employee attitudes transformed from one of, “I am an expert, I do not need new knowledge” to one of a continuous quest for knowledge; from just, “I need help” to “I can also help.” According to Arora, “The extent of organizational knowledge changed from narrow and shallow silos to wider and more permeable silos”.

To increase the effectiveness of KM, Tata Steel made two major changes in the organization. As a first step, performance evaluation of employees was linked to KM. The senior executives of the company started using a balance scorecard to monitor the performance of employees, divisions in the KM process, and for taking corrective measures to improve the implementation of KM. As a second step, Tata Steel also launched a formal rewards and recognition system for KM. The CEO rewarded the best performing employee, team and knowledge community.

Benefits Reaped from KM

Generally, any KM implementation has two sets of benefits: First, it reduces the cost of production and consequently, increases the revenue; and second, it leads to utilization of existing knowledge and creation of new knowledge.

In addition, Tata Steel reaped other benefits such as collaboration, conversation and interaction among employees increased, experts’ skills were available throughout the organization; job satisfaction among the employees increased and this reduced the loss of intellectual capital; expenditure on R&D was reduced as new ideas were generated from within the organization; duplication of ideas being used across the organization was reduced; productivity increased as knowledge was available more quickly and easily, and innovations were encouraged. Above all, KM allowed Tata Steel to gain a competitive advantage in the marketplace.

Future of KM at Tata Steel

In the future, Tata Steel plans to link e-learning with the KM repository and KM communities, devise an intellectual capital index, develop a network with retired employees, and develop employee skills for better externalization of knowledge and integration with the customers’ knowledge. According to company sources, “The most important challenge in this economy is creating conversations.” According to Arora, “The key to business modernization in the 21st century is not just through the expenditure of huge sums of money to create physical assets, but orienting people—the greatest asset—towards meeting the opportunities and challenges of the future.” Tata Steel seemed to be well-placed to achieve its mission which was redrafted in 1998 to include the statement: “Tata Steel enters the new millennium with the confidence of a learning and knowledge-based organization.”

Source: Adapted from “Knowledge Management @ Tata Steel” by Sanjib Dutta and AjayKumar, The Icfai Journal of Knowledge Management, Vol. III, No. 2 (June), 2005.

7. Conclusion

To be is to learn; to learn is to know and to know is to win. Today’s internet world, by offering a wide range of choices to consumers across the globe at the mere click of a mouse, has made consumers a highly knowledgeable lot. To survive in such a competitive world, organizations have to necessarily build knowledge, replenish it, and distribute it among the organizational members, so that the accumulated knowledge can be put to use for the accomplishment of organizational goals. In building up knowledge bases, organizations must be conscious of what is and what is not knowledge for the organization and only collate, interpret, synthesize and distribute among its members such knowledge that has a bearing on its performance. It is worth bearing in mind here that IT is only an enabler of knowledge management. Human resources are the key deciders of the effectiveness of knowledge management, for it is they who are instrumental in generating knowledge, learning from new knowledge and using it for the good of the organization. It is the leadership and the style of managing the human resources and the enabling culture that they create in the organizations, which ultimately define the effectiveness of knowledge management.