KM Stories: Part Two – Need for Cross-Functional Support

I started with a success so here is a failure to balance the picture. In this case a major utility company was undergoing transformation and needed to reduce costs. In this process, it fired half of its field service people, closed the local depots where they meet each morning to get assignments, and gave the remaining technicians laptops to enable them to work out of their house.

This move created more problems than it solved. Those who were let go provided a lower cost alternative for service for the client base, dramatically cutting reducing service revenue. Those left were without the place where they meet to share best practices so they had the worse of all cases. Large overhead and little ability to leverage their scale

The good news was that by working closely with the field technicians we were able to design a number of knowledge related innovations that were successful in the prototype. We looked at a set of Balanced Scorecard measures and goals (e.g. increase the percentage of one visit repairs, reduce the average repair time). Then we rode around in the trucks with the technicians to see what was blocking improvements on these measures and devised knowledge related initiatives to help overcome these obstacles. For example, we attempted to make better use of the new laptops by setting up a data base for sharing best practices. The field service people already had a culture of sharing best practices in the depots, now closed, and they liked getting the new lap tops as they felt it elevated their job status. A clear business case was developed based on conservative improvements to these measures.

The bad news was that the initiative never got beyond the prototype phase. The CIO led the attempt to implement knowledge management. HR was never really convinced to join, and stood on the sideline while the business units saw the implementation as a quest for more power by IT. While funding was approved for a prototype, the project did not go beyond the prototype phase as the business units worked diligently to block any success. Unlike Cigna Insurance in the last case, there was no strong senior leadership with a vision to push through the needed reforms. The division continued to have financial troubles and was soon sold off.

For knowledge management to be successful, IT, HR, and the business units need to work together to achieve success. It appears that if only one of the three supports knowledge management, then nothing is likely to happen. If two of the three support knowledge management, then something might get implemented, but it is unclear if it will get used or have sufficient power to have a lasting impact on the business. All three working together are necessary for real and lasting success. Going part way is generally worst than not doing anything as funds are wasted and good ideas get a bad name.

How do you get all three working together? It will vary in every organization, and there are no easy answers, but strong leadership with a clear vision is essential to overcome the turf wars that must be won. As Tom Stewart said in Fortune in the January 12, 1998 issue, “the danger, of course, is that the tension (between HR and IT) becomes a struggle from which one side or the other emerges victorious. Intellectual capital is a sum, not a remainder.”

Organizations serious about knowledge management need to develop broad sponsorship strategies and ensure that multiple stakeholder groups are effectively aligned. Unfortunately, many organizations fail to take this approach, and the results often mirror these limitations and provincial thinking.

Lessons Learned:

What was Done Right:

Listen to the Users

Align Knowledge Applications to Key Business Goals and Process

Develop a Clear Business Case

Design Measures Aligned to Business Processes

What was Missing:

Gain and Enlist Top Down Support to Overcome Turf Issues

It was ironic that the actual design for this system was more innovative that the one for the property casualty company, only because it benefited from the prior effort, but a failure of leadership was the critical difference.

Tomorrow I will take a break for the weekend and discuss the Newport jazz festival. Stories start again on Monday.