When the workforce is more mobile than ever, organisations must effectively manage, pass on and exploit critical know-how. By Darren Baguley

Industry giant British Aerospace's Australian subsidiary BAE Systems had a problem: engineering ability was eroding over time because their experienced personnel weren't passing that expertise on to new or less-experienced staff.

Engineers tend to be logical types, so the solution to the problem seemed simple: get people to document their knowledge and put it into databases.

Fast forward several years, however, and the problem remained. There was no change whatsoever and no-one was actually using the company databases. BAE Systems's next response was to employ a knowledge manager with a brief to implement a knowledge-management system.

Knowledge management, or KM, was widely touted in the late '90s and early 2000s as being the next big 'can't-do-without' system for organisations. Curve Consulting Principal, Gretta Rusenow, explains it: "In basic terms, it is how organisations make sure they use the collective knowledge of their staff to their competitive advantage, and that employees can get their hands on that knowledge when they need it. In more detail, it's the identification, capture, sharing and use of knowledge."

But in the wake of skyrocketing IT expenditure for the feared Y2K bug, and the general post-dotcom-boom tech-wreck contraction in IT budgets everywhere in the corporate world, things stalled.

In the 1990s, a lot of companies crashed and burned trying to implement KM systems. Today, KM systems are making a quiet comeback as a compelling topic for C-level executives. This is particularly the case with those companies that have traditionally been built around the intellectual capital of its workforce: law, accounting, engineering, and consultancy firms of all kinds.

The main reason? Contemporary businesses fast, ultra-competitive organisations that don't proactively leverage the knowledge of their existing employees - at different levels of the organisation, and having a reasonably long tenure with the business - risk falling behind.

The increasingly short periods of time that employees tend to spend in each job, in today's labour market, also means that fast knowledge transfer is vital for companies' survival.

IMC Sales Director Matt Dixon says, "With the skills shortage crisis deepening, employees have a lot of options at the moment, and when they move on from one organisation they take with them a lot of tacit knowledge about that business. [Because] it's in their head it's not easy to get back, and companies are feeling the pain from key staff leaving with significant knowledge about the business."

KM Down Under

Generally, Australian companies are lagging behind in the implementation of KM systems. Given the productivity benefits that KM delivers, this is a dangerous trend. Especially so because having KM systems in place can be a 'make or break' factor for employers seeking to attract the digital natives of generation Y. Knowing no other culture than the current Google-ised environment, gen Y doesn't want to pore over instruction manuals or rummage through files. It wants to punch a search query into a company blog, wiki or some other KM interface and get the answer now.

Dow Jones Enterprise Media Group Vice-President and Managing Director, Asia Pacific, Bruce Macfarlane, says, "Gen Y are not going to hang around the company for too long, so there's a whole knowledge-management strategy about making sure that intellectual property is retained.

"If you expect they'll be in for one or two years and then move on, then that's a challenge; but there are advisory firms that have a specific focus, in their recruitment and retention, around the provision of KM tools. And these firms are pushing that, because the expectation among the graduates and employees is that a company that doesn't have KM systems in place isn't worth working for.

"If you sat before a board or a management team and told them that, they'd be shocked. It's not part of the common understanding of how important KM is. But most young people coming into the workplace today will have access to better communication and sharing tools at home than they do in the workplace.

"Knowledge management is about giving the right information to the right people at the right time in the right fashion, about having integrated information flows, and knowing where people are working. If they're all on Facebook the whole time, that's fine. Make sure you're on Facebook, too. Strategically, this is where KM is going because there needs to be a change in how we understand people are using knowledge, and how they expect to have it served up to them."

Culture and content

This approach is illustrative of what has changed since the late 1990s early 2000s KM implementation programs: experience has taught organisations to take a far more nuanced approach.

At an even more fundamental level, they've realised it's not about information technology but culture and content, says Rusenow.

"In the '90s, KM was this hip, sexy topic, and it was sort of hijacked by the IT industry, which at that point rebranded any product as a knowledge-management solution." As a result of this focus on technology, at best, a lot of the early '90s implementations didn't live up to expectations and, at worst, were complete failures.

"The reason for this focus on IT is a very human one, however," says Rusenow. "Where you've got hard dollars involved, you're expected to demonstrate the return on that investment. So [a lot of those early adopters] wanted to see something tangible. But technology was only ever going to be a piece of it. KM also entails culture and content, or in consulting-firm speak, people and processes.

"A lot of organisations gave up because there wasn't enough recognition that they needed humans to identify the content, or that they needed to build processes around providing incentives for people to add another thing onto their daily workload."

And this is one of the main reasons why KM had such a troubled start. It is all very well to build the systems, but a different matter to get the information out of people's heads and into those systems.

Nevertheless, much of the techniques that apply to any change-management process can be applied to a KM implementation, says Accenture's talent and organisation performance practice senior executives, Tom Hoglund and Tim Powell.

"The issues are around how you change the culture from knowledge being something you covet, to knowledge being something you share," says Hoglund. "That involves looking at all the standard levers you would use to change behaviour. That includes aligning learning and development with the KM systems. It's also about alignment with the performance-management system."

Powell adds that leadership behaviour is critical as well. "As with any change-management process, the executive team needs to monitor and measure the behaviours and build them into performance evaluations, and so on.

"But leaders need to be cheerleading the activities, talking about where people are using the KM system to win business, getting things done smarter and faster, as well as banging people over the head if they're not doing the right thing."

Business narratives firm Anecdote's Founding Director Shawn Callahan says that executive buy-in needs to go still further than that. "A KM project is like any other project in that it's about communication, having a clear vision of what's required, getting people onboard and then working out how to actually implement the project. If you have a KM system executive sponsor who says things like, 'I just want to get the knowledge our employees have into a database', you're in for lots of problems.

"Knowledge is social, it requires trust; it's as much a cultural thing to give a good implementation as it is to have the right resources available to it."

Communities of practice

Taking the concept of knowledge being social even further is the concept of communities of practice (sometimes referred to as CoP); an idea that arose from research done in 1991 by Jean Lave and Etienne Wenger at the Institute for Research on Learning and widely co-opted by KM.

CoP is a process of social learning that occurs when people with a common interest collaborate over an extended period to share ideas, find solutions to problems and generally innovate. CoP can also refer to the stable group that is formed from such regular interactions.

While some managers see CoP as an excuse for technical types to hang around talking to each other, BAE Systems found out its implementation can pay serious dividends. "BAE employed a new knowledge manager who was very familiar with the people aspects of KM and he immediately moved away from the straight documentation approach," says Callahan.

"Anecdote was engaged to help BAE Systems establish a number of communities of practice and the first one was around draftspeople. In the past, big organisations like BAE would have a draftsman pool and because they were all together they would share what they knew. Someone could yell out, I need to do a decoupling on a metal shaft with a rotation of 35 degrees; has anyone done that on the CAD system? And someone would yell back the answer.

"But BAE Systems had restructured the business with one draftsman in each major project, or in a really big project, two or three, not a pool of 30 or 40. As a result they got isolated, didn't know what the other draftspeople were doing and were continually reinventing the wheel. Now the use of CoP as a way to steward and share knowledge is becoming a major initiative in this large organisation."

Some of the results have been quite astounding. "A Newcastle-based engineer was talking about building a library of drawings of rivets and screws for a particular type of aircraft and how it was going to take her probably a good week to put it together," says Callahan. "Then someone in Adelaide said, 'we've already got a rivet and screws library and I'm sure we can adapt that really quickly for that aircraft model in a few hours.' Something small like that saved someone a good three or four days of hard effort doing something that was already in the organisation and that's big dollars."