“Knowledge is power” has probably never been more pertinent than in today’s global, competitive and sophisticated business environment. No wonder knowledge management is crucial.

The Greek philosopher Socrates once said, “The only good is knowledge and the only evil is ignorance.” In today’s business world, knowledge is a major driving force behind product development as well as buyer sophistication.

In the early days of industrialisation, raw material, labour and capital were the main production factors. Today, it is generally believed to be knowledge, says Gerard Schram, knowledge manager at SKF’s business unit @ptitude, a technology venture within the SKF Service Division.

“More and more people are using their heads instead of their hands to produce value. SKF, for example, is growing steadily towards becoming a solutions provider of innovative products and services, rather than having a pure manufacturing role. Knowledge management aims to make our ‘knowledge workers’ as productive as possible.”

Schram defines knowledge management as a structured approach to the creation, consolidation and sharing of knowledge to enhance business performance.

New product development
Jan Grzonka is vice president of research and development at the Household and Bodycare Division of global consumer goods company Sara Lee, where knowledge of the end user is instrumental to survival.

“Sara Lee has focused its attention on utilising and developing knowledge management to speed up and improve its most important business process – new product development,” says Grzonka. “Thus, we have developed a number of practical tools to help multidisciplined project teams optimise their gathering of internal and external knowledge, to deliberately and continuously utilise their own team learning and to pass the learning onto colleagues in an effective and entertaining way. In short, these tools help teams to learn before, during and after projects.”

Increased pressure
Brad Vigers is a senior member of the team working on knowledge management at Shell International Exploration and Production (Shell EP), a unit that is less concerned with consumer know-how than with the knowledge required to locate and exploit new oil and gas fields.

He believes the reason why knowledge management has grown in importance during the past 20 years is the increased pressure to become more efficient, more flexible to change, more adaptive – and to find new ways of working.

“The pace of change is so quick nowadays, and competitors are much more agile, so we have to be a lot more responsive,” Vigers says.

He explains that Shell EP is looking at knowledge management from three angles – people, process and technology, or tools – always with the business needs at the centre. “Everything we do has to meet a business need,” says Vigers.

What are the sources of knowledge? Schram at SKF mentions acquisitions of new business units, new employees, working with universities, in-house research and development, experimentation, etc. Elsewhere, to acquire new knowledge in the age of “information overload” is certainly not difficult – but to retain it within a company and to translate it into an innovative and useful product or service may be. First of all, you need to make sure people share their knowledge and experiences internally.

“There are basically two kinds of knowledge – know-how that’s inside people’s heads and information that is explicitly stated,” says Schram, who believes a good knowledge management infrastructure must be able to connect employees with both kinds. “You have to connect people with other people, to allow them to share their experiences through internal training, intranet and meetings. And you have to connect people with information.”

Vigers at Shell EP differentiates between tacit knowledge and explicit knowledge.

“People don’t always ‘know what they know,’ and the company tries to tap into that tacit knowledge – that’s where the real gems tend to come out,” he says.

Schram concedes that getting people to share their knowledge can be a problem. “You have to create a knowledge-sharing culture such that knowledge sharing becomes part of the daily routines,” he says. “In an engineering company such as SKF, engineers are trying to find their own solutions. They’re certainly willing, but not trained in sharing their own experiences.”

The solution, Schram says, is to remove barriers and recognise people who are willing to share knowledge. “Being the expert in a particular area can potentially be very rewarding. Further, showing the indirect, internal value is key to getting get the employee’s and manager’s commitment.”

At Shell EP, Vigers agrees. “Sitting on knowledge is power. You have to communicate that knowledge is one of the few commodities that can actually gain in value once it is shared.”

Solving problems
To facilitate sharing, Shell EP has identified 250 professional experts, or internal consultants, around the world who are allowed to devote 15 full days a year to helping colleagues throughout the entire group with specific problems, by personal visits and/or electronically.

To Vigers, a lot of the value of the company’s knowledge-management tools and processes is that they build on natural communities around the world. He doesn’t believe in establishing databases to capture explicit knowledge. “You’ll find that people often don’t go through them in search of things. We want free-flowing discussions and volunteer-based programmes – not a top-down approach.”

Consequently, the company has set up intranet-based chat rooms, which are extensively used by 15,000 technical professionals worldwide. Between 200 and 300 questions and answers are posted daily on 12 networks aimed at different areas or communities of practice.

Another powerful tool in knowledge sharing is storytelling (in the form of, for example, customer magazines.) Jan Grzonka of Sara Lee says, “People remember stories better than isolated facts, and are able to interpret them and learn from them. But they have to be well-crafted stories with real people and events, not just preaching.”

Shell EP has also found storytelling to be effective, “particularly in helping to change our business mindset and improve our knowledge practice,” says Vigers, adding, “The power of a good story, well told, can inspire innovation, personal challenge and professional breakthrough. Stories can encourage us to change, to think outside the box, to seek the aid of others.”

Shell EP says in some cases the company may have to share proprietary knowledge with contractors, even if it may eventually leak across to the competition. But, Vigers says, “you have to ask yourself the question ‘is it worth not telling a company that’s doing work for you what you know about a certain practice?’ You might end up paying your consultants more if you don’t share the right knowledge with them.”