Five ways KM can help in a recession

Economically, times are still tough, and the crazy global decisions made during 2016 will not make them any easier. Here are 5 ways in which KM can help.

Cutting libraries, by Daniel Solis on Flickr

Firstly recession is a time of change and disruption, when old business models and assumptions crumble, and new models need to be worked out quickly. The company that does not learn and adapt, does not survive. This report from the Economist Intelligence Unit includes a survey of 349 executives in the depths of the recession between Dec 08 and Jan 09, on the topic of "Business agility" - a very important asset in turbulent times.  When asked to rank what they will do to increase agility,  the action of "Improving knowledge management and information sharing processes" was ranked the second highest, chosen by 38% of those interviewed.

The report concludes as follows -

"For most companies, the path to organisational agility involves transformation, the ability to whittle away at inefficiency and regroup around what is truly core to the business. While the task may appear daunting, there are a number of steps that management can consider to lighten the burden of change:

• Optimise core processes.

• Minimise information silos.

• Integrate and automate fundamental knowledge-sharing processes. 

"Getting through tough times" is arguably now Critical Knowledge Topic #1. If you view Knowledge Management as the systematic and strategic acquisition and deployment of knowledge, then KM need to be turned up to maximum setting, and aimed at "Learning how to adapt".

Secondly, a downturn is a time when your knowledge starts to leave the building. With every departing employee, some critical know-how disappears. If you already have a robust Knowledge Management Framework in place the risk of knowledge loss may not be too great, but if you haven't then you need to take action to use KM to retain, as best you can, some of this knowledge. Now is not the time to be letting assets leak away. You need the following

1). A strategic review of your corporate know-how, to identify those knowledge topics where you cannot afford to risk any loss, and then let HR know that experts and experienced practitioners in these areas should be preferably retained

2) A mapping of those individuals at high risk of loss (through early retirement, or because HR has already committed to losing them) who map onto these critical knowledge topics

3) A sensitive and effective program of knowledge retention

Thirdly, when the value of your financial assets is low, you look to release the value from your other assets. Knowledge is an asset you have for free - you already own it. Why not see how much value you can release from this (often unmanaged) asset? When work is slack, you have the time and the resources to release this value. You can direct people towards identifying crucial knowledge, developing current best practice, and using the know-how of the organisation to rework and improve processes, procedures and business models, so that when the upturn comes, you hit the ground running (and running much faster than your competitors).

Think about it - what does a football team do between matches? They learn and they train. They study themselves, they study their past performance, they study their opponents, and they improve their performance for the future. What does an army do, between wars? They learn and they train. They study themselves, they study their past performance, they study their opponents, and they improve their performance for the future. So what should a bank, or a business, do between business cycles? The answer seems obvious to me.

Today's business climate is a time of challenge - for your competitors as well as for you. It is a time when KM can both help you survive, and position you to take the lead if the good times return. 

KM and agility - how to survive recession

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In 2008 and 2009, the Economist Intelligence Unit surveyed 349 executives, on the topic of "Business agility" - How business can survive and thrive in turbulent times.

Although the focus of their questions was on Technology, and many of the people they talked to seem to be CIOs or the like, there were some interesting conclusions with regard to Knowledge management, and it becomes clear through the report that KM is closely behind process efficiency in driving agility.

Firstly, when asked to rank what they will do to increase agility, and the ability to make fast, correct decisions, the action of "Improving knowledge management and information sharing processes" was ranked the second highest, chosen by 38% of those interviewed, while the third choice was "Improve collaboration".

Secondly, they point to KM as a key tool for innovation and agility.

"In acknowledging the interplay between organisational agility and superior innovation, executives expect several tools to take a central role. Topping the list are knowledge management and collaboration systems, something that 81% of those polled indicate will go furthest in spurring innovation".

The report concludes as follows -

"For most companies, the path to organisational agility involves transformation, the ability to whittle away at inefficiency and regroup around what is truly core to the business. While the task may appear daunting, there are a number of steps that management can consider to lighten the burden of change:

• Optimise core processes.

• Minimise information (and knowledge) silos. Barriers to change include conflicting departmental goals and priorities, a culture of risk aversion and silo-based information. By reducing silos, business leaders can improve collaboration inside and outside their enterprise and better align departmental goals and performance measures with overall strategy.

• Integrate and automate fundamental knowledge-sharing processes. Such integration will enable IT (and KM) to advance an organisation’s ability to problem-solve, improve decision-making and convert information (and knowledge) into insight".

Italics are my addition - to move beyond the technology domain into the KM domain.

Are you putting a man on the moon? Or just trying out a new mop?

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Space shuttle liftoff from the
Kennedy Space Center: Merritt Island, Florida
Originally uploaded by
State Library and Archives of Florida

The story is told of how President John Kennedy once visited NASA. He came across a cleaner and asked him what his job was. The cleaner replied: ‘My job is to help to put a man on the moon.’

There is some discussion of whether this story is true or not, but what it illustrates is the cleaner's complete alignment with the aims of NASA, and the collective mission and strategy.

What if it had been the Knowledge Management lead that Kennedy had spoken to? What sort of answer would he have received?

I believe it is vital that KM efforts are linked to business outcome, and I am not the only on who believes this. I have a quote from a survey from the early 00s, that reads as follows

• “Most successful knowledge management applications
  addressed a ‘life or death’ business situation
  addressed an existing
  business issue
  
  Successful cases answered two questions at the outset -
  What business objective am I trying to achieve?
  How can I apply existing
  knowledge?”
  

Similarly Tom Davenport and co-authors, in the paper "Building successful Knowledge Management projects", conclude that "Link to economic performance or industry value" is the number one success factor for successful KM. I was reminded of this yesterday, at a presentation from Conoco Phillips, where they showed some of the portal pages for their Operational Excellence Communities of Practice, and there on the front page was the community goal to deliver X number of additional barrels of oil production to the organisation, plus the number of barrels delivered to date. They knew their role - to deliver additional oil to the bottom line.

Conoco Phillips aren't the only ones - Mars directed KM at delivering growth in emerging markets, De Beers at Block Caving, BP at cutting the cost of constructing retail stations, Ford at continuously decreasing manufacturing costs. In each case, this was their "man on the moon" - their business imperative that KM was serving, their "life and death" business issue. KM was being directed at solving real issues, and therefore gained a seat at the strategy table, and delivered successful programs as a result (at least for a while).

However a lot of KM professionals don't seem to have made this link with business value and business imperatives in their KM strategy. If you ask them what they are doing, they say "We're rolling out SharePoint", or "I am trialling MediaWiki". This would be the equivalent of the NASA cleaner saying "I'm trying out a new mop head". It doesn't have the same impact somehow!

Addressing urgent business issues is even more important during a recession, when management are looking to cut costs. I heard yesterday of another KM program closed, and another KM leader looking for a job, as the company sought to cut back on expenditure. If you're not seen to be addressing the crucial business issues*, then you could be seen as optional, and times are too tight for optional expenditure.

So if you were asked "What's your KM focus this year" - what would you answer? Could you point to a crucial business issue* you were helping to solve through application of KM? Could you say "We're helping put a man on the moon?" Or are you just mopping the floor?

*By the way, "reducing travel costs through enabling online collaboration" is not a critical business issue, nor is "reducing the time to find information". Your company is not a travel agent nor an information finder, and neither of these issues will keep your CEO awake at night.

KM in a downturn, again

Phil Ridout alerted me to this article on KM in downturns, entitled "Layoffs Send People and Knowledge Packing", where the author identifies the risk that layoffs can lead to loss of critical knowledge. He suggests that if some elements of knowledge management had been in place, that risk might not have been so great. I think he's right, or at least partly right, but for many companies it's too late for that already. The downturn is here, layoffs are happening, employee uncertainty and concern is huge, and if you try and introduce KM now, people will not be listening. If you haven't been operating a robust KM system already, you won't get one in place in time to cover the imminent knowledge loss.

Instead, you need to do four things immediately

1). A strategic review of your corporate know-how, to identify those knowledge topics where you cannot afford to risk any loss, and then let HR know that experts and experienced practitioners in these areas should be preferably retained

2) A mapping of those individuals at high risk of loss (through early retirement, or because HR has already committed to losing them) who map onto these critical knowledge topics

3) A sensitive and effective program of knowledge retention

4) Development of a knowledge asset on fair, transparent and effective layoff programs. Layoffs are a sad but inevitable consequence of downturn, and as I said in my blogpost on Jan 27, "knowledge of how to downsize well" is one of the most important areas of know-how that you need to acquire (and by "downsize well", I mean the things I said above - fair, fast, transparent, done with respect and humanity, and with minimum damage to those who remain as well as those who leave).

Visit our downloads page for a free white paper on Knowledge Retention

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A fifth reason

I've thought of one more application for KM in a downturn.

One of the most distressing and risky activities in a downturn is downsizing (ie making people redundant). Distressing for obvious reasons, risky because it distracts employees from the safe and effective operation of their work, can cause negative publicity both locally and nationally, and can leave the remaining staff disenfranchised and insecure.

Maybe that's why the Knowledge Asset we built in 1998 in BP on effective downsizing was considered so valuable. We looked at historical downsizing exercises, we drew out lessons learned and good practices, and we documented the secrets of downsizing quickly, effectively, fairly and openly; to minimise disruption, anxiety and insecurity. This knowledge was then applied in several downturns in South America, and proved very useful indeed.

So, reason number 5 for KM in a downturn; learning about downsizing. You may well have to lose staff from your company, so use KM to learn how to do this fast and fairly, leaving the remaining workforce energised about the future rather than traumatised and insecure.

4 reasons why KM can help you through recession.

I was interviewed on Friday, in Schipol airport, by a lady writing an article for a Dutch banking magazine. She asked me, how relevant is KM during times of recession? I had a quick think, and I came up with 4 reasons why it is still very relevant. I would like to share them with you, and see what you think.

Firstly, I argued; recession is a time of change and disruption, when old business models and assumptions crumble, and new models need to be worked out quickly. The company that does not learn and adapt, does not survive. "Surviving recession" now becomes Critical Knowledge Topic #1. If, as I do, you view Knowledge Management as the systematic and strategic acquisition and deployment of knowledge, then KM need to be turned up to maximum setting, and aimed at "Learning how to survive".

Secondly, when the value of your financial assets is low, you look to release the value from your other assets. Knowledge is an asset you have for free - you already own it. Why not see how much value you can release from this (often unmanaged) asset?

Thirdly, when work is slack, you have the time and the resources to release this value. You can direct people towards identifying crucial knowledge, developing current best practice, and using the know-how of the organisation to rework and improve processes, procedures and business models, so that when the upturn comes, you hit the ground running (and running much faster than your competitors). Think about it - what does a football team do between matches? They learn and they train. They study themselves, they study their past performance, they study their opponents, and they improve their performance for the future. What does an army do, between wars? They learn and they train. They study themselves, they study their past performance, they study their opponents, and they improve their performance for the future. So what should a bank, or a business, do between business cycles? The answer seems obvious to me.

Finally, a downturn is a time when your knowledge starts to leave the building. With every departing employee, some critical know-how disappears. You need to employ KM to retain, as best you can, some of this knowledge. Now is not the time to be letting assets leak away.

When I get hold of the article for publication, which expands on these topics, I will post it here.