WHEN GROCERY RETAILER and distributor Giant Eagle embarked on knowledge management three years ago, there were already several strikes against the nascent movement. For one thing, most employees at the chain's 215 stores had never used computers in their jobs before. In order to use the KM system (a Web portal called KnowAsis supported by Open Text Livelink), they had to make the time to log in and read messages from their peers on proven practices, as well as post their own ideas.
In addition, a competitive culture had grown among Giant Eagle's managers chainwide, with workers competing on a daily basis to have the best sales, the least amount of shoplifting, the happiest employees. This competitive spirit seemed incompatible with the very idea of employees working collaboratively, sharing the information nuggets that might give them an edge over each other.
Absent a groundswell of employee support and usage, Giant Eagle's effort seemed poised for failure, as KM systems are worthless unless employees use them. And with the economy teetering on the brink of recession and competition in the grocery business tougher than ever, the stakes were high. What turned this KM initiative around wasn't a proclamation from the executive suite or even a cash incentive for using the system. It began, simply enough, with a shrimp platter.
Around the holidays in 2000, a Giant Eagle deli manager hit on a way to display the seafood delicacy that proved irresistible to harried shoppers, accounting for an extra $200 in one-week sales. But uncertain of his strategy, he first posted the idea on the KnowAsis portal. Other deli managers ribbed him a bit, but one tried the idea in his store and saw a similar boost in sales. The total payoff to the company, for this one tiny chunk of information, was about $20,000 in increased sales in the two stores. The company estimates that if it had implemented the display idea across all its stores during this period, the payoff might have been $350,000. Previously, "there was no tradition of sharing ideas in the store environment," says Jack Flanagan, executive vice president of Giant Eagle business systems.
Seeing the bottom-line benefits of sharing knowledge propelled the employees over their initial misgivings, spurring them to try and out-hustle each other on having the best suggestions, rather than the usual metrics. "Now they're competing in the marketplace of ideas," says Russ Ross, senior vice president of IS and CIO at Giant Eagle.
"It became a 'Look What I Did' showcase. Everyone wanted to put something in there," says Brian Ferrier, store director of Giant Eagle's South Euclid, Ohio, supermarket. Ferrier makes a point of getting on the portal at least once a day and says the practices he finds there help him make money. Giant Eagle conservatively expects to generate at least $100,000 in additional annual revenue through sharing ideas-insulation against the industry's ever-shrinking margins.
The payoff for getting individuals mobilized around KM can be breathtaking. Shell International Exploration and Production attributes more than $200 million in direct costs saved and additional income in 2002 to the use of its SiteScape online collaboration forum. The division has clearly contributed to the success of its parent, Royal Dutch/Shell Group, which was ranked number four on the Fortune Global 500 this year. Royal Dutch/Shell increased its revenue a startling 33 percent from 2001 to 2002.
When embraced by individuals, KM can help companies such as Giant Eagle and Shell weather the worst this economy can dish out. Trouble is, sharing knowledge does not come easily, even during boom times. "Sharing knowledge is an unnatural act. You can't just stand up and say, 'Thou shalt share knowledge'-it won't work," says Hubert Saint-Onge, principal of business and IT consultancy Saintonge Alliance. Companies say that convincing workers to participate in KM is always a steep challenge and is not necessarily made harder by tough times. But the down economy does make it evermore imperative to spread the gospel of KM, as layoffs and retirements can lead to the draining away of crucial data and lessons learned.
So what does work? Linking KM directly to job performance, creating a safe climate for people to share, recognizing people who contribute-those are a start. Here are some highlights from practitioners who have successfully engaged workers in KM.
Show Personal ROI
Very simply, the effort of sharing knowledge has to be less than the value of participating. KM is not like other IT applications. Most of the time, employees just ignore it if they so choose. Therefore, the act of sharing knowledge-embodied in the KM application or system-must help people do a better job, whatever their function. "People have to see tremendous immediate benefit," says Barbara Saidel, CIO for recruiting company Russell Reynolds Associates. "They have to see, smell, touch and taste how it's going to improve their work lives."