by Tom Davenport

Finding the Lasting Value of Knowledge Management

Nov 01, 20006 mins
Enterprise Applications

“Is Knowledge Management still a big deal?” I’m often asked this question by conference attendees, consulting clients and concerned friends. The inference is that the movement is getting a bit long in the tooth. Those who observe such things might notice that the number of knowledge management conferences is down, and People magazine stubbornly refuses to name any KM expert as one of its 25 Most Intriguing People in the past few years. Even my wife, not known for her high level of interest in business trends, has suggested that I’d be wise to move on to other subjects.

It’s true that knowledge management is no longer the next big thing. It had its day in the PR sun but now has been eclipsed on the hype-o-meter by electronic commerce. You’d be nuts to try to market a new conference or a new book on plain-Jane knowledge management, though some variations on the subject (customer knowledge or new product knowledge) might still do well. No movement can remain a media darling forever, and it’s time to acknowledge that the bright lights have moved on.

But wait, the corpse is stirring. Knowledge management may be quiet, but it’s hardly dead. In fact, it’s just beginning to penetrate the fabric of many businesses. The early, flashy-but-insubstantial applications—best practices and lessons learned, for example—have given way to broadly focused initiatives that are transforming the way organizations work. These changes take time and are not amenable to shallow, sensationalistic journalistic treatment. In fact, only the most profound, gifted writers can comprehend and express them.

The two organizations I’ll focus on in this regard are the World Bank and Ryder System. They don’t have much in common other than the joint pursuit of knowledge-based transformation. Both are service organizations that are supplementing their primary offerings to provide knowledge to customers.

Banking on Knowledge

The World Bank Group has been dispensing loans to developing countries for 50-plus years. In 1996, James Wolfensohn, then the new president, announced that the World Bank would strive to become the “Knowledge Bank.” As usual with such Olympian pronouncements, the bank’s staff scrambled to figure out what the heck Wolfensohn meant, and the skeptics argued that “this too shall pass.”

But it did not. Instead, a large variety of initiatives appeared that penetrated almost every corner of the far-flung organization. Sure, there were the usual knowledge repositories, benchmarking efforts with other companies and consulting projects. But what the Bank has that few other organizations can boast is integration with the organization’s basic mission and processes. The Bank’s mission statement was modified to read: “To help people help themselves and their environment by providing resources, sharing knowledge, building capacity and forging partnerships in the public and private sectors.” Its strategic plan included a major section on knowledge management that defined the concept and how it would be applied within the organization. By fiscal 2000 the Bank spent about $45 million, or 5 percent of operational expenditures, on knowledge management. Every staff member was expected to devote two weeks of time a year to knowledge creation, sharing and learning. “Communities of practice” or, as the Bank quirkily called them, “thematic groups,” were organized for the creation and sharing of knowledge in key content domains, such as early childhood development, school health and disaster relief. Presently, there are about 100 such groups, and almost half of the Bank’s employees were active members of at least one group.

Most important, the effort is showing results. The “Urban Slums and Upgrading” thematic group, for example, used knowledge management-based approaches to begin circulating ideas around the Bank for dealing with the problems of slums in developing nations. They developed a CD-based “electronic tool kit,” for those who need help in designing and implementing large-scale urban infrastructure projects. They also developed an approach to “tacit knowledge download” to help new staff members learn from experienced ones.

See, See Ryder

OK, maybe you’re more interested in dollars made than dollars loaned. If so, Ryder System is your poster child for using knowledge management to transform the business. Ryder is a leader in the business of providing integrated logistics and transportation management solutions. Sure, that includes trucks—companies can rent, lease or even buy used trucks from Ryder—but it also includes knowledge. For example, say you are a PC manufacturer and you want to optimize your distribution network for your PCs. You need to know things like how many warehouses you should have, what’s the right mix of truck and air transportation, what distribution strategies will minimize the rapid depreciation of your products and how to deal with product returns. Making use of Ryder’s truck fleet may be part of the solution to these problems, but a more valuable component is the knowledge of the company’s “Logistics Solutions Experts” and “Transportation Solutions Experts.” Ryder’s integrated logistics business is fast-growing, already big (almost $2 billion in revenues) and extremely dependent on knowledge-based solutions.

So the company is implementing a major knowledge management initiative. Leading the effort is Gene Tyndall, Ryder’s executive vice president of global markets and e-commerce. “Ryder’s employees, the knowledge they have and the knowledge they create are the corporate assets that impact our performance more than any other form of capital,” says Tyndall.

Like many companies, Ryder’s knowledge initiative has a technical component. It’s called the Knowledge Center, and it has some spiffy elements. It’s in part a repository or centralized knowledge portal, with role-specific customization. It also supports collaboration. Allowing a team for example, seeking the best solution for a customer’s supply chain to come together online and share best practices in a virtual work space.

One of the biggest challenges to successfully implementing KM is to properly address the cultural change issues. Unlike many companies, Ryder’s efforts are focused on that aspect of organizational change. The Ryder implementation program includes communications, training, policies and procedures, knowledge proficiencies, incentives, a comprehensive measurement system, and the creation of an organizational team to lead and support the knowledge management effort.

Just as the World Bank will always offer loans, Ryder may always be the place to go for commercial trucks. But both organizations are also becoming destinations for high-powered knowledge-based solutions. The hype behind knowledge management may wax and wane, but the business transformations under way at Ryder and the World Bank are true indications of the long-term value of knowledge and its management.