In the late 1990s, the defense industry, no longer fighting the Cold War, was consolidating and downsizing. At Northrop Grumman Air Combat Systems (ACS), that presented more than just a short-term headache. As lead contractor for the B-2 Stealth bomber, an aircraft that was nearing the end of its production life, ACS was in danger of losing the expertise it needed to support and maintain a complex machine that would be flying?carrying precious lives and cargo?for years to come. So ACS instituted knowledge management procedures designed to capture the so-called tacit knowledge, or know-how and experience with the B-2, locked in its employees\u2019 heads.By 1999, with more cuts on the way?and with more knowledge in danger of being ushered out the door?Project Manager Scott Shaffar wanted to institute KM initiatives throughout the El Segundo, Calif.-based Northrop Grumman business unit. But before designing a program, Shaffar wanted to find out what barriers, if any, prevented employees from sharing knowledge with their peers. He figured that if he could apply hard numbers to ACS\u2019s cultural attitudes about knowledge, he\u2019d have a road map for designing a unitwide KM program and getting the funding for the technologies needed to facilitate it. So Shaffar decided to conduct a knowledge audit, surveying employees about their knowledge-sharing habits. That, he believed, would be a quick way to not only assess ACS\u2019s readiness for a formal knowledge management effort but would also highlight those areas where sharing was not happening. Shaffar hired Boston-based Delphi Group to conduct the audit and derive a baseline pulse of the unit\u2019s knowledge-sharing culture."The audit helped us turn gut feelings into numbers," Shaffar says, adding that he suspected employees would find the self-contained nature of the unit\u2019s programs a hindrance when it came to sharing knowledge. Now he\u2019s using this information to implement a bigger KM project and get the funding he needs to build the systems to support it.How Do They Know What They Know?Knowledge management first gained a foothold in ACS\u2019s B-2 bomber program in the late \u201990s. As the B-2 program was winding down, and engineers with 20 or so years of experience were leaving, ACS established a 10-person KM team to identify subject matter experts and capture the content of their brain cells.After creating about 100 knowledge cells (including armaments, software engineering, manufacturing and so on) and identifying 200 subject matter experts within those cells, the KM council turned its attention to knowledge capture. The team created websites for each of the knowledge cells and logged information about the knowledge experts into an expert locator system called Xref, short for cross-reference. Using Xref, employees can search for information in any number of ways, including by employee name, program affiliation or skill. If, for example, the B-2\u2019s landing gear is locking up, one can find the landing gear expert through Xref.The B-2 KM effort was deemed successful, and when ACS announced in 1999 a reorganization that would cut the workforce from 8,000 to 6,000, ACS established a four-person KM team charged with developing a unitwide strategy. That\u2019s where the audit came in."Sure, we could\u2019ve introduced a database technology and hoped that employees used it," says Shaffar, "but we wanted to avoid that black hole approach." In other words, Shaffar wanted to be sure that the expertise collected in centralized systems would not only be useful, but that it would be used. The Delphi Group\u2019s key weapon in administering the audit was KM2, which begins with a customizable, 97-question survey designed to unearth employee attitudes about knowledge and knowledge sharing, and in the process identify areas for improvement. The survey asked questions such as, "From your perspective, to what extent is the knowledge that you and your team generate reused by other teams?"The survey was e-mailed to 4,760 ACS employees at six locations across the country. Another 200 employees on the shop floor received paper-based surveys. Participation was voluntary; employees got a free lunch for taking 30 minutes of their own time to complete the survey, and Shaffar was pleased with the response: 3,380 employees completed the survey for a rate slightly better than 70 percent.Employees completed the surveys in January and February 2000. In March, Delphi consultants analyzed preliminary results and targeted 125 employees for face-to-face follow-up interviews. What They Think About What They Know"We expected that there would be challenges [when] sharing knowledge across programs, especially those with different customers and in different locations," Shaffar says. The survey results backed this up. But what Shaffar did not expect was the degree to which employees recognized the value of their fellow employees\u2019 know-how and their willingness to share information. Asked to rank the importance of knowledge in the discovery, development and marketing of products they worked on, 75 percent said knowledge was either very or somewhat important. In a nod to the importance of tacit knowledge, 51 percent said the brains of ACS employees were the primary source for best practices and lessons learned. (By comparison, 16 percent said electronic documents; 13 percent said e-mail; another 13 percent said electronic knowledge bases; and only 7 percent said paper documents.) A majority (56 percent) also characterized their colleagues as knowledge sharers rather than hoarders.Those results, Shaffar says, reinforced his belief that ACS had, at heart, a culture that would be receptive to a formal knowledge management push. But other findings indicated that there was still a lot of work to be done. Among the more eye-opening stats: Almost half of the employees spent at least eight frustrating hours each week looking for information they needed to do their jobs, costing ACS an estimated $150 million annually. Employees said only 6 percent of knowledge generated by teams was widely reused by other teams throughout ACS. And 31 percent of respondents believed that ideas generated by junior staffers were not valued and were likely to get smothered by the ACS bureaucracy. Armed with the survey\u2019s hard numbers, the KM team devised a three-pronged strategy focusing on people, processes and technology.How to Make Sure They Don\u2019t Forget What They KnowOn the human side, the KM team set out to identify and then retain experts throughout ACS, establish communities of employees who had similar responsibilities (known in KM circles as communities of practice) and facilitate sharing among employees.One such community of practice consists of ACS project managers in different programs. While many such communities exist informally, Shaffar says it\u2019s important to identify the ones that are strategically important, raise their visibility, and provide funding for technologies and systems to support them if necessary. "Establishing a community of practice should enable knowledge sharing across boundaries," Shaffar says, and end the isolation of people working in individual product lines.As for processes, the KM team focused on finding out how people captured, organized and reused existing knowledge. For the most part, employees maintained knowledge in their own files. There was no central repository where lessons learned could be easily shared or accessed by employees who weren\u2019t personally involved in a project. In response to that finding, the team implemented technologies designed to collect and disseminate lessons learned. The F\/A-18 fighter jet program, for example, now has a Web-based system that capitalizes on years of technical expertise by tracking structural problems with the aircraft. When an issue surfaces?a cracked part, for example?the first thing an engineer does is search the tracking system\u2019s 900 previously encountered experiences. To add an issue into the system, an engineer inputs the relevant information into a PowerPoint template that can include pictures, drawings and notes on the appropriate action needed to rectify the issue.How has the KM team integrated the tracking system into the workflow? Each week, engineers meet to discuss unresolved issues. To give a briefing on an outstanding issue, an engineer must first input data into the system; once engineers resolve an issue, it automatically becomes a lesson learned.When it comes to technology, the audit helped the KM team recognize the need to integrate the various KM systems at ACS. "It was clear from the audit and follow-up analysis that ACS had a lot of sources of information, but no central repository," says KM Project Leader Jeff Wessels.The technology pieces of the strategy?tools such as the homegrown Xref system, collaboration applications and document management systems?essentially serve as the glue lashing the KM initiative together. The audit revealed that people would share information if they had an easy way to do so. The technology initiatives that focus on five areas?portals, expert locator, knowledge capture, media management and collaboration?are a result of the barriers to sharing information, such as paper-based filing systems, disparate locations and an inability to locate internal expertise, which the audit highlighted. Currently, ACS has implemented the Xref system throughout the engineering unit as well as in systems for managing documents, collaborating and capturing knowledge. Other initiatives, including portals that push personalized information, are in pilot phase.Although Shaffar\u2019s team is still building a business case for KM?attempting to show the ROI of making information more easily accessible to employees?ACS will continue to invest in KM initiatives. (ACS won\u2019t reveal specifics, but it does say that overall investments in KM will increase in the future.) The KM team plans to conduct follow-up audits every 18 months or so to keep tabs on initiatives and culture. And while there\u2019s an interest in devising an ROI methodology, Shaffar says that executives are satisfied with soft benefits such as better decision making and improved collaboration.Now that employment levels have settled at 4,600, ACS\u2019s hopes for KM have shifted. Rather than serve as a mode of retaining knowledge, ACS views KM as a way to increase innovation and speed customer responsiveness. "We\u2019re positioning ourselves for the growth we see ahead," says Wessels. If innovation and speed translate to cost savings for the customer, then that\u2019s the ultimate sign that KM pays off.