KM - a new meme machine creating a world culture

From: Grant Callaghan (grantc4@hotmail.com)
Date: Fri May 10 2002 - 00:37:17 BST

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    Subject: KM - a new meme machine creating a world culture
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    KNOWLEDGE MANAGEMENT

    So, What Do You Know?

    Technology meets common sense and--voilą-- employees are talking to each
    other. Welcome to Asia's latest craze: knowledge management

    By Kim Jung Min/SEOUL and Suh-kyung Yoon/HONG KONG

    Issue cover-dated May 16, 2002

    SOUTH KOREAN FASHION retailer E-Land is a testament to the power of shared
    knowledge. At the end of 1998, the company was bruised and battered from
    months of painful restructuring that hauled it back from the brink of
    bankruptcy. The workforce had been slashed by almost half. Inevitably, the
    remaining staff suffered sinking morale and productivity was stagnant. The
    next year's takings compounded the blues--revenue rose by only 3.6%.

    Today, E-Land is flourishing. The company's total revenues rose by 21% last
    year to 808 billion won ($633 million), compared to 667 billion won in 2000
    when it rose by 17%. Productivity leapt by 70% last year. The company says
    each employee adds 10 million won each year in value to the company, up from
    its estimate of 900,000 won in 1998.

    E-land credits this turnaround to the latest craze sweeping Asia's executive
    suites: knowledge management, or KM. Japanese companies like Fuji-Xerox and
    Sony have high hopes that KM can foster innovation and jump-start their
    companies' sagging performances. In Hong Kong, telecoms company Pacific
    Century CyberWorks and hand-held-device manufacturer Group Sense PDA are
    also jumping on the bandwagon. And in Singapore, the government has adopted
    KM's principles in an effort to create a "knowledge society."

    But what is it? Fight through the smog of "consultant speak" that surrounds
    KM--jargon like "cultural change initiatives" and "a new way of
    thinking"--and it's actually pretty simple: KM is a combination of using
    technology and changing corporate culture to encourage employees to
    communicate openly and share their ideas and experiences for the good of the
    company.

    That's tougher than it sounds. Listen to Gillian Blake who overseas the KM
    initiative for the Hong Kong office of British engineering firm Arup Group:
    "Knowledge is power. Many people believe sharing knowledge is giving up
    their power." That's especially true in Asia, where companies are more
    hierarchical and junior staff tend to be afraid to voice their opinions. KM
    works against those ingrained tendencies in organizational behaviour.

    Many companies make the mistake of thinking they can change this with
    technology alone--usually an intranet that allows employees to share
    information with one another on-line. Software vendors--from big players
    like IBM and Computer Associates to the little-league companies like Hong
    Kong's Omnitech--have been aggressively pushing KM solutions over the past
    three years. But any company that has adopted KM knows that that's just a
    small part of it. "KM is not just IT," says Waltraut Ritter, president of
    the Hong Kong Knowledge Management Society. "Just because you put a solution
    in place doesn't guarantee that people will use it." Like any technology
    investment, installing the system is just the first step; persuading
    employees to adopt it is the real challenge.

    There are many ways to do that. Look at E-land's experience: In 1999, it
    became one of the first Korean companies to embrace KM. First, it installed
    an intranet and loaded it with custom-made software. With the technology in
    place, the idea was that staff would log onto the system to input
    information they thought might be useful to other colleagues. That can be
    anything from new product information to sales strategies or an instruction
    manual explaining how to decorate a store in a way that will attract
    customers.

    Nice idea, but how to get the staff on board? Incentives help. The core of
    E-Land's knowledge management is its points system. It gives employees an
    incentive to share what they know rather than hoard knowledge to protect
    their standing in the organization. E-Land requires every employee to submit
    a knowledge resume when they're being considered for a promotion. The resume
    lists one's responsibilities and projects, and assesses how much on-the-job
    knowledge and experience is gained from those efforts.

    The extent to which an employee has shared knowledge constitutes a key part
    of their performance rating. A quick look at the company's intranet records
    reveals which workers have shared the most information with their
    colleagues. The system enables employees to search or browse a database by
    topic, and then contact the authors via e-mail to follow up or communicate
    in the system's chat-room.

    Employees who share their knowledge on the system accumulate points. For
    example, an employee who lectures 10 colleagues on his area of expertise for
    two hours will receive 10 bonus points. The accumulated points are reflected
    in salaries and bonus payments.

    "The way E-Land combines information-sharing with performance-evaluation is
    impressive," says Kim Young Gul, director of the Knowledge Management
    Research Centre and a business professor at Korea Advanced Institute of
    Science and Technology.

    There are other ways to reverse the hoarding impulse. In addition to an
    intranet system, Arup, for instance, designates "knowledge fellows"--staff
    with particular areas of expertise who can mentor their junior colleagues
    for a year, imparting to them whatever knowledge they might need.

    Arup also has tried to create an atmosphere for informal meetings and
    water-cooler chats with a cafe and comfortable sitting areas. Intranet
    systems like Arup's cost a couple of million dollars or so to set up. But
    that's not the real investment: "KM isn't an expensive investment," says
    Blake. "It's more an investment of time and resources than money."

    And the rewards are impressive. Fuji-Xerox was one of the first companies in
    Asia to seriously adopt KM practices. The company that had started as a
    manufacturer of copiers had successfully transformed itself into "the
    document company" in the 1980s and was hoping to make a leap to being a
    knowledge enterprise in the 1990s. It had developed a suite of IT solutions
    for knowledge-management initiatives and was hoping to develop more software
    for its clients. "But we wanted to make sure that we ourselves were sharing
    knowledge before we started preaching to our customers," says Yotaro
    Kobayashi, Fuji-Xerox's chairman.

    On the IT side, the company created several intranets that allow its
    employees all over the world to share information with one another. One
    bulletin-board-type service called Eureka has 25,000 technical engineers
    on-line who post queries and answers for problems like printer malfunctions
    and system glitches. The company estimates that the network saves it $10
    million a year.

    Another crucial aspect of KM for Arup and other companies that work on a
    project basis is an "after-action review." Once a project is completed,
    members of the team sit down together to conduct a review of the entire
    process, producing a written report on their mistakes and the lessons they
    learned. Hand-held-device manufacturer Group Sense PDA partly ties its
    bonuses to participation in after-action reviews and other KM initiatives.
    "China is a highly competitive market and the only way for us to
    differentiate ourselves is through innovation," says Philip Fung, Group
    Sense's general manager for human resources. "After-action reviews let us
    learn as much as we can from old projects in order to create even better
    products in the future."

    Fung says KM helps the company avert potential harm from turnover among its
    500 or so research-and-development staff--as long as the knowledge is in the
    databases or shared among a team, the fact that one or more engineers may
    decide to leave isn't as much of a problem.

    Back at E-land, Chang Kwang Kyeu, chief knowledge officer, says the system
    has transformed the company into an innovative and profitable business. "We
    could have gone bankrupt if we hadn't embraced the knowledge-sharing
    scheme," he says.

    E-land's employees like it, too. Just ask assistant marketing manager Chung
    Soo Jung. Last year, she posted a report on marketing strategies to boost
    sales in 15 shops in Seoul and Taegu, a provincial city 300 kilometres
    southeast of Seoul. The result: a two-fold increase in monthly revenues at
    both shops. She received a bonus, and the company now provides lectures for
    newcomers based on her marketing strategies. "It's really encouraging me to
    be creative and work harder," says Chung.

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