KM Communities

Communication Breakdown

How can an enterprise access and share its intellectual capital for competitive advantage, asks Campbell McCracken.

The competitiveness of companies, as they expand globally, can be limited by their internal organisation or physical locations. Barriers, both structural and geographical, can prevent employees from gaining access to timely information. The Hurwitz Group ­ an IT and e.consultancy ­ says, “A company’s knowledge, its processes, employee know-how, customer information, guidelines and values are its competitive advantage.” But if the information that the employees need is not freely available then this advantage is eroded, often to the point of being nullified.

As well as physical and organisational barriers, the knowledge may simply not be available because it is still locked up in other employees’ heads. “Tacit knowledge is the single biggest chunk of knowledge in an organisation,” says Ernst Kallus, vice president of global sales and marketing at Orbital. “It typically forms 40% to 50% of an enterprise’s intellectual capital.” But unless this information is made available to others, it cannot be used. Furthermore, unless it is captured somehow, it is vulnerable. “One thing that does a lot of damage to an organisation is that the tacit knowledge comes and goes as the people come and go. What we (Orbital) do is provide a buffer to the entry and exit of your organisation’s skill set.”

It has been estimated that employee-to-employee (E2E) exchange of information is one of the most effective methods of sharing intellectual capital. In the past, employees shared this information informally. They were able to strike up relationships and hold conversations with each other when they gathered around the coffee machine. But there wasn’t any way to capture that exchange so that it could be used to enhance the performance of others in the business community.

And now, with corporate globalisation, telecommuting and the setting up of structures such as centres of excellence, even this limited practice is no longer possible. Employees no longer have easy, timely access to the people they need. They still have questions, but are finding it more and more difficult to know whom to ask.

What’s the solution - Knowledge Communities
One of the most effective solutions to this problem is to organise information into virtual communities that can be accessed either over the Internet or corporate intranet, or as part of a corporate portal. By joining the community and registering their interest preferences, users can be kept informed of new information as it gets added. If they have a question, they can go to the most appropriate community and ask it in natural language. If the question (or a similar question) has already been asked, the community will return the most appropriate answers.

If the community can’t find an answer or if the user indicates that the answer does not meet the requirements, emails will be sent to the community expert(s) and other interested members, giving them the opportunity to supply a better answer. Any new answers are stored in a database for future use and will also be copied to all users expressing an interest in that community.

The way the community organises its information depends on how the taxonomy has been set up. “For us, taxonomy is like a matrix,” says Denise Holz, Synergistics vice president of product. Synergistics products Authoriti and Prevail (See Case Study - Synergistics at Ryder) have found success with professional services and sales organisations. “If you think about the table of contents of things that people need to do their job - for sales people it might be corporate strategy, market objectives, trends in the industry, product information, etc. That’s one angle on the taxonomy.”

The second angle is all of those things that people typically type into search engines as keywords, such as the list of competitors, the list of products, the list of industries and so on. “So you could go into Authoriti and say ‘I need a competitive positioning around Competitor X, and how do I sell against them for Product Y and in Industry Z.’ Click. Click. Click.” says Denise Holz. In response, Authoriti would return the document that was the single best answer to this query.

If the user doesn’t like the answer, perhaps because it is not fully applicable to the X / Y / Z combination, all is not lost. “He can either widen his search or go into the contribute mode and say ‘I need help with this combination in the taxonomy’ and the three subject matter experts whose names are attached to those three elements X, Y, Z get an email.”

In addition to sending out emails to try to get the questions answered, the community software can also search through existing documents to see if a document already exists that might supply the answer, or send out crawlers to the Internet to search the Internet.

Case Study - Synergistics at Ryder Denise Holz - Synergistics Ryder Systems Inc, the US’s largest third-party logistics company, was founded in 1933 and has grown to a $5 billion company with 30,000 employees worldwide. Ryder’s management realised that slim margins and fierce competition were making the truck-rental side of their business difficult. They eventually decided to concentrate on and expand on the logistics solutions side of their business, solving transportation and inventory management problems for their clients. Ryder’s business was subdivided into competency areas such as distribution management, supply chain development and design and transportation network design. However this resulted in the inability to share supply chain expertise efficiently. Realising that the company’s wealth of knowledge resided in corporate files and in minds of individual employees, the management decided to create a knowledge base containing best-in-class solutions, where employees could access this and other information quickly. The knowledge base was put together by Accenture (formerly Andersen Consulting) using Synergistics Prevail Knowledge Centre. Ryder employees can now access sales proposals, market research information, technology solutions, project plans and corporate policies and procedures. In addition to providing consistency in the solutions they create, it also reduces cycle time and lead time of putting together a supply-chain design. David Baildon, group director of Ryder’s knowledge management group said, “We’ve received emails from people reporting that they now can repeat short-notice Requests for Proposals on time, because they can quickly find reusable quality content from the knowledge centre.” The Knowledge Centre portal also boosts productivity by reducing the amount of calls that experts get for information. “The people who are really good and highly knowledgeable about a given topic tend to get called all the time for information. Then they have to spend time to pull together the information and send it through Lotus Notes or fax, usually with several phone calls. The Knowledge Management Centre now gives people a facility to donate their intellectual capital in one place, where it then becomes easy for people to find and utilise it to better serve Ryder’s customers.”

Taxonomy Tree
By contrast, Orbital’s flagship product Organik organises the communities in a tree structure. “Organik facilitates Question and Answer dialog, capturing the results, storing them and making them available for reuse with the organisation,” says Kallus. “In most organisations, people are currently asking questions and getting answers by email. They are seeking out experts. But these emails never get recorded.

“The same questions get re-asked and re-asked. What Organik is doing is providing a capture mechanism for these questions, storing the answers and making them available for re-use by a wider audience. Tacit knowledge is the single biggest chunk of an enterprise’s intellectual capital, making up 40% to 50%, compared with intelligent search methods which typically address 20% to 25%. Organik raises the collective IQ of an organisation.”

At the same time as it is capturing the questions and answers, Organik creates a profile (or Persona) of each user either from existing data sources or from information provided by the user himself. All question and answer dialogues are used by Organik to update these Personas. These can then be used to help find the most appropriate person or persons to answer questions. (See Case Study - Orbital at ProfNet and Matrix) Alternatively the user himself can choose the person he thinks will best answer the question.

Orbital recently announced a strategic alliance with one of the leaders in high-performance search engines, Excalibur Technologies Corporation. The partnership will allow Orbital customers optionally to replace the search engine in Organik with Excalibur’s RetrievalWare intelligent search system, regarded by some as the best-of-breed.

Case Study - Orbital at ProfNet and Matrix Ernst Kallus ­ VP Global Sales and Marketing, Orbital Software ProfNet, a subsidiary of PR Newswire, describes itself as a “collaborative of public relations professionals linked by the internet to provide journalists and authors convenient access to expert sources”. It is a network of more than 10,000 academics and experts from colleges, universities, corporations, think tanks, government agencies etc. who are available for a fee for soundbites or comments on a particular topic. The press, for example, can log on to ProfNet and make a request for someone to give them five minutes on the current state of, say, nuclear physics. Queries are input in natural language. Orbital’s Organik product, the power behind ProfNet, profiles the experts and determines which of them are most suited to answer the query. It will find however many experts the user specifies, send questions to them, and get soundbites or statements back. In a different venture, Matrix Management Consultancy has launched an online community, directornet.com, for leaders and directors of progressive companies, again powered by Organik. The community allows members to search for previous networking dialogues on a specific subject and also identify members with experience in that field. By harnessing this shared knowledge, directors are able to make better decision and respond to issues and challenges more quickly and efficiently.

Guaranteeing Quality of Information
Knowledge communities work best when the information they provide is mission critical. And with so much hinging on the accuracy of the stored information, there has to be a high degree of trust that it is accurate. “Communities of interest can help people in operational roles like professional services, and sales people,” says Synergistics’ Holz, “but only if they trust the environment and if they trust the info in the community and if they trust each other. If they trust the environment they’re more likely to contribute to it.”

“Usually in an enterprise environment you’d have the data managed and authenticated by a moderator,” says Orbital’s Kallus, “so you don’t get someone saying they are an expert when they are not. The management and deployment are critical to making the community work.”

But being an expert is not simply about being able to answer any questions. In addition, you are accountable for everything that’s written in your community. If the information is of low quality, you’re not doing your job. Both Authoriti and Organik give users the opportunity to rate the answers that are given. In the Authoriti system, the ratings can be fed back to the original document authors and category experts to let them know how well the existing information answered the question.

“Just like how you can rate a book in Amazon.com,” says Holz, “we have a rating scheme that allows users to rank a document on three parameters - quality, usefulness, accuracy.” Authors can be rated by averaging the ratings of the documents they produce. “If it’s acceptable that I get a B+ then I’m doing well at my job. If all of the quality of my content is low, then maybe I’m not a good person to be a subject matter expert.”

With Organik, the ratings are used as part of the profiling decision making when determining the appropriateness of that expert when answering similar questions in the future. The ratings from previous answers are also available for review by users when selecting an expert. This allows them to make informed choices regarding experts.

Community Culture
Because online knowledge communities require openness and sharing, they are not immediately suited to all organisations. “You need to have a critical mass of questions and answers in the system at an early stage,” says Orbital’s Kallus. “In some cases you may need to seed the community to make it interesting and effective. You may also need encouragement and incentives for organisational users to participate in the question and answer sessions. You can do this with rewards, beans, or gift vouchers.” Sometimes the best motivation can be the participation itself. “People like to be seen as experts.”

“Some users are not, by nature, information sharing,” says Holz. “They want to know what’s in it for them. They want to get in to get information quickly and get back out. A lot of times they see that information as competitive advantage. But because we’ve put in the structure and we are about accountability for quality of content, people come here because it will help them close more business or raise their utilisation rates.”

Not only does there have to be some incentive to make users want to get involved in the communities, it has to be made easy for them. “The litmus test for customer participation is that if it’s harder for you to put an idea into the portal than it is to send an email or track somebody down on the phone system,” says Synergistics’ Holz, “then people won’t do it.”

What are the benefits?
There are other benefits to the knowledge community approach. Email blitz is avoided, by contrast, in the knowledge community the questions are sent to the relevant people.

The community also encourages participation - people like to be seen as experts and are keen to contribute when they know the answer to a question. This, in conjunction with the software’s ability to reuse previous answers if they seem appropriate, frees up the experts. “The load on experts actually reduces as the community grows virally or organically,” says Kallus. “Members start participating, answering questions as experts.”

Producing measurements of the effectiveness of the online community is not a straightforward task - normally an organisation has several changes or programmes running concurrently that can have an effect on the top or bottom line. So, you have to look at other measurements, such as increases in productivity and efficiency. “We’ve carried out some studies in the US that suggest that Organik can produce 15% improvements in the efficiencies of white collar workers,” says Orbital’s Kallus.

Other measurements include the decreased response time to customer queries, the reduced cycle time for reaching business decisions, more timely access to business information, etc. “Many times we’ll go through a pilot process where we implement for a small subset of the sales people,” says Holz. “We find that when we implement with those sales people they tell us that we’re not allowed to take it away from them. All you need is one or two war stories that somebody won a deal because of information they found in the Knowledge Centre, or somebody’s utilisation rate increased by 5%, and that translates to a very significant return on investment.”

Campbell McCracken

Links

Hurwitz Group: http://www.kmmag.co.uk/CURRENTFEB/www.hurwitz.com
Orbital: http://www.kmmag.co.uk/CURRENTFEB/www.orbitalsw.com
Synergistics: http://www.kmmag.co.uk/CURRENTFEB/www.syner.com