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Today’s post deals with some knowledge management initiatives going on in large global organizations.

Coke

For internal collaboration, The Coca-Cola Company has implemented its Common Innovation Framework, a system that combines project management and business intelligence capabilities to give operating units in 50 countries the ability to search for and reapply concepts used in developing and marketing over 2500 beverages produced by Coke.

The company uses it to develop new beverages, design equipment such as vending machines and fountain dispensers that it leases or sells, and create packaging concepts for new and already established products. One business unit can mine for product ideas by searching beverage or brand concepts that worked well in other countries. The Innovation Frameworks helps Coke recognize duplicate product ideas and prioritize the best allocation of resources.

Coke Zero’s expansion is an example of the Innovation Framework in action. Introduced in the USA in 2005, and now sold in almost 100 countries, it was the result of knowledge flow between financial, legal, sales, marketing, and R&D teams in different countries. The focus was more on deploying it to the market than about redesigning product, the Coke’s CIO said.

The platform helps capture the product development insights teams come up with in some regions, and share them with teams in other countries. The formula, brand, and packaging already developed for one market can be introduced immediately to the other market. ¹

Chevron

Chevron is one of the world largest non-government energy companies, and it is active in more than 180 countries. The organization is engaged in every aspect of the oil and gas industry, including exploration and production, refining, marketing and transport, chemicals manufacturing and sales, and power generation. 

With many Baby Boomers retiring, companies face a historical challenge. Chevron’s CEO described the loss of experienced personnel and knowledge as one of the critical issues facing the oil industry. Chevron’s business presents many possible career paths to motivated employees, and most individuals are satisfied pursuing a career within Chevron. The major source of knowledge loss, therefore, is retirement rather than leaving to work for other companies. The knowledge harvesting policy had to be implemented. 

Chevron found that knowledge and experience gained by an expert through his or her career was difficult to extract. Therefore, retention efforts should not be focused on end-of-career events only. 

As part of a new hires on-boarding process that introduces them to their work and their personal networks, Chevron has created early career-focused learning processes (Horizons) in a number of disciplines such as earth science, petroleum engineering, and information technology. As part of the annual performance planning process, each employee develops a personal learning action plan directed toward specific competencies. They can join a community of practice (CoP) in their discipline – a good way to learn from colleagues to solve day-to-day problems or to tap into documented expertise such as best practices, tools, and career development roadmaps with relevant training resources. 

Subject matter experts (SMEs) play a prominent role later in their careers as coaches or mentors. They may also develop personal work profiles to help identify the critical at-risk expertise that should be captured and transferred to new employees. In some cases, the life cycle of the SME extends into retirement, when a former employee may return to work on specific project assignments or serve as a mentor. ²

Buckman Laboratories

Bob Buckman, the CEO of Buckman Laboratories, considered the company’s knowledge management platform “K’Netix” to be “the greatest revolution in the way of doing business we have seen in our lifetime.” He attributed much of the company’s 250% sales growth (over $300 million in 1998) in the past decade and high percentage of sales from products less than five years old (34%) to knowledge sharing. 

$7,500 per person per year to implement K’Netix was a significant investment for a company the size of Buckman Laboratories. Yet, the company had been able to keep net income in the 3 to 6% range, operating income from 7 to 10.5% and gross profits from 52 to 55%.

After building the platform, those employees who have something intelligent to say now have a forum in which to say it. Management can no longer hold them back. These people become obvious and respected in the organization based on what they can contribute to others. Those who will not or cannot contribute also become obvious and can be intelligently eliminated from the organization. The change caused some problems. Middle management “revolted”. According to the CEO, “I got pretty blooded. They said, ‘you’re taking away our job.’ I said ‘no.’ Your job is to help your people succeed and facilitate their success in the world in front of them.’”

Within a year, the first formal system to share and capture knowledge within the company worldwide was started, using an electronic file to record how sales associates created new knowledge within the organization. They did so by resolving a problem at a customer’s business either by applying “existing Buckman knowledge,” if it was a well-documented problem, or by developing a new, more effective or efficient solution if it was a new problem.³

British Petroleum

British Petroleum, another global energy company, is also a recognized pioneer and practitioner of knowledge management.

BP’s knowledge management framework is simple, and it describes a learning cycle – learn before, during and after any business issue or task. The results arising from that learning cycle are codified into "Knowledge Assets" on the corporate intranet, where employees can reuse BP’s experience for new assignments.

Each business unit has leaders ("knowledge managers") who seek out and codify lessons and better practices from their area. Knowledge management became a mainstream activity in the company, thanks to the strong sponsorship and leadership of the CEO. He said that anyone in the organization who was not directly accountable for making a profit should be involved in creating and distributing knowledge that the company can use to make a profit. ⁴

When BP decided to analyze, using a knowledge perspective, why they had such differing performance levels in their deep-water drilling rigs, they found wide differences in local knowledge and practices, knowledge that was mostly tacit and undocumented. As a result of their efforts to have this local knowledge more globally practiced, BP achieved very significant savings and subsequently achieved legendary status within knowledge management circles. ⁵

Harvard Business School – The Importance of Knowledge Management and Learning

Below is a video from the Harvard Business School about the benefits and difficulties in creating knowledge sharing environment and implementing a knowledge management system in an organization. Professors David Garvin and Amy Edmondson are discussing the cases of GE, U.S. Army, and a child hospital in Minneapolis.

Today’s post was written by Michael Makowski. Michael is an analyst at Innovatech, Inc. He has over six years of experience in designing and developing accounting systems for FIN 46, FAS 140, data warehousing solutions and knowledge management systems.

Image Credit: mushon

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