Searching for knowledge

The world is a different place since technology hysteria came to an abrupt halt almost two years ago.

Hundreds of companies - most spectacularly Enron - restated their results after their aggressive accounting practices attracted the ire of regulators and suspicion of shareholders. Watching their stocks plummet to fractions of their former values has disabused many of the idea that the new economy really was as new, shiny and bright as it first seemed.

Stock options as the favourite remuneration of tech execs are not only under water, but there are increasing calls for these to be treated as expenses. Especially since there is little evidence, according to US Federal Reserve research, that they do, in fact, achieve their objective of aligning management interests with those of shareholders.

Some companies have recognised that we have moved from industrial to knowledge economies, and that commodity-driven economies are on the lower end of the food chain in the global economy.

Cathy Stadler, marketing director, CommerceOne SA

This new focus on accounting integrity, lower revenues, the embarrassment of being seen in a R10 000 Aeron office chair, and industry-wide retrenchments, leave few with the appetite for tackling projects that are hard to define, harder to communicate to staff, and well-nigh impossible to justify to sceptical shareholders in direct revenue or cost-saving terms.

No wonder that Knowledge Management Magazine folded in the US seven months ago. Not surprising that the KMForum Web site, established in 1995, was last updated in April 2000. Skandia, a Swedish financial services firm that became famous for its application of knowledge management (KM) principles and publicly reporting its intellectual capital position as it did its financial status, has ceased publishing these reports on its Web site.

Fortune recently published a scathingly sarcastic column under the headline "But wait, there`s more..." Drawing on the popular - if simplistic - notion that knowledge is to information what information is to data, it suggests leapfrogging KM altogether and appointing a CWO - chief wisdom officer. This officer would leave mere knowledge to competitors and even counsel employees against accumulating just conventional wisdom. Meta-wisdom is what`s needed - wisdom about wisdom. Surely this is clear to a far-sighted business brain?

Press releases floating this wisdom idea quite seriously are also not uncommon.

So it was in this cynical climate that ITWeb approached Cathy Stadler, marketing director at CommerceOne South Africa, an industry writer, and one of the few active participants in the Knowledge Management Society of South Africa. Her first response was, predictably: "There has been a lull in this area."

Does all this mean that KM is dead? That it, like many other woolly dot-com era management theories, evaporated like so much hot air?

Not at all.

Like artificial intelligence (AI), KM`s biggest problem is probably the inclusivity of its name.

AI is a catchall for many different techniques that mimic human reasoning. The discipline spans such research areas as robotics, pattern recognition, neural networks, natural language recognition, game theory, decision support and expert systems. Many of these have seen tremendous advances, including actual product roll-outs, but none is regarded as embodying the mythical goal of "artificial intelligence".

KM likewise suffers from fragmented - and sometimes competing - schools of thought and definitions.

Despite the temporal correlation of KM hype with Internet hype, Stadler points out that it wasn`t, in itself, part of the Internet boom.

Many of our people are driven not by monetary rewards, but by the pursuit - and sharing - of knowledge.

Steven Ing, consulting manager, SAS Institute

"I think that some companies have recognised that we have moved from industrial to knowledge economies, and that commodity-driven economies are on the lower end of the food chain in the global economy," she says.

According to James van der Westhuizen, CEO of Knowhouse, the African and European representative for Karl-Erik Sveiby`s KM tools and ideas, recognises the market`s perceptions about KM on his website as follows: "This basic realisation that the intangible part of what we buy and sell has become the new organisational wealth, has spawned a whole new industry of advisors, consultants and applications that are intended to help us be more effective in this new era. These have been grouped broadly under the terms `intellectual capital` and `knowledge management`. Despite all the best efforts of practitioners inside and outside organisations, very few really good case examples exist and many supporters of this movement are quietly becoming disillusioned..."

Jerry Ash, CEO of the US-based Association of Knowledgework, wrote an article - once destined for the failed Knowledge Management Magazine - denouncing those advocates of KM that sell it as some sort of cure-all. Quoted in CIO Magazine, he says: "The first thing KM advocates tell their organisations to do is throw out everything and start over. Selling KM that way, almost immediately it`s in trouble."

Another difficulty with "selling" KM is that it often involves ideas and techniques that are impossible to rigidly structure and define. Expressions like "airy-fairy" and "touchy-feely" are not uncommon and are entirely understood in discussions about KM.

Says Monika Calitz, senior consultant at Comparex Africa: "The reason for the slow adoption of KM in the market might well be as a result of KM initiatives being more difficult to quantify."

The reasons for today`s renewed scepticism of KM as a silver bullet date back a long time.

Gary Klein, a PhD in experimental psychology, has performed research on "naturalistic" decision-making in a wide variety of task domains and settings, including fire-fighting, aviation, command and control, market research, and software troubleshooting.

In 1989, he estimated that decision-makers in a variety of disciplines use intuitive methods 87% of the time and analytical methods 13% of the time. Some believe his study was actually biased in favour of analysis, estimating the breakdown at nearly 95% intuitive to 5% analytical.

People tend to think of KM either as research or as some sort of new-age library.

Lindy Smith, knowledge manager, Nedcor

Around the same time, some software companies started to conceive of ways in which technology could aid in making sufficient information available at the right time to increase the share of analytically justifiable decisions. Decision-support systems were born, and developed into management information systems, business intelligence, digital dashboards and similarly buzz-wordy tools that are designed to make decision-making easier and more reliable under conditions of stress, time pressure and uncertainty.

Klein, similarly, worked on systems that would focus not on the advanced technology, nor their ability to squeeze as much data as possible onto a screen, but on systems that would present humans with the information they would most likely require for any given decision.

Although some of these initiatives have enjoyed measurable success, most delivered on only a small subset of the promise that KM held.

Often, the required clarity of purpose simply isn`t there. At Sasol, for example, the KM practitioners propose - as evidence of a clear understanding among end-users of what KM is - the following vision and purpose: "Vision: our knowledge shapes our destiny; Purpose: energising collective knowledge, to create greater value."

Laudable, no doubt, but not exactly breakfast chitchat: "Honey, I`m off to go energise our collective knowledge. I might be working late, because it can shape our destiny. Will you remember to feed the dogs?"

Yet, the complexity of such systems and the abstract theories that accompanied them were considered achievable goals in the late 1990s, when expectations - like stock valuations - were sky-high.

The unpleasant repercussions of believing well-written (if insubstantial) business plans without the due diligence and financial discipline that should accompany it, has made businesses gun-shy. And KM, in this metaphor, is a big gun.

The growing number of companies that scale down on in-house research and development is evidence that knowledge management and knowledge sharing is becoming increasingly important as a structural underpinning of business.

According to a survey in November last year on the future structure of corporations by The Economist, businesses will achieve growth and development by increasingly (though obviously not completely) replacing the R&D lab - that proud hallmark of the industrial era - with knowledge generated through joint ventures, partnerships and alliances.

This trend is spurred as much by the commoditisation of mere mass production of products as it is by the ease, speed and low cost of communication derived from the networked economy.

Knowledge workers are by their very nature hard to manage. They know they possess knowledge, and they want respect for it. They know that their organisation needs them more than they need their employer. What more proof do they need than that their bosses haven`t read "A Clockwork Orange" by Anthony Burgess or "Stranger in a Strange Land" by Robert Anson Heinlein (which would make the heading above make sense: "getting friends to understand").

SAS Institute, a business intelligence firm, prides itself on its ability to attract and retain smart people. It ranks second on Fortune magazine`s list of companies people most want to work for, according to Steven Ing, consulting manager with the firm.

"SAS is able to attract people with knowledge, and create an environment that makes knowledgeable people want to stay," he says. "One of the major reasons we attract top calibre people is our KM approach and the systems we have in place to support this. Many of our people are driven not by monetary rewards, but by the pursuit - and sharing - of knowledge."

More and more people are interested in the successful implementation of KM strategies, so case studies are becoming more important.

Faye Reagon, head of information services, Human Sciences Research Council

If knowledge workers are dissatisfied, or disagree with the direction of the company, or paid with stock options that sink, or unable to achieve their personal ambitions and goals, they simply go somewhere where these drawbacks aren`t in evidence.

Many a company has found itself in dire straits because of having lost its most knowledgeable, creative people. Yet many companies continue to make the mistake of treating such people like production line workers.

These same traits among knowledge workers can become both the key to managing knowledge, as well as its biggest obstacle.

The obstacle is in the reluctance of many knowledge workers to share what they perceive as their competitive advantage. Partly, this is a misunderstanding of what knowledge is and how it can be applied to benefit the business.

Faye Reagon, head of information services at the Human Sciences Research Council, says few end-users understand knowledge management any better than a year ago.

"There certainly is more awareness of the concept, since it is bandied about quite loosely in corporate communications and in management literature," she says. Reagon notes that many management information systems are incorrectly labelled KM, while many KM projects are being implemented without people even understanding that KM is what they`re involved in.

"This happens mainly in environments where there is no knowledge manager or someone to bring these projects together," Reagon explains.

Lindy Smith, knowledge manager of the retail bank at Nedcor, says: "People tend to think of KM either as research or as some sort of new-age library. A significant portion of a knowledge manager`s job is therefore to emphasise again and again the message that the knowledge already lies within the business and that KM`s job is to establish the tools and processes that will make that knowledge explicit and accessible (and to avoid landing in the trap that people think you are their researcher and will find information for them)."

She adds: "Another challenge is the lack of understanding of `knowledge` in a business environment - people seem reluctant to attach the term to their everyday jobs, thinking that it must surely belong in a more academic, research-oriented realm."

According to Smith, it`s not that people don`t want to share knowledge, but that they don`t know how. She believes clear communication is necessary about how KM fits in with other - often more readily-accepted - initiatives like business intelligence and customer relationship management. Only once everyone understands the various knowledge sources can these be managed.

Sasol, SA`s premier petrochemicals manufacturer, has over 30 000 employees. Trying to centralise a KM drive seems daunting (and perhaps excuses its noble-sounding vision and purpose).

Marina Hiscock, Sasol`s KM officer, says the company has highlighted the intangible assets already available, namely the knowledge of its people, their interest in learning, and the availability of various structured forms of intellectual capital such as patents.

Given these assets, the company takes a very pragmatic approach to KM, which mainly involves trying to instil a culture of sharing, and making simple tools available to do so.

Says Hiscock: "The company is experiencing the first results from this drive. Many ideas on cost saving are put forward, mutual internal clients are identified, and newly-discovered areas of overlap are capitalised on. Feedback from learning is voluntarily being shared via a Sasol Group KM intranet site."

This case typifies the piecemeal way in which KM can - and probably should - develop within an organisation. While practitioners insist that KM "champions" and active executive-level support are necessary, a top-down, structured "implementation" is unlikely to succeed, as recent history has shown.

Reagon says research into KM is not waning. "However, I do think that the focus of research is changing. People are more keen to research components within KM and even its related disciplines. Here I refer to a myriad of issues such as business intelligence and customer relationship management technologies. More and more people are interested in the successful implementation of KM strategies, so case studies are becoming more important."

I personally don`t believe you can practise KM by dumping a whole lot of documents into a knowledge base and adding a fancy search engine.

Monika Calitz, senior consultant, Comparex Africa

This underscores the analogy to AI drawn earlier. Rather than a single, broad-based, but ill-defined concept, KM is increasingly being approached in a staged fashion - fragmented, but easier to manage and justify on a project-by-project basis.

Gartner research confirms this. It has published as a strategic planning assumption that in 2005, ontologies (ie sophisticated, holistic meaning-based systems) and other advanced semantic representations will have been adopted by only a fraction of large enterprises.

Gartner lists, in increasing order of complexity and richness of representation, the following techniques for representing knowledge:

* Terms lists, indices, glossaries and dictionaries.

* Classification systems, taxonomies, subject headings and hierarchies.

* Semantic representations, knowledge maps, semantic networks, thesauri and topic maps.

* Knowledge-based representations.

* Ontological representations.

For the immediate future, it predicts the need for more than simple search techniques on databases - structured and unstructured - of information.

"Simple search techniques will evolve from a focus on indexing words in documents to more-complex semantic analysis and pattern-matching algorithms, incorporating information about document characteristics, relationships to other documents and user interests," says Debra Logan, a senior research analyst with the firm.

It also emphasises that the typical curve of any such technologies, on an X-Y scale of maturity to visibility, starts with a technology trigger, rapidly rises up the visibility axis to a peak of inflated expectations, before dipping through a trough of disillusionment. This is, usually, not the end, however. As more minds are applied to the problem, the technology enters an upward slope of enlightenment, before maturing as a stable, productive element of business - lower in visibility, but higher in maturity, than at the initial "hype" peak.

Comparex Africa`s Calitz says many vendors are still punting mere document management systems - the explicit organisation of knowledge - as KM.

"Few realise that it requires a change in culture for most organisations out there, and that you can`t buy it neatly packaged as a software solution off the shelf," she says.

"I have seen some which punt collaboration tools, which are supposed to address more the tacit side. I personally don`t believe you can practise KM by dumping a whole lot of documents into a knowledge base and adding a fancy search engine. I cannot stress enough the importance of human interaction (the soft issues of KM) which is where tacit knowledge is best transferred."

Paul Norman, group executive for human resources at MTN, and the company`s KM champion, wrote in August 2000 that South African knowledge-based industries have low prominence and competitiveness in international markets. He cited as evidence the heavy weighting of resources stocks on the JSE, and the perception of foreign investors that SA is a commodities-driven market.

While there have not been large-scale changes in the composition of the JSE since then, some international ventures by South African IT firms (some of them successful) point to a change.

The same is demonstrated by several major South African companies, such as Sasol, Sappi, MTN, Comparex, Nedcor and NamITech, to name a few. All have, in different ways, had some successes with KM techniques and projects.

Despite the fact that KM practitioners will be the first to argue that KM isn`t a technology implementation, many KM solutions remain exactly that.

South Africans know AOL`s interruptive "You have mail!" popup via advertising and American films. There is software, however, that can alert you when someone wants knowledge the software believes you have.

Some companies have taken to analysing company e-mail to identify where particular expertise resides in an organisation. Software like KnowledgeMail from Tacit Knowledge Systems, for example, has enabled companies like the US oil giant Texaco to scan and index employees` e-mail for keywords and patterns. This enabled the company to instantly identify and summon the correct employees to provide input on particular projects or issues. Autonomy, a London-based company, has been parsing e-mail for searchable information since 1996. IBM`s Lotus division has a product called Discovery Server, and Microsoft`s SharePoint Portal Server (previously code-named Tahoe) is a document management system that includes similar functionality.

The Tacit product searches and stores phrases associated with people. When a questioner enters a particular phrase, close matches are shown - without identifying the associated "expert". The questioner picks what looks like a good match, and the system forwards the question to the expert, who is free to turn down such a request while remaining anonymous. It does not, however, pull off the more sophisticated trick of actually understanding context and meaning, so a significant error margin is to be expected.

The potential benefits of such document and e-mail management systems are obvious. Gartner estimates that 75% of a company`s communication, nowadays, is carried in e-mail. The average user, it says, spends four hours per day creating, reading and forwarding 30 e-mails.

The potential annoyance factor is not to be discounted, though. One employee was noted as an expert on "new" things, after he wrote some e-mail about New York, and some more mentioning the new economy.

The privacy implications of software like this are also huge. It is sure to - once and for all - kill off the use of corporate e-mail facilities for private use. One might find oneself listed as an expert in a rather embarrassing subject, or even an incriminating one.

Another company that benefited from a limited application of technology is local Nampak subsidiary NamITech. It specialises in secure payment solutions, and has claimed substantial savings through the implementation of Oracle Tutor, a "knowledge transfer" application. It picked the application after it commissioned a R20 million Oracle-based e-business project, to enable it to quickly and cost-effectively convey the details of 200 new procedures to its 65 staff members.

Wynand du Plessis, director of Oracle University South Africa, explains: "Using Oracle Tutor, the cost of implementing enterprise software and training up staff at a company the size of NamITech is only 10% of that of standard implementations.

"While estimated cost savings are obviously critical and impressive, Oracle Tutor is more about ensuring an implementation of a project the size of NamITech`s is successful, by significantly easing knowledge transfer during an implementation," he says.

Few realise that KM requires a change in culture for most organisations out there, and that you can`t buy it neatly packaged as a software solution off the shelf.

Monika Calitz, senior consultant, Comparex Africa

"Oracle Tutor lets you tackle the issue of end-user training in terms of time and costs, and yet still makes it specific to the way the customer has chosen to use Oracle in his organisation. That`s as invaluable as on-going cost savings because you can maximise the use of your new system faster."

Several other South African companies use products such as Oracle Tutor to develop processes and related courseware for their staff.

Similarly, Nedcor`s Smith says her company began its knowledge initiative by building a document library with the intention of capturing "corporate memory".

"While not very sexy, and certainly not rocket science, people were excited by this and could see the benefit - if only to stop them searching for documents three months after a project had ended."

While nobody would argue that any of these applications is, in fact, "knowledge management", each one of them contributes to the Platonic ideal of KM.

Smith agrees: "You still need to get the message across that this is only a portion of KM and that you`re always looking for ways to capture and represent current knowledge and thinking within the organisation."

The continued development and entrenchment of such individual projects build up ways of managing businesses in which knowledge and the ability to use it are the cornerstone of value creation and competitive advantage.