Picasso by numbers
Knowledge Management (KM) represents an opportunity to incorporate the human element into performance management, something that has been sorely lacking in the exhaustive progression of management tools that have attempted to sterilize the human art of business into bytes of ones and zeros. Touted as the cure, each new tool begs the attention of heart broken executives on the rebound–from TQM to Six Sigma to Lean–when in reality, it’s just a repackaging of predecessors with a few new bells and whistles. The opportunity to incorporate the human element, however, will be spoiled by the misdirected resources and technologies being sunk into KM that threaten to define it as nothing more than an a demented Alex Trebek who seems to know everything and nothing at the same time.
In response to Bain & Company’s latest Management Tools and Trends survey, which reflected the responses of 960 global executives, Darrell Rigby, senior partner and founder of the survey, said that the results showed that “technology’s influence on management tools is maturing”. Rigby found that nine in ten executives felt that information technology created significant competitive advantages. Surely KM was one of the management tools on the mind of executives when expressing the significant impact of technology. Yet, the IT advantages seem elusive; while the survey reflected substantial gains in the usage of KM (now nearing 55%), its satisfaction score ranked near the bottom of the group (fourth lowest). If the disparity between use and satisfaction widens, as the trend seems to suggest, this critical management tool is likely to experience the same fate as the many forgotten tools littering the PI landscape.
For years companies have deployed KM technologies focused on building repositories of knowledge. These dumping grounds have proven difficult to populate primarily due to the unnatural activity of recording for others what one already knows. Bain & Company, for example, created a system in the late 1980s, asking consultants to write one-page summaries of their projects. Yet, after 20 years it was only able to achieve 40% compliance in this initiative. Not until Bain hired and unleashed 20 knowledge “brokers”, charged with the task of encouraging and aiding consultants to write summaries, did a user base begin to establish itself. Raytheon and Xerox have encountered similar hurdles trying to extricate knowledge from their technicians. Raytheon used knowledge “coaches” to help guide input from its technicians’ experiences. Xerox seeded their Eureka system with ideas from management and gave rewards to those technicians that submitted tips.
In an attempt to circumvent the resources required to “broker” knowledge, organizations rely upon technology (the genie in the bottle) to effectively cloud the complicated human issues in learning and teaching. Big players, like Microsoft, which is rumored to be adding “expertise location” as future feature in its office suite (utilizing contextual interpretation of documents and the interconnectivity between people to locate expertise) are poised to create obscure oracles. AskMe Corp. has been engaged by the Commerce Department to create an expertise database. To navigate around the human “broker”, AskMe “simply” asks end users to build a profile by uploading their resume, a list of frequently asked questions, and other documents. The final component of AskMe’s database is an interface that allows knowledge seekers to request information from a list of individuals the system has defined as experts. Furthermore, it records all interaction–further refining expertise based on the participation rate of knowledge providers.
I have no doubt that this approach has “allowed experts to flourish and shine” as the Commerce Department claims. But what does it really buy an organization if those who ultimately engage the knowledge provider, the knowledge seeker, lacks the judgment to distinguish a true expert within a sea of Alex Trebeks? What defines an “expert”? Is it someone who is passionate and prolific? Is it someone who has an impeccable resume?
There is a place for the current pursuits in building KM repositories, but we need to be careful in setting our expectations for the returns on the knowledge found within them. Xerox estimates its Eureka database, with over 70,000 suggestions, cuts costs by 10%, saving millions in repairs. Technical repositories like Eureka effectively use technologies to simplify and distill activities often too complex to fit in a standard set of instructions but are repeated, with variations, again and again. Instructional KM systems like Eureka often meet expectations because the technical knowledge they hold is bite size, contextual, and well defined, requiring less effort to adopt. For the most ardent users of KM, however, many interrelated factors are at play. From subject-area expertise to tactical organizational intelligence, this complex kaleidoscope of knowledge cannot be simply replicated onto the paint-by-number canvas which current technological pursuits provide.
The underlying misalignment between the huge investments in KM technology and their required return is that it is ultimately not about refined expert and knowledge search technologies, save instructional knowledge; it’s about translating the universe of ideas into the adaptable folk taxonomy of the knowledge seeker. The gap between use and usefulness of KM will not only remain but will likely widen as technological answers by Microsoft and others pander to the notion that knowledge only needs to be searchable and accessible to be useful. Latching onto these initial technological answers will only bring disappointment to management and delay progress until a new sexier rendition builds enough momentum to woo the broken hearts of executives once again.
Suspicious Results from Six Sigma
Companies have invested billions in Six Sigma and Lean programs, but have those investments really changed the system? Fortune in fact published an article with the statement that “of the 58 large companies that have announced Six Sigma programs, 91 percent have trailed the S&P 500 since.” The statement is attributed to “an analysis by Charles Holland of consulting firm Qualpro (which espouses a competing quality-improvement process).” The gist of the article is that Six Sigma is effective at what it is intended to do, but that it is “narrowly designed to fix an existing process” and does not help in “coming up with new products or disruptive technologies.”
Economist Tor Dahl researched and compared two sets of business units, those that are considered quality-focused (six-sigma), and those that are considered performance-oriented (stable and consistent). What he found was that corporations that focused on quality encountered lower changes in productivity and lower net income. The net profit rate dropped by 7.65 percent per year.
The revelation of Dahl’s study is that over the same period, the performance-oriented corporations that focused on productivity are also associated with high quality. That is, those companies that primarily focused on increases in productivity produced high quality products and services to boot. Exceptional Performers differed from the Six Sigma companies in dramatic fashion. Productivity and net profit rate were extraordinarily higher.
Source: Productivity or Quality?
Source: New rule: Look out, not in. Old rule: Be lean and mean.