An Interview With Linda Holbeche, Director Of Research, Roffey Park Institute

If designing an organisation from scratch what key things need to be considered to maximise opportunities from a knowledge perspective?

Focus on getting the structure right: Where possible aim for small units and project-based working, in this way enabling more ideas to flow and be put to good use for the business as a whole.

Develop facilitative leadership: I have an interesting story about this from a client of mine who are providers of investment management services. In one of the teams the leader was new to the role. He had been promoted from within. One of the corporate goals for the organisation is the cross-selling of projects, as a way of maximising overall efficiency and returns. However, there is a tension with this particular goal and the company reward system, which is not team-based.

When he took up his new role this particular leader instructed his team to forget about cross-selling of projects and instead focus on improving their own team’s performance. The team set about creating their own simple knowledge management database in which they captured critical information about each of their clients. Each team member was encouraged to develop their antennae so that they became attuned to information about current and prospective clients that they could use in a strategic way. The informal contract between team members meant that they were each attuned to picking up critical information about each other’s clients. Very quickly the team built up a database containing information which others in the company ‘would die for’.

Because of their approach the team quickly gained a reputation for being one of the most highly effective and successful. Needless to say other managers wanted to identify what made this particular team so successful. However, the mistake that the organisation made was having identified the source of this particular team’s success it tried to take control of the database that the team had developed and turn it into something that could be used by others in the organisation. The result was less than satisfactory, both for this particular team and the organisation as a whole.

Build a good IT Infrastructure and ensure that everyone is trained to use it.

Build relationship with suppliers: Even in situations where services have been contracted it is important to build a good working relationship with third-party suppliers. A good

thirdparty supplier needs to understand your organisation’s business. So it is important to spend time developing the relationship and working on joint developments and learning projects.

How can HR really make an impact from a knowledge management perspective?

They need to work with the key decision makers to identify what the priorities are and focus on those. They need to help the organisation work out what its core capabilities are and also those of individuals within the organisation. Once they have helped identify the gaps between what is needed and what is required they can then develop a plan to address the gaps, either by recruiting in the missing capabilities (either short-term, or as a permanent appointment), or focus on development plans.

HR need to be championing and enabling a culture that is knowledge enabled. HR should not see themselves as the guardians of corporate culture, but instead be enablers of the corporate culture and be supportive of the necessary changes. They need to be talking to their colleagues out in the business.

They can act as catalysts for culture change, helping to spur on those aspects of the culture change that are important for future business success. They should encourage new ideas and ways of working and also ensure that high calibre people are recruited into the business.

Another key area where HR can make a big impact is helping the organisation implement the right structure, one that supports high performance. HR should help build an infrastructure that is adaptable and skilled. This requires addressing some higher-order goals, such as:

• Organisational design and structures. This requires a range of strands to be followed in parallel. Structures need to have permeable boundaries to allow the free movement of people. However, attention needs to be given to balancing the strengths and weaknesses of small autonomous units. While small units can enable autonomy and freedom, they can lead to duplication and wastage. Large structures on the other hand can stifle innovation, be cost-intensive and lack a customer focus. We should perhaps then think of organisational structures as ‘loosely coupled icebergs’. Where the organisational structure consists of small units, with flexible boundaries, then it needs to pay attention to developing people who are capable of working in this way.

• Careers and career structures. The organisation needs to attract people who are predisposed to being flexible and adaptable. Once inside the organisation, these people need to be inducted well. Where individuals are placed in key roles where they are developing new capabilities, or working in uncharted territories, the organisation needs to make sure that their capabilities are really being utilised. If not then these high-performing individuals will become disillusioned. Of course having recruited the best, the organisation needs to work at retaining the best.

• Performance management. Individuals need to know what is expected of them and what rewards to expect when they deliver. HR needs to develop a reward system where people are rewarded for knowledge-building and sharing.

• Developing a learning focus to enable the organisation to build its capabilities.

• Succession planning. This requires constant attention, not just a one-off initiative. HR will need to keep on challenging line managers about their succession planning approach. Consideration needs to be given too to protecting the organisation’s Intellectual Capital.

Strategies and policies for each of these areas need to be followed through with a partnership approach to implementation with line managers, the IT function and other key functional teams.

HR needs to work out what they are good at themselves (their own USP) and focus on that. One of the things that HR needs to avoid is getting itself locked into an operational trap, where they find themselves with a finger in every pie, but are not really having a strategic impact. They shouldn’t expect to do everything themselves. They need to know what areas to tinker with that will have maximum impact for the business. As a team they need to have a list of key areas to focus on. This may mean at times working on a number of what might seem disparate projects, but which in fact are joined-up.

The HR function needs to see itself as an integrating function. This may mean getting involved in areas that they haven’t been involved in before, e.g. ergonomics and office and space planning. They could consider taking on the role of Workspace Adviser, helping to draw together the IT and physical office requirements that enable knowledge to flow.

They may also need to help the business get back to basics and keep in touch with real operational difficulties. Take M&S and Asda, for example, they have both initiated a ‘Back to the floor’ programme. After the trading difficulties, M&S managers spent time on the sales floor listening to what customers and staff want.

In ASDA, all store managers spend one day a week on the sales floor working alongside their colleagues.

What can HR do to help their organisation retain knowledge?

In merger situations, or indeed any major change programme, HR needs to be involved in the organisation’s People Plan at a very early stage. Without this the organisation is likely to lose its most able people.

When we were doing the mergers research at Roffey Park we found some interesting data about employee retention during merger situations:

• 39 per cent fail to retain their best talent.

• 67 per cent fail to deploy talent effectively.

• After making people redundant, many organisations then find that they have to start recruiting again as they don’t have the resources they need to perform in the new business.

• There are two phases of exit in a merger situation. Those who go immediately, without waiting to see what new opportunities there might be. Those who play the waiting game, waiting to see if what is on offer meets their expectations.

HR’s role at this early stage in the change process should be to:

• Help identify what the organisation of the future will look like.

• Identify what capabilities the organisation will need. What it is good at already and what it needs to become better at.

• Identify the capabilities of the merging organisation, so that synergies can be determined.

• Establish which bits of the organisation are most at risk and hence need to be protected.

• Talk to managers about the way jobs are likely to pan out.

• Keep their ear to the ground, to identify issues of discontentment identifying what is real and what is fiction.

To achieve this HR will need to work in partnership with their counterparts in the newly merged organisation, even though their own position may be unclear at this stage. As the new structure emerges, HR needs to focus on:

• Introducing new structures and processes, such as collaborative working and cross-boundary team working.

• Ensuring that the right people get positioned in the right jobs.

Here it is important not to overlook junior people.

• Making sure that people are inducted into their new roles, so that they understand what is required of them.

• Targeting people whom they think need to be retained and ensure that the right rewards and incentives are in place to retain them. This may mean having to provide retention bonuses, or placing individuals in roles that provide developmental stretch.

• Facilitating the process of new teams working together.

• Developing people management policies and practices that are fair for all parties in the newly merged organisation. This includes ensuring that career structures and systems meet the needs of the changing organisation.

• Putting processes in place for learning from the change process, thus helping to build the organisation’s capabilities for managing change in the future.

• Focus on identifying the key people that need to be retained and put systems in place to help them manage their careers.

What about HR’s own capabilities, what should they be focusing on?

HR need to be well networked themselves, both within the organisation and outside. They need to be influential at all levels and build up their own personal credibility. It is important for HR to understand the business that they are working in. How can they be effective if they don’t understand the business? To be effective they need to spend time with their business colleagues building an understanding of what their issues are.

David Dell, the Research Director of the Conference Board Inc., a research network in America, argues that HR needs to learn to redirect themselves and their organisation towards a culture where collaborative and cross-functional team working is the norm and where the organisation is able to attract and retain the best talent on the market (Roberts-Witt, 2001).

If, as Tom Knight (2001) argues, the goal of any knowledge management approach is to change the way people behave, then clearly HR has a crucial role to play. While HR cannot in itself change an organisation’s culture it has the ‘know how’ to influence and support the transformation of an organisation’s culture.

Where should HR start?

Work With Business Leaders To Help Clarify The Start And Endpoint

Work with business colleagues to build a clear picture of what a knowledge-centric culture would look like within the organisation and assess the gap between where the organisation is now and where it wants to be. Chapter 10 contains some tools that could be used for this activity. In addition, generate a discussion around the ‘blueprint for a knowledge-centric organisation’ discussed in Chapter 3. Do you agree with this blueprint? Do colleagues? What elements might be missing?

There may be a need to gather some basic data, by asking the following basic questions:

• What knowledge do we have now and where is it located?

• Do we know what we are good at and what we are not so good at?

• Is the information that people need to do their jobs being systematically disseminated?

• Does the organisation systematically gather information/ intelligence from outside? What happens to this? How is it used?

• How does new knowledge get created and shared? What groups/areas/individuals are better at this than others?

Identify And Agree On A Few Strategic Goals

In the General Motors (GM) Corporation, for example, HR have been set a number of strategic goals that relate to managing knowledge (Roberts-Witt, 2001). One is to identify and eliminate unnecessary bureaucracy within the corporation. This involves reviewing different organisational practices to identify inefficiencies and barriers to rapid implementation and then redesigning these processes so that they are smoother and quicker. Another is to recruit, develop and retain flexible and mobile workers. A third strategic goal is to identify employees who only intend to stay with GM for a limited period of time so that the implications for the organisation’s knowledge base can be managed, as well as deciding how best to manage and reward individuals during the short time that they plan to be with the organisation.

Agree Priorities For Change

Having defined the end-state, the next step is agreeing the priority areas for change/action. It is far better to focus on a few key areas, rather than spread resources too thinly. Agreeing a few key priority areas for change will also make it easier to monitor and report on how well changes are being embedded. Often easier said than done, but each of the senior management team will need to agree on the priority areas for change.

Many change initiatives often fall by the wayside after the initial flurry of activity, due to a number of now well-documented factors (Kotter, 1995). These include:

Error 1: Not establishing a great enough sense of urgency, often referred to as not having a burning platform.

Error 2: Not creating a powerful guiding coalition.

Error 3: Lacking a clear vision.

Error 4: Under-communicating the vision.

Error 5: Not removing obstacles to the new endpoint.

Error 6: Not systematically planning for and creating short-term wins.

Error 7: Declaring victory too soon.

Error 8: Not anchoring change in the new culture.

With these factors in mind it seems essential that when embarking on their knowledge management journey the organisation sets up some form of steering group, consisting of key players from different parts of the organisation (e.g. HR, IT, Marketing, Business Strategy, Internal Communications, Customer Services). This is one way of demonstrating how seriously the organisation is taking the subject of knowledge management. One of the roles of this forum will be to ensure that a plan is put in place to ensure that the organisation does not make the same errors listed above. Leadership of this forum is crucial. It needs to be someone who is a respected player, has the ear of senior colleagues, and is very approachable.

Engaging Managers Across The Organisation In The KM Dialogue

Drawing on a well-accepted knowledge management technique, i.e. learning from the experience of others, the following case study which sets out the experience of how a car rental company set about developing a service culture, might shed some light on this question.