Shedding light on knowledge management; lessons learned lead to new ideas about sharing information

HR Magazine, May, 2004 by Pamela Babcock

Many knowledge management experts point to the events of Sept. 11, 2001, as the ultimate reason that information-sharing systems are necessary. The FBI has drawn criticism for ignoring intelligence that could have thwarted the terrorist attacks and for an apparent lack of communication with the CIA. According to congressional hearings, government agencies ignored many other signs--some going back as far as 1994.

It is a dramatic example of the failure of knowledge management. In an agency such as the FBI, where the sharing of information can save lives, such lapses can mean tragedy.

In the business world, they can bring huge financial losses. Fortune 500 companies lose at least $31.5 billion a year by failing to share knowledge, according to International Data Corp. (IDC), a Framingham, Mass.-based market intelligence and advisory firm in the IT and telecommunications industries.

It's not that companies and organizations aren't trying. Since knowledge management became all the rage in the high-flying 1990s, companies have poured tremendous resources into knowledge management technology that has failed miserably or shown little results. Businesses sank $2.7 billion into new systems in 2002, according to the IDC, which estimates that number to rise to $1.8 billion in 2007. The federal government will boost knowledge management spending from $820 million in 2003 to $1.3 billion by 2008, largely for homeland security requirements, according to INPUT, a Reston, Va., market research company.

Will these expensive new attempts work? Only if they take clues from past failures and develop a different approach, experts say. The reasons for failure are many and varied, but two factors seem common: Technology is too complicated, and, perhaps most important, organizations don't give enough consideration to the barriers human nature poses to information sharing.

"Knowledge management is change management, and, if you don't understand people's perspective, all the strategy and technology in the world means very little," says Carol Kinsey Goman, president of Kinsey Consulting Services, a human capital consulting firm in Berkeley, Calif.

HR can provide the balance needed during knowledge management implementation that ultimately can make a system work, says Marc J. Rosenberg, author of E-Learning: Strategies for Delivering Knowledge in the Digital Age (McGraw-Hill, 2000) and a knowledge management and e-learning consultant in Hillsborough, N.J.

"Where one side is heavy on trying to do the right thing with technology, HR can say 'What can we do to motivate people? What are their needs and comfort factors? And how can we assess quality of intellectual capital?'" Rosenberg says. "When you have a nice equilibrium among IT, HR and the sales or customer care side of the business, chances are you are going to be more successful."

Taming the Technology Monster

Everyone seems to agree that knowledge management should deliver top-line growth, improve operations and increase profit margins. Yet many knowledge management systems fail to deliver on this promise--at least to the extent that they could.

Knowledge management systems don't so much fail as they fail to meet their potential, says Thomas H. Davenport, a professor and director of research in the school of executive education at Babson College in Wellesley, Mass. "The failures are not clear failures in most cases,'" says Davenport, who--along with his colleagues--studied 29 knowledge management projects.

These projects "got used to some degree, but they really didn't revolutionize anything. The good news is most were successful by some criteria. They were getting some users and seemed to be providing some economic value," says Davenport, who is co-author of Working Knowledge (Harvard Business School Press, 2004).

The problem was that many of these programs failed to address key information needs. "Maybe three out of the 29 were really mission-critical applications," he says.

In other situations, knowledge management systems were perhaps poorly integrated with workers' jobs. The result was that users were buried with data, says Davenport. "Some of the consulting firms' systems, I think it's fair to say, got too much knowledge put in them, and people got overwhelmed by the amount of stuff they had to deal with."

Similarly, Rosenberg recalls a large firm that built "the Rolls Royce of knowledge platforms" but found that the overengineered system made every upgrade a monumental undertaking and kept the company so busy that it couldn't keep up with the rapidly changing business.

"Many people are going overboard," says Theresa M. Welbourne, CEO of eePulse Inc., an employee communications technology and research company, and an associate professor of organization behavior and human resource management at the University of Michigan Business School in Ann Arbor. "They're developing tools that are really 'cool' from a technology point of view, but that are not something that fits how a user does his or her job."