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A crucial business imperative - Leveraging human capital

This article appears in the issue April 1999 [Volume 8, Issue 4]


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As the value of intellectual capital is fully realized within the business community, greater emphasis is placed on the preservation and exchange of employee knowledge. Effective utilization of expertise within an organization means increased collaboration, competitive advantage and market longevity. And as employee retention becomes more and more challenging in a volatile job market, documentation of intangible human capital becomes a business imperative.

A KMWorld reader survey of senior management reveals that concern about knowledge retention spans vertical market segments, from financial services, healthcare and utilities to education. While 59% of respondents consider the loss of knowledge when an employee leaves to be a problem, another 38% term it a major problem. Despite that, systems to prevent losses of corporate capital are not being implemented or upgraded with the same fervor. Thirty-two percent have a system in place that still needs improvement, 23% are working toward an implementation, and while 27% consider such a system important, they neither have a system nor an immediate plan to establish one.

Exemplifying why it is critical to capture human capital, David Werner described a scenario at Northshore Utility District: "We currently have a problem in one of our departments because we’ ve been unable to hold an employee there. Each has left with a little less knowledge, and now no one knows the whole job, except the manager, who is stretched too thin." How to avoid such dilemmas is the question human resource managers are facing.

Sharing the responsibility

Best-case scenario, there is a central repository that can be contributed to constantly, by all members of an organization. But when it comes down to a question of who is responsible for tracking expertise, responses are varied. While it is an evolving task of the HR department, many others weigh in on the directive.

As Robert Sutton of NationsBank said, "Personnel has been charged with tracking; however, all levels of management are collaborating to obtain the best possible results."

This sentiment was echoed by other respondents, who list the following as being most involved in such projects: president, administrators and directors, managers, IT manager, IS department and HR division.

A county hospital information manager said that documentation "varies by department and role; there is no set method."

Barbara Bergen of the Practising Law Institute agreed, saying that tracking is primarily comprised of "management and HR’ s knowledge of individual employee’ s skills - Nothing formal."

Reliance on tradition

A lack of a structured methodology in some organizations leads to reliance on slightly outdated and haphazard techniques such as word of mouth, trial and error and archived annual review documents. The old standbys - written job and process documentation, cross-training and standardization of practices - still comprise the primary techniques for locating experts within many organizations.

To combat knowledge loss, Karen Unger, president of American Document, reported the company maintains written documentation for each piece of software and hardware, technical update notes, a corporate diary and project notebooks.

Establishing a skills database serves as the first step toward a more sophisticated knowledgebase.

Michael Kridel, a CPA at Daszkal Bolton & Manela, said he relies on an "access database of individual specialized skill sets," while a Blue Cross & Blue Shield branch is currently making the transition from written documentation to "a metadata project which will house employee information."

Repositories and other tools

The more traditional approaches are beginning to mix with current knowledge management practices: Web- and intranet-based repositories and databases, computer-based training, audio and video conferencing, and orchestrated interdepartmental sharing sessions between "experts" and coworkers.

The key for Computer Sciences, a global company of 50,000 employees, is an "ongoing technical refresh of the database as part of new employee and annual skills updates from existing staff," said Philip Runyan, senior manager. The primary tool used is a Lotus Notes database.

Wing Yu, senior technologist at The Prudential, also pointed to a "Notes database where employees input their expertise, which is monitored by our HR and upper management to identify training to improve efficiency."

Gary Stropoli, VP of American Re-Insurance, concurred: "We are working on such an initiative and will implement policy, procedures and systems to support the expert knowledgebase in the future. Our first step has been to use Lotus Notes databases and intranet applications to share data."

ERP systems with HR modules comprise the next tier of solutions. Countrywide Home Loans is "using PeopleSoft’ s HR tools, Employee Records and Evaluations, and Employee Survey," to accomplish job and process documentation, said Rodolfo Nonato.

Another company, MSKCC, is currently implementing PeopleSoft, with a more robust Develop Workforce Module.

Measure success by collaboration

Does knowledge tracking pay off?

Well, yes. The greatest byproduct is sharing. At BGS&G Consulting Services, "employees are realizing that they might not be the first person to encounter a certain problem, and are more inclined to ask a departmental technology mentor rather than reverting to pen and paper," according to Curtis Jacobson.

Regarding tangible ROI, Robert Sutton said, "Although we have seen increased cooperation, measurement has been less than scientific. Hurdles still exist as a nationwide concern; many areas have yet to buy in to the ideas of remote management and shared responsibilities."

As HR executives continue to extend knowledge capture directives, the segue from traditional to current knowledge sharing practices will become more marked. The transition is underway, according to Edward Kleinert, who is watching it unfold at MSKCC.

Information about employee expertise "is stored in the App Management System and will be stored and distributed even more effectively in our ERP system. We are not using a formal KM system to more effectively capture, compile, distribute and store data. That will follow," Kleinert said.


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