Dialog: Running Light One-On-One
Steve Cranford is the partner-in-charge of the knowledge management practice at KPMG.
RL: Tell me about how you launched the knowledge management practice at KPMG.
SC: I got into the KM as a result of the evolution of work that I was doing with KPMG in data warehousing. In the course of delivering data warehousing services to clients, we began looking at some of the challenges we were facing. Most of the challenges were not about the implementation of technology; they were about process, people, and change management issues. The methods for building data warehouses had matured almost to the point of being cookie-cutter, but we were doing very little in education. We identified the need for a lot of work in business process and change management to help these organizations use information to achieve the next level of business performance. To do that we had to integrate new skills with our data warehousing practice. We started to collaborate with our strategy practice and our process practice. That is when our knowledge management practice started to evolve.
RL: So you see knowledge management as evolving from advances in technology and preceding management practices?
SC: Today we view knowledge management as both a management discipline and a business model that companies use to move the industrial age to the information age. You can’t implement knowledge management by putting in a system, rather, you build a knowledge management environment by putting in the systems that support the environment. At the highest level, knowledge management is really business transformation that goes beyond business process reengineering and data warehousing. Business process re-engineering focused just on processes and it did not look deeply at the people and technology issues. Data warehousing didn’t look at the process side, or the people side, just the technology. Knowledge management is bringing all of these things together.
RL: Many people think knowledge management is about the technology. However, I have found that the technology forces you to look at the problems that you didn’t deal with before. So in a sense it is less enabling technology and more illuminating technology. It forces you to question your assumptions and focus on vision.
SC: I agree. I don’t think we have even begun to realize the power we are going to have once we start to get beyond the embryonic stages of knowledge management. Once we get into some the larger, enterprise-wide implementations, KM is going to transform the way businesses are run today in a dramatic way. Some of the Internet startup companies, the .com businesses, are starting to demonstrate the impact of the using and sharing information. These firms now have the ability to take a value chain and a supply chain and move all the way from manufacturing to customer and back to manufacturing while gathering information at every point in-between.
RL: How do you measure the success of a knowledge management project? Are you evolving unique measures for KM processes outcomes? Do you tie KM measures back to traditional kinds of financial ROI measures?
SC: It is difficult to tie KM back to traditional types of measures. We are now working on how to measure the value of intellectual capital. The Canadian Public Accountancy Board is planning to actually make IC a line item on the balance sheet. We are following that activity very closely. If we crack that nut, we are going to have the diagnostic capability to value the intellectual capital of an organization. It is more than just looking at market capitalization minus fixed assets.
RL: What are your key knowledge management offerings at KPMG?
SC: We are positioning ourselves as a soup-to-nuts provider and integrator. We can bring everything from the strategic consulting on knowledge management to the physical implementation and technology platforms. We are developing a three-channel approach to providing services to the market.
The first channel is a holistic approach for the organization, where we develop the knowledge strategy for how to move the organization from their current state to a knowledge-centric state. This focuses on the people-process-technology issues. The second channel provides point solutions for knowledge management in the research and development function. This is a customer-centric knowledge management function as a means to prove the concept or act as a first step towards becoming knowledge-centric. The third channel is integrated knowledge management that embeds knowledge management concepts, systems, and applications in solutions for customer management, IT management, and human resources.
RL: Do you have any stories you can share about what some of your clients have been successful in doing in KM so far?
SC: I have a couple stories from both the success and the failure columns. On the failure side, last year we worked with a major client that had expressed an interest in becoming a knowledge-centric company as a means of fully levering their large investment in technology. We put together a strategy and presented it to the board of directors and to the CEO. We introduced the terms chief knowledge officer, learning organization, and others that just overwhelmed them. It was not that the idea was bad or we that we had done shoddy work, it was that the cultural implications were overwhelming. It was actually a good experience for us because it cemented our belief that buy-in at the executive level is absolutely critical before any strategy should be formed.
On the success side, one of our clients was doing a global implementation of SAP and having a hard time coordinating the work they were doing in the US with that being done in Germany, and Australia, and other geographically distributed locations. We built a knowledge-based program management capability for them so that they could collaborate, share, and learn from the experiences of those working at other sites. This helped them expedite the implementation and cut associated costs. In this case management could see the benefit of knowledge management and measure its ROI in terms of time and cost savings for the implementation.
RL: What advice would you give for the new manager who has been tasked with doing knowledge management in their organization?
SC: Without sounding melodramatic or alarmist, if you want to be a viable business two years from now KM is something you need to explore today. The face of business is changing so dramatically and so quickly that if you wait a year or two, there are going to be new competitors in new markets through new channels that you cannot even predict right now