WATCHING THE WORLD

David Knott
London
[email protected]

In any organization, there is lots of information just lying around.

To make an organization act smarter, the good ideas hidden among this information must be put to use.

This might seem obvious, but according to Tony Davies, head of knowledge management practice at Renaissance Solutions Ltd., London, good ideas are commonly wasted.

Renaissance originated in the U.S. in 1995 and markets knowledge management software to companies, with several oil and gas majors among its customers.

"Knowledge management is about getting smarter," said Davies, "by capturing good ideas, allowing people to communicate and to solve problems in teams.

"It is about applying the information that is latent in any organization and turning it into applicable knowledge. To do this, we started developing knowledge communities.

Communal approach

"There is no such thing as a typical knowledge community, but the most successful include people from diverse backgrounds. Each member holds part of the puzzle, but only when the pieces are put together does the full picture appear."

A drilling knowledge community, for example, could consist of drilling engineers, production engineers, geologists, and chemists. They need not ever meet; they could communicate using desktop or laptop computers.

Davies said an intranet is a good medium through which knowledge communities can operate.

"It takes only $40,000-50,000 to set up a worldwide intranet," said Davies. "The intranet can be the holder of a company's best practice. The beauty is that people can use it to solve their own problems.

"Survival in this industry is coming down to who moves quickest with particular information. Many industry commentators are saying that the difference between success and failure will be ability to share knowledge."

Davies said a key reason for wasted information in petroleum industry is that companies reward employees for success but not for sharing details of how they achieved success.

Motivation

"At one company," said Davies, "we took the black books out of all the back pockets of the drillers. We combined the knowledge in these books and now the company saves $40 million a field on drilling."

Chevron Corp. was said to be saving $400 million/year by getting all its refineries to operate at about the same efficiency. This, said Davies, was achieved by circulating methods used at the most successful plant to optimize efficiency.

"If you motivate workers to shield information," said Davies, "they will do that. If you reward them to improve and share knowledge, they will do that instead. It's a culture thing."

In the old days, a suggestion box was often used to collect ideas, with a small reward for any good ones. With computer technology, ideas received and the benefits of any which are adopted can be monitored.

"If employees are able to save you a few million dollars," said Davies, "maybe you would want to offer reasonable rewards. If not, why should they stick their heads above the parapet?"