Knowledge Management and the Energy Sector: Part One

km-logo(This blog, written for Interliance Consulting, previously appeared on the web site.)

Over the past 20-plus years, Knowledge Management and Knowledge Transfer have become essential components necessary to achieve organizational excellence.  Utilized across multiple industries, Knowledge Management comprises the strategy, processes, practices, methods and technology that enable an organization to create, maintain and leverage its individual and collective knowledge to achieve its goals.

Stated most simply: The goal is to get the right information to the right people at the right time.  If done properly, business success likely follows.  Barriers are broken down.  Safety goals are met.  New workers become productive more quickly.  Financial performance improves.

Change, of course, threatens success.  And no area of the economy currently is undergoing more striking change than the energy sector.  A significant percentage of the workforce is aging, and experienced workers are retiring.  They are being replaced by a different generation, in many cases inexperienced first-timers drawn to the multitude of new opportunities available in the sector.

Compounding the challenges are the operational and technological changes buffeting the sector – as well as increasing regulatory and compliance requirements.  Technologies used across the energy sector have changed and evolved at a rapid rate.  New sources of supply have emerged, potentially changing the entire nature of the industry.

Successful Knowledge Management – and Transfer – is essential.  To be fair, the energy sector has not been sitting on its hands.  Kenneth T. Derr, former chairman and chief executive officer of Chevron, is one executive who was an early supporter.  “Of all the initiatives we’ve undertaken at Chevron during the 1990s,” he said at the 1999 San Francisco Annual Knowledge Management World Summit, “few have been as important or rewarding as our efforts to build a learning organization by sharing and managing knowledge throughout our company.”

Clearly, progress is being made.  Nonetheless, management teams worry that the changing environment could cause energy companies to be stung by significant knowledge loss.

The fact is, Knowledge Management and Transfer is no easy task, and for the energy sector to achieve optimal results, companies need to successfully address the following challenges.

Knowledge Management is an enabler; it’s one of the tools in the toolkit.  Problems develop when management teams forget this fact and, instead, treat it as the goal or objective.  It isn’t.  Knowledge Management is a tool that, when implemented properly by management, helps a company to achieve its actual business goals and strategies.

Executive Sponsorship
A Knowledge Management program is a C-Suite-level initiative and, as such, demands executive sponsorship to succeed.  Irrespective of whether the original idea began in the CEO’s office or in lower levels of management, C-Suite support and active involvement is required from start to finish. The sponsor wears the program as a badge on his or her chest, provides strong advocacy and helps the implementation team navigate and break down barriers.  Appropriate executive sponsorship also helps address a related challenge: funding. An inadequately funded rollout of a new Knowledge Management initiative is doomed – and likely will fail.

Day-to-day program “ownership” also is essential, and it needs to be clear to everyone in the organization that someone – in fact, the “right someone” – is in charge.  Without this clear leader, approval and/or implementation of key initiatives may be delayed or not achieved at all.  In the energy sector, lines of authority can sometimes be blurred because of the heavy use of outside contractors, and because of language issues across geographies, so it is important that program “ownership” is clearly established at the outset.

Each organization has its own needs, personality and values.  This is especially true in the energy sector, which comprises distinct industries and technologies, and spans multiple borders and cultures.  Therefore, the specifics of the implementation plan – and each of the tools utilized – are critical to ensuring success.  Boilerplate will not work.  Each plan must recognize – it its objectives, strategies and tactics – the unique circumstances and characteristics of the company, its sector, its people and its geography.

Human factors, of course, affect every organization, and employee behavior can exert significant impact on a Knowledge Management initiative.  Employees can be reluctant to share information for any number of reasons.  They may be hesitant because they believe it makes them personally less valuable to the organization.  Or they may be afraid to share mistakes they have made.  Or they may simply not trust others in the organization, including the person with whom they are instructed to share.

The question that is top of mind for every employee is “what’s in it for me?”  Just as they ask it in merger-and-acquisition or change-of-strategy situations, the five-word sentence is the first thing they think when asked to share knowledge.  The fact is, Knowledge Management and Transfer is extremely difficult in organizations that have not aligned their employee’s individual goals with those of the overall organization; are competitive or confrontational; discourage interpersonal communication, or overtly or covertly encourage individuals to seek power for personal gain.

If not addressed properly, these challenges can derail a program and prevent a company from achieving desired results.  Our next column will focus on the tools thant can be used to overcome these obstacles.


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