Although initial efforts in knowledge management were gloomy, a ray of sunshine is poking through the clouds.

After a largely unsuccessful start, knowledge management is making a comeback. More than ever, companies are recognizing that leveraging knowledge assets is critical to their ongoing ability to compete in a growing global marketplace. Effective knowledge management requires more than access to online collaboration tools and posters pitching the cause. Let's take a look at what some successful E&P organizations are doing to make it work for their businesses.

Knowledge management

Asking for a definition of knowledge management is like asking people to describe a cloud. No two people will give you the same answer. The most useful definition, however, goes something like this: the set of processes through which employees share business-critical knowledge across the organization to derive competitive advantages and mitigate business risks for the company.

Other definitions often include descriptions of technologies such as knowledge repositories, expert access tools, discussion boards, chat rooms, online meeting tools and data mining tools. The tendency to define knowledge management as a list of technologies hearkens back to an earlier, cloudy time.

Back then

Enterprise knowledge-management systems began making their appearance on the dot-com scene around 1996-1997, following closely on the heels of high-end enterprise resource planning (ERP) systems and customer relationship management systems. Knowledge-management systems were designed and driven by technology companies. Technology companies have an understandable affinity for selling technology tools bundled in packages and for selling them as enterprise licenses (read: revenues). These companies pitched a turnkey solution to the very broad problem of "knowledge sharing in the new economy." After all, there was already a growing acceptance that people in global companies working in knowledge-dependent and information-critical roles needed to share information and best practices. At the time, large companies were investing in new technologies at a dizzying rate. In the high-flying, techno-friendly economy that was the late 1990s, an enterprise knowledge-management system seemed like the obvious solution.

Further, these systems were pitched as "self-service" corporate knowledge resources. The implied goal was noble: once the technology was installed, users would automatically rush to the system and enter business-critical information and best practices and conduct thrilling educational conversations with their transatlantic counterparts via chat rooms and discussion threads. And, although it was not often explicitly communicated, there was a general understanding that these systems were "self-maintaining." The users themselves would "own" this initiative and this system. They would purge bad information and police their own online communities. Essentially, technology companies based development on new and exciting technologies and assumed that "new models of working" would happen naturally as a result.

Why they failed

This approach to enterprise knowledge management failed miserably for a number of very good reasons. The goal of early systems was much too broad; there was no clear way to determine the success or impact in light of any meaningful business measures. Sure, we could see how many people accessed or posted information to the system (and these metrics were, by and large, vastly disappointing). But we could not gauge to any useful degree competitive advantages gained, dollars saved on training and travel, or revenues generated as a direct result.

Additionally, there was no recognition that managing knowledge successfully required a substantial change in the business processes of the intended user group. The notion that people would immediately and automatically adopt a new knowledge-management system and figure out for themselves when and how to use it in the course of their everyday work was ill-conceived. The painful history of other enterprise technology implementations, such as SAP or Seibel, should have been more instructive to early knowledge-management champions; enterprise technology implementations always have required more time, training and convincing of end-users than anticipated. And no technologies - with the arguable exception of enterprise e-learning - have proven themselves easier to ignore in the regular course of business than knowledge-management systems.

There were other clear reasons for the failure of early initiatives. New technologies are intimidating to non-technical users. In general, users need to be supported when new technologies are introduced. With respect to knowledge management, if any training or online help was provided, it usually focused on the features and functions of the system, rather than the practical applications and business context of its use. Change management, if done at all, generally consisted of posters, newsletter articles and emails announcing the "availability" and features of the system. Seldom were meaningful incentives provided. Even more seldom were contributions and successful interactions recognized in any formal way or integrated into job performance measures.

Enterprise knowledge-management systems, in their earliest iterations, were very expensive investments and yielded little in the way of any discernible return. However, it is an issue that will not die. The largest corporations in the world are recognizing more and more the need for leveraging their knowledge assets around the globe, both as a competitive advantage and as a mitigation of risk.

Role consolidations

Exploration and production (E&P) organizations are dealing with an urgent set of challenges, including mergers, globalization and rapid changes in technology and demographics. Proper knowledge-management implementation can make these changes easier to swallow.

Our E&P contacts are particularly interested in knowledge management revolving around job/role consolidations. Increasingly, employees are being expected to perform larger and different roles than those for which they were educated and hired. Today, a geophysicist often will perform some or all of the job functions that were once handled by a geologist (and vice versa). Similarly, a seasoned production engineer might be assigned for a time to the role of reservoir engineer. People working across disciplines need tools to support them as they perform unfamiliar roles. Well-designed knowledge-management tools and processes can enable these employees to collaborate with experts, to learn new technical and business processes, and to access critical information relevant to their new roles.

Leveraging global expertise

Leveraging critical knowledge and expertise across a global organization is another issue we are seeing in E&P. Often, specialization in particular proprietary technologies and processes is regional. Since one of the reasons for the consolidation of oil and gas corporations is gaining a competitive advantage through the acquisition of technologies and processes, it is of critical importance that these technologies and processes are shared with other E&P divisions around the world. Many divisions within large multinational oil and gas corporations already have some form of knowledge management or shared best practices initiative in place or in development. Sometimes, these initiatives are powered by collaboration tools and database technologies, and sometimes not.

Mitigating risk

Additionally, global companies are discussing knowledge management as a means for avoiding costly errors. One of the largest oil and gas companies in the world repeated the same multi-million dollar mistake (incorrect application of a corrosive cleaning agent) on two of its platforms this past year. That's because there was no process in place for communicating the key learnings from the initial incident to other field developments around the world.

"Big shift change"

Probably the most often-cited reason why E&P organizations are interested in knowledge management involves what some are calling "the big shift change" - the impending retirement of the majority of E&P technical professionals within the next 6 to 8 years. This demographic trend represents a significant risk to multinational oil and gas corporations. E&P technical professionals hold in their minds a wealth of valuable knowledge on proprietary processes and technologies. Today's E&P organizations are spending significant energy and time planning how to recruit, mentor and train new technical professionals well enough to take the place of this retiring contingent. However, even with constant attention, new hires will not be able to rise to the competency of a 30-year veteran within 8 years. E&P companies need ways to capture and share specialized technical knowledge in a permanent and reusable way. Ultimately, global organizations will need these processes to be supported by some form of knowledge-management technologies.

Successful knowledge management

Today, the distinction between knowledge management and knowledge-management systems is becoming less cloudy. Knowledge management is the set of processes by which employees share business-critical knowledge across an organization to increase profits and reduce problems for the company. In many cases, it makes good sense to support these processes with knowledge-management technologies.

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