Knowledge Management Case Book: Siemens Best Practises Edited by Thomas Davenport and Gilbert Probst John Wiley/Publicus Corporate Publishing, 2002

This Knowledge Management (KM) case book is one of the best-documented case studies of knowledge transformation at work in a global business powerhouse. Siemens has been rated as one of the top 10 KM-driven companies worldwide according to an international benchmarking exercise (MAKE—Most Admired Knowledge Enterprise), thanks to its comprehensive efforts at fostering, promoting and optimising knowledge utilisation.

The 19 chapters covering Siemens’ KM journey have been compiled by a team of 44 writers, including business executives, managers, interns, professors and graduate students. The material is divided into seven sections, covering overall KM strategy, transfer techniques, communities of practice, e-learning, and organisational change.

With a diverse group of companies and almost half a million employees globally, Siemens is one of the world’s oldest and most successful corporations—which successfully adapted to the chaotic world of the Information Age to restructure itself around its most valuable assets: its knowledge base and people.

“Companies today live in knowledge ecologies where one company feeds knowledge into another. What counts is a networked approach to KM, involving internal as well as external parties. The logic behind this is as simple as it is compelling: “If you cut off the outflow of knowledge, you will also cut off the inflow,” begin the editors Thomas Davenport (KM expert) and Gilbert Probst (professor at the University of Geneva).

But KM is more than technology, and Siemens has also focused on a culture of sharing, synergy, and customer focus, especially in markets and fast-moving technology areas where the customer needs are more for total business solutions and sector intelligence than mere technology components.

KM at Siemens began in a bottom-up manner via various mid-level initiatives in communities of practice and bodies of knowledge. Managers of these initiatives themselves formed a semi-official community of practice. This was then followed by a corporate knowledge function, which officially supported and coordinated these various initiatives, via the creation of the Corporate KM (CKM) office in 1999.

The vision statement, goals and roles at the company now formally emphasise the role of knowledge and sharing. CKM has initiated over a hundred KM projects divided across lines of geography, industry, and functions.
A unique aspect of the book (and of KM practices at Siemens) is the contribution by collaborating academic institutes such as the Universities of Munich, Graz, St. Gallen, Geneva and MIT. The academic inputs helped develop the case studies into useful lessons for learning about KM, as well as readable and informative narratives.
There can be numerous barriers to sharing knowledge in a company: personal (lack of time or confidence), collective (in-house competition), structural (poor IT infrastructure), or political (lack of openness).

Siemens’ “top+” best practice sharing initiatives try to overcome these by connecting people, incentivisation, designing a topic structure for relevant experience, providing content support for editing and structuring of experiences, and finally via a cascaded communication strategy via divisional workshops, posters, postcards, flyers and even matchboxes with the KM Intranet URL. Siemens also has an Office of Best Practice, like Corporate KM, which plays an active role in implementation of the concept.

The key to successful KM is devising appropriate socio-technical systems in areas like communities of practice. This includes IT infrastructure, content taxonomy, and cultural issues like trust, sharing, responsibility, and care. The reference architecture at Siemens is able to address specialist knowledge, procedural models, and project experience along the entire spectrum of knowledge intensive businesses from consulting to products.

Siemens introduced the Knowledge Strategy Process (KSP) in 2001 as a method for business owners and teams to determine strategy and action plans, in consultation with Dutch KM company CIBIT in Utrecht. This is basically an iterative strategy of identifying clusters of competency and knowledge, and mapping codification status across time, based on current and projected market dynamics.

Transforming from a product seller (box mover) to a solutions provider, Siemens Information and Communication Networks (ICN) devised a business development KM practice called ShareNet in 1999 to help share project knowledge across technologies and markets in different stages of maturity. Sales staff now find themselves playing the role of strategy-management consultants who have to be able to interpret trends and design new opportunities together with the customer.

Knowledge areas covered include financing, planning, engineering and operations. This helps sales staff devise customised telecom solutions using existing service packages, business plans and profitability paths. ShareNet helps tap and share local innovation in different parts of the world via project debriefings, manuals, codified databases, structured questionnaires, chat rooms, and hot lines. Technically based on OpenText’s LiveLink, it is used by 7,000 sales and marketing staff.

Yet another area of KM focus at Siemens is the use of e-business methodology. It formed the Centre for e-Excellence in May 2000 to analyse business transformation via the Internet. A quarter of the sales of Siemens itself is expected to be eventually transacted via the Internet—50 percent or more of its consumer products. Knowledge communities have therefore been formed around key areas like supply chain management, e-readiness, and IT infrastructure.

Challenges faced by Siemens on the KM front include balancing energies, resources and rewards for local versus global KM initiatives on a daily basis, managing the knowledge-sharing tension between different business units, and nourishing KM during hard economic times.

Each of the chapters in the book ends with useful discussion questions and key propositions from each case study. It would be suitable to end this book review with a sampling of these propositions.

“The economic value of knowledge does not lie in possessing it, but in using it. Pilot projects for KM must have clearly defined, measurable objectives that can be achieved in less than six months. However, the changeover to a knowledge-based company involves a change process that can span several years,” say the authors.

“Only when we have made up our minds that sharing knowledge is important, not only for efficiency’s sake, but also to increase the essential humanisation of the business and social environments in which we work, will we be prepared for the tasks confronting us,” the authors add.

Knowledge sharing should not be reduced to appendices to everyday practice, but must become intertwined with practice. Case writing about this sharing is a useful learning tool, teaching method, and knowledge recap mechanism via its ability to tease out details and provoke or inspire further action. An interplay between writers from the outside and inside helps elicit crucial details in the case stories.

Madanmohan Rao is the author of ‘The Asia-Pacific Internet Handbook’ and can be reached at madan@inomy.com. This review is published in association with Inomy.com