17 billion dollar debt… a sign of hope?!

With revenue that exceeds 300 billion dollars in 2008, one may assume that British Petroleum (BP) did not have its share of financial problems for a long time. However, BP had suffered several setbacks in the previous two decades, which had threatened its operations throughout the world.

It was not until John Browne was assigned as its CEO that the end of the tunnel could be seen. The inefficient way of running the company had cost it 17 billion dollars of accumulated debt. Something needed to be done, and Browne believed that, “Any organization that thinks it does everything the best and need not learn from others is incredibly arrogant and foolish.”

What Can Be Done?

Creating a learning environment is crucial for the survival of organizations in this information-driven economy, as Browne argued. There are several factors that indicate whether the KM system (KMS) adopted is successful or not.

According to Conely and Zheng (2009), there are ten elements that contribute to the KMS success; three are of utmost importance:

1. Organization structure
2. Training and education
3. The roles of top executives

While the top executives have to promote KMS and raise awareness to its benefits, they must provide continuous training and education to their employees throughout the implementation process. This opens up the organization’s culture and makes it more likely to accept KMS (Kimble, 2008).

Additionally, altering the organization structure in a way that facilitates the integration of KMS into various business units can have a positive impact on the overall implementation process. Fostering the use of soft mechanisms such as face to face interaction may lead to better results than the sheer dependence on technology to collect, store, sort, and retrieve knowledge (Jasimuddin).

Browne’s Approach

In 1993, Browne decided to separate the regional exploration centers into forty-two entities. The goal was to give each entity the freedom to create solutions according to its own needs and the best knowledge obtained from these entities would be utilized by the company on a global level. As a result, Browne decentralized BP’s structure to allow for maximum communication between employees and executives. In fact, he headed the planning team responsible for the implementation process to monitor the project progress. The organizational culture changed gradually from an individual based to a teamwork based culture.

Browne emphasized the importance of educating his teams. In fact, half the budget allocated for the pilot project was spent on training the teams about KMS. Furthermore, face to face communication was reinforced by the use of videoconferencing as a tool not only for interaction between the teams but also as a way to innovate new concepts that will the help company thrive.

Lessons Learned

• Technology is a means to an end. IT departments can only prepare the infrastructure needed to introduce KMS.
• ­KMS can not survive without the collaboration and dedication of the employees.
• ­Top executives should be the first adopters of KM.
• ­An organization that stops learning is an organization that is doomed.

Indicators That You May Be Working for a Foolish Company

• Does your company resist creative thinking?
• Does your company foster innovation?
• Is teamwork at your company viewed as a waste of time?
• Is your company dependent on technology as the solution for every problem?
• Does your company offer incentives to its employees for sharing their experiences and knowledge?

~asia
Bp key facts and figures. Retrieved October 10, 2009 from http://www.bp.com/extendedsectiongenericarticle.do?categoryId=9021229&contentId=7039276

Conley, C. & and Zheng, W. (2009). Factors critical to knowledge management success. Advances in Developing Human Resources, 11(3), 334-348.

Davenport, T., & Prusak, L. (1998). Working knowledge: How organizations know what they know. Boston: Harvard Business Press.

Jasimuddin, S. (2008). A holistic view of knowledge management strategy. Journal of Knowledge Management, 12(2), 57-66.

Kimble, C., & Bourdon, I. (2008, December). Some success factors for the communal management of knowledge. International Journal of Information Management, 28(6), 461-467. Retrieved September 23, 2009, doi:10.1016/j.ijinfomgt.2008.08.007.

Wetlaufer, S. (2000) Harvard Business Review interviews with CEO’s. Boston: Harvard Business School.