New report from Best Practices gives roadmap to avoid potential market obstacles
Chapel Hill, NC — December 2, 2003 — Companies that tap internal best practices and encourage employee innovation reap huge benefits and avoid potential market obstacles, according to a study from research and consulting firm Best Practices LLC. Companies that do not leverage internal resources risk operating with redundant tasks, which often adds unnecessary operational costs.
The report, "Knowledge Management of Internal Best Practices," analyzes how world-class companies integrate knowledge management (KM) systems into strategic planning processes to maximize the company's intangible assets. Examples of the study's benchmarked practices include:
* One chemical company took carefully calculated steps when employing its own knowledge management process. The system boosted profits almost immediately; the company saved more than $1 million within the first 18 months after implementing this six-step system.
* A leading manufacturer identifies exceptional operating units, formally studies them and then implements those practices throughout the company. Its most recent set of practices netted sales that exceeded goals by five percent.
Additionally, according to an article originally printed in the August 2000 issue of Business Finance Magazine, Best Practices identified six ways in which companies can successfully implement a knowledge management/internal best practices program. They used examples of the internal steps organizations have taken for each approach.
* Connect best practices to strategy fulfillment. The U.S. Department of Veterans Affairs began a best practices initiative that aligned with its three organizational goals: continuous service innovation, effective management of intellectual assets between divisions (so one division knows what the other knows) and excellent patient service. "This organization was highly successful with that effort largely because they limited their number of strategic goals to just three," said Adam Bianchi, senior associate with Best Practices. "Companies with 10 or 15 goals have a much harder time aligning the knowledge management/internal best practices effort with all of their goals."
* Identify best practices. Hewlett-Packard Laboratories maintains a directory of its resident experts. W.R. Grace & Co., a supplier of specialty chemical, construction and container products, regularly updates profiles of its top salespeople. Toyota developed a world-renowned suggestion-screening system to prioritize best practices based on potential impact, benefits and difficulty of implementation.
* Develop best practices recognition systems. AT&T holds an annual internal excellence competition called the Chairman's Quality Award. GTE Directories offers multiple broad-based recognition programs that focus on customer satisfaction. Chaparral Steel changed its pay structure to reward the accumulation of knowledge.
* Communicate best practices. General Motors Corp. sends employees — everyone from upper management to line employees — to different plants where they learn internal and external best practices. Time Warner Inc. conducts a personnel rotation program to spread knowledge throughout the organization.
* Create best practices knowledge sharing systems. Motorola Inc. designed a knowledge sharing system that tracks benchmarking reports by title and description and is organized around user needs and habits. Cigna Corp. conducts a two-day innovation workshop. Digital Equipment Corp. created a database that also functions as a bulletin board.
* Nurture best practices on an ongoing basis. Manco Inc., a seller of home, office and do-it-yourself products, cultivates internal best practices by reinforcing a "we can learn from everyone" attitude; learning and borrowing are a cornerstone of its corporate culture. General Electric Co. strives to create a culture that it calls "boundaryless." Andersen Consulting and Electronic Data Systems have hired a knowledge manager who oversees and disseminates information about internal best practices.
The leading practices, managerial insights and lessons learned in "Knowledge Management of Internal Best Practices" are drawn from research and interviews with more than 55 companies across more than 10 industries, according to the consulting firm. The report also includes case studies of KM systems of five multi-industry companies; KM technology analysis, including an 11-step process for implementing technology; examples of real-life KM benefits that have convinced leadership at partner companies to increase KM program investments; strategic rationale and tactical implementation for KM programs; and advice to avoid implementation pitfalls and ensure KM program success.
"When executives search for ways to cut costs, they often overlook what their employees already know," said Chris Bogan, president and CEO of Best Practices. "Best practice sharing keeps the company positioned to leap forward when the market turns."