Knowledge Management: Sample Design Project

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ABC Insurance Company To: I.M. Da’man, National Underwriting Manager From: Jennifer Maddrell, Associate Underwriting Manager Date: 06/28/2008 Re: Underwriting Division Knowledge Management Proposal Confirming your request and our prior conversations, the following proposal highlights recommendations to create a knowledge management program within the ABC Insurance Company Underwriting division. As the Associate Underwriting Officer in the home office, I am in a position to evaluate how the Underwriting division is missing opportunities to generation, share, and collect knowledge across our eight regional underwriting offices. Through a knowledge management plan that is integrated with the core business operations of our division, we will be able to map our existing knowledge and expertise, manage the creation of new knowledge, and facilitate the transfer of knowledge across our 45 field office underwriters. This proposal highlights how we are losing by not having a formal knowledge management process in place, what we have to gain by implementing one, and details regarding the proposed knowledge management implementation plan. How We Are Losing Knowledge management can be tied directly to our profitability. By not effectively managing our knowledge, we are not maximizing our revenue potential or effectively controlling expenses. The following highlights four aspects of our current process of managing our division’s knowledge which result in lost revenue or increased expenses. As will be outlined later in this proposal, all of these areas can be addressed through better knowledge management practices. Innovation not tied to business planning process. While we have a comprehensive business planning process in which our each region’s annual financial goals are set, measured, and rewarded, innovation and knowledge creation is not tied to this process. While I’m sure everyone would agree Page 1 that innovation, knowledge creation, and knowledge sharing are all essential to our attainment of goals, too often we leave to chance that “someone” or “some key people” will take the initiative to find solutions to achieve our financial goals. Inevitably, we are missing business and revenue opportunities and increasing expenses by not identifying during the annual planning process what knowledge and innovation we need to achieve our business goals and where the required knowledge and expertise resides within our organization. Redundant effort. Tied to above, regional managers are duplicating their efforts as they attempt to reach their annual goals. Often a manager in one region is not aware of the creative initiatives other managers are taking to generate new business and retain customers. In addition, individual underwriters are seeking answers to complex business issues on a daily basis, but they are not benefiting from the knowledge that already exists with underwriters in other offices. This lack of awareness of what knowledge and expertise exists within the division results in a drain on division resources. We are paying people to find solutions to business problems that have already been solved elsewhere in the division. Knowledge gaps following turnover. While we are fortunate to have relatively low employee turnover rates compared to our competitors, institutional knowledge is lost when key people leave or take on different roles. Unfortunately, when underwriters retire or leave the company, new or existing underwriters are not benefiting from their experience and knowledge. Without a formal knowledge management plan, knowledge is not shared and we are finding solutions for the same issues and problems over and over all across the country. Our employees are forced to start from the scratch to solve problems which have already been addressed by underwriters in other positions or no longer with the company. Page 2 Wasted training initiatives. By not effectively linking our knowledge needs to our critical business goals and by not sharing our existing knowledge across divisions, it is very likely that much of our existing formal training is not focused on our true division wide knowledge and skill gaps. The thousands of dollars we spend in unnecessary training programs could be spent in either training programs tied to our business needs or initiatives to capture, create, and transfer the existing knowledge within our division. How We Will Gain Given these missed revenue opportunities and increased expenses, we need to find ways to be more strategic in how we create, share, and codify our knowledge around our central business goals. By doing so, we will gain in the following areas. Increased business. Managing our existing and needed knowledge will allow us to better target areas where we must innovate or share knowledge in order to meet our overall business goals. Further, as discussed below, utilizing more of the available features in our content management system will help employees find sources of knowledge and expertise and will enable our employees to connect on ideas to reach and retain customers. In implementing these steps, we will increase business by capitalizing on the existing knowledge within our organization. Bridge knowledge holes. Within our large division, it is likely that underwriters in one region can have their questions answered by members in other region. However, at the present time, most of our employees do not know staff members in other offices. Therefore, effective knowledge management practices will help us to bridge knowledge gaps in our organization by allowing us to create, share, and codify knowledge crucial to our business from various pockets across the division. In addition, all employees, including new employees trying to establish themselves within our Page 3 organization, will have a better understanding of our vital business processes and how to find people and resources to help them meet their goals. Accountability. We must move beyond a “hit or miss” process of innovation. By having our knowledge management tied to measurable business goals within our business planning process, we add accountability and responsibility for innovation and knowledge sharing. Proposed Knowledge Management Plan The proposed knowledge management plan that follows focuses on the people, practices, and resources needed for implementation. This first iteration of the plan focuses on two initiatives that will assist us in achieving our strategic business objectives. The expectation is that we will build on these two important initiatives in the future. Initiative 1 – Integrate Knowledge Management into Formal Planning Cycle During our existing annual financial and operating planning cycle, regional managers are required to lay out their financial and operating plan to reach each of their given business goals. These business plans are then aggregated within the division wide plan. Currently, these plans focus on key financial and operating elements, such as the region’s staffing, budget, and client marketing initiatives. While these plans are effective at qualifying and quantifying such financial and operational factors, there is generally little focus on the required knowledge and innovation needed to attain the goals. For the reasons stated previously, this is resulting is lost revenue, lost opportunities, and increased expenses. It is proposed that the regional and divisional business plans include a section dedicated to knowledge management. Given that knowledge is one of our largest assets and sources of future revenue, it is logical to manage it within our traditional planning process. Therefore, it is Page 4 recommended that the following areas be assessed and documented within the regional and division wide annual business plans. Existing and needed knowledge to reach goals. The regional managers will provide an assessment of the current and needed knowledge to attain each major business goal within their business plan. At the division level, this information will be aggregated within the divisional plan. Assessing and capturing this information will allow us to begin the process of codifying fundamental knowledge areas required to run our operations. As discussed below, these vital knowledge areas will be codified in greater detail in a knowledge mapping initiative. Key people with expertise to drive attainment of that goal. The regional mangers will also provide an assessment of key people within the region who will be assigned to work on each business goal. By capturing this information within each regional plan, the division will be in a better position to identify and track key staff members with expertise in our core business areas. How the knowledge will be effectively and efficiently shared across regions. Part of the process of identifying crucial areas of knowledge and expertise is contemplating synergies and overlap across the division. As noted previously, regional offices are largely fighting the same business battles each year. Therefore, the division wide plan will consider the knowledge held, the knowledge needed, and key people within each of the regional offices. From this assessment, the division wide business plan will provide recommendations to regional mangers on ways to connect and share knowledge with others across the division. Training initiatives. Based on the areas where knowledge gaps are identified, the division plan will incorporate an evaluation of needed formal training initiatives. As noted previously, this will allow us to tailor training programs to our identified business needs. Page 5 Initiative 2 – Map knowledge in crucial business areas Based on the outcome of Initiative 1, we will have a solid understanding of the essential knowledge required to manage our primary business goals. However, the information contained within the planning documents will be little more than an outline of the significant knowledge areas. The following recommendations are made to help us more formally map and codify the knowledge and expertise needed to run our business. Augment our existing content management system. Currently, our employees rely heavily on our content management system built on the Drupal open source platform. The latest usage reports from the Information Technology department show that our underwriters log into the Drupal system multiple times during the day to look up current copies of client contracts and other insurance coverage documents stored on the system. However, we are only utilizing a small portion of functionality available to us within the content management system. While we have access to other features, such as discussion forums and collaborative wikis, we have not explored ways to use them to help manage our business. Create employee profile pages. To that end, it is recommended that employees be required to create brief biographies on their Drupal account profile pages. Each biography should briefly describe the employee’s core job function, educational and professional background, and areas of underwriting expertise. In addition, when employees update and save their biography, they will be prompted with a list of predefined word identifiers which will allow them to select “tags” for their profile. This tagging feature will allow anyone in the division to pull a roster of employees based on a search of the key word tags. Employees will be encouraged to refer to these profile pages and the categories of tags when they have questions and need to connect with others on important issues. For example, if someone has a question about liquor liability Page 6 coverage, he or she could search within the account profile tags to see what employees in the division have tagged “liquor liability” as an area of expertise. The profile database will also assist management in assessing whether the existing staff includes employees with expertise in our core knowledge areas. Given that the profile database will only be valuable if it is accurate and current, it is recommended that the employee profile page be reviewed at each annual performance review to ensure that it accurately reflects the employee’s job function and expertise. Create books of knowledge. As will be identified within the annual planning documents, there are key areas of knowledge essential for managing our operations. As part of the knowledge mapping process, it is recommended that identified key employees be assigned the responsibility of moderating the creation of Drupal based wiki Books of Knowledge around central business processes and current business initiatives. The employee moderator in charge of each Book of Knowledge will be asked to encourage others to participate in the initial creation and ongoing maintenance of the wiki book. The Books of Knowledge should contain at a minimum the central aspects of the topic, principal contacts associated with the topic, and available resources within the division related to the topic. It is recommended that the assigned employee moderator’s formal job description be amended to include this role so that his or her performance as moderator can be evaluated and rewarded during performance reviews. Foster virtual water cooler discussions. Given that employees are geographically dispersed, there is little opportunity for informal water cooler chats with peer outside of each regional office. Therefore, it is recommended that the discussion forum feature within Drupal be enabled to facilitate posting of questions to the group and responses with suggestions. The resulting forum threads will also serve as a Frequently Asked Question (FAQ) database. As noted Page 7 previously, if one person has the question or issue, it is likely someone else within the division will run into that problem in the future. Concluding Thoughts At this point, you may wonder whether employees will balk at participating in these knowledge management initiatives. Employees will find it to be “just another chore” of the job if they do not find value in the process. However, if the initiatives offer them valuable connections to people, information, and resources, it will likely foster knowledge co-creation across departments and functional areas. As noted, knowledge is an asset that we must effectively manage. Otherwise, we will lose profit either from lost revenue opportunities or increased expenses. Central to the success of this proposed plan is the linkage to existing business operations. This linkage gives management a better understanding of the key business issues employees are working on and may be struggling to solve. This knowledge management plan should not be considered a roll out of an “end all” solution. Rather, it is important first step to tie knowledge management to our existing business planning processes and content management system usage. Further, in order to be effective, these recommendations must be undertaken and supported through all levels within the division. In order to promote widespread adoption, senior managers must demonstrate their support through action. They should monitor and reward the knowledge management outcomes as carefully as another planning goal. In addition, all managers should contribute to the content management system by adding their own profiles and by making occasional contributions and referrals to the wiki Books of Knowledge or the virtual water cooler. Finally, and most importantly, an environment of trust must be fostered during knowledge creation and sharing. It is critical to recognize that as part of this plan, employees and managers will Page 8 be asked to identify and critically assess gaps of knowledge and to publicly seek help to overcome these gaps. If employees or managers feel their opinions, contributions, or questions will be held against them, they will simply stop contributing. I look forward to continuing our conversation on this plan. Please let me know if I can provide additional detail or answer any questions. Thank you for your consideration. Page 9