Case Study: Putting theory in practice (Debowski 2006, p. 103-105)

Coalblack Industries have operated in the resource sector for 50 years. From an initial base of retrieving iron ore in the 1960s, it has expanded worldwide to encompass a wide range of exploration, development, and mining activities. Increasingly, it has diversified into sector development, chemicals, national infrastructure building in the Third World, and any other form of resource expansion that seems profitable. Some 8000 core staff are employed in the company, with most operating from Australia, and spending some time overseas.

Coalblack has a number of divisions that operate from Sydney. It also has regional offices across Australia, Asia, the Middle East, and Europe. It relies heavily on integrated systems to maintain effective links between its employees and spends millions every year on consultants who help to build better processes and systems. It is particularly keen to develop a strong knowledge culture and encourages those who are willing to share and collaborate. Systems, rewards, and recognition are constantly under review and development to encourage these values and outcomes.

The firm's core values reflect these commitments in such words as 'collaborative and innovative culture', 'communication across divisions and teams is strongly encouraged', and 'we aim to use everyone's knowledge for the public good'. Coalblack is widely recognised for its structural and public support of knowledge sharing. It is regarded as a knowledge exemplar by others in the field. Regular reviews of structures and work practices are undertaken to ensure there is good alignment to encourage knowledge sharing. Knowledge-sharing systems have been a major initiative for many years. Coalblack is now into its fourth system, with each increase in technological sophistication and user-friendliness. The first two systems were dismal failures, with many staff expressing great anxiety at the high demands generated by the systems. The latest version, introduced in 2016, has many new features which are regarded as the highest level of innovation. Communities of practice are well supported through the system and its interactive capabilities.

The organisation's core values are clearly displayed in all divisions as well charts, and new employees are provided with a pocket guide when they start their duties. The orientation program is intensive. New employees are given a detailed introduction to the structure of the organisation, the major systems, networking opportunities, shadowing of local leaders, and encouragement to share. New staff are provided with 3 days of training on the new knowledge system and are encouraged to return for a refresher in 6 months' time. (Unfortunately, very few do so.)

There are two key types of employees: core employees who are employed long-term, and contract employees who commit to work for the company for a specified period, ranging from 6 months to 3 years. Some are seconded from other resource firms for short periods, particularly where the knowledge base is very specialised and limited. Contract employees are normally high-expertise, high-value, high-cost members who contribute extensive specialised knowledge to the firm. Their expertise is highly regarded, but either very difficult to obtain and hold, or required for only a short period. Many of these contract members are at very senior levels.

Despite its strong commitment to knowledge management and its recognition of the value to the organisation, the company is very concerned about the lack of followthrough in knowledge sharing. The CEO, core leaders, and supervisors place a high degree of importance on the principles and encourage staff to integrate knowledge sharing into their work practices, but they can see that it is not demonstrated in practice. The new staff tries to share for some time, but quickly slots into performing their professional roles without significant sharing of learning with others.

Although supervisors are encouraged to promote sharing and the building of communities of practice, only one area has achieved significant, demonstrable collaboration - the Exploration Division, which operates across three nations and four states, has demonstrated a strong commitment to sharing knowledge and expertise across its virtual community. Its membership is diverse, comprising engineers, geologists, chemists, analysts, and a range of technical and professional employees from many disciplines. Its members meet regularly and use the organisation's knowledge systems extensively. New members are sponsored by experienced members and are encouraged to see that their fresh insights are both beneficial and useful to other members. The diversity within the division is valued and has also led to some inclusion of members from the rest of the organisation. The productivity of this division is noticeably high and has led to some major initiatives for the company. Members are also known to be highly committed and motivated, with very low turnover rates, despite the significant head-hunting which operates in that field. When questioned as to why their division is so knowledge-intensive, members cite their strong communities of practice. They note the importance of the social and emotional commitment of members and recommend that other divisions consider the development of similar communities.

Two such attempts have been trialed over the last year in divisions of similar size and complexity. In the first, the Chemical Division hired a consultant who spent 6 weeks analysing the reporting and management structures in the division and surveying staff about their work practices. The consultant conducted an analysis of knowledge barriers operating in the section and identified that the scientists, who constitute most of the employees, were reluctant to share their knowledge, despite their recognition of its importance to the organisation. They argued that time was too short to try to share highly specialised and complex expertise and that other colleagues would not understand their field. Given the highly pressured environment in which they worked, members of this division argued that the sharing of knowledge

would result in lost productivity, rather than gains. The consultant also received a number of comments regarding the high retention in this area, where most staff had been employed for 20 years. On the other hand, the scientists did acknowledge that most were in their late fifties and that many were thinking of retiring within 5 years.

Staff in the Engineering Division work on a project basis. Tenders are developed for commercial projects, and then, if successful, a project team is established. Members may vary across different projects, and some staff works on multiple projects at any one time. There is little evidence of learning to transfer across project managers, with some errors being repeated, particularly on projects in developing nations. Managers have expressed frustration at not being able to easily access information on past projects that would help with both tenders and new project management. Significant expertise is hired to meet short-term needs, although some experts have worked on more than eight consecutive projects as 'temporary' employees. Their expertise is not reproduced within the organisation at all. Staff who travel off-shore to work on projects often hand their local projects over to another staff member. Others hold the equivalent of two jobs, by working offshore and returning home to catch up. Many note that the challenge of taking annual leave is significant - it is very hard to find suitable days to spend away from work. Although there is high commitment and challenge in this area, there is also evidence of high stress and exhaustion. Employees note that they are working 60 hours a week and have a constant battle to keep up with demand. A new director of the division has been appointed with the specific brief to develop a stronger knowledge focus but has found that although members agree a knowledge management focus would be of value, they simply cannot manage the time commitment required.

Question 1

10 Marks

Imagine you are the new director of the Engineering Division. Review the stages of organisational development and consider how you would plan to improve the knowledge culture.