If Only HP Knew What HP Knows

Posted by Ron Aspe, CEO on 1/15/2015
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Originally posted 3/12/2013 on the SydneyPLUS and Inmagic blogs

“If only HP knew what HP knows, we would be three times more productive.” Lew Platt, CEO, Hewlett-Packard

corporate_knowldegeA KM strategy may not actually achieve 3X productivity, but impact - whether it is measured in profits or even in lives saved - can be dramatic, with amazing results as shown by the examples below:

  • A mountain rescue organization proactively communicates warnings of adverse conditions to equipment retailers, guides, the media and individual subscribers. Four novice climbers decide to stay home rather than risk death.
  • A professional services firm repurposes prior work and increases their billings by 1% -- resulting in 10% increase in profitability.
  • A software company reuses existing intellectual property to enter a new market segment. The lowered development costs result in a triple digit ROI.

Lew Platt and hundreds of other CEOs all know that if only they could tap the skills and knowledge within their own staff, it would be transformative. Imagine the impact if anyone in an organization who undertakes an assignment could easily discover if it’s been done before, if so by whom, and exactly how.

The Eureka project at Xerox is a great example of knowledge management delivering a stunning ROI. 15,000 service technicians contribute to and search a system containing 50,000 tips and techniques not documented in service manuals. Use of this system resulted in 10% reductions in labor and parts costs. Assuming a 10% profit margin and flat revenue, a 10% reduction in costs would result in a 100% increase in the profitability of Xerox’s service business.

If you aren’t sure this will work in your smaller organization, consider the following: if you’ve found a great local automobile mechanic, you can bet s/he uses Q&A forums. Mechanics are often paid "book time." That means that if the estimating guide used by the services manager says it takes three hours to fix something, the mechanic will be paid for three hours. Even for those who aren’t paid in this manner, performance is often measured against book time.

Like all professional services people, mechanics know that time is money, and that someone, somewhere has already solved, or is trying to solve, the problem they’re working on. They need to be efficient, and access to Q&A forums is proven to improve productivity. The mechanics don’t know everything -- they simply know where to find the answer.

If you want to increase the impact of your organization, no matter how you measure it, knowledge management has paradigm shifting potential. And that takes us back to Lew Platt’s assertion. How would your organization benefit if only it knew what it already knows?

Topics: Library Management, Knowledge Management

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