Do Incentive Schemes Promote Knowledge-Sharing?

Monday, August 08, 2005

Do Incentive Schemes Promote Knowledge-Sharing?

By Paul Wright Robert Buckman, former chairman and CEO of Bulab Holdings, Inc., a specialty chemicals company in Memphis, Tenn.

Talks about the movement toward knowledge-sharing as a journey of cultural change. Like most such journeys, it has its pioneers and its laggards. "As the train begins to move down the track," says Buckman, "you need to let everyone know where it's going and help them get on board.

Those that board early and do well, you reward." Buckman thus frames in a nutshell a key issue in the knowledge revolution: what kinds of reward systems stimulate knowledge-sharing? Bandy that question around and, while you're likely to find a range of answers, you'll also get fair agreement that the subject looms large on corporate radar screens.

Reward systems, of course, can cover many bases, from the economic to the symbolic. Among companies pondering the problem, purely economic incentives rank well down on the list of solutions, but probably not for long. And when the time comes, we're likely to see some novel alternatives. William E. Halal, professor of management at George Washington University and author of The Infinite Resource (Jossey-Bass, 1998) looks to the Internet for inspiration.

Pointing out that the Internet proves the feasibility of using information as a saleable commodity, Halal proposes creating internal markets for knowledge within organizations. He envisions that authors of information posted on a corporate intranet would charge micropayments each time a particular posting is accessed for use. Conceding that such an approach might seem artificial, Halal notes that many support services increasingly offer themselves for sale within organizations (and further suggests that his approach could at a stroke address both the problem of information overload and the quest for appropriate forms of personnel evaluation).

This approach may not sit comfortably with everyone, but no one disagrees that it's deep-seated attitudes towards knowledge that are up for challenge. Knowledge, long regarded as power, has naturally been viewed as ripe for hoarding. In a competitively individualistic environment, sharing it has looked abnormal. Now that organizations are discovering that sharing knowledge makes sound business sense, changing that behavior suddenly looks profoundly connected to their bottom-line fortunes.

Jessica Lipnack, president of the Networking Institute in West Newton, Mass. and most recently co-author with Jeffrey Stamps of Virtual Teams (Wiley, 1997), maintains that the trick to encouraging knowledge-sharing lies in designing reward and recognition systems that stimulate sharing of all kinds: goals, tasks, vision, and, of course, knowledge.

This thinking suggests the benefit of demonstrating at the highest levels how sharing knowledge affects a company's overall performance. Dan Cochran, manager of progress services at Chicago-based Amoco Corp., reports that knowledge-sharing counts as a major criterion in determining the winner of the annually conferred Chairman's Award. Judged by indicators that not only consider what learnings get shared and how, but carefully measure results, this aspect of the award, says Cochran, serves to show the growing ripple effect that knowledge-sharing has on the company's performance. He adds that each business unit stages a similar event to make the same point throughout Amoco.

Recognition by means of rewards, in fact, is a commonly used carrot to motivate this behavior. Robert Buckman tells of recently convening a meeting of 150 employees (out of some 1200) in Scottsdale, Ariz. The group represented those, he said, who had done the best job of knowledge-sharing the previous year. While the trip to Scottsdale was a welcome reward for those selected to go, it also brought the group together with Buckman's planning team to consider ways to improve the company's performance-a clear signal about the critical role of knowledge-sharing in the corporation. Providing those who attended with new laptops, he adds, emphasized that message.

Prof. Halal is not alone in looking to the Internet for ideas. William Woods, principal scientist at Sun Microsystems Laboratories (Chelmsford, Mass.) notes that "It's an observed phenomenon that if you have a corporate intranet with Web technology allowing people to create their own home pages, this encourages knowledge-sharing." In high tech environments like Sun, making available the capacity to set up their own Web sites as a way for them to advertise their ideas and accomplishments comes as a distinct benefit. Indeed, the power of recognition should not go unnoticed.

Companies are now developing internal directories promoting the skill sets of employees willing to share their expertise in return for recognition as prime organizational knowledge assets. Arthur Andersen LLP has adapted this principle in its internal version of KnowledgeSpace (SM) (a subscriber-accessed Web site complete with links to the service lines and industry areas in which Andersen specializes).

Thomas Hoglund, general manager for KnowledgeSpace (SM), describes the internal version as an opportunity for anyone in the firm to contribute client engagement experiences and advertise various personal skills; the network also offers a space for designated experts in the firm to elucidate firmwide technologies in an effort to embed knowledge-sharing practices. Some thinkers foresee as the ultimate incentive for knowledge-sharing creating ownership stakes via, say, stock options, at lower and lower levels in today's organizations, as a way to demonstrate the interdependent networks that cross-organizational sharing brings about. But whatever the reward systems likely to appear, it's a good bet that innovation will be their hallmark.

This article was taken from Knowledge Management Review.

posted by upay at 9:29 AM