One Reason Why Knowledge Management Fails

I picked this story up from Peter. With all the talk about Enterprise 2.0 and the resurgence of knowledge management, we tend to forget that employees are influenced (in terms of attitude, behavior, engagement) by both the macro messages that a company sends to its workers as well as the micro messages that come from a worker's day-to-day management channel. Imagine a company that is trying to "pick the brains" of its front-line workers to gain insight on how to improve quality controls, customer service, warehouse inefficiencies, and so forth. This type of tacit observation is difficult to duplicate. The insights of "floor" workers can prove invaluable when trying to identify and correlate patterns that are not well-documented by process measures. Such insight from employees cannot be conscripted - it can only be volunteered when people feel some sense of attachment, belonging, motivation, passion, loyalty, duty, etc. (just pick your favorite relationship or other people-influencing factors).

So blogs, wikis, social networking - none of this matters if companies treat people poorly and worse - institutionalize such actions (in this case, according to the NYT article, Circuit City has undertaken similar action previously). Organizations that reduce benefits, treat retirees badly, mishandle layoffs or have the appearance of eliminating workers with seniority or that are older are sending a clear message to remaining workers that will significantly damage any knowledge management effort, perhaps permanently.

The result - efforts to compete in the short-term on price by reducing workforce costs (e.g., outsourcing) can create more significant long-term risk due to the loss of know-how and opportunities for innovation that are best invented by the very same people that management so easily discarded.
   

One Safety Net Is Disappearing. What Will Follow? - New York Times

In strictly economic terms, however, paying people based on their age is a bit skewed. Sixty-year-olds are indeed more productive than 30-year-olds, studies have shown, but not 50 percent more productive. Experience isn’t quite as valuable as we might like to believe. In effect, most companies are underpaying their younger workers and overpaying their older ones.

This somewhat uncomfortable fact was a big part of the extraordinary layoff announcement from Circuit City Stores last week. On Wednesday, the company dismissed 3,400 people, or about 8 percent of its work force, not because they were doing a bad job and not because the company was eliminating their positions. Instead, executives said the workers were being paid too much and that the company would replace them with new employees who would earn less. It was the second such layoff at Circuit City in the last five years, and it offered an unusually clear window on the ruthlessness of corporate efficiency.

.......

There is a real question about whether these chains will hurt themselves in the long run by damaging employee morale, customer service and, ultimately, productivity. (Circuit City is forcing fired workers to wait 10 weeks to reapply for their jobs, I assume because the company executives were afraid that workers whose pay had been cut wouldn’t make effective sales associates.)

But there’s no question that corporate America is moving in the same direction as Circuit City. Companies are wringing out what they see as inefficiencies, like traditional pensions and health insurance coverage, and tying workers’ pay more closely to their performance

Source: One Safety Net Is Disappearing. What Will Follow? - New York Times

Comments

[Brad Hinton]

You're dead right about the importance of people in KM and social mdia. A disengaged workforce is unlikely to fully utilise social media and KM sharing applications. Organisations need to treat people with respect amd value their contributions. It's pretty basic human values really.
Regards,
Brad