~ Yes. It May Indeed Be About Downsizing.

I have a standard promotional talk that I do at conferences and early in the process of securing consulting engagements. Early on in it, I discuss the rationale for knowledge management and the pitfalls that projects can encounter when their sponsors and managers do a poor job of communicating their intentions to the knowledge workers who will be involved.

The value of knowledge capture and reuse, I intone, comes from enabling the organization to move responsibility for resolving frequently recurring issues down to the customer-facing agents who are the first to hear about them. The ideal I’m talking about is, of course, “first contact resolution” — enabling the first person who talks to the customer to quickly diagnose the problem, retrieve a resolution and remove the customer’s pain. If knowledge is captured effectively, it should lead to consistent answers and clients who are happier with the results. And because the issue stays at “Level 1” and does not have to be escalated to more senior technical specialists, it costs less to resolve issues this way.

All well and good. But there often is a suspicious murmur in organizations going through the KM adoption process, especially those who describe the KM process as a “do more with less” measure. The literature of KM is full of references to projects that foundered because the team refused to comply, as they assumed the whole purpose of the exercise was to capture the expertise that makes individuals essential, so that agents could be reduced to expendable, interchangeable parts.

No, I assure my audience — the knowledge base provides more leverage from a static set of resources. Reducing escalations and making each agent capable of handling a wider variety of issues, by pooling expertise and rewarding contribution to the collective knowledge base, will increase each agent’s value, not reduce it. KM is seldom, if ever, about reducing headcount. This is one of my favorite slides; it never fails to elicit a room full of self-satisfied nodding.


There’s just one problem with it. These days, KM may very well be about reducing headcount. I’ve been involved in two projects recently in which enabling management to lay off staff was precisely the point. In one case, an assessment was intended to identify areas of expertise that had become redundant as a result of the restructuring of IT. In another, the knowledge base was conceived and built with the specific purpose of codifying procedures heretofore escalated to senior specialists, so that a number of those specialists could be let go and replaced by new kids who, using the knowledge base, would be doing the same work at 40% lower personnel cost.

I have interviewed people, to analyze and deconstruct their business processes so they could be modeled in knowledge tools, and to capture their trouble-shooting expertise — I knew some of these people would shortly be out of a job. They didn’t know, at least not in any official way. (Naturally, a lot of them knew in the many unofficial ways employees learn or intuit things like this — companies don’t go out of their way to hire stupid analysts.)

This isn’t what I set myself up as a KM consultant to do. It isn’t the sort of communication I advocate among members of a project team, or between a project sponsor and his or her constituents. And it isn’t what I’ve sold as the value proposition for KM for the last 18 years.

Nor, however, is it fundamentally wrong.

Companies are downsizing now, and it is pointless to make value judgments because of this. Some organizations will take the process too far, and one way this will inevitably hurt them in the long run is by reducing the essential store of knowledge that enables them to do what they do competitively. Management won’t see this until it is too late; at best, they will wind up inviting laid off experts back at far higher consulting rates. At worst, they will lose a technical or customer relationship edge that will allow a competitor to eat their lunch when demand eventually revives. But they will have no choice; the cuts often are mandatory and indiscriminate.

Can KM be a valuable enabler in a time of layoffs? I’m prepared to answer “yes.” You can gain a differential advantage by broadening the capabilities of your remaining knowledge workers, and this may be enormously important if you’re going to be trying to function with fewer of them. The advantage will be measurable if you are handling an equivalent volume of issues with little or no loss of productivity, as measured in terms of average time to close an incident, or some similar metric, and with little or no degradation of customer satisfaction.

Customer satisfaction is subjective and is dependent on expectation management. It’s probably a cold comfort, but customers are likelier to cut you more slack in the current economic climate. As for productivity gains, knowledge base proponents have always promised that knowledge sharing would enable greater capacity from thinning resources. The challenge is to motivate people who probably know their days in the organization may be numbered to facilitate this by sharing what they know, rather than simply taking it with them when they leave.

How do you get them to play along?  To be blunt: Pay them.

Don’t undermine everyone’s confidence in management and the organization by imposing a KM program and then dropping the hammer on the team you are downsizing. Bad times bring morale issues; you will only make them worse for your layoff survivors by cloaking your intentions and then springing them abruptly. They will only be convinced that more layoffs are coming in waves, and they will refuse to participate in (or may even sabotage) the KM initiative if they feel exploited.

If layoffs are coming, explain the circumstances, be plain about where and why the cuts are coming, and offer what may be an enticing carrot: A knowledge transfer exit program.

Explain that everyone in the affected team will be asked to help establish a knowledge repository for the business function they support — customer service, tech support, HR, inbound sales, whatever. The business processes for that function will be examined and deconstructed to identify the most frequently recurring, mission-critical issues, problems or transactions — e.g., the “top 200” technical problems managed by a service desk, the ones that place the greatest burden on the team. The solutions to those issues will be documented and encoded as core, “seed content” in a knowledge base, using a suitable software repository, so that all members of the team can diagnose and solve these issues quickly and effectively without escalating them to the next level experts.

Be frank — explain that for some members of the team, this project may be their last as employees of the organization, and that this is pure economics and not necessarily a value judgment on their individual worth to the organization. If possible, suggest that the quality of each individual’s contribution to the knowledge capture effort may be taken into account in the decisions as to who stays and who goes, but do not make this promise unless you truly mean it and know you have the authority to say it.

You are going to be taking people offline for some portion of their day to do this knowledge gathering — off the phone, away from the day to day work you hired them to do. You probably will take a hit to productivity, as it normally is measured, in order to get it done. Manage expectations with your customers. More importantly, let your employees know you anticipate the disruption and that no one will suffer consequences for this.

Finally, announce an amendment to the usual severance package for those you must let go. Offer to retain these employees for an additional period — three to five days, say — to participate in an intensive, facilitated debriefing and knowledge-building session in which these individuals work solely on completing the population, technical verification and polishing of the knowledge base. Position this as an opportunity to leave a personal mark on the shared knowledge of the team, and earn consideration for post-severance contract work or even eventual rehiring when the economic climate improves. Again, do not promise such consideration unless you know you have authority to do so and that contract work or rehire are plausible.

Some of your people will opt out, of course. Severance is a stressful business, fraught with resentment no matter how you handle it. But, handled correctly, with empathy and candor and with the right kind of facilitation, a knowledge transfer exit program might be the means by which you finally get the sponsorship, resource commitment and breathing room to launch a KM initiative you may have want to undertake in better days, but couldn’t.


2 thoughts on “~ Yes. It May Indeed Be About Downsizing.

  1. Peter – Very appropriate perspective, given the current realities.

    On a different but related topic, readers may be interested in the Harvard Business Review article, “How to Design Smart Business Experiments” in the Feb. 2009 issue.


    The author, Thomas H. Davenport, describes an approach to gathering data from experiments to form a more sound, if not scientific basis for business decisions. It’s not KM in the usual sense, but rather a more scientific approach to knowledge building and capture. He does state the knowledge generated should be captured and disseminated, but doesn’t go further. So presumably this approach could/should be integrated into a full-blown KM process.

    He acknowledges it is usually more applicable to tactics than to major strategic decisions, but does nice job of laying out a logical approach, giving interesting case studies, identifying when and when not to use the approach, and how it relates to other organizational processes.

    On yet a third topic, a dept in our organization is currently undergoing a “strategic” inititative, hiring a big consulting company, doing internal/external reviews, to identify how the dept can meet/manage internal customer needs better through restructuring, capturing best practices, becoming more strategic rather than tactical, redefining roles, etc.

    So I would step back and ask the question about the big picture of KM. Peter has just described when it can be appropriately used for cost containment/downsizing, my reading of the HBR article implies the KM could be built on or linked to learning initiatives (whether they be experiments or just CQI), and organizations keep reinventing the wheel in terms of optimizing dept function. Is there a systematic classification of types of KM or roles and applications of KM that address real business needs–rather than being focused on KM itself? This may represent my “outsider” perspective on KM, although I’ve been an interested follower from a distance for a number of years. Is there a clear understanding and language for describing the value of KM in tangible business terms?

  2. Great Article Peter – you’re right no the mark as usual. While we implemented KM practices quite some time ago, without this as the intent, it certainly is a crucial enabler to our significant reduction of cost (staff) over the past several years. While doing that, we’ve been able to maintain our Service Levels, due in part to our knowledge practices, while saving millions.

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