May/June 2003

Can a bean counter make people use your intranet?

An update on knowledge management incentives

By: Ted Graham
The economic fortunes for those in the knowledge management business continue to be cloudy. It's tough on the companies that have unsold KM software sitting on their shelves. It's even tougher for the KM practitioners who are trying to get people to use the software already installed on their networks.

The success or failure of most intranet efforts is typically summed up by the people who say, "If they use it, I can make the business case for the investment." In other words, if employees submit their own best practices (especially those methodologies and templates they consider to be valuable) and use the system to find other knowledge to assist them in doing their job better, then they will be fulfilling the ultimate objective of most KM programs: improving the productivity of knowledge workers.

However, many observers have pointed out that this improvement is often an illusive goal. A few years ago, management guru Peter Drucker observed: "We are, in the year 2000, roughly [with knowledge workers] where we were in the year 1900 in terms of [understanding how to improve] the productivity of the manual worker."

Part of the reason is that line managers can't find the time, the resources or the incentives to attend to the issue. Why? Because most line managers are expected to focus on current performance, not longterm knowledge and productivity gain.

"We are, in the year 2000, roughly with knowledge workers where we were in the year 1900 in terms of understanding how to improve the productivity of the manual worker"

Yet focusing on and rewarding current performance can, in some cases, help long term productivity. Three years ago, Hill & Knowlton, a global public relations and public affairs consultancy, tried using a "micro payment" system called Beenz to temporarily help with the relaunch of its intranet and to motivate particular knowledge behaviours.

Get a bean if you're keen

You could earn Beenz through actions like filling out your profile on the intranet, submitting case studies, visiting particular areas, etc. Each person would have a "Bean Counter" on their desktop which would record the ongoing total of Beenz they had collected. Beenz was essentially an online currency provider which was also available on consumer Web sites for those who completed surveys or signed up for email newsletters. You could redeem Beenz for books or CDs -- with 110,000 Beenz you could take a trip for two to the Caribbean.

For Hill & Knowlton, the beauty of the system was the low cost of management and availability throughout the network -- the company simply needed to purchase each Beenz at a fraction of a penny and then paste a bit of code into its intranet to make them available around the globe. Beenz took care of all the account management, redemptions and even promotion to a general consumer audience. At first it worked well. People often talked about it with excitement, happy in thinking that they would be rewarded for their intellectual capital, and even happier in thinking that they could eventually earn a trip! Hill & Knowlton saw very little redemption and assumed that many people were collecting their Beenz for the sake of bragging rights.

Unfortunately, Beenz went out of business in August 2001 shortly after its largest competitor, Flooz.com, also shuttered its doors. Although Hill & Knowlton tried its best to replace Beenz with local rewards such as pizza parties or movie coupons, the company's incentive program quickly lost momentum because there was no longer a "common currency" throughout the organization.

Nick Bontis, CKO of Knexa software and a professor at the McMaster school of business, says that having some type of "intellectual currency unit" is key to motivating people.

"Thinking that everyone in a company is a willing participant in knowledge sharing is naïve -- everyone wants something," says Bontis. He goes on to add that while the measurement piece should be built into every KM system, people need to be conscious of organization culture. "Comparing performance rankings of various people in a meritocracy system will work in an 'up or out' type of environment but won't do well in government, for example."

Knexa's unique point reward system has been adopted in a variety of areas like municipal government and the insurance industry. KM World has again recently voted them to their annual list of 100 companies that matter in knowledge management.

Top thinkers receive rewards

Tom Davenport, who co-authored the seminal Working Knowledge back in 1997 with Larry Prusak, says his poster child for this kind of knowledge incentive is Siemens with its ShareNet system.

Siemens, with 426,000 employees in 190 countries, certainly had the breadth of experience to draw from, but "incentivizing" experts to answer questions was another issue. Their Information and Communication Network (ICN) division devised a system that gave people various levels of redeemable shares for answering urgent questions, participating in discussion boards, publishing knowledge objects (projects, functional solutions, etc.) and even providing or receiving feedback about published objects or answers to urgent requests. In the inaugural year the top 50 contributors to ShareNet were invited to New York for a Meeting of the Minds event where they were allowed to bring their significant other for a mix of work and fun.

Some of the ultimate rewards available through that system? How about a Siemens/Fujitsu laptop worth more than $2,000 US? Of course, you can work your way up to the laptop after collecting Palm Pilots, cellphones, and even a visit to the office of someone that you have collaborated with online. Siemens takes pains to point out that quantity does not trump quality -- you can only collect your prize after the quality of your contributions are validated by expert communities during the claim process. The ultimate reward goes to the company as a whole; in 2002, with 19,000 users from the ICN/ICM divisions, Siemens had 5,000 answered urgent requests and an estimated increase to the bottom line of $330 million.

Davenport believes, with the exception of Siemens, that most of these types of reward efforts focus on unsophisticated trinkets and ignore what really motivates other types of knowledge workers -- raises and promotions. "Treat it the same way as you would a significant accomplishment," he says. He points to McKinsey & Company, a global management consulting firm, as being one of the few examples he knows where one's knowledge contribution is directly related to whether that person makes it to the top of the firm.

"Thinking that everyone in a company is a willing participant in knowledge sharing is naïve -- everyone wants something"

Ellen Shedlarz, a former McKinsey HR director currently now with Hill & Knowlton, says, "In order to be elected [made partner] at McKinsey you have to be known throughout the firm and have outstanding knowledge contributions."

McKinsey is also famous for reputation incentives like its Best Sellers List, which recognizes contributions to its intranet that are consistently accessed by others throughout the firm. Not only does this help speed the flow of information inside the firm, getting on this Best Sellers List is often critical for those on the partner track who seek to develop a reputation outside their local office.

Bontis addresses Davenport's concern about trinket rewards by distinguishing between two types of knowledge contribution and having different rewards for each. In Knexa's Enterprise Knowledge Incentives (EKI) system, silver points are given out for "Primary knowledge behaviours" such as uploading a document or filling out your profile, with gold points awarded for "Secondary knowledge behaviours" which incrementalize those contributions -- for example: building on a submitted document to create a new knowledge object or using profiles of two individuals to connect people to answer a problem.

Under the Knexa system, it is suggested that only gold points be redeemed for items, although you must have a number of "contingent" silver points before you get gold points (Bontis suggests a relative value of 2:1 or 3:1). If you're a frequent flyer you can understand the system by using the analogy of status miles versus Air Canada's regular aeroplan miles (while aeroplan miles can be collected by various sundry activities, such as using your credit card or renting a card, status miles can only be collected by flying on Air Canada or its partners.) As in the case of Siemens, the rewards Bontis often sees include PDAs or cellphones, but they also might involve extra vacation days or even points that add up to a yearly cash bonus. "Every organization says something different motivates its employees," says Bontis. "I think you need to have a combination of both physical and intangible items."

Assessing the knowledge life cycle

Bontis also points out that knowledge workers have different life cycles in the organization which require different types of currency. When you start with a firm you are often reading and learning as you get oriented, but you gradually get to the point where you can contribute your own knowledge and then eventually build on that knowledge collaboratively.

So what can companies who have already sunk substantial sums into KM systems do to avoid the gathering dust? "We [Knexa] often get asked for help from people who have already invested in collaborative tools or intranets who find that it's still empty after six months," says Bontis, who is confident with where Knexa is positioned in this marketplace. He advises that those running the pilot invest in some rewards so that the points can be redeemed for something at the end of the test period.

What these systems have in common is a concrete, timely reward: a recognition that is tangible, visible to your colleagues and, at the end of the day, motivates the behaviour that helps make knowledge workers more productive.

Ted Graham is worldwide director of knowledge management services at Hill & Knowlton. He can be reached at ted.graham@hillandknowlton.com.

For more on KM rewards:

Realizing the Promise of Corporate Portals, J.C. Terra and C. Gordon (case studies on Siemens, Bain and Hill & Knowlton, among others)

Knexa Software

www.knexa.com

Working Knowledge, Thomas Davenport and Laurence Prusak (Harvard Business School Press, 1997)

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