“If Only HP Knew What HP Knows . . .”
Thomas H. Davenport
Innovation in Action
About the author: Tom Davenport, professor of Information Management at the University of Texas, Austin, is best known for his research on how organizations bring about major innovations in their work processes. His 1993 book, Process Innovation: Reengineering Work through Information Technology, was the first book to describe what has become known as “business reengineering.” More recently, Davenport’s research interest has shifted to the question of whether “knowledge work” is characterized by processes and amenable to process improvement. Last year, he published “Improving Knowledge Work Processes” in Sloan Management Review. He also has two books forthcoming on related topics.
ewlett-Packard is a large, successful company with over $38 billion in 1996 revenues. Its fast annual revenue growth—approximately 30%—from such a large base has astounded observers. The company competes in many markets, including computers and peripheral equipment, test and measurement devices, electronic components, and medical devices. It has 112,000 employees and over 600 locations around the world.
HP is known for its relaxed, open culture. All employees, including the CEO, work in open cubicles. Many employees are technically-oriented engineers who enjoy learning and sharing their knowledge. The company is perceived as being somewhat benevolent to its employees, and fast growth has obviated the need for major layoffs. All employees participate in a profit-sharing program. The company is also known for its decentralized organizational structure and mode of operations. Business units that perform well have a very high degree of autonomy. There is little organized sharing of information, resources, or employees across units. HP managers feel that the strong business-specific focus brought by decentralization is a key factor in the firm’s recent success. Although culturally open to sharing, few business units are willing to invest time or money in “leveraged” efforts that do not have an obvious and immediate payback for the unit. It is
The Well-Read Manager, pg. 85
Creating Fertile Ground . . . , pg. 34
If ever there were a “knowledge-intensive” company, it’s Hewlett-Packard, the huge and hugely successful hightech firm. There is widespread recognition at HP that its knowledge—about markets, products, and customers— is its biggest source of competitive advantage. But because the firm is highly decentralized, its knowledge is dispersed across business units that have little perceived need to share with one another. In such an environment, it’s no surprise that knowledge management efforts have proliferated. Three notable ones have been: the “Trainers’ Trading Post”; the “Connex” guide to internal experts; and “HP Network News,” a resource for HP dealers. All have been successful, leading managers to the conclusion that knowledge, like the firm that houses it, may not require a central management function. Instead, the emphasis is on building awareness of and sharing lessons from the many projects underway.
common, however, for employees to move from one business unit to another; this mobility makes possible some degree of informal knowledge transfer within HP. In mid-1995 it became apparent that several knowledge management initiatives were underway in various HP business units. Some had been in place for several years; others were just beginning. Noticing this phenomenon, Bob Walker, HP’s CIO and Vice President, and Chuck Sieloff, Manager of Information Systems Services and Technology (ISST), decided to attempt to facilitate knowledge management at HP by holding a series of workshops on the topic. Their idea was to bring together a diverse group of people within the company who were already doing knowledge management in some form, or who were interested in getting started. The corporate ISST group had previously sponsored...