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    « Spend marketing dollars effectively during a trashed economy | Main | Tooty tooting -- Three Spheres of Web Strategy »
    Tuesday
    Oct072008

    Bagging management back-up books in favor of knowledge bases

    Most times when a marketer like me touts the benefits of a knowledge base, we focus on the customer service benefits.  While those are plentiful, today I want to share a story that exposes the internal benefits of having a well-populated knowledge base.

    Back in the day, Cynthina Heinsohn, developer extraordinaire, and I worked in an Exxon Exploration Planning group.  Among our various semi-regular responsibilities, the Planning group prepared our division management team (the Exxon way) to weather senior executive reviews of our division's operational activity and investment portfolio (and our division budget encompassed $100s of millions).

    For each review, our group's preparation involved undertaking a mountain of analysis, generating a plethora of reports, and then building two to three back-up books filled with the results, with each binder book being about about three to four inches thick.  And this happened two to three times per year.

    At least a half dozen or more people worked to deliver these mammoth binders, filled with data on every aspect of our division's activities with answers to every, and I mean every, conceivable question the execs might ask.  The prep team included division management through high-level professionals down to tech aids and secretaries.

    We invested a chunk of time in preparing up-to-date analysis and reports.  The entire team also expended a large chunk of time in preparing the books themselves -- printing, collating, and indexing -- so divi-management could find the info they needed at their fingertips.  And god forbid if documents changed -- which some always did -- or if the managers needed the books segmented another way to make it easier for them to find what they needed.  Changes always, always occurred. 

    In today's dollars, given the number of people involved and the hours required, just the physical preparation of the books for one division alone cost Exxon at least at least $13,000 to $15,000 for each review or about $39,000 to $45,000 per year.  And that was in one, count it, one division of many so you can multiple that cost by a factor of 10 or more.

    Whew! 

    That was then, though, this is now.

    If I were in that Planning group today and preparing for exec meetings the Exxon way, I would bag the back-up books.  Instead, I'd hand the divi-managers a laptop loaded with a well-populated and indexed knowledge base or wiki. If a hard-to-answer question popped up, they could find the answer through a quick look-up in a table of contents or via a keyword search.  Not only that, they could use an LCD projector and flash any documents on-screen so the rest of the meeting attendees could view it too.

    The value of such a knowledge base would extend well-beyond the exec meetings, though.  After all the intense effort that went into analysis and report generation, wouldn't you want your management team to have easy access to the information?  I would -- and you could do that infinitely easier with a knowledge base than with a shared group of folders on network containing hundreds of unindexed documents. 

    I'm not faulting Exxon senior execs for asking hard, penetrating questions.  Last year, ExxonMobil spent almost $16 billion in capital and exploration expenditures (1) so if I were steering the company, I'd ask tough questions too.  Nor am I faulting its division managers for wanting to be prepared with answers at their fingertips.  I'd jolly well want to sound and act knowledgeable too with that much as stake.

    The labor costs of manual preparation is eye-popping though, which is why a knowledge base makes more sense.  It's more than good math sense, though.  It's good business sense. 

    Let me put it this way.  Imagine if you were an Exxonian division manager or executive.  Would you want your high-paid geoscience and engineering technical people putting together binder books?  Or would you want them finding new commercial reserves of oil and gas and more effective and efficient ways to produce it?  You know, activities that will actually generate revenues for your company rather than just a giant expense.

    I know what I would choose.


    (1) Note:  The ExxonMobil budget figure reflected all of Upstream.  That is, both Exploration and Production.

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