An environment for innovation:American Management Systems

"Innovating is not something you can mandate, but you can create sustained opportunities for collaboration and innovation. That's what we do," said Susan S. Hanley, director of knowledge management initiatives for American Management Systems (www.amsinc.com).

Hanley and AMS have achieved the near impossible: to make "innovation" a formal, daily part of the culture at AMS. They do it by building and maintaining the "shared spaces" in which communities of interest--and those who need expertise--can meet and exchange knowledge.

And that achievement earns AMS the KMWorld Best Practice Award for "Nurturing and Sustaining Innovation."

Organizational structure comes first

AMS is headquartered in Fairfax, VA, with offices in 55 cities worldwide and is among the 20 largest consulting firms worldwide, expecting 1998 revenues of approximately $1 billion.

But in the early '90s, growth was causing pain. An expanding practice and the inevitable friction from time zones and dispersed locations pressured AMS to reconsider its "let's-meet-at-the-coffee-machine" style of collaboration and knowledge transfer.

A series of initiatives, begun in 1993, now ensure that each engagement team has access to the best of AMS' knowledge, practices and technology. The most recent of those initiatives, the AMS Knowledge Centers, adds to existing infrastructure the concept of knowledge-based communities of practice.

AMS' knowledge management initiatives include three components:

• technology research and development (AMS Center for Advanced Technologies),
• best-practices discovery and dissemination (AMS Best Practices Program),
• knowledge-based communities of practice (AMS Knowledge Centers).

"The model of having a physical space (the AMS Center for Advanced Technology or AMSCAT) where leading academics, practitioners and researchers could share ideas evolved to be a formal community of practice," explained Dawn Shande, an independent consultant who has studied the AMS initiatives. "AMSCAT sponsors the communities of practice for technical architects, who are responsible for putting the latest technology innovations into practice for their clients.

"The communities of practice provide a formal mechanism for promoting information, learning and innovation in this fast changing field. Through networking sessions, seminars and workshops, the members align topics to real client needs. Their membership and funding processes keep the communities of practice program in line with business goals. They promote collaborative learning, not just document collating."

The AMS Best Practices Program is a formal effort to discover and disseminate the best methodology and management practices from both within and outside the company. At the heart of it is the AMS Knowledge Express, a Lotus Notes-based corporatewide knowledge repository. The Knowledge Express includes a collection of databases ranging from a corporate Yellow Pages to a directory of "Who Knows About ..." to a collection of examples of work products produced on client engagements. The Knowledge Express databases include more than 10 GB of data with more than 3 GB accessed each day by AMSers around the world.

Finally, AMS encourages "birds of a feather" to congregate into communities of practice called the AMS Knowledge Centers. Each is a worldwide virtual community of "Knowledge Centers Associates" connected by interest and expertise in a specific discipline. Each community is led by a team of coordinators whom the company recognizes as leaders in their disciplines.

Knowledge Centers Associates must commit to share their knowledge in a formal way at least once a year, by contributing an original research paper, providing insight into a new technology or project management technique, or with a sample deliverable or report on the lessons learned from a client project. Those contributions are added to the Notes-based knowledge repository and are cataloged and indexed by a team of reference librarians. That knowledgebase is accessible by all AMS employees.

While open sharing and communication may describe the culture at AMS, it is one with its past firmly planted in an oral tradition. AMS' biggest challenge has been in encouraging people to write down their insights so that anyone who needs them can retrieve them electronically, even from different time zones, even if they don't know one another personally.

AMS spends great effort on internal communications, continually describing the benefits and value of documenting knowledge. They encourage participation through rewards and incentives--from invitations to conferences with industry-known speakers, to golf shirts and gourmet cookies, and through public recognition of key contributions in newsletters and flyers.

Of course, AMS doesn't rely entirely on T-shirts and psychic rewards--it has an explicit requirement built into most performance evaluations to demonstrate how each employee has made a contribution to the collective intellectual capital.

You can't manage it if you can't measure it

AMS believes that tying knowledge management initiatives to a business problem and measuring success against the resolution of that problem is the only way to be successful.

There are two components to AMS' measurement approach: the tracking of key metrics and the application of what Susan Hanley calls "serious anecdote management."

As for metrics, AMS views a balanced scorecard from four perspectives:

1. Financial perspective. A key component of the AMS Knowledge Centers is a full-service reference library and a knowledge hot line (phone number: AMS-KNOW). Last year, the team of four reference librarians successfully solved more than 8,000 knowledge requests. Their speed and efficiency saved AMS more than $500,000. A recent survey of users of the corporate intranet also indicated that the time saved by AMS consultants through the use of the knowledge databases represented savings of more than $5 million a year. 2. Customer perspective. AMS clients must receive more than just "more information"; they must receive information of high value to them. More than 300 AMS clients visited the AMS Center for Advanced Technologies and AMS Knowledge Centers in 1998. 3. Internal business perspective. Employees shared more than 8,000 deliverables in 1998 and exchanged more than 70,000 E-mail messages each day. 4. Learning perspective. Last year, almost every one of the 800 Knowledge Centers Associates participated in at least one workshop or conference.

They also measure value to AMS through "serious anecdote management" of stories from AMSers who have won deals or found what they have needed quickly through the various knowledge management initiatives. When a customer reports that the deal was awarded because of an AMS KM initiative, the Knowledge Centers "take credit" for that in their reports to senior management.

Standardizing on Notes

Without a technological infrastructure, AMS' knowledge management initiatives would have been impossible. Their primary enablers are Lotus (www.lotus.com) Notes (bolstered by worldwide access through Domino Server), voice mail, E-mail and video teleconferencing.

The corporatewide knowledge repositories are organized under the AMS Knowledge Express--Notes databases of expertise and practices.

"We use Notes the way Lotus envisioned using Notes for KM," said Hanley. "When we began investing in our KM initiative, there wasn't a 'product' for innovation. So we experimented. Eventually we built our databases of expertise, and then the discussion forum.

"Initially the only people who had Notes were the members of the advanced technology community. Then everyone got wind of it. Within two years we had enough licenses that we were able to charge the Notes license into the business units for each person. By the end of '96 we had Notes for every person," said Hanley.

Organic growth

The communities of practice and technology infrastructure initiatives have inspired similar activities throughout AMS. For example, the Finance Industry Group in Europe has established "expert groups," whose members have expertise in related core competencies, such as risk management, etc. Their goal is not only to share intellectual capital, but also to mentor others to grow their expertise in the discipline. The Government and Education Management Systems Group (GEMS) established a "GEMS Knowledge Center," which is a collection of best-practice intellectual capital for reuse within the state and local government practice area. Those efforts grow organically and complement the corporatewide initiatives.

"Most people now tell you to start small and expand. We didn't do that," laughed Hanley. "We started enterprisewide and are moving down into the sbusiness units. They are modeling their infrastructure and strategy on the larger system. All I have to do is give them the discussion templates, etc., and they're most of the way there."

Organic growth stimulated by firm management and encouragement. AMS has truly created a "sustained opportunity" to excel.