The stick component is a good deal more subtle but more pervasive: everyone in the company knows that Bob Buckman isn't just watching the knowledge net - he's constantly on it. Early in the life of K'Netix, Buckman laid out his expectations in a speech to his people. "Those of you who have something intelligent to say now have a forum in which to say it," he told them. "Those of you who will not or cannot contribute also become obvious. If you are not willing to contribute or participate, then you should understand that the many opportunities offered to you in the past will no longer be available."
For companies thinking about entering the knowledge economy, Bob Buckman emphasizes one lesson before all others: "What's happened here is 90% culture change. You need to change the way you relate to one another. If you can't do that, you won't succeed."
At the heart of knowledge-sharing, Buckman-style, is a commitment to the individual. Buckman's values represent a flip of the prevailing corporate mind-set, where the company comes first, and employees are fortunate to have jobs. The Buckman Code of Ethics, captured on a wallet-sized laminated card and passed out to every person in the company, stipulates a fundamentally different operating philosophy. The first proposition is "that the company is made up of individuals -- each of whom has different capabilities and potentials -- all of which are necessary to the success of the company."
The philosophy applies directly to the operation of K'Netix, where anything is discussible and anyone can participate. For example, one lengthy online discussion tackled the always-sensitive issue of compensation -- in this case, a special bonus award given each year to the salespeople who record the largest year-to-year percentage sales growth. For several weeks, salespeople from around the company traded opinions and argued directly with Buckman over what was unfair about the existing award and what a fairer system might look like.
What made that exchange work is the same thing that makes the larger knowledge transfer system work: the trust that exists in the company. "It has to do with the fuzzy-wuzzy stuff that's not easy to get your hands on," says Buckman. "But it boils down to this: Do you trust the people who give you the information?"
In the emerging knowledge economy, the debate that's waiting to happen is all about measurement: Can you prove that all these knowledge management expenses finally contribute to the bottom line? Bob Buckman, who publicly discloses that he spends 3.75% of company revenues on the knowledge transfer system, dismisses the return-on-investment question out of hand. "I used to be a statistician," he says. "There are no absolutes. All you can do is increase the probability of success. If I can change the speed of our response to a customer from three weeks to six hours, it doesn't take a rocket scientist to see the economic benefits."
According to Lou Breyley, a sales manager in Cincinnati, Ohio for Buckman's water treatment division, the economic proof of the system's value is in the contracts it helps the company win. "We might come in with less experience than a competitor," he says, "but we can show that we can tap into a worldwide resource where others can't. That's a competitive strength."
The water treatment division, for example, recently identified the ammonia industry as a growth target. Despite a lack of experience in the field, Buckman beat out seven competitors to win part of a contract that could be worth up to $6 million in new business. "The customer acknowledged that the network was a factor in our landing the deal," says Breyley.
While Bob Buckman rejects the standard financial metrics, there are a few measurements he does focus on in evaluating the performance of the knowledge network. The percentage of his workforce that is effectively engaged on the front line is one key figure. Another is education. The proposition is straightforward: if you want to compete on knowledge, you need to hire smart people. One proxy for evaluating smart people is college graduates. In 1979, only 39% of Buckman's people had college degrees. Today it's 72%.
From Bob Buckman's vantage point, it is impossible to put a dollar figure on the value of the knowledge network. It is simply fundamental to the way the company does business, intrinsic to its operation and embedded as an expression of the company's value system. Looking back, Buckman says that incorporating the knowledge transfer system into a corporate culture is at least a three-year process. "The first year they think you're crazy. The second year they start to see, and in the third year you get buy-in," says Buckman. "What you need is persistence. This whole thing is a journey."
Glenn Rifkin (grifkinb@aol.com) is a Boston-based business writer who contributes frequently to "The New York Times."
Additional reporting by Christina Novicki (cnovicki@fastcompany.com) and Susan Diesenhouse.
Bob Buckman and Buckman Labs can be reached at knetix@buckman.com or http://www.buckman.com/
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