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The Gateway to Capture Knowledge in the Energy Industry

Published on 04 Mar 2016 by Jared Tomlinson


What is Knowledge?
There are two types of knowledge that can be transferred between people and/or entities. A significant difference is between tacit and explicit knowledge:

Tacit knowledge is the stock of expertise and knowledge within an organization—primarily located within the brains of employees that cannot be easily expressed or identified, but may nevertheless be essential to its effective operation.

Explicit knowledge is the most visible knowledge found in practices, manuals, presentations, guidelines, documentation, files and other accessible sources.

The importance of knowledge management (KM) within the corporate environment as mentioned by Chevron’s former CEO, Ken Derr: “We learned that we could use knowledge to drive learning and improvement in our company. We emphasize shopping for knowledge outside our organization rather than trying to invent everything ourselves. Every day that a better idea goes unused is a lost opportunity. We have to share more, and we have to share faster.” BP’s former chairman and CEO, John Browne, similarly identified the central role of KM: “All companies face a common challenge: using knowledge more effectively than their competitors do.” The oilfield services leader Schlumberger’s D.E. Baird was saying that: “We must become experts in capturing knowledge, integrating and preserving it, and then making what has been learned quickly and easily available to anyone who will be involved in the next business decision.” The online knowledge-based OGnition also mentioned: “With worldwide knowledge in the energy industry, we offer to close the competency gaps in the workforce by leveraging the experience and technical knowledge of industry experts to address the challenges the industry faces today.”

Urged by a common goal of maintaining valuable knowledge, energy and services companies set out to adopt a strategy to establish their own sets of knowledge management. The table below shows how each company started its own Knowledge Management.

Company
Motive for Adopting Knowledge Management
BP
Following radical organizational decentralization, Knowledge Management viewed as mechanism for achieving lateral coordination
Shell
In Shell’s highly decentralized multinational structure, Knowledge Management was a natural complement to strategic planning and career management as an integrating mechanism. With poor profitability during early 1990s, Shell came under strong pressure to make more effective use of its dispersed talent
Chevron
Chevron’s adoption of Knowledge Management driven by pressure for cost reduction during early 1990s and as recent as 2015 resulted in strong interest in the transfer of best practices
ExxonMobil
XOM adopted Knowledge Management during the mid 1990s primarily by its desire to improve efficiency in E&P and in refining through improved identification and transfer of best practices
ConocoPhillips
Expansion of exploration, especially in deepwater Gulf of Mexico, created the need for data management systems to support large amount of data being generated and processed and link them to decision processes
Marathon Oil
Desire to improve upstream performance through more effective linking of people to people and people to information
Schlumberger
Knowledge Management came from the need to link rapidly advancing data management with systems that link human expertise in globally distributed operations
Halliburton
Fluor Corporation
Fluor started the Knowledge Management system, Knowledge OnLine, to enable employees throughout Fluor's worldwide offices to access corporate information and contribute solutions, lessons learned and expertise

When did Knowledge Management become recognized by companies?

Since the early 1990s, the major oil and gas companies as well as large services and consulting firms have realized that they are operating in a knowledge-based business environment where technical and safety performance must be achieved through the early identification of opportunities and potential issues that can arise, both from an organizational knowledge-capture perspective and as training to a transitioning workforce.

The following table illustrates the timing when companies started adopting Knowledge Management.

Company
Adoption of Knowledge Management
Originated for Knowledge Management
BP
1996
Organizational learning/best practices transfer in upstream
Shell
1995
Organizational learning initiatives by corporate planning
Chevron
1996
Best practices transfer and cost reduction
ExxonMobil
2003
Exxon: application of IT to E&P
Mobil: best practices transfer
ConocoPhillips
1998
IP support for E&P
Marathon Oil
1999
IP applications to exploration
Schlumberger
1997
IP applications to drilling
Halliburton
1998
IP applications to drilling
Fluor Corporation
1998
Collaboration and knowledge transfer

Why should we capture Knowledge?
  • Some select industries are faced with an aging workforce. The majority of the workforce, in fact, will be nearing retirement age over the next decade.
  • Between 2000 and 2010, the Society for Petroleum Engineers (SPE) estimated that 231,000 years of cumulative experience and knowledge will be lost to the industry in the next 10 years due to the retirement of petroleum engineers and other technical staff. Knowledge management offers a means of limited and potentially devastating effects of the continuous knowledge loss due to retirement & downsizing (Drain, 2001).
  • In order to make sure that this current gap does not turn into a future shortage, the industry needs to work in tandem with educational institutions and government to recruit and train people and transfer knowledge.
  • It is served as a hub for innovative technologies and thinking and as an industry striving to always improve in both good times and challenging times.
  • Since the energy industry is often challenged by fluctuations due to the world market, supply and demand, geopolitical conditions, etc. that makes sustaining the industry and workforce a huge challenge, a knowledge database can provide current and future industry professionals a means to exchange knowledge, collaborate and to address technical and commercial challenges facing the industry.

How can Knowledge Management help current and future professionals in the energy industry?

After the oil bust during 2008-2009 and as recent as Fall of 2014, more energy knowledge loss contributed by people taking early retirement, forced to move to a related industry and some taking a different approach of pursuing an entirely new career path. Knowledge Management is even more critical when baby boomers, born between 1946 and 1964, are heading into retirement in large numbers. If not managed properly, this could contribute to lost and irreplaceable knowledge in the industry.

Major companies have been going beyond occasional bilateral knowledge exchanges to form interactive groups that share knowledge in a rich, continuous and dynamic manner. Since 1998, all of the oil and gas majors have established informal or semi-formal groupings of employees that share common technical or professional interests for the explicit purpose of sharing knowledge. These knowledge-sharing groups go under a range of different names. For example, community types within ExxonMobil include: communities of Practice, Best Practice Communities, and Communities of Interest (ExxonMobil, 2003). Unfortunately, information gathered from these interactive groups’ knowledge sharing sessions often does not equate to real life experience that professionals can search for easily.

In order to mitigate the shortcoming to replace valuable knowledge, we need tools that capture the intangible assets of tacit knowledge for speedy exploitation to superior technology, management systems, innovation and know-how in order to achieve the competitive advantage in the industry, especially not to reinvent the wheels.

There are online forums and platforms that can help such as Google and Linkedin Groups that gear toward technical subjects. However, those groups are typically organized in an isolated subject or discipline. If one needs to learn across disciplines and various subjects, chances are that person needs to join multiple groups in order to get the information (s)he seeks to learn.

Fortunately, there is one online knowledge network, OGnition, that can connect those missing dots together. OGnition is an online community for the energy industry that offers knowledge and solutions in disciplines that range from upstream, midstream and downstream to occupational safety and operations. Anyone can ask a question to be answered by a Subject Matter Expert (SME) in their field of expertise. People can also share their accrued industry experience as lessons learned through posting as a blog or simply describing the factual events. Sharing lessons learned is the most valuable way to capture knowledge management that can be tagged and searched for and reused repeatedly.

The goal of knowledge management is to make sure that good experience gets repeated and bad incidents never ever happen again, to anyone, anywhere. Without knowledge sharing and lessons not-learned, we will keep making mistakes and reinventing the wheel.

Knowledge is meant to flow!




REFERENCES
Boyd, A. (2003): “Shell’s Communities of Practice: Ten Years On”. Presentation. January.
ExxonMobil Corporation (2003): Knowledge Management in ExxonMobil Upstream. Presentation, February.
Chevron Texaco Corporation (2002): The Chevron Texaco Way. San Francisco.
Derr, T.K. (1999): “Managing knowledge the Chevron way”. Speech given at Knowledge Management World Summit. San Francisco, California. Available at http://www.chevrontexaco. com/news/archive/chevron_speech/1999/99-01-11.asp
Drain, B. (2001): Retaining Intellectual Capital in the Energy Industry. Sapient Corporation.
Gartner Group (1999): The Knowledge Management Scenario: Trends and Directions for 1998-2003. Gartner, 18 March.
Hansen, M.T., Nohria, N. Tierney, T. (1999): “What’s Your Strategy for Managing Knowledge?”, Harvard Business Review, Vol. 77, num. 2, pp. 106–116.
KPMG Consulting (2002): Knowledge Management Research Report 2000. KPMG, October.
Grant, R. (2013): The Development of Knowledge Management in the Oil and Gas Industry, Universia Business Review.
EngStack (2016): Retrieved from https://www.engstack.com/about-us/

Tags: knowledge