Understanding the Benefits and Impact of Communities of Practice

Organizations are increasingly providing Communities of Practice with resources to improve the exchange and flow of knowledge and information. However, as with any other significant investment, managers are naturally interested in, and are frequently called upon to justify, the impact that these communities have on individual performance, overall productivity and the bottom line. In this chapter, we present the results of work with thirteen Communities of Practice, focusing on how managers can collect community benefits via serious anecdotes and measure the impact that communities have on time use in knowledge work activities and on individual, community and organizational benefits. 2 Fontaine and Millen Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. INTRODUCTION From the beginning of the industrial revolution through to the mid-1990s, the knowledge needed to compete and succeed in business was housed locally within the co-located boundaries of the office, the city, the county and within formal worker groups who interacted daily. Today, however, in almost every aspect of business, organizations are pressed to fill the needs and wants of globally dispersed customers and suppliers, in real time and on-demand. At the same time, work teams have not only grown more complex and geographically distributed, but also their need to tap into the knowledge and expertise of their co-workers has never been more critical. To meet both of these challenges, organizations such as BP/Amoco, IBM, Montgomery-Watson Harza, Shell, Siemens, Johnson & Johnson, The World Bank, and Bristol-Myers Squibb have begun to support communities of workers, commonly referred to as Communities of Practice (CoPs), to increase the sharing of lessons learned, the exchange of insights and ideas and the transfer of expertise and hand-on experience. Ethnographies of these communities reveal that sharing and exchange of knowledge occurs in a variety of ways. In a study of copy machine technicians, Orr (1996) reported that much of technicians’ informal discussion took place in natural social interaction, for example, during meals, coffee breaks, and while driving to customer sites. The volume and detailed nature of the conversation supports the transfer of knowledge from the more experienced to the new technicians. Wenger (1998), in his research of a community within an insurance firm, describes how call centre employees exchange knowledge during group meetings and by handwritten notes passed among workers. Lesser and Storck (2001), in their study of seven CoPs in large, multi-national firms, describe how CoPs increase social capital and organizational performance in addition to reporting key value outcomes such as increasing customer response and creating new business opportunities. In their respective works, Teigland (2000) and Liedtka (2000) linked CoPs to an organization’s competitive advantage and ability to deliver on-time customer performance. Finally, Fontaine and Millen (2002) reported that to support the sharing of knowledge in communities, organizations are increasingly providing the following resources: • People: to fill certain community roles and manage the community’s activities • Activities: to bring the community together in meetings and events • Technology: to facilitate the flow of knowledge and information between activities • Content: to manage and share the explicit knowledge that the community creates Understanding the Benefits and Impact of Communities of Practice 3 Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. However, as with any other significant investment in resources, management is naturally interested in the impact that these community investments have on individual performance, organizational performance, overall productivity and, ultimately, the bottom line. As corporate investments in community increase, so does the scrutiny of the individual and organizational benefits of these investments. There is increasing pressure to augment the qualitative results with more formal measurement of the financial benefits and costs of the communities. In fact, measures of value are seen as being instrumental for communities to gain visibility and influence as well as to educate and guide their own development (Wenger, McDermott, & Snyder, 2002). To meet this challenge, Knowledge Management (KM) researchers have considered various approaches to measuring the benefits of communities. For example, one approach has been to measure the time savings that accrue to various knowledge work activities because of IT investments (Butler, Hall, Hanna, Mendonca, Auguste, Manyika, & Sahay, 1997; Clare & Detore, 2000; Downes & Mui, 1998). A second approach has been to elicit detailed stories from knowledge workers that describe the benefits resulting from the use of various collaborative systems. These stories or serious anecdotes have been used to informally calculate the Return on Investment (ROI) for IT investment (Davenport & Prusak, 1998; US Navy, 2001). Finally, other researchers have employed various assessment models including Social Network Analysis (Schenkel, Teigland, & Borgatti, 2000), Balanced Scorecard (Roberts, 2000; Walsh & Bayma, 1996) and intangible asset valuation methods (Edvinson & Malone, 1997; Lev, 2001; Sveiby, 1997) to account for improvements in social connectivity, organization performance and intellectual capital value. COMMUNITY VALUE RESEARCH To understand the impact that these investments have on both community members and the organization, we studied thirteen communities in ten global organizations in two studies as part of our work with the IBM Institute for Knowledge-based Organizations and IBM Research. In the first study, undertaken in 2000, we interviewed 100 community members in seven global organizations. Working with KM and community leaders in these organizations, communities that were well established and had strong member participation were identified (Table 1 shows the mix of organizations and communities studied as well as the research methods used). The findings from this study were published (Lesser & Storck, 2001) and a second follow-up study was undertaken in 2002 that used a mix of paper and electronic (web) based methods to administer a self-report survey to members of five communities. In total, 431 survey responses were received. The survey was structured to gather information about the nature and frequency of 4 Fontaine and Millen Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. participation within the community and to capture self-reported judgments about the benefits that result from community activities. More specifically, the 2002 study asked community members to report the following: 1) What benefits result from community activities, members’ use of content and technology resources and overall participation? 2) In what ways has time spent in knowledge work activities changed as a result of the community? Is there evidence for an increase (or decrease) in worker productivity? WHAT ARE THE BENEFITS OF COMMUNITIES OF PRACTICE? Those who have worked with CoPs have long believed that they increase the level and flow of knowledge within an organization. That withstanding, how to measure and package this belief to convince senior management that actual value is being attained has been a struggle. The intangible nature of “sharing knowledge” is often difficult, if not impossible, to quantify. To help address this struggle, a list of measurable community benefits was compiled from the interview analysis with the seven communities who participated in the first study and a scan of community literature. Table 1: Community Value Research Studies (2000 and 2002) Organization/Industry Community Research Method