Posts Tagged ‘executive sponsorship’

T2-5 Sensing of Client Issues during Contract Negotiation: Some Practical Tips for KM Consultants

February 7, 2010

The previous blog post is about knowledge of what works during contract negotiations. Knowing what does not work (or what are the risks) is also useful knowledge. After going through scores of KM contract negotiations, some successful and the others unsuccessful, let me share with you some of my experiences on what does not (or what may not) work and what are potential risks in contract negotiation.

  • Find out who is the manager authorized to make scoping decisions? cost decisions? the final decision? At the start of the negotiation, ASK WHO are authorized to make the above decisions. (a) If no one in the organization is sure about the answers to the above questions (i.e. their contracting process is not yet standardized), you are in for a difficult and surprise-full negotiation process. (b) What is the INTERNAL POLITICS between them? You may be wasting your time while the managers perform their “power plays” during the negotiation process. If you are able to talk to the TOP EXECUTIVE or whoever will approve the contract, these risks can be better managed. KM projects not supported by the top executive are risky projects not worth going into. (c) If the manager who invited you to submit a proposal and the executive who will approve the contract are not the same person, find out if the latter is aware of the proposal invitation. If not, you can have a problem in your hands. Do not proceed any further until the latter not only knows about the invitation, but is also open and willing to consider your proposal.
  • A client is after a desirable outcome, but you can only guarantee to deliver a set of outputs which contributes towards (but does not assure) that outcome. If the client wants his desired outcome to be your contractual deliverable, then propose instead that you GUARRANTY ONLY THE DELIVERABLES but not his desired outcomes.
  • A client may keep asking details and more details about project methodology, or may want you to specify them in detail in your proposal. Beware: it is possible such a client may not be intending to award you the project or to hire you; he may be intending only to use your proposal to STEAL your methodology and do the project himself without you.
  • If the client is not very definite about what he wants, or if there are differences in understanding of deliverables among the managers in the client organization, or between you and the client, then the deliverables must be specified clearly, CONCRETELY and in fine DETAIL. Avoid general terms with unclear or varying referents, such as “KM system”, in the description of deliverables.
  • Do you have doubts about the way the client perceives and defines his problem? Is the client seemingly fixated in a solution, or seems to have jumped to the solution without being sure what the problem is? Do you sense a risk that the client underdefined or misdefined his problem? If this is the case, propose a two-phase project and commit only to the first DIAGNOSTIC PHASE, the purpose of which is to cleary define what is their problem.
  • There are instances when the success and appropriate scope of a project depends on a decision the client has YET TO MAKE. If so, do not accept this project; propose instead another project to assist the client make that decision.
  • There are instances when the outcome and appropriate scope of a project depends on factors or events that are outside the control of the client. If so, propose instead a RISK ASSESSMENT project, the output of which will be the basis of the client’s next actions.
  • If project tranches are predetermined in amount and paid in a foreign currency, while project expenses are incurred in your local currency, then you shoulder FOREX RISKS. Study the fluctuations of the exchange rate over the last few years. Is it going steadily up or down? Is it steady or does it wildly fluctuate? What is the worst-case scenario during the project duration? How much contingency fund shall you set aside to cover such scenarios? Add this contingency fund in the project cost. Or, propose that the project is denominated in your local currency.
  • There are projects whose scope is not easy to define or anticipate. There are clients who (from past experiences) have a tendency to stretch the scope of the deliverables or to change their authorized sign-off officer to someone who has a different or broader interpretation of deliverables. In these cases, the risk of “SCOPE CREEP” during project implementation is high. Some solutions are: propose to divide the project into smaller-scope shorter-duration phases whose deliverables are easier to define or anticipate, and define the deliverables in a clear, concrete, detailed and unambiguous manner.
  • In a training project, there are clients who will pay you for delivery of the training course, but who also wants to OWN THE DESIGN of the training course and its learning materials. If you are willing to sell your IPR (intellectual property rights) on the design and learning materials, then separate the pricing of the delivery from the pricing of the design. If you are not willing to sell your IPR, then either back off from the contract or incorporate a contractual provision that you retain ownership over all IPR. You can then offer a licensing agreement whereby the client can use your IPR and pay you a per use fee (difficult to monitor use frequency) or an annual fee (a simpler arrangement).
  • If the project is full or partial computerization of a business process which includes financial transactions which are vulnerable to CORRUPT PRACTICES, then suspect that there could be staff members within the organization who will resist or sabotage the project if they are in fact involved in corrupt practices. Project non-completion risk will be high. Perform your due diligence processes more thoroughly before committing yourself to this kind of project.
  • There are organizations whose administrative unit (or whichever unit is responsible for the contracting process) like to take their sweet time nit-picking the details of a contract, wasting much time as contract versions go back-and-forth between you and them. Ask your client what is the typical or average length of their contracting process. If it is unusually long, beware. Ask in advance what are the REQUIREMENTS of the administrative unit. Ask for a SAMPLE CONTRACT and study its terms and conditions. It happens often that the technical people involved in scoping negotiations are ignorant or unaware of the contract requirements from their own administrative unit.
  • Be sensitive to signs that there is FACTIONALISM among the managers. If one faction will engage or hire you, it can happen that the rival faction will not cooperate or support (or may even sabotage) the project.
  • A technically good project proposal may be turned down because its cost is deemed too high by the client. Avoid wasting your time by asking the client beforehand what is his approximate BUDGET for the project (some will tell you but other clients won’t).
  • Schedule of payments of tranches is often flexible and negotiable. The ideal PAYMENT SCHEDULE is one that will not leave your project cash flow negative at any time during the project. A client organization may have a policy of remitting the final tranche 30-90 days after the accounting unit receives the payment order or payment clearance from the unit that receives the final deliverable. If so, add the cost of money and administrative costs of advancing the amount for fulfiling your payables before the receipt of the last tranche.
  • Success of project implementation can depend on COOPERATION of some key staff members of a client. If they are informed about, and better if they are engaged during the project scoping and procedure formulation, then chances of project success is better. If key staff are engaged and interested, but do not have enough time to support the project, then project success can be enhanced by a contractual provision where the client must assign specific staff to devote specific hours per week to perform SPECIFIED TASKS in support of the project.

If you wish to add your own experiences of what does not work or what are the risks during KM contract negotiation, please use the “Leave a Comment” link below.

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T5-3 Motivating Knowledge Workers Need Not be an Expensive Proposition

November 20, 2009

Motivating knowledge workers in KM projects does not have to cost much money. A survey of 22 Asian organizations performing good KM practices (conducted by Asian Productivity Organization) reveal an interesting pattern: they employ various (low-cost) ways to motivate knowledge workers:

  • Rewards and recognition schemes are often used. Airtel in India instituted the Knowledge Dollar (K$) as the unit of performance credit and the Joint President’s and CEO’s Knowledge Management Award. A Learning Award for knowledge transfer and an Enterprise Award for intrapreneurship were established by Unilever Indonesia. Wika in Indonesia instituted ten different awards. The Learning Award resulted in “new enthusiasm for learning, confidence in trainers to conduct sessions, new standards of module development… and preservation of knowledge not captured before.”
  • Infosys uses measurable returns from KM initiatives to demonstrate the benefits and rationale for engaging in KM. Initial positive feedbacks on outputs/benefits of KM were encouraging and provided motivation for the continuing development of KM at Goldsun in Vietnam.
  • At the Department of Health in the Philippines, members of the KM Team through a workshop surfaced their personal talents, passions and life goals and each member clarified how he or she can optimize the conscious convergence between personal and organizational goals.
  • Management of Qian Hu in Singapore designed a mix of informal and formal communication modes to strengthen buy-in from employees and customers. This includes “floor walks”, tea sessions and informal gatherings besides more formal modes such as seminars and focus group discussions.
  • At SCG Paper in Thailand, a balance of virtual interaction and physical or face-to-face meetings is employed. Physical spaces designed for interactions are provided that can foster openness and trust among employees. Similarly, Bank Negara Malaysia redesigned its library environment to make it more reader friendly, using ergonomics furniture and encouraging a more cheerful mood using paintings and appropriate color scheme for walls and furniture.
  • The importance of senior management commitment or executive sponsorship was mentioned in many case studies. In a survey of more than 200 organizations in Thailand this factor was ranked highest among critical success factors for KM. At Siriraj Hospital in Thailand, the CKO (Chief Knowledge Officer) was selected on the basis of commitment, leadership ability and recognition from other staff. Leadership and policy was ranked second in a study in Malaysia of success factors in KM. JTC Corporation’s managers created “a motivational organizational culture characterized by a caring leadership behavior which supports active questioning and allows for mistakes… Employees are thus able to trust each other and to share their opinions about work related issues more freely.”
  • Learning is a win-win activity for employees and the company. CAPCO in Taiwan established an on-line learning program for its employees, the Multimedia Cyber College. It has motivated its employees by including on-line training and certification as part of the employee evaluation and promotion processes.
  • The motivational value of learning through face-to-face interaction in a team or CoP is mentioned in many case studies. Unilever Indonesia, SCG Paper and Siriraj Hospital in Thailand, and SAIT in Korea are examples of organizations that set up and nurture many CoPs. To sustain employee interest in KM activities, Bank Negara Malaysia initiated cross-functional teams, benchmarking projects and study visits or attachments.
  • At SCG Paper, the honor of being a mentor or coach is seen as a motivating element in tacit knowledge transfer processes such as the buddy system, job rotation and cross-functional group activities. Designating functional heads as the knowledge champions and setting up a community of experts were instrumental in gaining buy-in for KM at Airtel. Wika and Bank Indonesia created the role of “begawan” (sage) for mature and experienced mentors.
  • “Praise Ground,” which is an avenue for peer-to-peer public compliments for exemplary KM behavior, is an innovative process at Samsung Advanced Institute of Technology. According to the case study author,
    “A member identifies another employee who has done something worthy to be praised and writes a short, but entertaining note about it on the website. That member, then, identifies still another employee to praise and the process is repeated over and over… The Praise Ground is one of the most popular and most frequently visited website at SAIT. Most, if not all, members at SAIT consider it a great personal honor to be mentioned at the Praise Ground.”

If you wish to read more about these 22 KM case studies which I edited, click here and access the 3rd item in “Downloadable KM e-books”.

KM in Asia

KM in Asia (22 case studies)

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Practical Hint #20: Consider the Power Dimension in KM

May 1, 2009

Power is part of workplace reality. It is a fact of life. Here are some practical hints which consider the power aspect in KM practice:

  • In a Lessons-Learned Session or After-Action Review, some team members may tend to keep quiet or just agree when the boss is participating. Learning may not take place. A solution: divide the session into two parts: (a) the first part is participated by peers only so that they can talk more freely among themselves on what they think worked and what did not work and why, and (b) the second part is when the boss joins the session and gives his perspective.
  • In any new KM initiative, the formal authorization and/or informal “go ahead” signal from the boss is important, especially in Asian contexts. But once the initiative is started, look for ways to encourage or energize the KM initiative from the staff. For example you can (a) show how the KM initiative will work for their advantage, (b) identify those who are most interested and get them engaged, (c) emphasize or demonstrate the personal learning and other benefits, (d) connect the KM initiative to what they are doing, (e) make learning a social process, (f) ensure that good work is identified and appreciated by the rest of the group and (g) ask the boss to personally acknowledge and recognize staff members who are performing exceptionally well. The presence or participation of the top boss in a KM activity delivers a signal to everyone that the top boss supports KM.
  • Recognize, acknowledge and then harness relevant talents no matter how seemingly trivial by inventing descriptive, attractive and honorific KM titles or formal designations, and accompanying responsibilities, e.g. “Knowledge Networker,” “PowerPoint Expert,” “e-Group Co-Moderator,” “Internal Consultant on HTML,” “Proposal Writing Expert,” “In-House Editor,” “Expert in xxx”, “yyy Mentor”, etc. Get the boss to make the formal designation in writing.
  • In choosing members of a cross-functional KM team, select members who are (a) close to and listened by the boss, (b) influential among members of the division or department, and (c) respected by his professional peers.
  • If a Chief Knowledge Officer or a KM Officer is to be designated, recommend someone who is from the upper management level (at least vice president level). A middle or lower-middle manager would be less able to push the KM agenda across the organization.
  • If the top boss does not believe in KM, and for as long as he does not believe in KM, it would be fruitless to start a KM initiative in the organization.
  • If there is factionalism or power struggle, pervasive indecision or frequent decision reversals in an organization, it would be risky to start a KM initiative (or any other initiative) in that organization.
  • If the boss is a “know-it-all,” frequently tells people they are wrong or publicly scolds subordinates who make mistakes, then learning processes would be stymied in that organization.

Cheers!

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