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Knowledge Management at Scandinavian Airlines

Bernhard Rickardsen, Senior vice President Human Resources, SAS

Bernard was born in Norway and served a mandatory military in the Royal Norwegian
Navy as a petty officer and instructor in tactical training. He has also previously
worked in the retail sector and as a Social Worker. He joined Scandinavian Airlines
in 1981 and in 1993 was appointed the Corporate Head of Human Resources and a
member of the Management Core. He's the Chairman of the committee responsible
for People Policies Training and Internal Communications at the Star Alliance. He's
the Chairman of the Board of the SAS Flight Academy, and a member of the board of
the SAS's commuter airline.

So we’re reverting to some old technology here, I'm not a technophobe, but at times
I'm a techno bore, which means that I'm so bored about hearing about it so lets see if
it works. First a very small lesson in Swedish, what it says he is that the new SAS
we changed our livery just last fall, and we're doing our whole change internally
within our organisation with people, how things look, but mainly the way we work and
knowledge management, of course, is an integral part of that. Now when you see all
these colours, what I feel like telling you about here, is that these red engines is
something like engines are not supposed to red, that's sort of dangerous isn't it.
While red's a warm heart and blue's a cool head. So I think that is a good
combination when we talk about knowledge management. The topic of my speech is
hard to devolve a culture well, I think that what Lia told us about the way British
Airways work with this is to ride piggy back on other initiatives. I think that was a very
good way of saying it, because when you try to introduce something like knowledge
management, like a conscious way of doing things, I don't think the grand scheme to
roll out this big big plan and have top management being very focused on it, that's
not usually the most successful way of doing it. There are lots of initiatives going on
in the organisation, if you can pull together those initiatives and try to, as she said,
ride piggy back on it, to my experience that's a much more successful way of
introducing something that makes people think a ha so that's the way we should look
at that, wow that's a good idea, I could do something over here may be that fits into
the picture. So the culture consists of the thinking, the language and the actual way
of doing things and that's the approach we have taken to knowledge management. A
lot of things happen within Scandinavia when it comes to learning and knowledge
management. In Denmark, they're going to set up the learning lab, and they have
this ambition of having a world attractive centre for learning, learning about learning,
research about learning processes. And the government and business in Denmark
are in on this together. In Sweden Leif Edvinsson who sold a Scandia Insurance
Company has done pioneering work in how to assess intellectual capital, how to
intellectual capital into the annual report of the companies. Of course my own
country, Norway, who I was interested to see Bruce's number's this morning, 20.5%
of Norwegians are internet users on the top of the list. So a lot of things are
happening within our society and what we're trying to do is to draw the best out of
that and put it into independent thinking make our own language out of it, and then
putting it into work, both with tools and in the actual way we run our business
processes.

But first just a few words about my company. We are 22,500 employee, and we had
21.5 Million passengers last year, making us the 14th largest airline in the world and
it's interesting to see here it says passengers, it doesn’t say customers, because we
don't really know how many customers are behind those numbers, so I think we have
a some way to go also in our industry.
We're part of this airlines, with a quarter of a million employees and 190 million
passengers last year, to 700 destinations all over the world. At SAS lots of things
were happening in the 1980's and it was interesting to hear somebody use the
phrase moment of truth. Now that was a phrase that was coined by a former CEO
Yan Corason (spelling!!! - or it could be young person) in the 1980's a phrase really
pin-pointing the activity going on between the customer and the service delivered.
Now what kind of culture for learning and what kind of culture for delivering a service
have we had. In the 1970s the whole attitude was, do what we tell you to do for the
passengers, and then came this big revolution at the SAS in the 1980s, but it was, do
what you feel is best for our customers, in the 1990s we sort of lost track of the
customer, it was cost cutting, it was the Gulf War, it was really focus on internal ways
of running the business with a bottom line that was acceptable. So we turn it to do
what you have to do for the customers, and what we're now moving into and have
been working for for a few years, and which is really the heart of the new SAS, do
what you know is right for your customer, focusing on the responsibility for the
individual and also focusing on knowledge, it is not only what you think is best for the
customer, but really you know a lot about your customer, and we will also provide you
with tools so that you can know even more about the customer.

What we did in the 1980s was very very pleasing both to the employees and to the
customers, it was a management strong on charisma and visions, it was a limitless
when it comes to freedom to act, but there was little business understanding in that,
so when the Customer Service Manager at the airport in Stockholm realised that
there was a traffic jam due to an accident on the road between the airport and the
city what does she do, she hires a helicopter and brings the customers into town. Of
course a wonderful experience for the customers but if you do that now and then, not
much of the revenue is left. The skills were mostly based on personal experience
and motivation, there was no real training, the training was how do we make these
people utilise their skills and utilise their ways of finding out how the customers like to
be treated. And the knowledge, the knowledge transfer that was to have people
become totally immersed in this way of thinking in this charismatic way of making
people do whatever is best in their own opinion for the customer. So it was very
successful, but it was also very fragile.

What we are doing now is figuring out how people will be able to know more about
the customers and know more about how they can use the different tools in satisfying
our customers, and also focusing the responsibility for everyone for their own
customers. So there's a management by challenge, by inspiration, and last but not
least support. Business understanding, we run courses in business simulation and
business understanding for first time managers, also for the employees when they
enter the company. Customer knowledge and also the quality standards that define
the opportunities for giving good service. We develop and also bring in new
competence and new understand of competence to training, communication, learning
from the colleagues and a desire to know more. And there is a knowledge transfer
through methodology, through the infrastructure where the intranet is one vital part of
that. Peer pride, realising that I as an employee suddenly have another colleague
here and how do I make that colleague do the work up to the standard that we like to
have here. We've done a lot to try to unlock this pride in work, pride in service levels
and have people bring their colleagues into that. And the individual responsibility of
actually delivering what you know is best for your customers. And we have seen
success and we've also seen that this is a much more robust way of working than
working only by charismatic leadership.

Now what kind of definition do we have when we talk about competence. When we
say knowledge management in our language, the language that we have defined
ourselves based on the thoughts and the insights of other people, we think of
knowledge as just one ingredient in our definition of competence, and when we use
the word competence and this then of course has an impact on our training activities
for instance we start out with abilities. There's an attitude necessarily, the
knowledge, the skills and also the experience. All these make up our definition of
competence. In creating a new culture in which competence management would
thrive and also finding a new robust way of treating customers, learning about how to
treat customers and developing their competence we embarked on the journey that
had these ingredients. We started on a culture of swot, looking into the strengths,
the weaknesses, the opportunities, the threats, when it comes to the culture aspect of
the organisation, and I'll go through all of these a little bit more in detail. From us to
me a change in Scandinavia from the collective perspective to a much more
individualistic perspective shifting the mindset of managers into the mindset of
leaders. Developing business understanding all through the organisation, making
tacit knowledge tangible, not only staying inside of our heads but making it visible for
others to learn. Focused and frequent dialogue, making information readily available,
mainly through the intranet but also inspiring managers to share knowledge, whereas
gathering and collecting knowledge was the way to be important before. And ride
piggy back, see opportunities for learning anywhere, everywhere, in all kinds of
situations. The culture is what was a particularly interesting activity, it was and of
course it is so easy to say 'I think the reason why the situation is this and that is this'
and somebody else says 'well I think it is like this' so what we try to do is go behind
those words, go behind those words, go behind those perceptions and go back to our
people, because our people are the ones actually owning the reality. It was their
experience that is their reality today. Instead of having us in management sit around
and try to figure our what actually changed over these years, we went back into our
organisation and talked to our people. So we systematically gathered information
and we found a few things that were the same things that we had thought, but we
also found other things that were revealing and interesting to understand. And what
was most interesting to see was that many people were still looking forward to
management understanding that the way things had been handled 10 years ago,
waiting for management to understand that that was the only right way of doing
things. And when you have that sort of expectation, an expectation of why can't we
turn back the clock 10 years and continue where we left off. And we you have
management just running off in another direction not even knowing there is a history
in the company obviously there is a very very different, you will have a gap between
the expectations within the people and where management impatiently wants to run
off.

I mentioned the radically in Scandinavia from the us culture to the me culture, and
this is important in learning as well, as the school system in Scandinavia used to be
very much based on equal opportunity and equal treatment. Meaning that the best
minds did not get those opportunities that perhaps they best minds would get
anywhere else. But on the other side the people that were not doing to well in
school, they were not ostracised, so there was this grey evening out of everything.
But the thing is that a lost talent, a talent not utilised is such a tragic thing that I'm
glad that we're moving towards a situation where we're actually utilising the talents
and powers that people have. And we see this as a drastic change when we now
bring new people into the organisation. Whereas we had many years in the 1980s
where we didn't really hire new people. Now there's a generation gap within the
organisation, there are new people coming in with totally new expectations and totally
new demands, and when they are in training situations they don't say 'oh good so
now I know who to do things' what they say is 'why should I do it this way what don't I
do it that way instead'. Now this has been interesting as it has a strong impact on the
people in organisations who have been used to working in a special way and take for
granted our way of doing things as the only way of doing things, a very healthy and a
sound way of asking questions about those things that have perhaps been stale or
staying in a way for too long.

We have shifted management focus and behaviour from the defining of tasks and the
controlling of activities, to communicating visions and objectives, creating a
supportive work environment, really being responsible for having your employees
competent in using the tools, and actually in the position where they can actually do
their work without any hindrances. Providing efficient working conditions and tools,
and giving feedback on all achievements. The number one or the top item in the list
in our questionnaires and our internal enquiries about how people experience their
work situation is, we want more feedback on how we do our work, that is at the top of
the list.

Another part of the culture change is to develop a business understanding throughout


and it doesn’t attempt to change the mindset that is emanating from our monopolistic
culture from a time when the airlines were part of this big regulated environment and
we find these activities and training programmes in continuous targeted information
about the business environment what's happening to our company what's happening
inside, what do the competitors do and also utilisation of communication tools, and
this really what we feed a lot of into our intranet all sorts of information that people
can find out, not only because then they will know about the aspects of our industry
but also using a tool on an independent basis, not waiting for your managers to tell
you about what a situation is like. This is one of the most exciting areas to make tacit
knowledge tangible, all that understanding all that knowledge which is there in the
organisation somewhere, inside of peoples minds, or somewhere in the organisation,
bringing that out into the open making it tangible, and also making it the subject for
reproduction into learning and bringing into other people's obvious knowledge. We
had a lot of opinions on what our customers wanted or not, and instead of having
endless discussions over that what we did is to video tape our customers in their
different situations, on board aeroplanes, in the line for the check-in counter, at the
reservations counter, actually on their journey in the airport terminal and on-board the
aircraft. So we got 1,500 hours of an anthropological study on how our customers
actually behave in the travel situation, and we learned a lot. We learned a lot that we
didn't know before, we learned about how you can actually do things about the
situation when you have a delayed plane, instead of having people run around the
airport and then losing them, should you get a slot and get away from the airport
earlier than what you expected. So what we found out was why don't we equip all
the passengers with a little beeper and then they can go out anywhere, and if there is
any information we just give them a little beep and they can come back and then
we're off 20 mins before the suggested new departure time. So we learned a lot that
triggered off some new ideas, some fresh ideas about how to treat your customer.

The focus on frequent dialogue, well there's a lot of talk going on that is labelled as
dialogue but which I usually call a mutual monologue or even worse a necrologue,
very often people talk to each other but what they're actually doing is they're holding
their own speech to each other, and I think this is one of the areas where the intranet
really has an impact in provoking people to take part in discussions and not only
giving out their views and perspectives, they're being challenged, there're people
coming back and asking why did you say that, why did you think that, and we see a
lot of manager's feeling uncomfortable about having to be faced all the time with what
kind of information they have given, suddenly their information is turning into one side
of a dialogue. And we also specifically train managers in doing this, within our
ground operations area where we have 500 managers, we actually train them in how
to make a good dialogue with their employees, so the training is not only what topics
you should talk about but the training is specifically how do an environment which is
efficient for a dialogue, how do you make your point so that people would think this is
an interesting topic. We actually do that in our training and for a lot of the managers
it's the first time ever they have received any training in how to present things and
how to speak with their own employees. Perhaps the most aspect of this conference
is to make information readily available. It is also a way of changing the way the
management works, from a situation where collecting information really gives you
power as a manager, you know everything and if somebody tells you something new
that you really don't know, you try to handle it in a way that they should get the
impression that you actually heard that about 10 minutes before, to a situation where
the real power is to spread information who is the best information provider in the
company, that is where the status is moving just now. Important here is of course the
efficient infrastructure and the tools and to give training in the navigation, perhaps
people say that they no how to extract information and so forth, but it turns that if you
lower the risk of being laughed at because you don't know the latest features, instead
of doing that invite people in and you figure out that or you see that people are
actually willing to learn a lot and you get a lot more usage out of your systems. In
Scandinavia we've managed to have the government give tax incentives to
employees of companies buying a home computer, so when we started out on this
scheme just before christmas last year, we think we had penetration of home
computers with our employees of about 25-30%, now between 55 and 60% of our
22.500 employees have invested in a home computer just during these 2 months, so
what we're now moving into is giving access from the home to the intranet, so that
we will put out information, just like Lia told you from British Airways, travel benefits,
latest news, discussion databases, and then ride piggy back on that with other types
of information and then moving into our employees homes, of course at their own
discretion, but so many of our employees are impossible to get hold of in their work
situation. We have our flight attendants, we have our pilots, and what is intriguing to
them, is that through these tools we will be able to give them the opportunity to give
them their own work schedules from their own home. So to those perhaps 25-30%
who have not invested in a home computer we're giving out a tool which is a web
based television tool, which means that through the television and a tool they can
find out I want to work on that date, I want to work on those dates and so forth, and
then suddenly we are able to alter change to physical working environments at the
airport because all these people don't need to sit around on the crew base before
they go off on a flight to find out what their schedule is like, to find out dates when
they want time off for specific activities at home and so forth. So their has been a
drastic change in the way that people look at working with these tools and their
private time at home. So what we think today is that about 75-80% of our employees
have a computer at home to work with. And then give an efficient link-up between
that and the system that we have at SAS.

We've tried to see opportunities for learning everywhere, there are so many projects
going on in an organisation, and 3 years ago we found out that instead of just having
people solve project tasks, we wanted to change those projects into learning
situations. So what we do now is we find several tasks that need to be solved, and in
addition to just people together to solve those tasks we design that as a learning
activity. Giving them some person who can provide them with aspects of learning
reflection and so forth, so that when these task are done, it is not only a report for
implementation but these people have also gone through some learning experience
in order to find different competences, how to work across the functional barriers of
the organisation, how to be able to research what they're looking into, using tools,
going into the internet and so forth. So instead of taking people out of their working
situation and putting them in a traditional learning situation on a course, we tried to
move the learning situation out into the workplace.
The last in this culture change of understanding learning and knowledge
management, what about the measurings, well we decided very early on that this
extreme focus on activities, the focus on what to do, the focus on activities is a goal
in themselves, there was something amiss here, so we have shift the focus from the
activities to the gap between the vision and the reality of today. And that might sound
like precisely the same thing, but if you look at this is your vision, this is where we are
at today, what kind of activity that will bridge those two decisions, might not be the
one activity that you had in your mind in the first place. So we define the future
desired results and the present situation in measurable terms, and then we find some
sort of activity that will fill this gap, then we prototype it, we evaluate it, we run, we
measure and we modify it. And I would like to show you perhaps the most important
area in which we have applied this way of thinking. That is the way we do training
and any kind of management development competence at SAS. This is the process
that it used to be, there are lots of people working in the organisation that are just so
eager to make courses, to make programmes, to make development activities, so it
very easily (tape finishes) (next tape begins) so we have spent a lot of money on this
and I don't think this is a unique way of handling this I don't think so. So what we do
now, and I stress what we do know, because any single activity for learning or
developing confidence is now designed according to this process. We're starting out
with analysing what is happening around us, could be an internal or external
business event, and then we define what sort of desired competence do we need in
order to meet this challenge to be able to win this war with somebody, and then we
define the gap between that desired competence and the current state of affairs, and
we set up a project with the superiors of the target group and the prospective
participants, and then we design the activities, and those activities could be anything,
and I would like to say anything other than sending people off to a training course
somewhere. It could be project as I've just mentioned. It could be seconding
somebody to another company, it could be sending somebody home for two days to
figure out how this problem should be solved without giving them any tools other than
what they can find themselves. It could be recruiting new people, it could be
anything, and the focus is much more on how to do things than on what, it is more of
bringing up the consciousness on the how perspective, instead of telling people do A
do B do C do E. And then we check the results in the environment, of course we ask
people if they felt that this was a good experience, but most importantly we check on
a 360 degree, with the persons, the managers, the employees, the colleagues and
the customer, did the customer notice any difference at all, internal or external
customer.

Finally I'll just give you a little picture of three actual competence programmes that
we've been running within this mindset of knowledge management, and I'm showing
this to you to explain that we have not embarked on a grand scheme where top
management retreat to somewhere and come back with some brilliant ideas about
knowledge management at SAS, but where these activities are parts or elements of a
way of handling knowledge management in our organisation.

These are the 3 out of several programmes or activities, development of


employability. We have a group of employees at SAS, our flight attendants and the
turnover rate within that group is extremely low, it's about 2%, so when we hear
about other airlines that have a 20% or even more, well we think it sounds like a
good idea, because a turnover rate of 2% that does not make for a good
environment. The management planning and provisioning, we don't believe in
making fixed career plans for our managers because things change all the time, so
what we're doing is to look at the next step for our manager, not 3, 4, 5 steps ahead.
And we have talked to a lot of corporations that used to do long term career planning
for managers, finding it more and more irrelevant to do that, not only because things
change, but because most managers have a husband or a wife where they don't
want to moved around all over the world on the basis of that being planned 7 or 8
years before. And the third part here, the knowledge measurement. We realise that
a lot of people in organisations were saying at a certain time in their professional
lives 'I wish I had trained for a different career when I had the opportunity', you
realise so many talents have been lost that so much time has passed without actually
grabbing the opportunity and utilising their talents and interests. So we wanted to
shift focus over to what to I want to do in order to achieve something in my
professional life. So we've designed a programme that is now being run for our flight
attendants as the first target group, where we guide attention towards ones own
future, cause so many people come into that position at an early age, and they don't
realise what happened but suddenly they find themselves still there 15 years later,
being absorbed by the work consideration by the culture the working schedule, by the
special kind of life that that entails. And we also promote the development of
employability as something that is a possibility for you to utilise more of your own
competence and really getting more out of your professional life. We stimulate
slumbering interests and talents and a lot of these activities are in smaller sessions of
people and one to one, and what we are doing is bringing a lot more personal
responsibility for ones professional life to these people, together with these people,
we define development plans and targets and then we established the plans, we ran
through different kinds of competence plans, that could be externally through a
learning institution, it could be programmes internally, it could be all sorts of things,
and then we give them specific training in job hunting and self promotion. To many of
these people that see that their colleagues have let 20 years go by without using
other opportunities a lot of these newer employees that we pull into this programme,
we see that they feel like wow finally we see that we can do something with our
situation and not being stuck here, not being absorbed by this lifestyle, but taking
responsibility for ourselves.

The measurements are increased turnover, wherever that’s desirable, a shorter time
in the same position, which we think is desirable anywhere in the organisation, we
want people to stay for a shorter time in their position and preferably move to
somewhere else in another part of the organisation to bring more of a cross
functional culture into the company and in terms of intellectual capital language we
would like to say that this is a way of accruing interest on intellectual capital, because
the capital is there among these people and how can we really bring that forward to
make more out of it. We’re working with cabin attendants just now, but we have
other groups of people with dramatic potential, our pilots, for instance, I think any
airline, in the Western world at least, have pilots with all sorts of activities going on in
addition to being pilots. We have lawyers, we have doctors, we have accountants,
we have economists, we have all sorts of people. Now the working schedule of
those pilots are such that they have so much concentrated time off that they find that,
well I’m not going to sit around at home not doing anything, so what we started
talking about and discussing with our pilots unions is why don’t we go into that area
of competence and see how it could be applied elsewhere in the organisation. And
with the amount of money we spend on consultants each year, we think we can have
a win/win situation here, bringing some pride, and utilising all those powers that these
people have and utilising at the same time at a rate that, although they are pilots is
not the same as ???????.

If we look at management planning and provisioning this is also a dramatic change in


mindset, a manager would typically say, come to me and say, Bernhard I need the
best person in the company for this job, and I would say stop, if you’re taking that
person, we’re not using his or her talent to the best of the company. Now that has
been a really radical way of thinking, a change in thinking, so some people think that
well I didn’t get the best person but I realise that this lady does a much better job in
that position because she has the talent that nobody else has and where can we use
that for the best of SAS. So instead of having some people from HR move around in
the organisation and assessing people’s competences, what we do at HR is that we
train managers in the assessing of competence and then they are set out to appraise
achievements, the targets for the last year, do these people actually meet these
targets, do they provide a good working environment, are they successful in the
projects that they have within their responsbility. So these managers do that, they
identify the talents within the organisation, they have the management team reviews
on an aggregated level throughout the organisation. We run assessment workshops
and we tailor development programmes specifically to those individuals and all this
ends up in these reviews, weather or not they are on the management team levels
within the divisions, or in the top management team at SAS corporate level we try to
link talents with challengers, we're not putting the best people into a job where we
have five other people that can do that job, who have another job where there is only
one person that believe who have the right talents for that. And some people don't
like this because they want to attract the best people. But we have seen with
success that we have achieved the utilisation of the best talents for the toughest
challengers. Just the focus that it gives on achievements has given us a result of the
improvement of manager's achievements all through the organisation, a large
increase in potential candidates for manager positions because suddenly all
managers are looking for potential candidates for managers positions. It's not only
HR that is out as some sort of talent scout organisation. And the increased rotation
particularly across units, because suddenly people realise, well we have somebody
good over here that could do this job, I never realised that because nobody showed
me that before I was able to see that until we had a management review over this.
So we're talking in the language of intellectual capital, about increased intellectual
capital, we have actually increased the intellectual capital of the company.

The third area, the third knowledge programme, is something that is perhaps a little
embarrassing to tell you about. But apart from pilots, apart from our cabin attendants
when it comes to their safety training, and some other groups of employees such as
the engineers, for instance, mostly we did not measure at all the level of knowledge
that our employees had, so a person working with reservations, or a person working
with customer relations their hasn't been any sort of knowledge measurement, we
just took it for granted that these people after some training knew what it was
necessary to know. And the reaction was always, well I know all there is to know
about that just give me some better tools for my job, and we really didn't believe that
it was always something wrong with the tools, and after we've gone into these
activities we realised that people are saying there is obviously more to learn there's
obviously always something new to learn. And this is perhaps a banality but what we
do is we specify a syllabus, we design a test accordingly, we run the test, we
evaluate the results, we assign improvement training, we run the test. Simple, but it's
the first time for many long time employees, and in an environment where about 90-
95% of our employees are union members this is a cultural change, suddenly people
that were supposed to know everything just through the fact that they had attended
some sort of training 10 years ago, suddenly people are asking do you really know
what it is necessary to know today. And don't you take pride in being able to handle
your worst situation in a more professional manner. There has been a shift here, and
as I told you earlier there has been a change in the demographics in Scandinavia,
moving from a collective perspective to an individual perspective that falls very well
together with this.
And finally the measurements on that should be pretty obvious, we are checking the
level of productivity before and after we run these activities, and we see a significant
increase in productivity, we see that people are actually able to handle situations
much more efficiently, and we also see people spending less time complaining about
tools instead of doing their work and then putting demands on those delivering the
tools, because now we know what should be improved in those tools, it's not only a
complaint about them not working, it's I want this to happen when I do this in our
systems, for instance. So here it's certainly a return on investment in intellectual
capital that we are seeing.

So I have tried to give you a picture from SAS, how we handle our competence
management if we can use that phrase, with some specific examples which I think
the most important thing here is to find a way of working that is challenging the
culture of the organisation, and the major task of the people that have been involved
in this activity is to really return any statement, return any proposal, return any sort of
last line from a top management, saying why, why do you say that, why do you think
that, why is it handled that way, to start the process of being questioned about what
is at first the obvious ways of handling knowledge management. Thank you.

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