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Monsanto

Monsanto Company, headquartered in St Louis, Missouri, develops products for the agricultural, pharmaceutical, food ingredients and chemical industries. Products manufactured by Monsanto include Roundup herbicide, Daypro and Arthrotec arthritis treatments, Ortho lawn-and-garden products, Wear-Dated carpet and NutraSweet brand sweetener. For the year 1995, Monsanto recognized $739 million of net income, a 19 per cent increase from the previous year. Management attributes the financial success of Monsanto to a focus on core products and a continuing effort to redesign work processes and cut costs.

As a life sciences company, Monsanto is committed to finding sustainable solutions to the growing global needs for food and health by sharing common forms of science and technology among agriculture, nutrition and health. Its mission is to help feed the world, help people lead longer healthier lives and help create a sustainable environment (a ‘bio-knowledge triangle’). This was a direction conceived about ten years ago. Monsanto had gone from ‘a company that thought in terms of producing chemicals shipped in tanks to one that thinks of innovating chemicals that are shipped in test tubes’.

Setting its sights on the future

While Monsanto now celebrates tremendous success in providing products that improve quality of life, management realizes that much more can be accomplished in terms of serving customers better and at lower costs, developing new products and new businesses around the world, and addressing the global challenge of sustainable development.

Linking knowledge management to company mission

Monsanto thinks of its products as mechanisms for leveraging knowledge, i.e. the company views the product not as an end point but as a means of delivering information and expertise. Monsanto's New Leaf Superior potato, for example, has been genetically engineered to destroy its most pernicious pest, the Colorado beetle.

Monsanto plans to respond to the changing regulations and economic developments that affect various industries by giving each business more autonomy in operations, aspirations and culture without sacrificing interaction among the various businesses. Emphasis will be placed on avoiding duplication, taking advantage of scale, drawing on each other's skills, serving customers better and creating new business opportunities.

Management at Monsanto realizes that knowledge management can help ensure that the right combination of autonomy and interaction is achieved, thus producing a faster, more focused and more effective workforce.

With such a clear agenda to leverage knowledge, it comes as no surprise that Monsanto's knowledge management programme has gained a high reputation both inside and outside the company.

The knowledge management process

Monsanto's views on the knowledge management process are:

1   Information is the raw material of knowledge. The mission of Monsanto's knowledge management process is to add value to this raw material. Thus, one of its roles is to take information and create knowledge/insight, its intellectual capital. Additionally, once knowledge is created, Monsanto wants to perpetuate its value by continuing to update and refresh it – a process known as learning. The system focuses on events within the marketplace – ‘futuristic’ information – as opposed to information used to run the business – ‘historical’ information.

2   The company further distinguishes between structured and unstructured information. Structured information provided by data warehousing technology is useful in developing and carrying out business processes, whereas unstructured information is information derived from Notes, the World Wide Web, e-mail and the Internet in general.

3   Insight is created by people by appropriately leveraging across structured and unstructured information. The enterprise-wide knowledge management capabilities will primarily focus on connecting people with people and encapsulating that knowledge so it can be shared.

Knowledge management structures

Building a base of knowledge that can be leveraged on behalf of the total business is central to Monsanto's efforts, which is reflected in their organizational structure. Monsanto's ‘knowledge management architecture’ (KMA), was developed due to the flattening of the organization. The primary purpose of this architecture is to create enterprise-wide capabilities which will allow Monsanto to leverage its collective intellect, thereby creating value.

Decentralization actions included changing the company's organization from four large business groups to a dozen strategic business units. This caused a further dilution of knowledge within the company, and its 28 500 employees, creating duplication of effort and lost opportunities. Monsanto wanted these units to be ‘small and connected’. Furthermore, management wanted inputs (shared knowledge) from the business units to produce tangible outputs for customers (products and services) and shareowners (income and equity).

Increased global competition also highlighted the need for a shorter decision cycle, and a competitive edge. An organizationwide restructuring programme in 1995 allowed Monsanto to become more effective in the marketplace, due to a radical decentralization of the organization. Through the capture, codification, transfer and use of the company's knowledge, employees are able to make more educated decisions.

Communities of knowledge practice

Networking structures are evident in knowledge sharing – people coming together in cross-functional teams, learning networks and communities of practice. Monsanto's network – the honeycomb structure – is especially noteworthy. Each core team (including the top management team and business sector teams) has two leaders – a science leader and a commercial leader. Each team has people who also serve on other teams, and each key person serves on more than one team – hence the honeycomb. Managers spend 50 per cent of their time in one sector and 50 per cent on other teams. Knowledge management is one of the core capabilities, with its own core team. Bipin Junnarkar, Monsanto's previous Knowledge Management Director, now a consultant, described Monsanto's competitive advantage as ‘the way we work together’. While Monsanto's KMA is now fairly familiar, their recent moves into honeycomb structures and the attention to ‘sense making’ is more recent. The latter is a framework showing completeness of information on one axis and degree of understanding on the other. Junnarkar, argues that innovative breakthrough comes, not from seeking ever more information, but from making sense with incomplete information ahead of your rivals. These are some of the principles and highlights:

1   The learning process hub: describing foundation skills for the knowledge enterprise – learning organization skills (e.g. mental models, team learning), relationship skills and learning about learning skills.

2   Monsanto's ambition is to build a ‘high knowledge metabolism company’: capturing knowledge and taking advantage of it faster than competitors; creating an integrated ‘web of intellect’.

3   Seven bases for knowledge advantage: foresight, navigation, invention, speed, relationships, integration and adaptation.

4   New knowledge roles: steward, knowledge editors, knowledge champions, cross-pollinators, knowledge team members.

Information technology

The barriers to Monsanto's internal knowledge management process have not been technical. The technical architecture is flexible and capable of accommodating their global business strategy. Key IT vendors and products have been carefully selected to enable effective knowledge management. The systems are based on a client/server model and accessible to employees worldwide. Information is collected and stored in Oracle on a Digital AlphaServer and delivered to the knowledge worker through MicroStrategy's front-end analytical tool, DSS Agent. The importance of technology in this effort cannot be underestimated though. The capabilities that KMA provides rely on Monsanto's IT infrastructure. Knowledge management architecture is constantly pushing the infrastructure's envelope with respect to speed, reliability, capacity and geographic availability.

According to John G. Ferrari, a process and technical manager at Monsanto, the company was adapting portal software from Plumtree Software to make its intranet information more manageable for and accessible to knowledge workers. The software gathers research, corporate and competitive information from different media, e.g. the Internet, Microsoft Corporation Office documents and Notes database information, in one spot.

Monsanto used a card catalogue metaphor in revamping the Plumtree interface – switching from the standard Yahoo-style look and feel to a hierarchical set of folders, with a navigation bar on the left and links to story titles and summaries in the main frame of the page.

It is equally important to orient corporate culture toward learning and sharing. Although KMA is an enabler for change within Monsanto, other initiatives, which focus on empowering people and recreating the organizational culture, are equally important for the company's long-term success. The KMA team is working closely with people involved in these other initiatives to find new ways to bring information and learning to these efforts. Monsanto's effort is unusual in that it is trying to work out how to marry more traditional approaches to training and education with new ideas about organizational learning before it builds a so-called knowledge management system. More typically, companies build the systems first, then try to work out what role, if any, traditional learning can play.

Results

Positive outcomes have resulted out of the knowledge management efforts in Monsanto. For example, Monsanto was nominated for the Smithsonian/Computerworld Award in 1996 for its KMA and was a finalist in the ‘Business Category’. Most of these are captured in anecdotal form and shared widely throughout Monsanto via an electronic newsletter.

The ultimate value of the knowledge management efforts is that it has allowed Monsanto to bring innovations to market quicker, to improve upon the operational efficiency of Monsanto's businesses and to serve its customers better. This results not only in increased profits for Monsanto, but benefits Monsanto's customers by providing better value and more new product offerings.