KNOWLEDGE MANAGEMENT

PROJECT

TITLE: IMPLEMENTATION OF KNOWLEDGE MANAGEMENT IN HSBC

Name of the Student:- Yash Mittal

Program:- BBA + MBA

Course:- IS & DSS in Business

Faculty Guide:- Mr. Arpan Sinha

EXECUTIVE SUMMARY

Banking giant HSBC bills itself as ‘the world’s local bank’, a phrase no doubt intended to
highlight the importance of local knowledge, combined with financial might that
businesses need in their banking partners today. However, HSBC has had a chequered
background with knowledge management (KM). For example, in 2002 it established a
specialist unit to drive through a newly established knowledge-management strategy. One
year and one management re-organization later and that unit had been disbanded in favor
of a less centralized approach. But it certainly did not mean an end to KM at HSBC. Far
from it. In the past, HSBC has undertaken such KM initiatives as knowledge audits and
knowledge-capture projects, which were intended primarily to identify and ‘download’ the
knowledge, experience and wisdom of ‘wise old heads’ before they left the business.
Along with knowledge audit HSBC also used Knowledge café and Peer assist for
knowledge management. Just as knowledge-capture projects make many members of staff
feel valued (because such initiatives reflect the value that the organization places upon
their knowledge, skills and accumulated experience) so does the introduction of flexible
working – if it is done correctly, for the right reasons and staff are adequately supported.
ABOUT HSBC

HSBC   (abbreviation origin: the "Hongkong and Shanghai Banking Corporation") was
founded in the former British colony of Hong Kong (in 3rd March 1865), it is a
British multinational banking and financial services company headquartered in
London, United Kingdom but founded in China. As of 2011 it was the world's second-largest
banking and financial services group and second-largest public company according to a
composite measure by Forbes magazine.
HSBC is a universal bank and is organised within four business groups: Commercial
Banking; Global Banking and Markets (investment banking); Personal Financial Services
(retail banking and consumer finance); and Global Private Banking. It has around 7,500
offices in 87 countries and territories across Africa, Asia, Europe, North America and South
America and around 100 million customers. As of 30 June 2010, it had total assets of
$2.418 trillion, of which roughly half were in Europe, a quarter in the Americas and a quarter
in Asia .
The HSBC Group operates as a number of local banks around the world, which explains its
advertising tagline "The World's Local Bank." In response to ongoing discussions about the
survival strategies for banks, and the suggestion of "Living Wills" HSBC explains its
structure as "separately incorporated and capitalised" the structure is based on a lead bank in
each region .The hexagon symbol was originally adopted by The Hongkong and Shanghai
Banking Corporation as its logo in 1983. It was developed from the bank’s house flag, a
white rectangle divided diagonally to produce a red hourglass shape.
 CHALLENGES OF KNOWLEDGE MANAGEMENT

Most often knowledge lies within an organisation implicitly, out of sight, undervalued and
underused. Often, it leaves the building when the employees walk out of the company along
with them. This is what is used in HSBC managing the flow of knowledge around an
organisation, is a challenge. The Knowledge management process normally face six
challenges at each stage of the process flow and failing to complete all these tasks in HSBC
ability to use its knowledge assets to its best advantage. The six challenges are as follows:

a) Knowledge Acquisition: HSBC has implemented and began KA as part of the drive to
build knowledge-based systems, and was a line of research devoted to developing methods
and software tools to provide knowledge content for such systems. The challenge here is to
get hold of the information that is around, and turn it into knowledge by making it usable.
This might involve, for instance, making tacit knowledge explicit, identifying gaps in the
knowledge already held, acquiring and integrating knowledge from multiple sources (e.g.
different experts, or distributed sources on the web), acquiring knowledge from unstructured
media (e.g. natural language or diagrams). Knowledge acquisition (KA) is a field which has
reached a certain level of maturity.

b) Knowledge Modelling: Modelling bridges the gap between the acquisition of knowledge
and its use. Knowledge model structures must be able to represent knowledge so that it can
be used for problem-solving. HSBC needs to acquire not only knowledge but also to model
that knowledge into the industry required format.

c) Knowledge Retrieval: When a knowledge repository gets very large, finding a particular
piece of knowledge can become very difficult. There are two related problems to do with
knowledge retrieval. First, there is the issue of finding knowledge again once it has been
stored, understanding the structure of your archive in order to navigate through it efficiently.
And second, there is the problem of retrieving the subset of content from the repository that is
relevant to a particular problem. This second problem, the dynamic extraction of knowledge
from a repository, may well set problems for a knowledge retrieval system in HSBC that alter
regularly and quickly during problem-solving.

d) Knowledge Reuse: One of the most serious impediments to cost-effective use of

knowledge is that often knowledge bases or systems are constructed afresh. It is unusual for
problem-solving experience or domain content to Knowledge Management: Why Do We
Need It for Corporates 43 be acquired and then reused, partly because knowledge tends to
require different representations depending on the problem-solving that it is intended to do.
HSBC understands the use and application of knowledge would enable more leverage to be
gained from the knowledge already at hand, thereby increasing the returns on the investment
in those knowledge assets.
e) Knowledge Publishing: The challenge of publishing or disseminating can be described as
getting the right knowledge, in the right form, in the right place, to the right person, at the
right time this is what HSBC is trying to implement. Different users will require knowledge
presented and visualized in different ways, and the quality of such presentation is not merely
a matter of preference, but can radically affect the value of the knowledge to the user. Getting
presentation right will involve understanding the different perspectives of people with
different agendas, while an understanding of knowledge content will help to ensure that
important related pieces of knowledge get published at the appropriate time.

f) Maintenance: The last challenge for HSBC is to keep the knowledge repository
functional. This may involve the regular updating of content as content changes (e.g. as price
lists are revised). But it may also involve a deeper analysis of the knowledge content. Some
content has a considerable longevity, while other knowledge dates very quickly. If a
repository of knowledge it to remain active over a period of time, it is essential to know
which parts of the knowledge base must be discarded and when. Other problems involved in
maintenance include verifying and validating the content, and certifying its safety.
 STRATEGIES USED BY HSBC

KM strategies in HDFC include: using simple mechanisms (such as training programs and
seminar series), using technology, using frameworks or process-based models (including
concept mapping), and using communities of practice to capture and share knowledge.

Simple mechanisms, including training sessions, workshops, mentoring/apprenticeships, and

interviews, were implemented in 6 studies . Some of the training programs are virtual or web-
based , however, others are delivered face-to-face because it is believed to be an essential
component of training programs. Implementing a seminar series was another dominant KM
approach; for example, managers and/or employees are interviewed by their peers with the
goal of retaining the knowledge of "experts" who are planning to leave their current
organization. Other seminar series included a number of classes where group work, problem
solving, and coaching occurred in interactive settings.

KM is frequently positioned as being comprised mainly of efficient and effective information

technology (IT) and ICT systems . For this reason, using technology systems (and
communication technologies) is a key element that is incorporated into KM initiatives in
HSBC. While details of each technical system vary, the overarching purpose of technology
systems is to organize, codify, distribute, and maintain knowledge resources. The
predominant focus of many KM strategies is on technology and management of explicit and
tacit forms of knowledge.

Another framework in HSBC introduced the concept of mapping out knowledge, routines,

capabilities, and inertia as a tool to advance KM in an organization or unit. The fundamental
idea behind this is that latent resources (dormant, but capable of development) are mobilized
by managerial or legislative/environmental elements, and that different ratios of active to
latent resources, routines and capabilities can have different degrees of adaptability.

Another framework in HSBC introduced the concept of mapping out knowledge, routines,

capabilities, and inertia as a tool to advance KM in an organization or unit. The fundamental
idea behind this is that latent resources (dormant, but capable of development) are mobilized
by managerial or legislative/environmental elements, and that different ratios of active to
latent resources, routines and capabilities can have different degrees of adaptability. In stable
contexts, organizations that are more adaptable will also be more flexible and responsive,
whereas less adaptable organizations are more "lean" (or efficient) but have a limited
portfolio of resources to draw on (i.e., more prone to the status quo). Others have used the
mapping concept (e.g. "Capabilities Map", and "Levels of Learning Progression Map") as a
process that can capture knowledge-oriented practices.

Another concept often considered a useful KM strategy, and heavily discussed in the ,
is Communities of Practice (CoP) . Communities can vary in format (virtual/face to face),
and HSBC has three main underlying structures:
• Domain (the sphere of knowledge and expertise held by members)

• Community (relationship, affinity, and the sense of belonging among members)

• Practice (the common set of frameworks, ideas, and tools members share in their work
context)

The objectives of the CoP are aligned with the host firm's strategic purpose .Each CoP has a 
Leader or Moderator who spearheads defining the objectives of the CoP and maintaining the
focus of the community .In addition, there is a Core Team who assists the Leader by
developing activities and workshops in collaboration with the Leader. The active members
each bring their own role, knowledge and expertise to the community .
 TOOLS AND TECHNIQUES USED BY HSBC

1) Knowledge audits
Knowledge audits help organizations identify their knowledge-based assets and develop
strategies to manage them. Developing a knowledge-sharing culture helps HSBC to change
process on the way to better organizational performance. To achieve that change, HSBC
needs a vision of where it wants to be and an accurate picture of where it is now—that is, its
current reality. A knowledge audit is one way of taking that picture.
A Knowledge audit is a practical way of getting to grips with "knowing what you know". It
identifies owners, users, uses and key attributes of core knowledge assets.

 Objectives of using Knowledge Audits in HSBC

● To give a high-level view of the extent, nature, and structure of the knowledge in a
specified section;
● To provide meaningful hard data input to the strategic plan for knowledge processing;
● To identify the relevant knowledge repositories within the organization;

 Implementation of Knowledge Audit in HSBC

To achieve the above objectives, a step by step approach was adopted by HSBC while
undertaking the knowledge audit, details of which are as under:

1. Identified what knowledge currently exists in the targeted area

● HSBC determined existing and potential sinks, sources, flows, and constraints in the
targeted area, including environmental factors that could influence the targeted area
● HSBC identified and locate explicit and tacit knowledge in the targeted area
● HSBC build a knowledge map of the taxonomy and flow of knowledge in the organization
in the targeted area. The knowledge map relates topics, people, documents, ideas, and links to
external resources, in respective densities, in ways that allow individuals to find the
knowledge they need quickly

2. Identified what knowledge was missing in the targeted area

● HSBC done a gap analysis to determine what knowledge was missing to achieve business
goals
● HSBC determined who needs the missing knowledge

3. HDBC provides recommendations from the knowledge audit to management regarding the
status quo and possible improvements to the knowledge management activities in the targeted
area.

 What a Knowledge Auditor Does in HSBC

A Knowledge Auditor does not attempt to develop a comprehensive inventory of knowledge

assets, but works on the basis of developing a prioritized list of assets. These are identified by
analyses of core business processes and critical management decision areas.
● Analysis of key documents e.g. plans, process models and descriptions
● Analysis of current information systems
 ● Interviews with representative cross-section of staff
● Information requirements questionnaires
● Analysis of information and knowledge flows
● Development of knowledge maps
● Creation of an action plan.

 Knowledge analysis methods used by Hsbc in the Knowledge Audit

1. Questionnaire-based-To obtain broad overviews of knowledge surveys: an operation's

knowledge status.
2. Task environment analysis-To understand, often in great detail, which knowledge is
present and its role.
3. Basic knowledge analysis-To identify aggregated or more detailed knowledge.
4. Knowledge use and requirements-To identify how knowledge is used analysis: for
business purposes and determine how situations can be improved.

2) Knowledge cafe
Through knowledge cafe HSBC brings people together to have open, creative conversation
on topics of mutual interest. It can be organized in a meeting or workshop format, but the
emphasis should be on flowing dialogue that allows people to share ideas and learn from each
other. HSBC encourages people to explore issues that require discussion in order to build a
consensus around an issue. 

The knowledge cafe brings to the surface, in an informal environment, all the understanding
we have in an area.

 How HSBC runs a knowledge cafe

A simple and recommended method that works well involves the following steps:

1. Preparation for a knowledge cafe

 HSBC appoint a facilitator – someone who can encourage participation.
 Identify a question relevant to those participating.
 Invite interested parties.
 Create a comfortable environment – a ‘café’ layout, with a number of small tables,
supplied with tea and coffee, is one option.

2. During a knowledge café

 The facilitator should introduce the knowledge cafe concept, any codes of conduct,
and finally pose the question.
 Participants should arrange themselves into groups to discuss the question.
 Each participant in turn shares their knowledge and experience without interruption,
giving everyone an opportunity to talk. Alternatively, a ‘talking-stick’ can ensure only the
person holding the stick can speak, thus avoiding the discussion becoming dominated by
one or a few speakers.
 After each participant has shared, the group continues the discussion together.
 The groups should eventually reconvene to exchange ideas and findings – these could
be captured electronically or on paper.

3. After a knowledge cafe

The real value of a knowledge cafe is what people take away with them in their heads, and
the new connections they have made with people.

Sometimes HSBC recorded the knowledge cafe – making sure to avoid disrupting or
influencing the conversation – the information may be distributed to participants after the
session.

Remember, a knowledge cafe is not a talking shop. Turn-taking is important. If everyone is

encouraged to have their say, a natural and stimulating group discussion should evolve, and
good ideas won’t be long coming.

3) Peer assist
HSBC use a peer assist to gather knowledge and insight from other teams before embarking
on a project or activity. It partners those seeking assistance – ‘receivers’ – with a peer or
group of peers who have expertise in a desired area. HSBC used peer assist at last from an
hour to a full day depending on the size of the project.      

 Benefit of using Peer Assist in HSBC                                                                  

Talking to experienced peers about the best way to approach new projects saves time and
money and avoids repetition of mistakes. It also creates strong links across teams and
relationships between people.

 How HSBC implement peer assist?

A simple method that works well involves of the following steps:

Appoint a facilitator

HSBC appoint someone from outside the team who will ensure the participants achieve their
outcomes.

Select the participants

HSC choose participants who have diverse knowledge, skills, and experience. There is no
hard and fast rule about minimum or maximum numbers but the right participants are
particularly important.
 Share information
HSBC divide the meeting time into four parts:
 Clarify purpose 
HSBC presents the background and objectives of the project or task they are about to begin.
They should also say what they hope to achieve in the peer assist.
 Encourage the peers to ask questions and give feedback 
The peers discuss the receiver’s situation and share ideas and experiences. The receivers
should simply listen.
 Analyze what’s been heard 
This is the main part of HSBC, analyze and reflect on what they have learned and to
examine options. The peers should take a back seat.
 Present the feedback and agree actions
The peers present their feedback to the HSBC analysis and answer any further questions.
 BENEFITS TO THE COMPANY

The primary purpose of KM as efficiency and productivity is achieved through the reuse and
sharing of experience and know-how. Often overlooked is the potentially more important
goal of promoting quality of work product and practitioner training that can be shown to
increase the value of the client service. In fact, knowledge management can serve a wide
variety of purposes, effective knowledge management pays off in fewer mistakes, less
redundancy, quicker problem solving, better decision making, reduced research
development costs, increased worker independence, enhanced customer relations, and
improved service .

Among the many possibilities, HSBC considers the following :

• Productivity and efficiency

• Knowledge sharing, skill development, and training
• Competitive advantage, including market visibility as a high-tech firm
• Ability to direct work to skilled specialists
• Consistency of work product across offices or practice areas
• Faster delivery times
• Quality control
• Reduced frustration searching for documents
• Client collaboration
 KNOWLEDGE MANAGEMENT SUCCESSFUL IN HSBC
Success in Behavioural and Cultural Traits in HSBC after implementation of
KNOWLEDGE MANAGEMENT

Individuals working in HSBC are not afraid to ask others for inputs.

Management is careful to not blame individuals. Problems can be technical or. If technical,
solutions are sought and corrections implemented. If human, management explores how it
can change the situation through its own behaviour, education, staffing, or perhaps by
changing the operation itself.

Knowledge Management successful in HSBC

Helped in making a e-directory.

Through knowledge audit, HSBC was able to introduce an electronic expertise location tool.

HSBC successfully has now created opportunities for UK Businesses through

knowledge sharing and facilitating connections

Their 'Business Thinking' initiative connects forward looking businesses with each other and
with businesses across the World (through 'thought exchanges').

Their online Knowledge Centre provides over 500 pages of insightful information to help
businesses plan and grow.

In HSBC, with the implementation and success of Knowledge Management, Knowledge

Sharing and Learning were made possible, due to which the people working at HSBC
can

Post Research Online

Conducting After-Action Reviews
Conduct Peer Assists
Knowledge Storage
Assessing the Effectiveness of Assistance in