Brand Course for International Students
Buckman laboratories (www.buckman.com), headquartered in Memphis, Tennessee, manufactures more than 1,000 specialty chemicals. The company employs over 1,300 people in 90 countries and its annual revenues exceed $300 million. Although this small, privately–held company depends on its research laboratories for the products that bring in its revenues, the whole company itself is a learning laboratory.
What is it about Buckman Labs that attracts executives from AT&T, 3M, Champion International, US West, and other Fortune 500 companies, who trek to Memphis to see and learn? They’re coming to see how the company stays so fast, global, and interactive. Bob Buckman, Buckman Lab’s CEO from 1978 to April 2000, recognized the power of knowledge and information long before others did. Buckman and his associates began treating knowledge as the company’s most important corporate asset back in 1984. They believed that being (and remaining) competitive in a knowledge-intensive global environment required three things: (1) closing the gap between the organization and the customer; (2) staying in touch with each other; and (3) bringing all of the company’s brainpower together to solve problems for each customer. Beginning in the early 1980s, Buckman was concerned with staying connected, sharing knowledge, and functioning anytime, anywhere, no matter what.
Buckman Labs has organized its associates and their work around its knowledge network, K’Netix. This global electronic communications network resulted from Buckman’s desire to close the gap between his associates and his customers——instantly. He started thinking about how important information and knowledge were——not just to him but to all of Buckman Labs’ associates. What he needed and what his associates needed was a steady stream of the latest information about products, markets, and customers. And this information needed to be easily accessible and easily shared. As an ardent reader of business and management literature, Buckman remembered a comment from the well-known and well-respected CEO Jan Carlzon (Scandinavian Airlines’ former CEO) that stuck in his mind, “An individual without information cannot take responsibility; an individual who is given information cannot help but take responsibility.”
Buckman realized that the way to maximize each individual associate’s power was to connect each associate to the world. He wrote down the characteristics of his ideal knowledge transfer system. Here’s what he wrote: (1) It would be possible for people to talk to each other directly one on one, to minimize distortion. (2) It would give everyone access to the company’s knowledge bases. (3) It would allow each individual in the company to enter knowledge into the system. (4) It would be available 24 hours a day, seven days a week. (5) It would be easy to use. (6) It would communicate in whatever language was best for the user. (7) It would be updated automatically, capturing questions and answers for a future knowledge base. But the technology of the system was not the most important barrier to knowledge sharing. Such a system would require a total cultural transformation——literally turning the organization upside down by getting associates to be deeply involved with knowledge sharing and collaboration. And that’s what Bob Buckman set out to do. It wasn’t easy however, to transform the company from an old top-down, bureaucratic, command-and-control organization into an organization in which every associate had complete access to all information and one in which no one would be controlling associates by telling them what to do all the time.
Getting the physical hardware and software in place to support such a system was the easy part of the battle. Getting associates to use the knowledge base and contribute to it required a corporate culture change. After all, a knowledge-based company is successful only if knowledge is shared among all its organizational members, because knowledge has value only when it moves across the organization. What was particularly difficult about this type of culture transformation was that employees in traditional organizations had always been rewarded on their ability to hoard knowledge and, thus, gain recognition and power. This is how the situation at Buckman Labs was described: “There were people whose file cabinets were locked and filled with everything they knew, and that was the source of their power.” But that philosophy had to change if the knowledge system was going to work. Not long after K’Netix went online, Buckman made his expectations clear: “Those of you who have something intelligent to say now have a forum in which to say it. Those of you who will not or cannot contribute or participate, then you should understand that the many opportunities offered to you in the past will no longer be available.” What ultimately emerged at Buckman Labs has been a mixture of visible incentives and invisible pressure to use K’Netix the Buckman Knowledge Network.
Because Buckman Labs competes in a variety of markets, often against competitors three to five times its size, its commitment to knowledge takes on a new urgency. Salespeople need the right answer for each customer and they need it fast. K’Netix has made getting answers simple and rapid. But the company’s commitment to speed, associate interactivity and knowledge sharing, and its embrace of globalization would not be possible without a recognition of the learning which is taking place.
Sources: Company’s Web site (www.buckman.com), February 24, 2000; S. Thurm, “What Do You Know?” Wall Street Journal, June 21, 1999, pp. R10+; B.P. Sunoo, “How HR Supports Knowledge Sharing,” Workforce, March 1999, pp. 30-32; G. Rifkin, “Buckman Labs Is Nothing But Net,” Fast Company Web page (www.fastcompany.com), April 17, 1997; and A. Bruzzese, “Sharing Knowledge Breaks Hierarchy,” Springfield News Leader, October 17, 1997, p. 7A.
QUESTIONS
1. On the basis of the case information, describe what decisions you think Buckman Labs has made regarding the six key elements of organizational design. Be as specific as possible.
2. Would you describe Buckman Labs as more of a mechanistic or an organic organization? Explain.
3. Is Buckman Labs a learning organization? Explain.
4. What could other organizations learn from Buckman Labs’ approach?
ANSWERS
1.On the basis of the case information, describe what decisions you think Buckman Labs has made regarding the six key elements of organizational design. Be as specific as possible.
The six key elements of organizational design are work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization. Let’s take each one individually. Because Buckman manufactures more than 1,000 specialty chemicals, work specialization is probably fairly high, although there’s probably a significant amount of coordination between units. The departmentalization is probably a cross between customer and product. Chain of command appears to be very flexible and interactive. One of the key elements of its design is the desire to stay in touch, which would indicate that there’s little top-to-bottom flow of information and authority. The company would also appear to be quite decentralized. Finally, formalization appears to be low.
2.Would you describe Buckman Labs as more of a mechanistic or an organic organization? Explain.
Buckman appears to be more of an organic organization. There’s a significant free flow of information, there’s little formalization and decentralization, and there appear to be wide spans of control.
3. Is Buckman Labs a learning organization? Explain.
Buckman would be characterized as a learning organization. The definition of a learning organization is an organization that has developed the capacity to continuously adapt and change because all members take an active role in identifying and resolving work-related issues. Buckman clearly fits the four characteristics of a learning organization.
(1)Organizational Design
The company completely changed from a pyramidal, bureaucratic, command-and-control organization to an organization in which every employee would have complete access to information.
(2)Information Sharing
Buckman Labs shares information openly, accurately, and in a timely fashion by creating the Buckman Knowledge Network.
(3)Leadership
Bob Buckman, Buckman Lab’s CEO, created this idea and got employees to use the Buckman Knowledge Network through a mixture of visible incentives and invisible pressures. The leadership has a shared vision.
(4)Organizational Culture
Buckman Lab’s culture is one that now relies on employees’ interactivity and knowledge sharing and globalization to maintain their market position.
4. What could other organizations learn from Buckman Labs’ approach?
(1)Different communication styles (2)How to effectively change a corporate structure (3)How to change a corporate culture
