Add Permeability to Knowledge Flow: Part I

Knowledge flow and fluid flow obey analogous laws. The analogy suggests that the knowledge productivity of an organization can be increased by changes in three variables: organizational permeability, knowledge viscosity and business pressure gradient.

Reid G. Smith




"Knowledge is sticky. Without a systematic process and enablers, it won't flow."
      - Carla O'Dell, APQC

This observation led me to think about similarities and differences between knowledge flow in the human world and fluid flow in the geological world.

There is a substantial petroleum engineering knowledge base, including mathematical and descriptive models, laboratory data, and decades of field experience and know-how. Could this knowledge base suggest new ways of thinking, as we attempt to improve the management of our organizational "knowledge reservoirs"?

Fluid Flow in the Geological World

Fluids like water, oil and gas flow underground through pores in subsurface rock. The flow is described by Darcy's law (after Henry Philibert Gaspard Darcy). In its simplest form:

Darcy's law

v is the velocity of the fluid flow. m is the viscosity (stickiness) of the fluid. pressure gradient is the local pressure gradient, and k is a proportionality constant called the permeability of the rock. It is determined by rock structure (tight rock with small pores has a smaller permeability than coarse rock with larger pores). Similar laws describe the flow of electricity or heat. Permeability is analogous to electrical or thermal conductivity.

Darcy's mathematical formulation is consistent with our personal experience with fluid flow.

  • Fluid flows faster through a more permeable structure than a less permeable structure.
  • The more viscous a fluid is, the less easily it flows.
  • Fluid flow is improved by applying pressure (e.g., squeezing a sponge or sucking on a straw).

O'Dell's observation about knowledge flow is consistent with Darcy's description of fluid flow.

  • Knowledge flows faster through a more permeable organization than it does through a less permeable organization.
  • Tacit knowledge (the knowledge that must be gained from personal experience) is stickier than explicit knowledge (the knowledge that can be written down and captured in books, reports and databases). It does not flow as easily.
  • Knowledge flow through an organization is improved by applying pressure (e.g., competitive pressure, availability of new technology, managerial pressure).

Knowledge Reservoir Engineering

This table presents knowledge management analogs for familiar petroleum reservoir engineering concepts. Each analog suggests actions for knowledge managers.

Petroleum Reservoirs Knowledge Reservoirs Actions for Knowledge Managers
Fluid Flow
Movement of fluid through permeable reservoir rocks.
Knowledge Flow
Movement of knowledge through an organization.
Apply what has been learned about improving fluid flow in reservoirs to knowledge flow in organizations.
Rock Permeability
Measure of a rock's ability to transmit fluids. Varies throughout a reservoir.
Organizational Permeability
Measure of an organization's ability to transmit knowledge. Varies throughout an organization.
Improve permeability throughout the organization. Focus on knowledge flow channels and barriers. Where does knowledge stick? Where does it flow?
Fluid Viscosity
Property of a fluid that indicates its resistance to flow.
Knowledge Viscosity
Property of knowledge that indicates its resistance to flow. Tacit knowledge is more viscous than explicit knowledge.
Reduce knowledge viscosity by converting tacit knowledge to explicit knowledge whenever possible (e.g., standard operating procedures, best practices and lessons learned).
Pressure Gradient
Difference in pressure as a function of distance. Increase by injecting water or gas into the reservoir (increase the inlet pressure) and by pressure drawdown at a producing well (lower the outlet pressure).
Business Pressure Gradient
Difference in business pressure as a function of organizational distance.
Take managerial action to increase pressure gradient. Increase inlet pressure (e.g., ensure business pressure is sensed by all parts of the organization). Reduce outlet pressure (e.g., ask questions, implement recognition and reward programs and build knowledge sharing into employee objectives).
Rock Porosity
Capacity of a rock to contain fluids; percentage of pore volume or void space. Effective Rock Porosity connected pore volume or void space – contributes to permeability and fluid flow.
Organizational Porosity
Capacity of an organization to contain knowledge; its people, workflows and knowledge bases. Knowledge Connectionsconnected people, workflows and knowledge bases – contribute to permeability and knowledge flow.
Increase organizational porosity. Hire and retain people with deep and diverse knowledge and connections to the outside world, plus a facility for sharing. Empower them with the efficient workflows and comprehensive knowledge bases. Improve the number, quality and robustness of the knowledge connections.
Reservoir Model
(Reservoir Characterization)
Map that incorporates all reservoir characteristics pertinent to oil and gas flow. Used to optimize production.
Knowledge Map
Identifies business-critical knowledge assets – the processes, gaps, sources, flows, barriers, dependencies and knowledge at risk if key employees leave.
Knowledge mapping is as essential to knowledge management as reservoir modeling is to petroleum reservoir management. Use it to focus the KM program, support mergers and acquisitions, reduce time-to-competence for new recruits, and ensure knowledge continuity in times of personnel flux.
Separation
Oil and gas must be isolated from other produced material like water and sand before they can be processed and applied.
Validation
High-value, actionable knowledge must be isolated from the overall information flowing through the organization before it can be confidently applied.
Put in place a workflow to validate information and transform it into actionable knowledge. Validate quickly and close to sources so that invalid information flow does not damage the organization and necessitate expensive corrective action.
Stimulation
Treatment performed to enhance or restore the productivity of a well.
Stimulation
Treatment performed to enhance or restore the knowledge productivity of an organization.
Apply knowledge management techniques appropriate for the stimulation goal and matched to the organizational dynamics – increasing organizational permeability, reducing knowledge viscosity, increasing business pressure gradient.

 

Example Reservoir Permeability Variation

Petroleum Reservoir Permeability Variation
Two-dimensional slice through a petroleum reservoir (depth increasing from top to bottom).
Red - Low Permeability; Blue - High Permeability.

Discussion

Knowledge flow and fluid flow obey analogous laws. The analogy suggests that the knowledge productivity of an organization can be increased by changes in three variables: organizational permeability, knowledge viscosity and business pressure gradient.

  • The main avenue for increasing organizational permeability is knowledge connections – between people and the particular knowledge they need to perform a task. Focus on improving their number, quality and robustness by finding and building on the existing knowledge flow channels (i.e., the strongly interconnected parts of the organization that enhance knowledge flow) and removing or bypassing knowledge flow barriers. Build new flow channels where necessary (e.g., via personnel transfers, cross-functional project teams, joint R&D with customers, expertise locator systems).
  • To reduce knowledge viscosity, put in place a workflow for capturing valid, tacit information and refining it into explicit, actionable knowledge. Guided by knowledge mapping, follow up with technology and processes to ensure the knowledge is available to everyone who needs it.
  • The business environment supplies plenty of pressure to encourage knowledge sharing. Take managerial action to increase the business pressure gradient. Examples include: firm and clear management leadership to ensure business pressure is sensed by all parts of the organization and the business imperative of knowledge sharing is widely understood (analogous to increasing the inlet pressure); and, active management pressure to encourage knowledge flow by personally passing on information and knowledge to the right people, by asking questions, implementing recognition and reward programs, and building knowledge sharing into employee objectives (analogous to lowering the outlet pressure).

New Knowledge Reserves

There are no practical ways to create new petroleum reserves. By contrast, new knowledge can be created every day in organizations, adding to the knowledge reservoir. In addition, while the fluid injected into reservoirs to enhance oil and gas recovery is usually recycled water or gas from producing wells as part of a closed-loop process, the knowledge injected into an organization is the result of the innovation ongoing in the outside world. Two imperatives follow for knowledge managers.

  • Put in place strategies to nurture knowledge creation, as well as flow to the customer-facing parts of the organization and application to customer needs.
  • Nurture a learning culture that increases the "absorptive capacity" of the organization (the ability to recognize the value of new, external information, assimilate it, and apply it to commercial ends). Success means that the organization is able to quickly "apply everywhere what is learned anywhere" (as in Schlumberger's InTouch).

Real-Time Knowledge Reservoir Management

Real-time reservoir management is cited as a major contributor to recent advances in petroleum reservoir productivity and recovery. The key elements are sophisticated real-time sensors and actuators, an accurate reservoir model and powerful simulation tools that honor reservoir dynamics. Via laboratory experiments and simulation and field experience, much has been learned about which sensors are most effective, how best to place them and how best to act on their data.

Unlike petroleum reservoir engineers, knowledge managers do not yet have a powerful simulation toolbox at their disposal. There are few tools that enable them to accurately predict the effect of applying a particular stimulation technique, or to experiment with alternative strategies "in the lab" before they are implemented live "in the field." Today's best practice is based mainly on field experience. Knowledge managers employ techniques that have been successful in similar organizations in the past and they start with pilot projects that impact only small parts of their organizations before launching full-scale programs.

Despite this shortcoming, knowledge managers can implement the key lesson of real-time petroleum reservoir management: measure the performance and health of the knowledge reservoirs. Relevant metrics include:

  • Knowledge Production: How much knowledge is created and applied for each business process? What are the gaps and shortfalls?
  • Knowledge Recovery: What fraction of the overall knowledge is being applied? How much is left behind – unused?
  • Knowledge Impact: What is the impact of individual knowledge nuggets on customer satisfaction, revenue, cost savings, safety,...?
  • Community Participation: Who is creating knowledge? Who is using it?
  • Cost: What is the cost to render knowledge actionable (capture, validation, publishing, maintenance)?
  • Time: What are the delays between creating knowledge in one part of the organization and applying it in another?

Knowledge managers can also employ a two-part process to act on the data:

  • Determine which of the three knowledge flow variables to adjust: organizational permeability, knowledge viscosity or business pressure gradient.
  • Select a stimulation technique both capable of influencing that flow variable and matched to the dynamics of the organization.

The Bottom Line

The summary message to petroleum industry professionals is this:

Use reservoir engineering thinking and experience as a guide to implementing a knowledge management program in your organization.

The summary message to knowledge managers is this:

Put in place real-time sensors to monitor the performance and health of your organizational knowledge reservoir. Determine which knowledge flow variables to adjust, then select and apply stimulation techniques suitable for the task and matched to the dynamics of your organization.


Armed with this approach, you have a chance to achieve real-time knowledge management for optimal knowledge reservoir performance.

In Part II of this series, we will evaluate a range of knowledge management tools with respect to their ability to influence the three knowledge flow variables: organizational permeability, knowledge viscosity and business pressure gradient.


Acknowledgments

Thanks to Guillermo Arango, Anthony Booer, Will Davie, Adam Farquhar, Chuck Martin, Cindy Hubert, Geoff Maitland, Carla O'Dell, John Old, Vince Polley, Mike Sheppard and Stephen Whittaker.

This article appeared in E&P, June 2005, pp. 13-17.


Additional Sources

  1. Cohen, W.M.; and Levinthal, D.A. Absorptive Capacity: A new perspective on learning and innovation, Administrative Science Quarterly, Vol 35, No 1, 1990, pp. 128-152.
  2. Dake, L.P. The Practice of Reservoir Engineering (Revised Edition). Elsevier, 2004 (1st reprint).
  3. Smith, R.G.; and Maitland, G.C. The Road Ahead To Real-Time Oil & Gas Reservoir Management Transactions of the Institution of Chemical Engineers: Chemical Engineering Research and Design, Vol 76A, pp. 539-552, 1998. 


Additional Analogies

I will add analogies here as they are suggested. Following are a few that did not make it into the Hart's E&P magazine article due to space limitations.

Petroleum Reservoirs Knowledge Reservoirs Actions for Knowledge Managers
Fluid Flow Channel
Strongly interconnected pore volume or void space in a rock that enhances fluid flow.
Knowledge Flow Channel
Strongly interconnected people, workflows and knowledge bases that enhance knowledge flow.
Find and build on the existing knowledge flow channels. Build new channels where necessary (e.g., via personnel transfers, cross-functional project teams, joint R&D with customers, expertise locator systems).
Fluid Flow Barrier
Impenetrable barrier to fluid flow.
Knowledge Flow Barrier
Impenetrable barrier to knowledge flow (e.g., lack of trust, 'Not Invented Here').
Remove or bypass barriers by improving knowledge connections and aligning employee performance appraisal processes with knowledge management goals.
Fluid Production
Measure of fluid produced from a reservoir over a specific period of time.
Knowledge Production
Measure of knowledge produced (i.e., created and applied) by an organization over a specific period of time.
Improve production. Nurture a learning and knowledge-sharing culture. See New Knowledge Reserves.
Fluid Recovery
Fraction of reserves that can be economically extracted from the reservoir; e.g., at 35% recovery, 65% of the oil & gas is left in the ground.
Knowledge Recovery
Fraction of the knowledge held by the organization that can be economically applied. The rest is left "in the organization" – unused.
Enhance recovery. Maximize movement of stored knowledge to points where it positively impacts the organization's business goals and client needs. See Real-Time Knowledge Reservoir Management.
Relative Permeability
Relative permeability of oil goes down as the water saturation goes up.
Relative Permeability
Relative permeability of valid information goes down as the amount of invalid information goes up. On the positive side, "powerful" ideas flow more easily through organizations.
See Separation. Validate information as quickly and as close to the sources as possible.
Time to First Oil
Time from the start of exploration to the onset of production.
Time to First Knowledge Use
Time from the creation of knowledge somewhere in the organization to its first application somewhere else. A measure of how quickly knowledge flows.
Nurture a knowledge-sharing culture that seeks to rapidly disseminate knowledge and apply it for the benefit of stakeholders. Measure the results.
Producing Well
A well producing fluids (oil, gas, water).
Knowledge Application Point
A part of the organization where knowledge is applied for the benefit of customers (e.g., field service).
Build two-way flow channels that connect customer-facing parts of the organization to the knowledge created in other parts of the organization.
Injection Well
Well in which fluid is injected to maintain reservoir pressure and improve production as the reservoir is depleted of reserves.
Knowledge Injection Point
A part of the organization where knowledge from the outside world is injected (e.g., R&D center).
See New Knowledge Reserves. Nurture a learning and knowledge-sharing culture. See also Water Flood.
Water Control
Treatment conducted within a reservoir or well to reduce water production.
Invalid Information Control
Treatment conducted within an organization to reduce the flow and application of invalid information.
See Separation. Validate information as quickly and as close to the sources as possible.
Water Flood
Secondary recovery method in which water is injected into the reservoir formation to sweep residual oil to production wells.
Knowledge Flood
Injection of new or recycled knowledge into the organization to combine with and sweep existing residual knowledge to application points.
It is important to sweep new knowledge through an organization (see New Knowledge Reserves). However, it is also important to recycle old or existing knowledge already in the organization. It might have new impact when mixed with new ideas. Or, it may need to be nurtured and re-examined when the time is right; e.g., when the enabling tools are available. There is a danger of ideas ahead of their time being isolated and forgotten.

 

Additional Discussion

In this article, I chose to focus on Exploration and Production. Individuals working in the Petroleum industry will understand that only a small number of the possible analogies have been explored in this article. One could extend the analogy to cover the Refining and Retail aspects of the Petroleum industry.

For example, knowledge nuggets are adapted and refined as they propagate through organizations. This could be considered as analogous to petroleum refining. One could also argue that a "Knowledge Application Point" (customer-facing part of the organization) is analogous to a gasoline station.

After the article was published, I invited individuals to share their ideas, to discuss actions to start, continue, cease or change to enhance the knowledge productivity of an organization, and to explore other analogies, such as: bypassed oil, bubble point, fingering, flow gradient, fracturing, matrix acidizing, multi-laterals, reservoir plumbing, wellbore stability and so on.

Following are some examples of the resulting discussion.

From Gerald Verbeek (gverbeek@verbeekservices.com, www.verbeekservices.com), Sunday, June 19, 2005 16:19:

Very interesting article, but I feel that one important aspect is missing.

You mention that there is no practical way to create new petroleum reserves, while you can create new knowledge in organizations. That is very true, but you can go one step further: petroleum reserves in places don't just evaporate when they turn 65 or 70, and yet that is what is happening with knowledge.

Unless we start to pay serious attention to the loss of knowledge through the retirement of our staff, we really don't have an adequate knowledge management system.

Gerald Verbeek
Verbeek Management Systems
Tyler, TX

Response from Reid Smith

Your point is well taken. Given the age distribution of SPE members, it is especially clear how important the issue is for the Oil & Gas industry.

As I see it, the issue has two components: ensuring that valuable knowledge stays behind when employees leave or change jobs within the organization; and, reducing the time-to-competency of new employees. As mentioned in the article, the Knowledge Map is a useful tool in this regard.

There have been some informative benchmarking studies, like that of APQC, done in 2001. Some practical actions are suggested. See Retaining Valuable Knowledge.

From Reid Smith, Saturday, June 4, 2005 17:55:

Organizational Distance

Amy Price has pointed out that all four variables on the right-hand side of Darcy's law can be influenced in its Knowledge Flow counterpart.

In the Hart's E&P article, I considered permeability, viscosity and pressure gradient. With respect to the latter, I concentrated on increasing the numerator – pressure. However, it is also possible to reduce the denominator – organizational distance.

For example, one of the effects of portal technology is to reduce organizational distance by connecting individual employees all over the organization with the information and knowledge they need to do their jobs.

From Jeanne Perdue (Jperdue@zeusdevelopment.com, Houston), Monday, May 30, 2005 19:06:

I enjoyed your insightful masterpiece about how knowledge management parallels Darcy's Law. Right on! I had some further thoughts about that, based on my past doing permeability measurements as a chemist in the Texaco research labs, as a technical librarian at the Texaco Library, and as a trade journal editor:

I consider publications and trade journals to be a big frac job, opening a wide pathway for the knowledge to flow freely from the whole reservoir, connecting smaller natural fractures/pathways and providing a conduit for the knowledge therein to reach the Well of Knowledge and then up to the big storage tank, which would be the online searchable archives or hardcopy libraries. And you need a big sucker rod pump to counteract gravity, which in this case would be monetary incentives to counteract the disinclination to write and publish SPE/AAPG papers for that archive.

How's THAT for stretching a metaphor?

From Amy Price (price@petris.com, Houston), Monday, May 16, 2005 12:28:

Very good article! I’d like to add to it the concept of the reservoir ‘thirds’.

The ‘first third’ is the easiest oil - what we always called the 'low hanging fruit' in KM. Technology, workflow and communities are all useful here, and this is fairly straightforward to do. Most organizations are in the 'first third' for their current KM work. It’s easy to justify and the results are self-evident.

The ‘second third’ requires more investment and know-how – it’s where technology makes a real difference in E&P. For KM, it involves going deeper into tacit knowledge, developing innovative schema to unlock innovation and ideas within the organization, and far better and more intuitive technology. Not many companies are into the 'second third', as accessing this knowledge can cost quite a bit more and take a lot more effort, and the cost justification isn’t as clear as for the ‘first third’. Harvesting the ‘second third’ also requires that a higher degree of trust exist between management and rank-and-file. The backbone of a good 'second third' program should be a vibrant CoP program that is successful in precipitating what it knows while using its senior members to help develop the more junior ones (one of the key elements of tacit knowledge transfer).

The final third - we aren't sure quite how to get to it yet. Certainly even better technology will be required, but deeper cultural changes may also be needed.

From what I’ve seen, organizations stop at the 'first third' unless competitive and business pressures dictate they must go further. And, though there is still a lot of good work in the 'first third', there is most likely as much to be gained by going into the 'second third'. But it's not nearly as easy to see.

The ‘crew change’ in the E&P industry is not going to make it easy to get to the 'second third'. Many of the employees with the deep knowledge needed for the 'second third' are retired, laid off or a bit concerned about their jobs. Trust is harder to come by, and that is critical for the 'second third'. Many enterprises are going to have to make do with what they have in the 'first third', and redevelop over time the knowledge of the 'second third'.

Thanks for the opportunity to comment!

From Matt Simmons (msimmons@simmonsco-intl.com, Houston), Monday, May 16, 2005 12:00:

This is great stuff. In additional to offering some very useful thoughts on better knowledge flow through organizations, it is a good reminder of the time tested limits to why we got great oil from some areas and poor recovery from others, even in the same "Organization"; i.e. reservoir.

I am now committed to frac Simmons + Co. To enhance our already highly permiable flow of data! 500md is fine but if your goal is truly "highest quality energy investment banking advice", 3 Darcy is much better!

From Geoff Maitland:

More on Knowledge Flow Channels

To improve overall flow, one could say that the more parallel paths there are through an organization (greater connectivity) the better.  However, one can think of situations where this could lead to unwanted effects.

  • Separate paths with the same or different starting points and different end-points, without the paths crossing, could lead to duplication, poor communication, re-invention of the wheel, inefficient use of knowledge etc.
  • Pore or throat plugging: Either the overall inlet flow rate of knowledge is too high for the flow network to cope with, or the interaction of new knowledge with existing knowledge in certain parts of the organization results in closed minds to any further new approach or knowledge input, resulting in local blocking of idea flow—the KM equivalent of formation damage.

More on Validation: One way to define knowledge is interpreted information.  Therefore interpretation or processing is vital at all levels to create and enhance the transfer of knowledge. This is not a linear process or a single event, so information needs to be continually recycled through the interpretation process in the light of current understanding, knowledge, needs etc. (See also Water Flood.)

On Invention and Innovation: One can define invention as "the creation of knowledge" and innovation as "the bringing together of invention and the organizational needs."  Knowledge Management requires flow of both types of knowledge: the invention and the business needs, and indeed a collision of the two.  One goal of KM is optimized steering and control of this collision rather than relying on random processes.



Dimensional Analysis

This is a useful method for checking equations by considering the "dimension" or qualitative nature of a physical quantity (e.g., length, mass, time, force). (These sources provide useful background: Harvey Mudd College and Wikipedia.)

For Darcy's Law, we have: v - distance / time; k - distance 2; m - force • time / distance 2; p - force / distance 2; x - distance.

For a dimensionally correct knowledge flow equation, we take distance to be organizational distance (e.g., from a knowledge creation point to a knowledge application point). We take force to be supplied by the business environment, by management, by peers and by personal motivation.

Last Updated: 05-Jun-2009