How does Todd Herman Associates manage its knowledge assets?

Last month, I shared the following key points:


  • Bing's definitions of:
    • Knowledge Management (KM) - The process of identifying, organizing, storing and sharing knowledge within an organization.
    • Knowledge - An intangible asset that consists of skills and information that people possess.
  • The difference between:
    • Structured Data - Highly organized data that can be put in “rows and columns” as in a spreadsheet.
    • Unstructured Data - Data that is not consistently organized in a predefined manner and cannot be put into “rows and columns.” Examples of unstructured data include emails, images, videos, audio files, PDF files, and social media posts.
  • My friend's story, distilled to these key factors:
    • Inventory of Information
    • Technology in Use
    • Digitization of Handwritten Items or Printed Information
    • Search Tools
    • Process - Both initial and ongoing
    • Investment - Both initial and ongoing
  • Finally, the difference among:
    • KM Review - The starting point of determining your "current state."
    • KM Plan - The creative and strategic thinking required to visualize a "future state."
    • KM System - The initial effort and investment required to convert the KM Plan into reality, and then the ongoing effort and investment to maintain, improve, and grow the knowledge under management.

This month, as promised, I'll tell my story, discussing the same six key factors as in my friend's story.

My Early Career

A little background on myself.  After graduating from Wake Forest University with degrees in Accountancy and Mathematics (based on my chosen courses in the latter major, you could say I earned a minor in Computer Science), I went to work in the Audit Practice of Arthur Andersen & Co. (AA&Co.) in their Greensboro, NC office.  Early on, I naturally gravitated to using the then-nascent desktop and "portable" personal computers and quickly distinguished myself in using these.  Because of this, I spent 18 months in the Chicago World Headquarters, working in the firm-wide audit software research and development group called ACAT (Advanced Computer Audit Techniques).

In a professional services firm, especially a global one such as AA&Co., capturing, storing, and disseminating knowledge is critically important to both client service and competitive position.  Fortunately, the partners managing the ACAT group were very forward-thinking and were always able to find money to try out new ideas and new products, even knowing that some would not work out.

At the time, little did I know that one key idea and one key product would significantly shape the trajectory of my post-AA&Co. career.

One Key Idea – Hierarchy of Knowledge

About 35 years ago when I was in ACAT, I learned about a four-level hierarchy of knowledge – the levels in the first column of the table. To illustrate this hierarchy, I've added my own financial and textual examples in the second and third columns.

Level Financial Textual
Wisdom Strategic Plan Interpretation
Knowledge Variance Explanation Executive Summary
Information General Ledger Report
Data Transactions Isolated Facts

Moving up each level involves more summarization, abstraction, or processing from a previous level – in general, improving the context and quality of the information.

Moving up a level also means the questions being asked become harder, which also means finding good answers becomes harder.

  • “Who,” “What,” “When,” and “Where” questions are typically not hard because they have objective answers – such questions can be answered with little skill.
  • Questions involving “How” and “Why” are generally much harder to answer because they have subjective answers – such questions require skill and judgement to answer well.

Providing answers to the easier questions – generally, the Data and Information levels – still provides significant value, if the information is consistent, visually highlights trends and exceptions, and has been tailored for particular users.

Providing answers to the harder questions – generally, the Wisdom and Knowledge levels – adds the most value to a company.

One Key Product – Notes

While in ACAT, I learned of a brand-new product called Lotus Notes.  Back in 1989, Notes was at Version 1.0, and it cost $100,000 for 1 server license, 100 client licenses, and a technician from Cambridge, MA to come on site to setup and configure everything.

When I first played with Notes, I didn't "get it" – in hindsight, I believe this was for two reasons:

  • Notes defined a new software category called "Groupware" – it was like no product or software category the market had ever seen before, so, it was hard to understand what it did.
  • Groupware is useful only when a number of people are actually using it, and I was the only one initially testing it.

Of course, I saw many new software products while I was in ACAT.  Most came and went.  Notes had staying power.

My Story – Todd Herman Associates

In 1989, auditing had "lost its charm" so I decided to go into business for myself.  As Todd Herman Associates (THA) grew, I had to add people and technology to support THA's growth.

At some point in 1995, I decided I needed to upgrade my company's email capabilities.  By that time, Lotus Notes had reached Version 3 and its price had dropped considerably, so I acquired Notes and rolled it out in October 1995.

Initially, we used Notes only for email.  Soon, I began exploring its collaboration capabilities and that's when I finally "got it" about Notes – its ability to store, search, share, and disseminate information among a group of people is what distinguishes it as groupware.

Shortly after that, I began designing and co-developing the applications we now use to run THA.  Over the years, the key ones have become:

  • Contact Management – A light version of Customer Relationship Management, or CRM, software.
  • Time Sheet – Daily time entry.
  • Client Folder – Documents related to Clients and Projects, including our monthly Invoices.
  • Personnel File – Secure storage of documents related to hiring, tax withholdings, benefit elections, performance plans and reviews, and similar items.
  • Project Database – Key information from client projects.
  • Financial Archive – Key internal information, including transaction source documents and key corporate documents such as leases and insurance policies.
  • Job Aid Library – Storehouse of instructions on how to perform virtually all "behind the scenes" tasks at THA.

One key decision I made: anytime we scanned a document to store in any of these applications, we used OCR (Optical Character Recognition) software to convert scanned text into searchable text.

As I was doing everything I just described, I didn't realize I was using Notes to build THA's Knowledge Management System. 

Demonstrating THA's KM System to My Friend

At the end of the phone call with my friend, I invited him to visit my office so I could show him how THA had approached the challenge he described to me.

We met a couple weeks ago in THA's conference room, where I gave him a quick overview of the applications in the previous section, then demonstrated how:

  • Documents could be organized and indexed in a consistent manner within an application.
  • The contents of an application – both the database documents and any file attachments in those documents – could be quickly and easily full-text searched using a Google-style search syntax.
  • The contents – both documents and file attachments – of ALL applications and, optionally, the contents of files stored on the server itself, could also be quickly and easily full-text searched using a Google-style search syntax.

I also shared how THA had addressed the same six key KM factors from our phone conversation:

  • Inventory of Information – Virtually all of THA's key information is housed in an appropriate Notes application.
  • Technology in Use – We use the Notes platform.
  • Digitization of Printed Information and Handwritten Notes – We scan and OCR everything we want to keep. Even though handwritten notes cannot be converted to searchable text, other information about the source of those notes provides meta-data about the notes themselves.
  • Search Tools – Notes has strong full-text search in both individual applications and across the entire domain of applications and file system.
  • Process – The applications and our KM processes did not spring into today's mature form overnight. Nonetheless, by scanning and OCRing everything we could, and by using one platform for virtually all our needs, we very early laid the foundation for managing THA's knowledge.
  • Investment – The hardware and software required to perform everything I described were purchased and developed over nearly three decades. Even today, it does take ongoing investments of time and infrastructure to maintain and enhance THA's knowledge.

My friend challenged me to find several pieces of information about interactions we had or meetings we jointly attended, and my KM system allowed me to quickly and easily do so.  I even showed him handwritten notes I'd taken at those meetings – even though my handwriting itself wasn't searchable, the meta-data describing the meeting and listing the participants provided enough context to reach those meeting notes.

I also demonstrated how THA had transformed the lowly Job Aid from Word documents and sticky notes into a versatile management tool.  By documenting the routine and non-routine accounting, administrative, and business development tasks, employee transitions became much easier, easy-to-overlook non-routine tasks are now reviewed monthly, and workloads by position and by month are now known.

As we wrapped up, he said THA's KM system was an incredible business asset, and a much more sophisticated system than any he'd seen even in very large companies.

Different Companies = Different Needs and Techniques

If I had to do it all over, would I do things differently?  Perhaps.  THA's KM system works very well for my associates and me, allowing us to quickly and easily store, share, and search large bodies of knowledge to find exactly what we need – and it largely traces back to my unique education and work experience.

For my friend, would I recommend Notes as the basis for his KM platform?  Probably not, because he doesn't have to store and share information with others.  What will he come up with?  Hard to say, yet that would make a good newsletter itself.

The Most Valuable Knowledge

What is THA's most valuable knowledge?  The ideas in our heads!  How do we come up with those ideas?  We each work with one or more people to develop ideas, and then the responsible person goes off to implement that idea.

THA's KM infrastructure does help us find words and data, and we use these results to help us come up with practical solutions for our clients.  Research from tools like the AI-enabled Bing also provide raw material for ideas, yet my associates and I can do something Bing and its ilk currently cannot – distill, for example, key implementation ideas about KM systems into six key factors to consider.

I've told my folks that, once we have an idea for a client, if anything we write or present sounds like it came from the Harvard Business Review, then we're doing something wrong.  Boiling things down and making them easy to understand and implement – that's a key part of THA's value to our clients.


Todd L. Herman