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Wednesday, March 15, 2006

Why measure the value of KM?

By Chris Collison

Measuring value can often seem like a time consuming effort for knowledge workers. Is it worth it? Is measuring the value of KM initiatives a worthwhile way to spend time? Don't get me wrong; clearly any KM activity needs to be linked to the creation of business value, and we need to be able to illustrate that convincingly. But, the concern is that to try and separate out the unique contribution than KM activities make can become something of a cottage industry and counterproductive to "getting on with the business of making a difference."

Like most business changes, knowledge management moves through the cycle from unconscious incompetence, to conscious incompetence, conscious competence and, finally, that elusive "nirvana state" of unconscious competence, where knowledge sharing has become part of "how we do things around here."

This is where there's conflict with detailed "compartmentalized" measurement approaches. KM will never become an unconscious competence in organizations where it's measured as something distinct from good business management. The act of detailed measurement imprisons us in the "conscious competence" quadrant (although that's good news if you're an accountant). How much time do you want to spend arguing the toss over whether it was KM, Six Sigma, Lean, Appreciative Inquiry, Systems Thinking, NLP or the corporate values program which helped a team achieve a remarkable outcome? I'd rather be out there working with the next team, helping them achieve their own remarkable outcome!

I can remember the second year of BP's KM program some years ago, when we were asked to demonstrate $100m of business value through the application of KM approaches and tools. We did this by asking senior managers, directors and VPs who had been applying KM tools (mostly with some support from our team) for anecdotes and stories with $ value attached. Many of them did and when we passed the $250m barrier we stopped counting. Was it scientific? No. Did it comply with Generally Accepted Accounting Principles? No. Did they have credibility as stories? Absolutely yes – because of who was telling them. Did the stories inspire others and give momentum to what was going on? Definitely.

However, one senior VP in Mergers and Acquisitions refused to be drawn on the specific contribution that KM had made to a recent acquisition. "It's a big number" he said, "but it's in there with the spaghetti..." (meaning, the other approaches that had also been brought to bear on this acquisition). I have a lot of sympathy with that view. Whilst I recognize that we need to be able to illustrate the value that knowledge sharing brings, with compelling examples and stories, my preference would be to commit the minimum time necessary to the activity of measurement. Like that manager – I'd rather than get on with eating the spaghetti than don a white coat and spectrophotometrically analyze the bolognaise source.

Chris Collison is a KM Review Editorial Board member www.knowledgeableltd.com

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