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Last night I attended yet another dull knowledge management presentation.
The presenter was enthusiastic but the audience was limp, and not just
from the overheated venue. Why? The answer was not revealed during questions.
It only came clear later over drinks when the attendees chatted among
themselves. The presenter had lost
all credibility by quoting incredible rates of return without once referring to
measuring knowledge in the first place.
“Knowledge management” is fashionable jargon.
Knowledge management as a concept adds value by getting people to think about
information in new, structured ways - as an asset.
But listen to the presenter trying to drum up new business in a drying market.
“42% improvement in corporate knowledge” (what?); “efficiency gains of
15% to 65% at law firms!” (really, profits up that much because of a knowledge
management system?); “XXX, the big market research firm, states that KM
initiatives have a three month payback” (since when did I ever believe their
claims?). These claims insult an
audience’s intellect. The knowledge management community should shake these snake
oil sales techniques. The presenter
made one claim that did ring true, albeit a cliché that was not followed
through, “knowledge management is only useful if it improves business
performance”. Fine, so how are we
going to measure this?
Things are not straightforward.
Take a hypothetical 100 person firm examining its knowledge base.
Say that the firm believes that there are three important knowledge areas
(1) professional knowledge, (2) industry knowledge and (3) knowledge of the
firm. Assume that (1) is broadly
assessed by qualifications, (2) by time in the industry and (3) by time with the
firm. At the start, all 100 people
have spent 10 years working only with the firm. 1,000 years of experience in the industry and 1,000 years
with the firm. One employee leaves
to be replaced with a new hire who has 10 years of experience outside the firm.
Now we have 1,000 years of experience in the industry but only 990 years
with the firm. But it’s fairly
obvious that this new person has a great opportunity to add value.
So why do our calculations show that knowledge was destroyed?
Because simple measures of aggregated knowledge are close to useless.
It’s as if we said that the world-wide web was valuable because of X
billions of documents, rather than what the world-wide web enables you to do.
We need to look at the return on an asset, not its list of features.
Some phrases ring loud bells with a financial auditor - “X is an asset.
X is crucial to our organisation.
People in our organisation manage X. X has
value.” Assets - useful or valuable
qualities or things - require care and attention. Asset value needs to be preserved and, where possible,
enhanced. If knowledge is an asset,
let's treat it like one. There are
some challenging implications from this simple association.
For any significant asset, an auditor expects seven typical pieces of
evidence:
-
accurate
understanding of the Cost of the asset;
-
confirmation
of Ownership of the asset;
-
some
Disclosure of the importance of the asset;
-
ability
to confirm the Value of the asset;
-
evidence
of the Existence of the asset;
-
clear
lines of Responsibility for the asset;
-
measurable
Benefit from the asset.
Without all of the above, phrases such as “knowledge as an asset” or “knowledge
management” are just fluff sitting on top of some new technology (perhaps the
somewhat surreal, but snappy, “COD-VERB” should catch on as a mnemonic device).
If knowledge is not an asset, let's stop bandying about phrases with little
meaning and talk about a few databases we happen to have lying about.
The rate of return, so transparently concocted by Knowledge Management
systems providers, can be estimated by analysing what reduction (or enhancement)
would be achieved with a new product or without the asset.
Meeting the COD-VERB tests should be a goal for information systems
professionals and knowledge management system providers.
Until presentations on knowledge management include solid examples of the
measurement and reporting of COD-VERB, the claims of knowledge management firms
are hard to swallow. Without knowledge
measurement, there’s no management at all.
And I’ll go back to sleep in the back row. |
