 KNOWLEDGE
MANAGEMENT PAYOFF |
Treating
knowledge as a tangible asset allows for a value
to be imputed to knowledge repositories. The Danish Carl Bro
group, for example, publishes a set of Intellectual
Capital Accounts annually so that investors and other
stakeholders can value the business for its intellectual worth.
Intellectual capital statements are part of KM, and valuations
form part of the history of intellectual capital . These authors
provide a matrix composed of definitions of human, organisational
and customer capital, which demonstrates how intellectual
capital can be made visible by creating intellectual accounts
using specific metrics, based on statistics, key indicators
and measures of effects, but with no fixed model in view.
Many
organisations require apparent bottom-line pay-offs from knowledge
management and other such initiatives. Lack of evidence of
such a pay-off (as calculated above) will be considered as
a project failure.
However, it is important that organisations recognise that
pay-off is unlikely to come from short-term increased share
prices but is more likely to be exhibited through a long-term
increase in profits and reduced costs which may be exhibited
through reducing future time scales on project completions
etc. Pay-offs tend to be seen in the terms of ROI (investment
and return) rather than human benefits and the increase
in intellectual capital is either not realised or understood.
Success in knowledge management projects are certainly to
be thought of in long-term invisible benefits and not necessarily
as part of the ‘bottom-line’.
Likely
reasons for such a lack of pay-off whether in ROI or the increase
in intellectual capital may come from the:
- Lack
of clear and specific business objective
- Incomplete
programme architecture which does not link the dynamics
of organisational
change and knowledge creation and use
- Insufficient
focus on top strategic priorities
- Lack
of sponsorship at all levels not just top management – top
management unsureness about the topic leaves lower level
managers without clear leadership
- The
idea that knowledge management can be performed by a ‘technology
fix’ using such systems as the Internet, data warehousing/mining,
document management, decisions support and groupware rather
than a culture change initiative. Technology can assist
the knowledge management initiative but it cannot BE the
knowledge management initiative. (see attached file for
further information about technology initiatives)
Managing
knowledge, therefore, with a sociotechnical
perspective, has a wide ranging necessity to manage the
organisation through continuous change and a process of continuous
learning supported, where appropriate, by technology.
There is also a
map available for the Knowledge Management
Review section
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