Measuring the value of Knowledge

In the world of Information Technology, a key measure of success and failure is Return on Investment, or ROI. For many IT things, measuring the direct impact is a straightforward matter, such as how many man-hours were saved because of the insertion of technology.

Since many knowledge management initiatives and systems are seen as information technology projects, many times run through the CIO/CTO, it is only natural that many people want to apply this same measure of ROI to knowledge. But how do you measure something like that?

A concept that has logically evolved is that of Return on Knowledge. As part of some current research I’m working on, I am exploring that very question. Unfortunately, it is not as straightforward as a simple ROI.

Organizational Knowledge – What is it (part 2)

When most people discuss Knowledge Management in organizations, they are mainly talking about managing the knowledge of the individuals in the workforce. It seems to me that from an organizational standpoint this is really nothing more than information management. I say that because the “knowledge” that a worker possesses, when put into the larger context of an organization, is simple information that the organization uses to create knowledge, make decisions, etc.

As knowledge in humans is the interconnectedness of information in neurons in the brain, so then is Organizational knowledge the knowledge that the organization possesses as a result of the interconnectedness of the information in the neurons – that is, the people – in the organization.


Sitting here studying some statistics – I’m sorry, “quantitative analysis” – listening to and watching a Joe Satriani DVD: Live in San Francisco (2001). I love just listening to his music, and enjoy watching him and his band play even more.

Part of my fascination, especially as an amateur piano player, is watching the ease with they play even the most difficult pieces. It is as if their fingers, hands, indeed their whole bodies just know what to do. Of course, my point is exactly that: through extensive training, practice, repetition, and learning from mistakes, the body basically goes on autopilot.

This is not to take away from the performance. Not at all. You can still see the concentration it takes, especially on the difficult ones (they all look difficult to me, but that is beside the point), but it is a comfortable concentration. They are having a hell of a lot of fun, and you can tell.

As you’ve probably figured, this is leading up to some sort of analogy with organizational knowledge. Imagine for a moment that you are a CEO or some other executive, and you want to get your organization to some goal. Maybe through a little trial and error (simulation?) you come up with the goal (write the song), then you get the message out to the workforce and keep driving it home so everyone knows what you are looking for (practicing the song), then you are ready for the real world (performance).

This is obviously a very simplified analogy, and of course your workforce will likely have more of an opinion about what you are trying to do than your hands and fingers would. In many ways, though, the analogy works and there are many similar analogies you could use (for example, the training of an elite athlete).

I’m sure we’ll get into more of those later….

What is Knowledge Management, anyway?

Many definitions of Knowledge Management have been, and continue to be, thrown about. One I’ve always had trouble with is the “right information to the right person at the right time” thing. My main problem with it is my belief that there is no such thing as THE right answer. Maybe a bunch of A right answers. Unless of course you are looking at right in this case as relative.

My other problem with it is that it is focused on the individual, not an organization. Knowledge Management is not something that makes each individual’s job performance better, it is something that make the organization perform better. It is entirely possible that in order for an organization to do its best some of the individuals within that organization will do less than their best. (Kind of like evolution taking two steps forward and one tiny step back.)

On I came across the following, proposed by Dr. Yogesh Malhotra. (emphasis added by me)

Knowledge Management refers to the critical issues of organisational adaptation, survival and competence against discontinuous environmental change. Essentially it embodies organisational processes that seek synergistic combination of data and information processing capacity of information technologies, and the creative and innovative capacity of human beings.

I’m still torn about whether IT is an actual part of Knowledge Management or just a (very effective) tool in carrying it out. I think before long IT itself will cease to be a “separate” thing and simply part of the world.

We’ll see.

Access to more information and more advanced decision aids does not necessarily make decision makers better informed or more able to decide.