Okay, this is on my mind because of an article that I stumbled across last week and I’ve been chewing on it ever since. It seems that according to one knowledge management “expert” the world of knowledge management has moved from a viewpoint that KM was all about either “systems and technologies” or was about “people and learning organizations” or was about “processes, methods and techniques” or was a “mechanism to manage knowledge assets” or a range of practices to “identify, represent, create and distribute knowledge.” However, the expert has stated that now the world of knowledge management is shifting gears and is moving toward exploring how it can be “integrated with an organization’s business.”
While I agree about the “systems and technologies” and don’t necessarily agree (that it isn’t) about the “people and learning organizations” or about “processes, methods and techniques” or a “mechanism to manage knowledge assets” or a range of practices to “identify, represent, create and distribute knowledge” in general I’m left with an overwhelming sense of feeling a little like, “well, look who just caught up.” But I’m also troubled by this expert’s viewpoint and the lack of understanding of the differences between tangible and intangible assets.
To suggest that knowledge management is now to be all about integration with an organization’s business, to the exclusion of, or disregard that it also must be about people, learning, processes, knowledge assets, and those “pesky” KM practices — all sounds a bit like it is being suggested that it is all about tangible results. And in fact the expert in the same article then suggests as much in discussing the need for knowledge management to produce a “tangible value.”
Which to me sounds very much like that brings us right back to — yet again — the whole notion that you must determine the ROI of knowledge management…its ROI. And the crazed notion that somehow you are able to determine the tangible value of knowledge management or knowledge. All discussed before, and in the last week. (for example, here or here or here)
I could drag out all the reference citations…but let’s not waste the time to call each one out. By any definition, the whole idea of “tangible” isn’t going to sit well with the concept of what knowledge is, much less what knowledge management is. A “tangible value” is by definition the “Fair Market Value of the monetary and physical assets.” And a “tangible asset” is something that is “capable of being appraised at an actual or approximate value.” And of course an “intangible asset” is one that is not physical in nature. And I think that where we need to head with this is summed up very neatly with the statement that such things as “knowledge, knowledge activities, know-how, collaboration activities” and such are classified as a form of intangible assets referred to as “competitive intangibles” (or also here) as per the International Accounting Standards Board and Generally Accepted Accounting Principles.
I’ve said before, I have no problem with determining and measuring the value-added benefit of knowledge management but it is not about seeking to determine the specific ROI that KM must achieve.
To successfully tie KM to the organization’s business is more about identifying the knowledge gaps that exist, and in then determining how those closing those gaps allows for the organization to close its strategic gaps (as proposed by Zack more than a decade ago). Knowledge management is NOT about a Return-on-Investment, but it is instead all about utilizing knowledge to provide a competitive advantage.
Knowledge and knowledge management are intangibles. KM isn’t a physical thing that has a Fair Market Value and to suggest that it is and does, is just downright silly. Knowledge management is all about the value-added. It adds value to other things in the organization. It can be measured through the concept of Knowledge Value-Added (KVA).
A key concept in understanding the benefit of knowledge management comes with the recognition that the only thing that makes any organization unique is its people, and the knowledge that is held by those people. Anything else – anything – can be replicated or procured. If you’re not utilizing the knowledge held by the organization and its people to obtain and maintain a competitive advantage, you’re wasting time.