Why its important to convey the value of Knowledge Management

The most important thing you can do for KM within your company, is help people to understand the value. 

I often say that “knowledge management is how people would manage their organisations if only they knew the value of their knowledge”.  If they understood the unrealised value of the knowledge assets they already hold, they would willingly invest in that value. And if they understood the value of the knowledge they risk losing, they would invest in retaining it.

If you know what something is worth, you know you need to look after it. If you don’t know what its worth, you don’t treat it with due care.

Organisations which apply knowledge management really well, report huge value. Mars, with their billion dollars of knowledge-enabled value, Texas Instruments with their “free fabrication plant” through KM, Shell with their $200m value per year.

The value is delivered through giving people access to better knowledge, so that they can make better decisions. Knowledge can be transferred from good performers to poor performers, or carried forward from one project to another, in order to improve business results. If you know the value, you can justify the investment.

In one drilling program, we anticipated that KM could save in the order of $100m (in the end, we saved $83m). So when management challenged investment in three full-time learning engineers, the KM team were able to justify this investment by pointing to the scale of the potential savings.

So an early exercise for you to undertake in your KM program is to estimate the “size of the prize” that KM could bring.

Once the senior decision makers understand the value that KM can bring, and the size of the potential prize, you will find it far easier to get support!

View Original Source (nickmilton.com) Here.

Quantified value stories in KM – numbers 115, 116 and 117

As part of our series of stories and examples of quantified value from KM, please find below three examples from a 2015 article in the UAE National, entitled “Knowledge management is power for companies”

An example of KM in action is the case of El Paso Corporation – a 5,000-employee North American provider of natural gas and related products. To maximise the benefits of a new organisational structure and encourage communication, El Paso decided to try a KM programme focused on business opportunities and challenges. Its aim was to foster expertise within the workforce and share technical knowledge with a scorecard used to measure and report on the programme. Its elements included: savings, improvements, successes, costs and milestones. In the first year, the goal was to save the organisation US$500,000, but it delivered $1.2 million in savings.

“A recent best-practice transfer between KOC and other k-Companies in Kuwait, where technology and know-how have been transferred between companies resulted in savings of several million Kuwaiti dinars,” (Abdul Jaleel Tharayil, project leader of Knowledge Management Practice for Kuwait Oil Company) says.

“Another example is an internal collaboration between deep drilling and development drilling, which brought forth a reduction in non-production time by introducing a change in casing design, leading to savings of around 250,000 dinars.”

The Kuwaiti Dinar is currently worth about  3.3 US Dollars.

View Original Source (nickmilton.com) Here.

If organisations treated money like they treat knowledge …..

What would it be like if organisations treated money the way they treat knowledge?

This is a simple thought experiment, which you can use with your senior managers to get them to think differently about knowledge. We know knowledge is an asset, we know it has value to an organisation, but compared to a different asset – money – we treat knowledge in a naive and unthinking way.

If we treated money like we treat knowledge ….

  • We would allow people to hoard company finances and not share company money with others, just as we allow them to hoard knowledge;
  • We would have no single company bank account, just as we have no single knowledge base;
  • Even if we had an account, nobody would manage it or monitor it;
  • If we wanted to draw on company money, it would be as hard to find as company knowledge;
  • People would treat company money as their own property, just as they do with knowledge;
  • We would not create any budgets for our activities and projects, just as we do not do any knowledge budgeting;
  • If we wanted money for our projects, we would assign rich people, in the same way that we assign knowledgeable people as the default way to access knowledge;
  • If we created new income from a project, we would leave it in the pockets of the project team, just as we leave knowledge in their heads;
  • If someone left the organisation, they would take a whole stack of company money with them, and there would be no attempt to retain this money, just as there is no attempt to retain the knowledge;
  • We would see it as a sign of weakness to ask for money;
  • In fact people would be suspicious of money from others – “Not Earned Here” as a parallel to “Not Invented here”;
  • We would not report any financial data to senior management who would have little idea of the financial wealth of the organisation (do they know the intellectual wealth?);
  • We would have no roles specifically for the management of money – no financial departments, no CFO, no accountants;
  • We would have no processes for managing money – no planning, forecasting or accounting;
  • We would have no technology for tracking money;
  • We would have no financial policy, or guidelines, or rules, or expectations;
  • In short, we would have no financial management at all.
Once you have gome through this experiment, ask your managers how much value would be lost if we treated money in the same way we treat knowledge, ask them how much value is currently being lost through unmanaged knowledge, and ask them

isn’t it time we treated knowledge management with the same level of attention we treat financuial management?

View Original Source Here.

How communities of practice can help reduce staff turnover.

There are many ways in which Communities of Practice add value to an organisation, 27 of which are listed here.  Here is a 28th way.

There is a really interesting analysis of Communities of practice from the Geneva Knowledge forum which looks at CoPs in several large multinationals, and which points out some of the softer benefits. For example, CoP members can get the following personal benefits:

  • the thrill of participating in an exchange of ideas with like-minded colleagues who share a common interest and skills, resulting in a major boost to organisational members’ motivation and satisfaction at work;
  • the feeling of belonging to a group and the particular value of recognition by peers who are perceived as competent judges of one’s own ideas and performance;
  • the possibility of honing existing skills and developing new ones through participation in network activities is an obvious plus for individual performance;
  • networks may serve as a ‘shop window’ for talented employees. 

As a result, network membership not only engages the employee, but also helps the showcasing of individual performance towards an audience that is ‘ready to promote.’

The article quotes the following example from Deutsche Bank

Networks at Deutsche Bank focus on this particular aspect. The company learned its network lesson the hard way. In 2000, the acquisition of Bankers’ Trust prompted an exodus of key investment bankers — taking accounts with them. However, top managers were less concerned by the loss of accounts than by the loss of knowledge, which they feared could potentially have even more severe consequences. After all, the managers who quit the organization had an in-depth understanding of key procedures and they knew best how to manage their customer relationships. 

In 2000, Deutsche Bank decided that merely tracking turnover was not sufficient, so it made explicit efforts to develop an indicator to measure the commitment of key individuals to the company. The reasons individuals left the bank proved the point that best-practice networks are one of the most important tools for tying highly qualified managers to the organization.

View Original Source Here.

Quantified value stories 112, 113 and 114; three examples from customer service

From a blog post called “In praise of Knowledge Management” come the following examples of quantified KM value, all from customer service centers;

Image from wikimedia commons
  • “A leading European mobile phone retailer saw a stark increase in contact deflection of 27.3 percent while markedly improving NPS  (Net Promoter Score) by 12 base points after implementing a knowledge management system”.
  • “One of the largest global insurance providers realised a massive decrease in agent training costs by 50 percent, and a sharp drop of 30 percent in complaints”.
  • “An Australian Government agency saw its customer satisfaction levels surge to 93 percent as well as raise agent satisfaction and reduce handling time by 53 percent”.

The article concludes that “it is these kinds of success rates and improvement which make knowledge management a serious contender for inclusion in any list of top ten contact centre technologies”.

View Original Source Here.

Quanitified value story number 111, multiple benefits at Goodyear Tire company

As the 111th entry in our ever-growing list of examples of Quanitified Benefit from Knowledge Management, here is a story on value and value measurement at Goodyear Tire Company, described by KM World Magazine.

Goodyear use what they call “value pyramids” for each key KM initative, to track knowledge impact on delivery results, Using this approach, they have identified the following KM value impact:

  • a 50 percent reduction in development cycle time;
  • associates using KM-developed Learning Journals achieve competency three months faster,
  • project teams using the Knowledge Sweep method/service have saved up to eight weeks in development time, and
  • the ACE Lessons Learned method has resulted in numerous updates to design standards.

This has been delivered through:

  • findability skills,
  • online collaboration habits,
  • expertise definition and location,
  • lessons learned definition and sharing,
  • use of and benefits of tagging,
  • cross-functional and cross-geographical valuation,
  • knowledge worker recognition methods and
  • multigenerational team approach.

View Original Source Here.

Quantified KM value story 110 – cutting development cycle time by 2-3 years at NASA

As the 110th entry in our ever-growing list of examples of Quanitified Benefit from Knowledge Management, here is an example from NASA

Image from wikimedia commons

The example is given by Jim Rostohar; the CKO of NASA’s Johnson Space Centre.

In the Space Centre, KM is used mainly to support programs and projects, and the Engineering Directorate. One of the tools used in this support is a new contextual search engine.  Jim describes the benefit as follows:

If this tool wasn’t available, the Orion team would have had to decide what level of program resources should be applied to develop and certify contingency measures for the Orion capsule. According to the Engineer, development of a test article would take two to three years and add an additional cost of several million dollars.

View Original Source Here.

A value-led KM story

I have blogged many times about how Knowledge Management should be value-led, and driven by the needs of the business. Here’s a story of how one KM Community leader helped define that value in a very graphic form. 

Image from wikimedia commons

The story was told to me by my friend Johnny, who was at one time the leader of a highly successful Community of Practice in the Oil Refining sector. The great thing about Johnny’s story is that way that the Community were able to make an enemy of the waste in the production process.

Johnny took this Cost of Lost Knowledge and personalised it as a thief – “The Phantom”.

Here’s Johnny’s story.

“It is always a hard one – to wrestle with the value that a community can deliver. It is very difficult to measure somehow. In some ways you just know instinctively that it has made a difference, but to actually pin a monetary value on it, is sometimes very very difficult.

“However, we recognised that in the operating area, there was money disappearing. Every year, while the plants are running, we say “this plant could have run better – we could have got more out of this asset”. So we have lost money somewhere along the line. 

“We like to spin it around, and say that it is money that has gone to The Phantom. It has disappeared, you can’t recover it. So we need to go after this Phantom Money. 

“One of the tools that we have in the Community tool box is “Capturing The Phantom“. We actually go after the drips and the bits and pieces like that. And shared learning is very important. If you can capture what people have done before you, you can get enormous value from that. We can start to measure that less and less money is going to The Phantom. 

“People understand what The Phantom is, and they also understand that we can maybe capture The Phantom, but if we take our eye off it, The Phantom will come back. The Phantom will always come back!”

View Original Source Here.

27 ways in which a Community of Practice can add value

How can communities of practice add value? Let me count the ways.

Image from wikimedia commons

Here’s a list we made of 27 different mechanisms by which a community of practice can add value to an organisation.

No doubt you can think of more!

Community members can

  1. solve problems for each other 
  2. Learn before” starting a piece of work – using the CoP as a “Peer Assist” mechanism
  3. “Learn during” a piece of work, drawing on the knowledge of the CoP
  4. “Learn after” by sharing lessons with the community
  5. support each other emotionally, through messages of support or congratulations
  6. benchmark performance with each other 
  7. exchange resources through the community, such as tools, templates and approaches
  8. collaborate on purchasing (buying things that any one member could not justify) 
  9. collaborating on contracts (using the purchasing power of the community) 
  10. cooperate on trials and pilots 
  11. share results of studies, and maybe remove the need for others to re-do the same study
  12. exchange equipment (re-use old equipment, share spares) 
  13.  mentor and coach each other 
The community collectively can
  1. collaborate on a community blog, to act as a real-time story of what the community is collectively learning
  2. act as a learning resource for new staff
  3. build and maintain documented Best Practices, perhaps using a community wiki as a shared knowledge base
  4. build and maintain a curated document base as a shared resource
  5. decide a taxonomy and/or metadata scheme so members can record their knowledge in a consistent way
  6. recognise the most useful resources (for example through feedback and voting)
  7. recognise the most helpful and generous sharers (for example through “contributor of the year” awards)
  8. develop lists of common risks and warning signs (and what to do when you see them) 
  9. develop checklists and templates for member use
  10. create knowledge products for use by clients or customers
  11. identify knowledge retention issues 
  12. identify training gaps and collaborate on training provision 
  13. innovate new products, services or opportunities by combining ideas from everyone
  14. advise the organisation on strategy

View Original Source Here.

KM value delivery through problem solving

Much of the value delivered through Knowledge Management comes as a result of solving problems.

“How do you show the value of Knowledge Management?”

Yet another client was asking me the same question – how can you demonstrate the value?

I had just quoted to him Shell’s claim that they deliver £200m per year though their knowledge-sharing communities, and he just could not see how that value could be measured.

The answer is quite simple.

Shell’s CoPs are based on Pull – on Problem Solving. People in the Shell business units have a problem, and they got to the Communities of Practice to find a solution. When they have found a solution, they estimate how much time, money or risk that solution offered them.
Here’s an example

You can see clearly how access to Community Knowledge allowed this guy to obtain a better price from a vendor. Demonstrable value added. Here’s another example

One man-month of effort avoided. Demonstrable value.
It is by adding up examples like this, that Shell come to the figure of $200m annual savings that they claim for knowledge management.

Part of the challenge for the customer, was that until that point, he had not made the link between Knowledge Management and Problem Solving. To him, KM was all about blogs and case studies  – about Knowledge Push, and not Pull.

Once he could see the problem-solving link, he could more clearly see how KM could deliver value.

View Original Source Here.

Skip to toolbar