Wednesday, 3 November 2010
When I was at the KMRussia conference with Larry last week, he asked a question which made me really think hard, and its an interesting question for anyone concerned with KM metrics.
He asked "What percentage of a company's non-capital spend, is spent on knowledge"?
Now I would be thinking in terms of 3% maybe - perhaps the training budget, or perhaps the budget spent on conferences, but Larry suggested that would be quite wrong.
His answer was - 60%
60% of an organisations non-capital spend, is spent on knowledge.
As he said - "When I was at my last job, at the age of 50 they paid me 10 times more than a 30-year old with the same qualifications. What was the residual difference? Knowledge and experience".
Hmmm - now, that's an interesting way to think about it! Take the company wages bill, take away what this bill would be if everyone was paid as a new graduate, and that's the investment in knowledge. After all, if knowledge was not valuable, you could staff the company with smart young graduates at a fraction of the cost. The only reason you don't, is because knowledge is valuable.
And what do most companies do with this knowledge, that they have invested 60% of their non-capital spend on?
Usually they leave it in people's heads, where it can't be seen, can't be accessed easily, where it leaks away until the day it walks away.
Unless, that is, they have bought into the value of KM, as a way of maximising that investment.