Thursday, 5 May 2011
How much is knowledge worth to your organisation?
I know it's really hard to come up with an exact and defensible figure, but you can come up with an estimate in "orders of magnitude" terms. You can ask "if we forgot how to do what we do, how much would we lose?" for example (see examples from Boeing and the NNSA). Or you follow Larry Prusak, and claim that the value of knowledge equates to 60% of your organisations non-capital spend
When you do make an estimate, that estimate is a pretty huge number. I know that one Drilling organisation, for example, estimated that their knowledge was worth $500 million on an annual basis.
Knowledge is a massive asset, worth a huge amount, and that asset needs to be protected, and it needs management.
So the two questions for your organisation, if they recognise that value, is
1. Who manages that asset?
2. How do they manage that asset?
All too often the answers are 1. "Nobody, at least not explicitly" and 2. "I dont know".
But who would leave a company asset, worth 10s or 100s of millions per year, unmanaged? Nobody in their right mind, surely?
That's where Knowledge Management can step in ......