Wednesday 15 July 2015

COLK - the Cost of Lost Knowledge

One the  enduring challenges in Knowledge Management is defining effective metrics to measure its value. A promising metric which may fill the gap is the Lost Knowledge Frequency (LKF) and it's partner the Cost of Lost Knowledge. 

Image from wikimedia commons

In safety management, they talk about "lost time incidents" (LTI), where through the failure of the safety management system, somebody sustains an injury which causes them to lose time at work, either through treatment or through convalescence. A core safety metric is the LTIFR, or Lost Time Incident Frequency Rate.

In knowledge management, we could talk about "lost knowledge incidents" (LKIs). This is where the knowledge is or was once available to the organisation, but failed to reach the person who needed to act upon it.

 Unfortunately a lost knowledge incident is far less visible than a lost time incident. An LTI is visible because a person is not available for work, while a LKI is only visible when a mistake is repeated or a capability lost. Probably the majority of LKIs go undetected.

However you can measure this frequency through surveys or through careful analysis of the lesson learned system. A company I was working with recently ran a survey in 2005 where one of the questions asked was "do you know of any examples where projects failed because lessons were ignored or missed". 75% of staff answered yes. In a more recent survey, this had fallen to 26% - still too high, but a massive improvement.

The Lost Knowledge frequency is one parameter, the other is the cost of the lost knowledge (COLK). In some cases this can be huge.  Here is a very good example, where the loss of knowledge about making nuclear weapons cost £69 million to replace.   If you can look at a selection of lost knowledge episodes and calculate the cost of these to give an average cost, then multiply this average cost by the estimated Lost Knowledge Incident Frequency Rate, then you end up with a total estimated COLK.

So how does an LKI happen?

  • It can happen when somebody has knowledge, but doesn't want to pass it on or record it. This is a cultural failure.
  • It can happen when somebody has knowledge, but has no mechanism to pass it on or record it. This is a failure of the KM framework (and by Knowledge Management framework, I mean the combination of people, process, technology and governance).
  • It can happen when somebody has knowledge and has passed it on, but that knowledge cannot be found. This is also a failure of the framework.
  • It can happen when somebody needs knowledge, and has the mechanism to find it, but doesn't know that they should look. This I would suggest is also a failure of the framework, because there should be processes for knowledge seeking built into activity.
  • It can happen when somebody needs knowledge, and has the mechanism to find it, but they don't want to look for it or don't want to consider it. This is a cultural failure, often known as "not invented here".

What if somebody needs knowledge, has the mechanism to find it, looks for it, finds it, considers it, and then decides after mature consideration that it's not applicable for their situation? I would say that this is not a failure of the knowledge management system, and there must be many many cases when this is the right thing to do. The key here is the mature consideration - not just ignoring the lesson because you naively think "this time its different" is not mature consideration, its another cultural failure. 

Tracking LKIs and estimating their value will not be an easy task.  The survey approach described above is one way to do it ( a top-down analysis), while an analysis of project failures, cross-referenced to the lessons management system is another, bottom up, approach.

Both ways may give you a useful metric for the cost of lost knowledge, which should decrease over time as your KM system develops.

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