Monday, 5 December 2022

Why it's important to communicate the value of knowledge

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

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 delivering that value through better KM. 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.  Sometimes people estimate the value of KM by assuming how much time will be saved if people can find knowledge better, but this underestimates the value by a couple of orders of magnitude and therefore does not make the case for the sort of budget you need. Better to focus on the value of finding better knowledge, than on finding kn9owledge better.

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.
  • Can you estimate the current cost of lost knowledge?
  • What risks and costs would you face if critical knowledge were lost?
  • Can you look at performance across the organisation, and estimate the value of bringing all performance up to the standard of the best?
  • Can you calculate what it would be worth to accelerate your learning rates in new areas of business?
  • What are you spending on rework and duplicate work, dues to a lack of KM?
  • Look at some of our value stories. Do they provide analogues for you?
  • Can you use our Bird Island exercise to help people feel the value?

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 their money and support!

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