We are often asked how Knowledge Management can be measured, and indeed whether it can be measured at all. Certainly we have met many people who believe that metrics cannot be applied to an intangible topic such as KM. However we believe that what cannot be measured, cannot be managed, and over the years we have seen some very successful metrics applied to KM.
Metrication principles. Before introducing any metrics system, get clear on the question you want the metrics to answer. Metrics can help answer several questions, such as the four below
In addition, be clear about who needs the metrics, and what decisions they will make based on the metrics. Most metrics will require a baseline to measure against. Without this, measuring KM is hard.
Measuring KM implementation. The first thing you will probably want to measure, is how well you are managing to implement KM When you run your assessment at the start of KM implementation, you will develop some baseline metrics which you can measure improvement against. Our KM assessment protocol measures several aspects of knowledge flow within an organisation, and allows you to identify blockers and obstacles to knowledge flow. Re-running the assessment later allows you to measure progress.
Measuring KM value. Why do you need to measure value? You need in the early stages of implementation to demonstrate enough value add that you can gain full support from senior management. They will need to make some investment decisions in order to support you, and they want to be sure their investment will be worthwhile. So how do you measure the value? Simply you take an area of the business that is struggling through lack of knowledge, you take a baseline metric, you introduce KM through a pilot project, and you measure how much the benchmark changes. Sounds simple, eh? And if you choose your pilot project well enough, it IS simple. It is possible, though more tricky, to continue to measure value during KM operations. Ford did it, Shell do it to an extent, and Conoco Phillips do it as well. The secret here is to find a way to put a monetary value on learning interactions.
Measuring KM compliance. Lets assume you have introduced a knowledge management framework to the organization, with some clear accountabilities and clear expectations in the form of KM policies and standards. You may want to measure whether people are complying with these expectations, by using a dashboard to track whether projects in an organisation are doing what they should be doing. Similar dashboards may be needed in other parts of the company.
Measuring KM activity. It's also useful to introduce some activity-based metrics to track different components of your KM system. A list of possible metrics is shown below.
Measuring business outcome. We strongly believe that knowledge management drives continual performance improvement. As knowledge improves, so should your results. Therefore the more you deploy and apply KM, the more the business performance should improve. This is not to say that all of the improvement is a direct result of KM, but if you are doing KM and business results are not improving, something is going wrong somewhere, and you need to find out why.