KM Pays Dividends

One of the recurring themes on knowledge management site is return on investment, in other words how do I know that investing money in managing knowledge will pay dividends?

It’s correct that before investing in knowledge management you should consider the return on that investment. Creating a business case for any new business venture is a prudent exercise and one that helps to ensure that the scarce resources of the organisation are used wisely. There are many books published and courses run on how to create a business case, indeed there is now a thriving business in writing business cases.

In case you aren’t aware of it, sites such as elance allow people from around the world to ‘bid’ to undertake creating your business plan. For example, when I looked earlier today when I was thinking about what to write in this blog, I noticed that someone had posted an invitation to tender to write a business plan in connection with a restaurant. When I looked they had received twelve bids from around the globe to do this. We certainly live in a global economy.

So however you decide to do it, identifying the value that you expect the investment to generate is a good idea. If you don’t know what you want, you possibly won’t know when you get it!

In identifying the return that you expect you don’t need to be too specific. The early work we did in BP involved a simple matrix that mapped ‘degree of difficulty’ verses ‘anticipated financial benefit delivered’. I still like this method because it takes into account how difficult it might be to deliver something. Especially when you are getting started you might want to settle for a smaller return but one that is almost certain to be delivered verses a very large return which might not be delivered. It’s about managing risk. Having a number of smaller items that are easy to deliver balanced by a longer term, more difficult to deliver item is a good strategy.

When I was reviewing the 2009 Global MAKE Finalists I couldn’t but help but feel that anyone who questioned the value of managing knowledge should read this list. The list reads like a global who’s who of successful and well known organisations. Perhaps they have discovered the secret to being successful in business? Perhaps their inclusion on the 2009 Global MAKE Finalist list isn’t a coincidence?

Being successful in business didn’t just happen for these companies, it took leadership and a vision of what might be possible. Knowledge management thrives in an organisation where leadership provide the environment that allows individual time to think, to reflect and to learn from others. Unless that environment is in place you may put a lot of effort into introducing knowledge management to the organisation and be disappointed by the results. If you want to test to what the environment in your organisation is like, why not request your copy of the Knoco KM risk evaluation template which will assist you to calculate the risk to successful delivery of your KM implementation. Being informed allows you to design a productive way forward. I look forward to seeing your company appear in future editions of the Global MAKE Finalists.