March 30, 2010

KM: Making The Business Case

It never fails that March comes around and I become a total "flogger" (flakey blogger).  In my defense, my family celebrates a birthday each week for the first three weeks of the month.  Plus, this year, my lesbian wife, Brandy, gave me the fantastic gift of a five-day trip to Chicago during which "the Braintrust" (her and Lil Magic) and I endeavored to make as many bad decisions as possible.  Although we lived up to the immortal words of Dr. Venkman ("We came, we saw, we kicked its ass!") I was both elated and disappointed to discover that I'm not as "wrong" (read: scandalous) as I think I am (and as my birth date, 3/15, suggests).  Sadly, age brings maturity and wisdom.

Somebody should do something about that.

Anywho, I've got 2 days left in the best month on the calendar (don't agree? Ask someone Irish...holla!!) and in-between matches (this weather is too perfect not to play as much tennis as possible) I figured I should make-up for my ir-writ-sponsibility.

Last month, I was stoked to have a revised version of my Guerrilla KM post published in InsideKnowledge magazine.  Seeing yourself in print for the first time is like your first kiss...too sweet!  I'm following this up with a contribution on Making the Business Case for KM but the downside of writing for a magazine is all of the editing that needs to be done. Don't get it twisted, I'm happy with the end result, but I kinda like the extraneous ramblings I include in my writing. Fortunately, I gots me a license to blog, hardy har har, so I can share with y'all the (mostly) unedited piece.

When I was a grad student in the University of Southern Maine’s most excellent College of Education and Human Development, I wrote a paper on critical technology issues of knowledge management in which I summarized an episode of the 1990's TV version of La Femme Nikita. In the episode, Section One, an ultra-covert, counter-terrorist agency, carried out a plan to “upload” to its computers the knowledge and memories of all its operatives in a gambit to create – at will – “perfect” agents with the collected knowledge of years of training and experience. I wrote, then, that despite its sci-fi appeal, this was exactly the method to managing knowledge many organizations seemed to be attempting (and most interested in aping). Nine years later, it seems to me that for far too many organizations, this is still the reigning concept of what KM is all about.

Since I’ve dedicated 2010 to evangelizing the importance of a KM value proposition, it seems only fitting that I should write about making the business case for KM.  Whether you’re engaging in an initial discussion or re-branding knowledge management efforts, the ability to define, rationalize and set expectations of KM is a critical cornerstone of a successful and sustainable KM initiative.

As usual, before climbing onto my soapbox, I looked to the literature to see what’s already been written on the subject and, frankly, I wasn’t impressed. Dale Neef’s 1997 article, “Making the Case for Knowledge Management: The Bigger Picture” seems less concerned with making the case for KM as it is with providing a list of considerations for developing a KM strategy. David Skyrme’s 2001 article, “Making the Business Case for Knowledge Management: As Simple as ABC?” offers three “planks” on which to justify knowledge management (asset value, benefits potential, and cost effectiveness) that leaves me with a bad taste in my mouth. Perhaps, because I subscribe to the belief that KM (as a discipline) requires explanation rather than justification. Save the pleading for your strategy. Lastly, Yelden & Albers 2004 article, “The Business Case for Knowledge Management” advocates delivering a comprehensive KM strategy that identifies “all the options available with the associated risks involved with each choice” since “[c]learly delineating the expected hard and soft benefits of each aspect of the initiative aid in effectively justifying its need.” Not only is this impractical, the amount of up front information this approach calls for is completely overboard. It also fails to consider the implications of proposing a strategic solution to stakeholders whose understanding of KM – which might run the gamut from none to “coo coo for Cocoa Puffs” – can completely derail a KM initiative before it’s even begun. Diligence must be tempered with appropriateness.

Clearly, my sage advice is needed on this subject.

Ultimately, the objective of a business case for KM is to provide organizational stakeholders with an awareness and understanding of knowledge management that will set the stage for a deeper exploration of how it can be approached strategically. First, build (and sell) the case for KM; Second, secure enough buy-in to undertake a proper knowledge audit; and, Third, develop (and pitch) a strategic solution.

Elements of a Business Case for KM
  • General and organization-specific definitions of knowledge management
  • Awareness of the role that KM plays in the organization
  • Awareness of how KM impacts an organization
  • Cost and benefit(s) of a strategic approach to KM
General and organization-specific definitions of knowledge management
I’m fond of defining KM as the set of strategies that improve how information is shared and leveraged in an organization, but if that doesn’t work for you, then look no further than the Wikipedia entry for knowledge management for something more comprehensive. Just remember to observe the wisdom of the KISS principle and keep it simple, stupid! Avoid tossing around know-it-all terms like tacit and explicit knowledge and generic statistics about employee retention, knowledge half-life and even competitors KM behaviors. You don’t create a connection by talking over the heads of your audience. You have to speak in their language about their organization. Will some respond to and even demand this type of information? Sure, but your task is to keep them focused on their organization. What works next door and across the street isn’t, necessarily, applicable at home and even if it might be, benchmarking the best practices of others is highly premature for organizations still defining their need for and approach to KM.

And you should say so.

Awareness of how KM impacts an organization
Fundamental KM belief #1: There is no such thing as an organization that does not practice KM, whether or not it's been formally documented or recognized as such.  When an organization says it "wants” KM what it's really saying is that whatever it's currently doing isn't working (for whatever reason and to whatever degree).

If you need to, take a minute and let that marinate.

This is the reason I espouse explaining versus justifying KM. KM is not some external activity that an organization can opt-in or out of at their leisure, it is a reality of doing business that it is embodied in all of the processes and activities that inform and influence how human and technology resources are utilized, developed, and leveraged across the organization.

Awareness of the role that KM plays in the organization
Fundamental KM belief #2: Good KM professionals should, ideally, be working themselves out of a job. While there may be an on-going need for someone to manage KM systems and routine activities (knowledge audits, data analysis and reporting, etc.) at some point, once the task of facilitating the cultural adoption of KM is complete, these activities should be able to be absorbed by other functional areas (preferably, at the executive level).

Of course, for most organizations, I don’t see this happening any time soon. Why? Because KM confuses the heck out of people!
With all of the different activities that support and enable KM – many of which are valid disciplines in their own right – it’s easy to see why. So, when making the case for KM, it’s necessary to focus on the added value that KM as a whole (not just its various enablers and activities) brings to the organization.

As a field, knowledge management is rooted in the following core values:
  • KM is strategic (mission and goals-oriented, tactical, agile)
  • KM is about sharing (collaboration, partnership, active participation)
  • KM is about community (mutuality, trust, respect)
  • KM is about innovation (growth, adaptation, change)
And, in addition to being warm and fuzzy, KM also provides a holistic lens through which policies, practices, and strategic goals and objectives are analyzed to determine how fully people, process, and technology are being engaged.  This is a critical aspect of KM that is often ignored.  Typically the KM function is engaged to assist in determining how KM systems might be used to facilitate a particular goal or objective, but rarely is KM engaged to evaluate the actual goals and objectives.  “How can KM support this initiative?” should give way to “How feasible is this initiative from a KM perspective?”

Cost and benefit(s) of a strategic approach to KM
Fundamental KM belief #3: KM is taking place – like it or not – and if you're not addressing it directly then you're missing out on a golden opportunity to shape and direct how it takes place and benefits the organization’s bottom-line.

Regardless of how you choose to make a case for KM you’re going to be asked to justify (there’s that word) its cost and demonstrate its benefit(s). If you’ve successfully established KM as an existing and on-going organizational practice then consider yourself halfway home, if not, you’ve got an uphill battle ahead of you. But, a smidgen of wisdom, a pinch of logic, and a dash of courage might be enough to pull you through.
  1. The actual cost of KM
  2. Whenever the subject of the cost of KM rears its head, it’s decidedly in reference to the purchase of some behemoth enterprise system promising a revolution in the management of information resources. In actuality, aside from the cost of the human resources required to implement a KM strategy (and, if applicable, to manage whatever technology resources are already in play) the most common cost of KM is a factor of the time involved in strategy, process, and educational development and delivery activities. (Any other costs to be considered should be outlined and presented in a comprehensive KM strategy based on the results of a formal knowledge audit. At which point cost can be considered a determining factor in the prioritization of KM activities.)
  3. The cost of doing nothing
  4. I have yet to come across an organization that doesn’t want to improve something about itself or see some inefficiency in how it operates. Find these “open flaws” and exploit them. It isn’t necessary to bombard stakeholders with a litany of corporate transgressions and misdeeds that KM will (attempt to) “fix” (that’s me being sarcastic). Instead, focus on the top three to five regularly voiced concerns and suggest how a strategic approach to KM can mitigate them then posit the cost of continued inefficiency in the face of a valid solution.
  5. Satisfaction with/usage of enterprise systems
  6. You don’t need a full-scale knowledge audit to do a word of mouth survey or 100% participation for the feedback to be valid. The goal here is to present a snapshot of how people get at and share critical information and how they regard the systems available. Focus on the people who influence the flow of money – sales, product development and support, and client-facing professionals. What are the sundry information needs of these key players and how do they describe their experiences filling these needs in the current environment?
  7. Rate of failure of new initiatives
  8. Simply put, compare the number of new initiatives that were introduced to the company in the current year (or recent years) to the number that are still standing as an indicator of change fatigue or cultural resistance to change. (Try to emphasize the initiatives that were reasonably intelligent or worthwhile; failure of the stupid ones tend to speak for themselves). And, if they’re still around, enhance your findings with qualitative “lessons learned” feedback from initiative sponsors/champions.
  9. Rate of new hire acclimation
  10. Work with HR to seek out both new hires (at varying lengths of employment) and hiring managers to obtain feedback on how quickly new hires have been able to get up and running in their roles, get at critical information, and accomplish (relatively basic) work-related and HR tasks.
  11. Resource/succession planning policies
  12. Is there a set of policies to plan for the loss of critical organizational knowledge and leadership? Have these critical organizational roles been identified? If yes, is the plan active and effective? If no, bad ju-ju.
  13. Quantity and quality of documented best practices
  14. Successful companies share and institutionalize the knowledge that makes them successful. One of the best indicators of how well an organization is (or isn’t) managing its knowledge is the quantity, quality, and ease of access to internal (and industry) case studies, best practices, and lessons learned type documents.
In his 2005 Projectified blog post, “KM and PM: The Redheaded Step Children of all Organizations?,” Brian Kennemer insightfully writes, “PM [project management] and KM ‘systems’ are about people being comfortable with changing the way they do things.” The best approach to making a case for KM lies in making people aware of and comfortable with KM; helping them to understand the way(s) in which they are currently engaging in KM activity and illustrating the types of adjustments that can be made to shape their behaviors for a targeted result.

Sound like a tall order? In my experience, not so much.


Simon Goh said...

Hi Christian,

thanks for your post, I like the idea of working us out of job - how I long for that day to happen! It will be a good retirement wish.

Central to the success of a KM initiative is the adoption and engagement level of KM stakeholders. You've correctly mentioned that KM should be strategic, which means participation by relevant people to bring on the intended impact and outcome of the initiative. For this, I've written an article on adoption and engagement.

Mario said...

Hey, Christian. The case for KM is spot on and is reflected similarly in many other writings over the years. The main challenge in my few years of working the military organizations is that they get it, but they want it right-the-heck-now!
I have encountered this phrase a lot in the last two years: "if it's going to take years, it can't be our top priority." The mentality across DoD is that they are trying to move at the 'speed of war', and in so doing they will latch on to EVERYTHING that they believe will give them the quick wins. Sure I can deliver the quick wins, but the loftier stuff takes time and dedication on their part, not just the KM and IT staff.
I have seen this in local private sector companies, too. They want the elephant eaten, but they don't want to take the time needed to eat it. They just want to nibble at it when it suits them.
Now I'm hungry! Pass those frijoles negros!