Knowledge Management Maturity

Regardless of how great its knowledge management, every organization should take time to see if it enables the flow of knowledge across people and systems and identify opportunities for its improvement.

Most organizations go through some evaluation when they first initiate their KM programs. However, it is equally important to revisit that self-evaluation at key intervals, such as when participation in KM tools and approaches lags or when leaders want to capitalize on the success of an effective, but limited, KM implementation by expanding it organization-wide.

This post is about knowledge management strategy as well as governance, processes, technology, and change management associated with successful and sustainable knowledge management implementation. In following posts, we will share details about the governance structures, processes, technologies, change management enablers and measurement approaches associated with successful and sustainable KM implementations.


Focus on Value Creation

Start with a focus on value creation. When it comes to building KM capabilities within your organization, it’s important to focus on the organization's goals from the very beginning. According to analysis of the assessment data, organizations that acknowledge value creation as a major objective of KM have a significant advantage in setting clear goals and objectives for their KM efforts.

Specifically, those organizations are nearly four times more likely to document their KM strategies and road-maps than similar organizations which are not focused on value creation and they are 15 times more likely to articulate formal business cases that lay out the expected benefits and impact of applying KM to business opportunities.

Organizations which start by understanding the relationship between the flow of knowledge and desired business outcomes and then work to design KM tools and approaches that will aid those outcomes are successful in their KM efforts.

Any KM initiative worth pursuing must generate business value in the form of increased revenue, faster cycle times, cost savings, enhanced quality or other tangible benefits. When value creation is acknowledged as the underlying goal of KM, the initiative is starting on the right foot.

By contrast, if an organization has not made the connection between KM and value creation is prone to start throwing tools and techniques at employees without thinking through how they will be used or what broader purpose they will serve. And that kind of KM program tends to fade out over time as users fail to perceive why they are being asked to share their knowledge or how the new tools will help them in their day-to-day work.

Define your strategy and road-map

Once your organization recognizes the relationship between KM and business value, the next step is to cement that relationship by building it into a formal KM strategy and road-map. Writing down exactly where your KM program is headed and how you intend to get there is very important.

A solid strategy will accelerate knowledge management maturity by providing focus, alignment, and credibility throughout your KM journey. It will also guide conversations with the business stakeholders whose support and buy-in you need to win along the way.

Alignment between KM and enterprise strategy is important for many reasons, but most importantly because it helps you justify the ongoing time, energy, and money required to support and participate in KM tools and approaches. If senior leaders understand the link between KM and the big-picture business concerns that keep them up at night, securing support becomes much easier, even during downturns and business disruptions when funding for “nice to have” programs dries up.

Documenting a KM strategy and road-map is linked with an even more meaningful outcome: the ability to leverage knowledge assets for competitive advantage. Almost every modern organization wants to compete on knowledge: to put its collective know-how to work to get to market faster, deliver superior products and services and earn customer loyalty.

KM exhibits its benefits behind the scenes, and customers reap the rewards without distinguishing the role played by better, faster access to institutional knowledge. But regardless of whether customers see your superior KM processes or they just know they’re getting something better from you than from your rivals, the ability to leverage knowledge for competitive advantage is a goal worth striving for.

Estimate impact

The most powerful accelerator of KM maturity related to strategy development involves analyzing the financial and other benefits your organization can expect from implementing the proposed KM tools and approaches.

Although that may entail estimating a hard-dollar return on initial KM investments, it does not have to. But regardless of the nature of the benefits on which an organization focuses, your KM team must get specific about the projected impact (on productivity, quality, safety or other key performance indicators) and articulate a set of measures that can be tracked to compare reality against the forecast.

Those organizations that follow this strategy, get it back in the form of reliable funding, leadership and business unit support, program resilience and return on investment.

Financial analysis and documentation of benefits would greatly help the allocation of a KM budget. Even more impressively, organizations that document KM benefits are over five times more likely to procure flexible KM budgets that expand in response to increased demand for knowledge assets and competencies. This relationship is logical because leaders tend to be forthcoming with additional capital as needed if they feel confident that their funds will yield tangible results.

A clearly articulated business case and projection of value are also instrumental in engaging and retaining business unit support. There is no more crucial enabler of KM sustainability than solid business unit backing. Your KM core team can only accomplish so much on its own, and without the business dedicating resources and assigning people to support KM processes and approaches, KM’s scope is destined to remain limited.

Solid business unit support goes hand in hand with opportunities to expand and enhance the KM program, so it is not surprising that financial analysis and documentation of benefits are statistically linked to outcomes.

For example, KM groups that perform the analysis are more likely to enhance KM capabilities across business units or disciplines and to expand focus from initial areas to other areas of the business. They are also more likely to be able to develop a formal business case for expanding KM to new domains based on predicted gains and impact to the organization.

The most compelling reason to perform financial analysis and documentation of benefits is its strong link to return on investment (ROI). Although many KM programs achieve success without measuring ROI, those that rely purely on anecdotal evidence and success stories to justify KM investments may find themselves on shaky ground if the business environment changes or a more skeptical CEO arrives. Some clear measure of business impact, whether ROI or another outcome in keeping with the goals laid out in the KM strategy and road-map is required to ensure sustainable KM development over the long term.

Conducting financial analysis and documentation of benefits during KM strategy development is highly correlated with an ability to show that type of tangible result. KM programs reap what they sow, and those that establish clear milestones and measures of success upfront are much better positioned to substantiate claims of value down the road.

Stay tuned for further posts on knowledge management.

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