Five Tips for Effective KM Measurement Systems

I have below five tips for creating and sustaining successful KM measurement programs.

Tip No. 1: Start with a measurement paradigm that drives KM linkage to business needs.

Far too many KM measurement attempts focus exclusively on activity metrics such as number of communities of practice, number of documents downloaded, and number of people who participate. While these are critical indicators of the health and adoption of knowledge-sharing practices, they are not an end in themselves.

Starting with the value chain along the top, a KM measurement system should incorporate business outcomes as the focal point for the KM strategy and a way to measure its effectiveness.

Once an organization defines the business objectives for KM, the knowledge flow processes--such as communities--need to be established and their activity levels tracked. The goal is to tie trends in activity measures to business outcomes.

Clear business outcomes provide the ROI to justify investment in the KM approaches as well as the necessary people and technology enablers and infrastructure that any successful initiative requires.

Tip No. 2: Select measures that are appropriate to your organization's particular KM approach, its objectives, and its stage of development.

In the early stages of deployment, any KM strategy needs measures of alignment with business strategy, acceptance, and behavior change, as well as a method to predict desired business outcomes and begin tracking them. However, the way in which an organization measures the particular costs and impacts of its KM program depends on the KM approach(es) adopted.

For example, a KM initiative focused on improving sales force effectiveness would track the reuse of effective proposals (activity) and sales (outcome), but such measures would probably be irrelevant to a KM initiative centered around building new knowledge in an engineering discipline. Likewise, an enterprise whose goal is to implement communities of practice would measure success differently than wound an organization that wants to install a content management system.

Tip No. 3: Understand the linkage between inputs, process changes, and desired outcomes.

A value path model which shows the relationships among inputs (investments), processes (KM-related activities and behaviors), and outcomes (organization objectives) is recommended. Depending on the particular KM activities being performed, examples of inputs might include time, salaries, and IT costs. Process changes might include cycle time, participation, and contribution to a body of knowledge. Examples of outcomes important to the organization might include employee and customer retention, reduced costs per transaction, or increased revenue.

Tip No. 4: Create a measurement system that actually works.
Many organizations have lists of measures, but lack the necessary processes and accountability for collecting, organizing, reporting, and using the measures to improve their KM programs and drive funding and investment. In addition, a measurement system that captures intangible benefits such as social cohesion, job satisfaction, and time-to-competency will provide a broader perspective of successful KM efforts.

Tip No. 5: In addition to metrics, provide compelling examples of success.
At every stage of KM deployment, organizations need examples of success that can help justify past and future investments and provide management with a vision of what is possible. Collect success stories that illustrate the value path from inputs to outcomes.

The Bottom Line
KM measurement is like a beautiful automobile. Although measurement has inherent esthetic and social value, its utilization value comes when it propels one from point A to point B--from ignorance to understanding or informed action. A measurement system that links KM activities to business impact provides a rationale for investment beyond the esthetics and intangibles that KM brings to an organization.