January 31, 2006, 12:54 PM — An organization that implements an effective knowledge management (KM) program should see a substantial payoff: Reducing duplicated work increases productivity; leveraging past experience improves quality; and tracking customer behaviors enhances customer service.
In practice, this has not always happened. Many companies have invested millions, even billions, of dollars on KM technology and received little in return. Why?
After researching and reviewing numerous KM initiatives, comparing those that succeeded with those that failed, the answer becomes clear: KM isn't simply about technology. It's about people.
Consider this real-world example of a global financial services company that invested a sizable dollar amount in a system for capturing, organizing, and retrieving project methodology information. It seemed like a good idea -- high-powered software that promised to improve staff efficiency. The system was expensive, however, and hard to learn. The implementation did not include a pilot to test user adoption, and many of the key personnel never used the software. It was, in short, a waste of money. "Cool" technology was implemented, rather than something that met business needs.
All too often, KM initiatives that are driven by technology fail. In many cases, KM is the brainchild of an IT person who envisions a grand repository of all the company's information in the form of a database with a search engine that can find all documents matching a certain keyword. Again, it sounds like a great idea. But does it meet the company's business needs and, in particular, does it take the organization's people into account?
Knowledge management is not only about information; it is also about the people you have recruited, trained, developed, and promoted within your organization. KM involves not only the implementation of a software system; it involves understanding your business needs, your organization's culture, and your personnel. To succeed, any KM initiative requires that you know your people and clearly define the behaviors that need to be changed or reinforced.
Following are five steps that are crucial to the success of a KM initiative:
1. Understand key business drivers. To be worth the investment, a KM initiative must improve the bottom line by either increasing revenue or reducing cost. You need to develop a business case for the initiative based on metrics that can be measured on an ongoing basis to demonstrate the value added.
Some will argue that KM is too subjective -- it's too hard, at the outset, to define the metrics for determining value added. It's an argument worth refuting. If the value of the initiative can't be defined before it is implemented, what chance is there that it will be adopted by your organization's people and deliver value once it has started?