Five steps to a successful knowledge management initiative

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?

2. Get executive sponsorship. One of the goals of a KM initiative is that employees will collaborate with each other more willingly and effectively, sharing their knowledge and skills. This can amount to a momentous change of organizational culture, and it is never easy. Strong executive sponsorship can be the difference between success and failure.

The ideal sponsor is not necessarily a person in the IT organization. In fact, the best sponsor for a KM initiative is the person responsible for the key business driver. For example, if the goal is to reduce product development time by improving collaboration and reusing knowledge, the executive responsible for product development should be the sponsor. IT people will be important in enabling the initiative, but they do not need to take the lead.

3. Analyze knowledge. A common pitfall with KM is to attempt to collect and distribute all knowledge in the organization. The cost of collecting and categorizing the enormous amount of data is likely to be excessive. If it is not done effectively -- a difficult, painstaking task -- it will be impossible to identify useful information and employees will not use the database.

There is no reason to collect all of an organization's knowledge. What is important is to identify the knowledge that affects the business drivers, and collect only that.

Think in terms of targeting your KM initiative, which will enable you to design the underlying processes and tools effectively. Certain types of knowledge, such as project status updates, need to be shared within a project team in real time. Other types of knowledge, such as the best practices learned from an implementation, need to be shared across an organization in an asynchronous fashion. A careful analysis of your organization's knowledge is crucial.

4. Provide rewards and recognition. Many organizational cultures do not reward the sharing of knowledge. In fact, they do quite the opposite. Some individuals perceive that it is in their interest to hoard knowledge because then they come to be recognized as experts and indispensable resources. To make KM successful, such behavior must be changed. New incentives need to be put in place. If an organization uses a balanced scorecard approach, for example, one part of employees' scores might be how well they contribute their knowledge and how valuable others find their contributions to be.

Incentives do not need to be in the form of direct financial compensation: Visible recognition across an organization as an expert who contributes his or her knowledge may be incentive enough.

5. Implement in phases. No matter which technology solution you select, the key is in the implementation -- particularly in getting people to use it. Rushing an organization headlong into radical changes is not the way to succeed. Breaking the initiative down into manageable phases is.

Phased implementation also has another benefit: It makes it possible to measure user adoption and identify best practices for your organization. Each phase should yield important lessons which can then be leveraged in the next phase.

The benefits of knowledge management can be tremendous, but getting the most from a KM initiative is no easy proposition. However, if the people issues are effectively managed, your organization's chances of success are high. It's high time to put people back into KM!

The ideas expressed in this article are solely those of the author and do not necessarily reflect the opinions of ITworld.com.