Having completed the knowledge services audit and now well on the way to a first version of the knowledge service strategic framework – the organization’s knowl-edge strategy – the knowlknowl-edge strategist and the knowlknowl-edge services team now turn to developing a knowledge services measurement strategy. The objective now is to ensure that the value of knowledge in the organization’s operational and functional structure is quantified and, as a result, recognized. With the knowledge services audit now providing findings and recommendations for the organizational knowl-edge strategy, the knowlknowl-edge services team will devise a measures and metrics plan in order to convey clearly the concept of the value of organizational knowledge – its intellectual capital – in the achievement of the organizational mission to the
at-large organizational community. It is an activity generally referred to as value creation, and its development is not open to question for employees working in or otherwise affiliated with the organization’s knowledge domain. Knowledge is an essential and critical organizational asset and the knowledge development, knowledge sharing, and knowledge utilization process is a legitimate functional operation in the organization. Yet because KD/KS/KU is ubiquitous in the pursuit of organizational success (whether acknowledged or not), the value of the process must be given specific attention as enterprise leadership begins to embrace the concept of the knowledge culture. Providing the means for that attention would seem to be a fairly straightforward process, but there often seems to be a somewhat negative attitude about how knowledge services – as an operational function – is valued. When asked to express his views on the subject, one colleague noted with sadness that it had been his experience that “when the accountants are looking for cost savings these departments are at the top of the list.”
Is there a solution to this problem, a way to change this attitude on the part of those with authority in the organization, when this idea represents the way they think about knowledge services? For some it would be the solution, as this manager puts it, to “find a ‘magic bullet’ – to come up with an explanation that could demon-strate in accountant friendly terms just what value knowledge demon-strategists bring to the organization.” Other knowledge strategists have their own techniques and approaches, but like other managers in the organization, they are often surprised at how little financial value is put on the services they and their colleagues provide.
According to another knowledge strategist, there does seem to be one approach that can provide a slightly different perspective to this situation. This person writes, “The biggest challenge that I see here (and elsewhere) is that we are being asked to do more with less. The smart organizations (and I would like to think that there is still an abundance of those!) will not do away with KD/KS/KU – they can’t do that and stay in business – but they might ask knowledge strategists to manage with smaller staff and increased responsibilities.” In the situation he is describing, the knowledge strategist has responsibility for the organization’s research operations, organizational archives, the organization’s legacy content digitization project, and, since the organization includes a wide membership base, an information resource and clearinghouse for scholars and academics in the field in which the organization specializes. For this knowledge strategist,
“The solutions to the challenge will be (and are currently) multi-level: we re-think our priorities and we question whether all of yesterday’s services/tasks, etc., are relevant and necessary today. When required, job descriptions are modified and if the tasks are more than can be accommodated in the hours in the day, we look to what can be outsourced. These are the challenges relating to service delivery and staff capacities that we must confront, and on a daily basis.”
For knowledge strategists, the value of services offered must be matched against the organization’s success in accomplishing its strategic mission. This means, in the words of one colleague, moving “away from” defending the knowl-edge services unit as a place or function (“as we find ourselves doing too often”) and “concentrating on the professional skills and values our knowledge workers and strategic knowledge professionals bring to the organization.”
Another solution to the “value” challenge urges knowledge strategists to think of themselves as businessmen and businesswomen: “Metrics, metrics, metrics,”
another colleague pointed out in a meeting. “Measure, measure, measure. And deliver measurement results in business terms. Management has only one ques-tion it wants answered: Do the services provided by knowledge services save the organization money? Or, put another way, does the knowledge services unit bring in revenue? It’s that simple. From the organizational management perspective, it’s all about metrics and ROI. In our field we tend to roll our eyes when we hear about ROI but this is what management wants. It is very important to capture metrics, and they must be specific, actionable metrics.”
Hearing these comments, the knowledge strategist finds himself or herself in an almost-ideal position to apply business principles and concepts to the development of the knowledge services strategic framework for the organization. In fact, using the word “ideal” intentionally, my strongest recommendation to the knowledge strategist and the knowledge workers and strategic knowledge professionals working with the strategist in the knowledge services unit would be to recommend that they become familiar with the Knowledge Value Chain®. Created by Timothy W. Powell, now Pres-ident and CEO of The Knowledge Agency® and, well-known for his pioneering work in KVC studies, Powell writes about and defines the knowledge value chain for us:
The KVC framework is easy to understand and apply because it builds on a simple insight:
in a complex organization the people who produce information (producers) are fundamen-tally different from the people who use it to create results and value (users). This creates a knowledge-value gap between producers and users that is often vast – some call it a “gulf” – and includes many professional and cultural barriers.
In short, information people don’t typically understand the language of business, and business people don’t typically understand the language of information. The connection between the two halves – the knowledge value chain – is broken.
The net result is that information resources and the people who manage them fail to have the impact they could have, and fail to optimize their return on investment. Instead of being part of the organizational solution, information becomes part of the problem as people scurry to absorb and make sense of it.
Understanding the knowledge value chain from both producer and use perspectives is a first step toward bridging this fundamental barrier. (Powell, 2014)
With this concept, the knowledge services team has the opportunity literally to make that transition described earlier. In doing so we re-state the terms in Pow-ell’s quotation by referring to information people (the producers, those who produce information) to the “producers” in knowledge services work, those employed in the KD/KS/KU process, our knowledge workers, strategic knowledge professionals, and of course referring to the knowledge strategist, the leader or knowledge executive.
Likewise, Powell’s description of “business people” and the difficulties of business people (the users) to speak the language of information can help us bring the knowledge value chain construct smoothly into the knowledge domain and refer to the knowledge development, knowledge sharing, and knowledge utilization that takes place in the organization. And, of particular note in both iterations of the knowledge value chain, whether speaking of a company in the business world or of any other type of organization, the producers (whether of information or of knowledge) must seek to close the knowledge-value gap not only between the producers and the users but between the producers and a more specific group, those enterprise leaders with decision-making authority.
These people must be made to understand that their agreement and commit-ment is required, to ensure not only that the gap is closed but that they will support knowledge services so that the gap stays closed. Again from Powell (and St. Clair is in total agreement): “When we speak of knowledge manage-ment and knowledge services, if we are going to be successful, we are required to be speaking at the board level, at the senior management level of the organization.”
When knowledge strategy-focused activities are initiated and when benefits accrue, the knowledge strategist has attained a place in the organizational culture (not just the organization as a knowledge culture) that many knowledge workers aspire to but few achieve: adding value because of the identified and recognized output of the excellence of the KD/KS/KU process. Getting to that KD/KS/KU excel-lence is a goal Powell recognizes. Working with companies as they pursue knowl-edge value or seek to close the knowlknowl-edge-value gap, Powell has frequent opportu-nities to observe what works and what doesn’t, and his focus on KVC® is essential background for helping the knowledge strategist and the knowledge services team relate to how companies and organizations work with knowledge value.
Developing a knowledge services measurement strategy. As with any manage-ment function, expectations play a key role in the measuremanage-ment of knowledge ser-vices. Not only must metrics be developed and used in order to keep organizational management informed about the financial performance of knowledge services, all workers affiliated with the organization’s knowledge domain – knowledge
workers, strategic knowledge professionals, and (particularly) the knowledge strategist – must develop and use measurement tools for very basic management tasks: to continually examine and analyze operations, to differentiate the knowl-edge services function in its larger organizational service sphere, and to reduce costs and improve productivity. Metrics tell us, with respect to our work, where we’ve been, where we are now, and provide us with the basic information we require to determine the direction we’re going. Given the critical role of measures in the management of the knowledge domain and especially as the emphasis turns to both the knowledge services audit and how the findings of the audit are used in support of the business case for knowledge services, attention to measures is not an option. It is part of what the knowledge strategist and the knowledge services team do.
The first step in establishing the value of knowledge services is to state the objective and purpose of the measurement effort, and that is not a difficult activ-ity to undertake. The organization’s knowledge strategist and the team staffing the knowledge services unit understand the importance of measures. Their goal is direct: to develop a measurement strategy that will identify and codify the central value proposition for knowledge services within the larger enterprise in alignment with the vision, mission, and values of the organization. This strategy will link to the findings and recommendations of the knowledge services audit and the implementation and planning directions of the organization’s knowledge services, its knowledge services strategic framework.
In taking on this task, the knowledge services team expects to determine organizational standards and expectations, thus enabling themselves to evaluate current operations and service delivery and to establish a baseline for managing and delivering knowledge services (and eventually, of course, for going beyond the baseline to establish standards of excellence for the management and deliv-ery of knowledge services in the larger enterprise).
Once the purpose of the exercise has been established, the focus can move to the “how-to,” to identify further steps that will enable the development of a measurement strategy for knowledge services. A typical situation is one in which team members looking at the measurement strategy discuss the process; “What do we do first?” is the usual opening question in their initial discussion. If some in the group have experience with metrics, an early step often involves identify-ing metrics tools and seekidentify-ing to fit the recognized tools (or those with which some staff members have experience) into the present strategy planning.
There is more, though, to building a measurement strategy for knowledge ser-vices than simply identifying metrics tools; looking at the tools first is somewhat akin to putting the cart before the horse. To be safe, every metrics development
activity should proceed by thinking about the two questions which always must to be asked:
1. Who will be receiving the information (and making decisions based on these metrics)?
The success of the measurement effort depends on understanding the audience for whom the metrics are developed and to whom they will be deliv-ered. Most of these people are not necessarily focused on the role of knowl-edge in the organization, except as a support mechanism. It is not patroniz-ing them to note that for these people, metrics must be presented in language that makes sense to them as non-specialists (that is, in terms of knowledge services). For most situations, a well-used technique presents measurement results in terminology that is understandable and relevant to others in the organization, recognizing that information management, knowledge man-agement, and strategic learning are but part of their daily work life, not their workplace focus. Some information and knowledge professionals get around this impediment by applying the “so what?” question to each metric pre-sented (either literally or rhetorically), thus giving those who see the metrics a description that resonates with his or her own experience and expertise.
2. What do those people want (need) to know?
So we clearly understand that any knowledge services measures must relate to business outcomes and to how the business will be favorably impacted or affected by the elements measured. Another key issue, particu-larly when developing metrics for knowledge services, is to think about how the metrics will be used. Thus the knowledge strategist and the knowledge services unit’s staff are required to use care in not only deciding what to measure, but what measures to use. This can be a cumbersome and sometimes off-putting prospect, but the solution is easy to come by, and it has two parts.
First, the knowledge strategist and his or her staff simply look around the organization and identify other functional units that are required to measure service delivery. Metrics development (and certainly the development of a metrics framework) does not take place in a vacuum, and since in managing and delivering knowledge services the knowledge strategist expects to take an enterprise-wide perspective anyway, it is a wise choice to look to others in the organization for conversation and advice, to learn about their previous experience, and to seek direction in planning a measurement activity.
In addition to looking at how other departments and functional units measure performance, a second important step is to address the topic with senior man-agement. Whenever possible, selected enterprise leaders should be engaged, cer-tainly in discussion, and occasionally (when there is an expression of interest),
even in participation in the planning. Obviously such participation is usually at a strategic and not tactical level but that distinction is not really important. As is often desired with any organizational functional unit, the attention of senior management to the workings of the unit can lead to a better understanding of the role of the unit in the larger organizational picture and, when appropriate, lead to the development of a sponsorship relationship. While such a relationship is not necessarily required for the successful development of a measurement framework for knowledge services, when such engagement takes place with a management leader, the metrics effort is starting off on a sound footing. The classic sponsorship role is to say or speak about, model, and reward whatever effort is being under-taken, and if a member or group of members of the senior management team signs on to champion the development of metrics for knowledge services and becomes involved in the effort, the entire process moves forward more smoothly (and not unexpectedly the larger enterprise realizes even higher-level benefits).
As for the specifics of the effort, as described above it makes sense to look beyond the immediate discipline and identify tools and techniques from other service delivery functions related to the work done with knowledge services. An obvious relationship already exists with the organization’s technology manage-ment unit (and especially since information managemanage-ment is one of the three ele-ments of knowledge services), and a recent list of “essential” metrics for technol-ogy management can be transcribed for use with the knowledge services unit. In a white paper from Forrester Research, Craig Symons and his colleagues note that
“the key to success is choosing a small number of metrics that are relevant to the business and have the most impact on business outcomes” (Symons et al., 2008, emphasis added).
Transitioning the Forrester recommendations into the knowledge services framework, with its emphasis on sustained knowledge development, knowledge sharing, and knowledge utilization (KD/KS/KU), criteria for determining the relevance and impact of knowledge services and the knowledge services oper-ational function can be established. A first metric demonstrates the alignment of the organization’s investment in knowledge services to its business strategy.
How have organizational goals been described? Does the company’s mission statement provide a thematic approach to achieving success? Probably not, and if that is the case, where does the knowledge strategist locate, say, the primary 3–5 organizational drivers for the next two or three budget periods? These must be identified before a measurement strategy can be developed, but once identified, the relationship between the services, products, and consultations offered by the knowledge services unit and the company’s focus can be linked. Metrics can then be developed, for demonstrating how well the knowledge services function does (or does not) support that linkage.
Another of these identified essential metrics seeks to measure the business value of knowledge services investments, and as described in the discussion of return-on-investment (ROI) below, the relationship of knowledge services to the larger enterprise purpose, as identified through an analysis of projects through-out the organization affected by the presence of the knowledge services unit, enables the knowledge strategist to establish value. By looking at the maximum expected return on the organizational investment in projects and linking these to such measurable knowledge services elements as efficiency, the quality of service delivery, and the development of strategic partnerships throughout the organization, the knowledge services contribution to the success of the projects is established. An important caveat with respect to determining the business value of knowledge services naturally demands a recognition that the subject is not only knowledge services and that the knowledge services unit does not operate as a stand-alone office or business unit. The viability of knowledge services solutions depends on the level of integration of knowledge services throughout the organ-ization, together with an understanding – despite the enterprise-wide focus – that no one solution applies for all situations in the larger organization, and that
Another of these identified essential metrics seeks to measure the business value of knowledge services investments, and as described in the discussion of return-on-investment (ROI) below, the relationship of knowledge services to the larger enterprise purpose, as identified through an analysis of projects through-out the organization affected by the presence of the knowledge services unit, enables the knowledge strategist to establish value. By looking at the maximum expected return on the organizational investment in projects and linking these to such measurable knowledge services elements as efficiency, the quality of service delivery, and the development of strategic partnerships throughout the organization, the knowledge services contribution to the success of the projects is established. An important caveat with respect to determining the business value of knowledge services naturally demands a recognition that the subject is not only knowledge services and that the knowledge services unit does not operate as a stand-alone office or business unit. The viability of knowledge services solutions depends on the level of integration of knowledge services throughout the organ-ization, together with an understanding – despite the enterprise-wide focus – that no one solution applies for all situations in the larger organization, and that