Knowledge to Value (K2V)

I was recently asked to keynote a conference on Turning Knowledge Into Value, funded by the European Union. That’s something I care deeply about, and I am greatly honored to have been asked. I have been head-down on that, and will share with you at least a top-line on what I’ve come up with.Tim in Turkey

I was at first planning to pull a few slides out of my Knowledge Value Chain® Handbook, and call it a day. But then the organizers doubled my speaking time, and at the same time I realized I wanted to give them more than that.

Knowledge is the engine of value

The KVC model can be the starting point for examining various issues. I decided to use the KVC core principles as a jumping-off platform, but to then get more granular on how you actually go about building an “engine of value” on a foundation of knowledge — step by step.

My experiences on the faculty of Columbia University’s Information and Knowledge Strategy program were helpful, as were comments from other faculty members there. But I also began to weave in themes from my stints in new product development at KPMG and PwC, as well as from the development of The Knowledge Agency. During those efforts, I’ve learned empirically — by trying things, by making mistakes, and by eventually finding out what works best.

Knowledge as a Service

In my experience, all knowledge is tacit. Knowledge is irreducibly human — it all resides in our heads. Before it can be socialized or shared, it must be made explicit — which we do though language and other forms of mediated symbolic expression.

In KVC terms, the way to get your knowledge into your client’s head is to first convert it into “information”. Then you can “communicate” it to the client, who can then convert it into his own tacit knowledge — and then make decisions and execute value-generating actions based upon it.

But “Knowledge as a Service” — as I refer to nearly-pure knowledge disciplines like law, finance, and management consulting — is only one avenue for knowledge to be manifested in a value-generating form.

Knowledge as a Product

Ford Motor Company (perennially my favorite random example) manages a lot of knowledge about automative technology, assembly-line manufacturing, materials science, sales and marketing, and many other topics. But they do not, for the most part, make money by selling their knowledge directly, in the form of lectures, books, or advisory services (as a consultant would).  Ford Motor Company sells their knowledge in the form of cars and trucks. Ford’s knowledge is infused and embedded into products that are ready to be sold and ready to fulfill user needs.

In a nugget, what I recommend is turning knowledge into a product. But not just any product — it has to be a product for which there is a user need, and that by its use creates user value. (I user the term “product” to mean either a physical product or a service, and the term “user” to mean a client or customer of that product.)

K2V

I’m keen on process — at best, it tells you where you are, where you need to go, and what you need to get there. So I’ve outlined a simple process — Knowledge to Value, or K2V — that in my experience takes you “from here to there” in terms of knowledge-based products.

It looks like this:

K2V Overview

K2V has two phases, Discovery and Development. (I borrowed that elegant formulation from my pharmaceutical clients.) And each phase has two aspects, one internal and one external to the organization. The former we call Enterprise, the latter Ecosystem.

Enterprise and Ecosystem are analogous to strategic philosopher Sun Tzu’s Self and Other. But where Sun’s “Other” is often translated as an enemy (rival or competitor), that to us sounds too narrow in terms of what organizations face.  We use Other in a more “Druckerian” sense, to mean the whole competitive universe — including competitors, of course, but also including clients and “market forces” in general.

Discovery

Knowledge Discovery (enterprise) is where you figure out what knowledge you possess, or have ready access to, that may be market-worthy. Market Discovery (ecosystem) is where you determine where that market is, how big it is, how fast it’s growing, whether it’s profitable, and so on.

Those two sub-phases should be managed in parallel, with the results feeding back and forth, such that variations can be tested iteratively.

Development

Client Development Ladder

Then Product Development (enterprise again) gets us ready to go to market, including pricing structure, price points, competitive positioning, and other supporting attributes.

Finally, Client Development (ecosystem again) gets our product into the hands of live, paying clients. The “Client Development Ladder” (shown at right) moves us from the levels of Awareness and Attention, into the revenue-generating levels of Engagement (one-time transaction) and Relationship (serial transactions).

With this, we have completed our fourth and final step in converting our Knowledge into Value.  It’s really as simple as that!

So that’s what’s been on my mind. Happy Spring!

And if you happen to be in Istanbul next week, stop on by and say “Merhaba.”

Leave a Comment