Building Knowledge Value in Practice

My basic work and message have been steadfast for a couple of decades: helping companies use information more effectively in the service of functioning and competing more effectively.

However, I find that the way I express this core message varies based on the level of sophistication of my audience and on the level of the opportunity it represents.

In speaking recently with students at Columbia University’s innovative Information and Knowledge Strategy program, I used a technique recommended by many successful speakers — distilling a complex message down to core “principles of practice” that can be readily applied.  I’ll briefly describe below what those are.

The inspiration for my talk started one year prior, when Larry Prusak had spoken to a previous group of students, and observed that, “We have to figure out how to SELL this knowledge stuff.” Larry is a pioneer in the knowledge field and has a knack for knowing — and saying — what is really happening. So his words resonated deeply with me, and I vowed to use my training in business strategy to help these students “sell” their work.

To me, selling anything is primarily about getting the potential buyer to recognize the value of what you are selling — after that, the stuff sells itself. I believe this insight applies not only to knowledge but to all B2B sales — and B2C too.

Knowledge producers and practitioners, though often acting as internal staff resources rather than outside agencies, still must “sell” their work and its value. When they do not understand this, or know how it applies to their work, their contribution is undervalued, their careers can suffer, and so on. It’s not a happy situation.Key_Principles

I believe that the key to escaping this low-value loop is to understand and practice these six principles:

The Language of Value

Understand the basic concepts and metrics of value. ROI = V = B/C. This means that ROI (= value V) equals the ratio of the benefits (B) of an effort to the costs (C) of that effort. Both benefits and costs are incremental, i.e., those that would not have occurred without the effort. Both benefits and costs should include those that are “hard” — direct and readily measurable — and those that are “soft” — indirect and less available to measurement.

User-Centricity

Determine the benefits and costs — hard and soft — from the User’s perspective. It matters much less what the Producer of knowledge thinks the value is than what the User thinks it is. I see this mistake made all the time. It is easier to ascribe value at a distance to a knowledge product (a term I use to include knowledge services) than it is to empirically determine what the value is to the User. But it can be done, most often by asking the User.

The Value Sphere

Understand who benefits from knowledge: who cares, how much, and why. Benefits of a knowledge initiative could vary with different stakeholders in that initiative, whose own value systems differ. A success in an human resources-sponsored knowledge effort could be measured differently than in an innovation-sponsored or IT-sponsored effort. The interests and incentives of the people working in these areas vary, and the value they ascribe to knowledge will vary accordingly.

Enterprise Value Metrics

Understand how your client thinks about and communicates value. Within a given enterprise (business, government agency, NGO), there will be many existing metrics — externally-facing ones like those required by regulations and/or stakeholders — and internal ones like Key Performance Indicators, scorecards, dashboards, and so on. Understanding what these metrics are and how they work in an organization is key to managing within that organization.

Value Impact

Align the benefits of your knowledge product with these value metrics. The benefits of any knowledge product should map to the overall goals and strategies of the enterprise in as direct and measurable a way as possible. Demonstrating enhanced revenues or cost savings are among the most persuasive arguments for a value-adding knowledge initiative.

Value Proximity

Identify and remove the barriers to producing enterprise value (“knowledge-value gaps”.) I often notice that, rather there being a clear chain between knowledge production and enterprise value, there are gaps. Such disconnects can be identified and fixed.  The KVC methodology is designed to do this rapidly and effectively.

So there it is. I hope this helps you. Contact me if you have questions or would like a copy of the full slide deck.

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