25 March, 2008
Knowledge Management is the First Step to ROI In Your Talent Management Program
Author: Maksim Ovsyannikov

It is not a surprise that many organizations that consider implementing talent management programs struggle to justify costs to their executives. You see, HR people are fundamentally not the business people and despite this fact, they are the ones who are frequently being asked to put such business cases together. There is however one area of talent management that you should focus on in order to build a solid and timely business case for the other components of talent management lifecycle. This chief area of talent management is called knowledge management.

More than 30 years ago, management guru Peter Drucker declared: “To make knowledge work productive will be the great management task of this century, just as to make manual work productive was the great management task of the last century.” It turns out that Drucker’s instincts about making the knowledge work productive—managing knowledge—were spot-on! Those of us who struggle finding examples should look no further than the Ford Motor Company, who’s “Best Practice Replication” system helped plant manager achieve a 5% annual productivity improvement; no further than the oil giant Chevron, which saved $650 million between 1991 and 1999 by sharing best practices among managers in charge of energy usage at refineries; and no further than Texas Instruments, which saved $1 billion by disseminating best practices throughout its enterprise. These are the companies that were able to focus on knowledge management as the first components of their talent management program – they saw results – and their CEOs could not refute the resulting ROI.

In simple terms, knowledge management allows for the retention and transfer of formal and informal knowledge. An organization is only one example, but Google is also a knowledge management system—the one that many of us choose to use in order to find information. That said, however, my view of knowledge management goes beyond Drucker’s definition from a while back—in my opinion it is the knowledge self management that we should all focus on. Knowledge self management results in true collective intelligence.

Simple conclusion—enable technology to share knowledge in your organizations. Then go beyond this and enable collaboration, recommendations, and a connected corporate community around the process of knowledge management.  This is quickly becoming a new competitive edge for many organizations. Results will blow your competitors away—and they won’t even know where the wind came from!

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Comment from Ian Lubsey on March 27, 2008
Very interesting comments I recall the days when KM was topical. Knowledge self management seems to be worth exploring. Thanks for the post.