Accelerators of KM maturity: Part 4

Organizations that track their KM maturity are significantly more likely to achieve other higher-level capabilities related to standardization, alignment, enhancement and expansion.

When member-based nonprofit APQC launched its KM Capability Assessment Tool in 2007, the goal was to provide organizations with a way to measure every aspect of their KM programs, from strategy and business case development to processes and technologies. Based on our work designing and implementing KM strategies for our members, we knew that certain actions create momentum and help boost the overall maturity and sustainability of the KM effort. But at the time, we had only ad hoc evidence and our gut feeling that this was true.

Fast forward eight years and more than 200 KM programs have completed the KM Capability Assessment. APQC has collected and validated that assessment data through the years, but until now had never analyzed the combined responses to explore their broader implications. But our most recent research changes that. We tested more than 90 statistical correlations in order to identify clusters of KM capabilities that trend together and early-stage KM activities that contribute to program resilience and long-term value. The results reveal a set of foundational KM capabilities we’re calling “accelerators of KM maturity” because putting them in place will vastly increase your odds of building a mature, impactful KM program.

The first three pieces in this series highlighted accelerators related to formulating a KM strategy, putting governance and resources in place to support it, and developing KM processes and technology. This final article focuses on why you need to measure your KM efforts and the measurement activities most closely associated with KM program success:

• Define key performance indicators for KM.
• Measure KM adoption, engagement, satisfaction and impact.
• Assess the maturity of KM programs and track progress over time.

Establish a measurement strategy

If you want to demonstrate tangible business value from your KM tools and approaches, you have to measure their performance. Anecdotal evidence may spark interest and inspire participation, but it can only take you so far. The most reliable way to secure ongoing leadership and business unit support for KM is to show stakeholders what they’re getting by explicitly measuring the health and impact of KM activities as well as the program as a whole.

Whether an organization’s KM program is six months old or more than 10 years old, measurement can be hard. But hard does not mean impossible—nor does it mean that it shouldn’t be done. In fact, APQC believes that measurement is one of the top three critical success factors for a KM program.

Why? First, a thoughtful measurement strategy clarifies the goals and expected outcomes of the KM program. When you establish key performance indicators (KPIs) and targets, that helps build consensus around what KM will (and won’t) do for the business and the anticipated timeframe for results. The result is that the KM team knows what it must deliver and business stakeholders understand the expected payoff for their time and resource investments.

Second, most organizations experience ongoing pressure from internal or external factors that can drive knowledge-related initiatives off course. Change is the only constant, and it is easy for KM to lose focus and funding during times of business disruption. Measurement helps the KM program sustain momentum during hard times and reassert its business case when a market downturn, reduction in resources, reorganization, merger/acquisition or change in leadership threatens its existence.

Define key performance indicators

When creating a comprehensive measurement strategy for KM, the first step is to determine which measures you’ll pay particular attention to. After all, there is a nearly infinite list of potential measures, and not all of them are meaningful gauges of performance or results. A few well-chosen yardsticks will help communicate the expected results and focus the KM team on what’s really important.

APQC recommends selecting key performance indicators that align with the goals set out in your KM strategy and roadmap and touch on what the business really cares about. For example, if your KM effort aims to promote collaborative innovation and knowledge reuse within a new product development group, meaningful KPIs might focus on:

• the number of new ideas generated through collaborative platforms,
• the percentage of those ideas that ultimately make it to market,
• the percentage of new product designs that incorporate or benefit from reusable knowledge, and
• the cycle time to develop those products (to test the assumption that effective knowledge reuse shortens the product development cycle).

The appropriate KPIs vary widely across KM initiatives, but the effect of establishing those measures is relatively consistent.

First, more than three-quarters of organizations with defined KPIs recognize the tangible business impact of applying KM approaches, compared with only 11 percent without KPIs (Download chart of Figure 1, on page 27, KMWorld, April 2016, Volume 25, Issue 4). The logic of that is relatively obvious—after all, a main purpose of KPIs is to demonstrate how adoption of KM tools and approaches influences related business measures. Thus, we would expect organizations with KPIs to have a better understanding of how KM can help move the needle on key business challenges and opportunities.

Much more intriguing is the suggested connection between establishing KPIs and achieving business support for/expansion of the KM program. The data shows that KM programs with defined KPIs are three times more likely to extend their reach beyond initial focus areas and nearly four times more likely to secure direct funding from the business units they support. In other words, developing a focused measurement strategy based on KPIs boosts a KM program’s chances of gaining both the money it needs for ongoing operations and approval to expand to other parts of the organization.

Getting business groups to allocate resources for KM capability and knowledge asset development is a particularly important milestone in KM program maturity. Although KM teams typically receive some funding from a central source to get them started, this tends to decrease over time, with the business groups that benefit from KM expected to supply more of the necessary resources. Business stakeholders may invest in the promise of KM up to a point, but in most cases, measurable results are required to guarantee continued support. Ultimately, if business groups don’t see a clear return on their investment, they will not allocate funds or allow employees to spend time capturing, sharing and accessing knowledge. Thus, continued resource allocations from the business are an indication that KM is generating solid value and has the stamina to survive and thrive long term.