Monitoring knowledge (management): an impossible task?

It isn’t an impossible task to monitor/evaluate (M&E) intangibles, knowledge or knowledge management (KM), but it requires a series of tough choices in a maze of possibles. This is what Simon Hearn and myself are discovering, trying to summarise, synthesise and build upon the two M&E of KM papers commissioned earlier, as well as the reflective evaluation papers by Chris Mowles.

We are still at the stage of struggling very much with how to set the ballpark for our study. So this is a good opportunity to briefly share a blogpost I wrote recently about this very topic, and to share some preliminary thoughts. If we get to engage your views it would certainly help us to get going. Continue reading

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8- Valuation of Intangible Assets

The private sector has a handy way of assigning market value to tangible and/or intangible assets: the capacity of the asset to generate earnings. Using the M&E framework proposed earlier, this is the same as saying that the value of 1 is the sum of all future 3 (after discounting):

Continue reading

4- Unconscious KM and Conscious KM

We have seen from two previous posts that (a) intangible assets generally contribute more than tangible assets in producing the results that organizations value, and (b) knowledge assets are only a subset of intangible assets. Continue reading

2- Intangibles: More Essential for Value Creation

Let us “connect the dots”:

  • Starting in the 1980’s book values of corporations around the world constitute an increasingly smaller percentage of market values.
  • Corporations which excel in managing their intellectual capital (MAKE winners) grow twice faster than Fortune 500 corporations (Teleos).
  • The world economy is now creating more wealth from services than from industry or agriculture; global service trade has been growing faster than global commodity trade.
  • Human capital of a knowledge worker is what generates his regular income.
  • Remittances from overseas workers now constitute more and more of wealth creation in many developing countries.
  • Most successful anti-poverty projects are those which leverage on existing intangible assets of communities (Knowledge for Poverty Alleviation model).
  • Fukuyama observed a pattern, namely, that high-income economies are often also high-social trust societies.
  • Sustainability of CBRM projects hinges on intangible factors: sense of ownership, transparent and accountable managers, cohesiveness of the community, self-confidence and hope.
  • High trust (Covey) and low/managed ego (Marcum and Smith) reduce business costs.
  • High social capital was found (U.K. Office for National Statistics) to be correlated with better health, improved longevity, better educational achievement, lower rates of child abuse and less corruption in government.

What do we see here?

It seems to be happening across many sectors: intangibles have become more essential in creating value!

Do you agree? Is the inference correct? Or is it correctly worded?

We saw from my previous post (“KM is Not Enough”) that intangibles largely overlap with knowledge assets. Managing intangibles has become the “the name of the game”. In fact, knowledge has become the prime creator and repository of value (see first six bullet points above).

We can now assert that the proper goal of KM should be to create value. The causal model is:

From the previous post, we saw that “knowledge” is capacity for effective action, which includes information for effective action. The model defines what is “effective”: a decision or action is effective if it produces the result desired or valued by the actor. Knowledge is “what works” for a user.

The next issue is more knotty: what precisely is “creating value”? See you in my next blog post.

(By the way, you may be wondering why I am posting this series of blogs. I am writing a paper on M&E of KM for Development, and I would like to test my ideas with you and other colleagues/peers in KM practice. It always happens that others see important things I do not see, and so I will be most grateful for your comments, suggestions and criticisms.)