Impossible to calculate return on knowledge-management investments

A thoughtful piece by Don Cohen in the Harv. Bus. Rev., Vol 84 December 2006, at 28 starts by acknowledging that “businesses have been trying — and mainly failing — to calculate the return on knowledge-management investments for more than a decade.” The short piece discusses why the measurement problem has not been solved and then offers two ideas.

Cohen suggests that “the more successful management projects target particular roles, groups, or processes and expected outcomes are articulated upfront.” For example, a law department might target the process by which its staff reviews marketing materials.

Second, those organizations with the most vibrant KM programs “approach the measurement problem by accepting soft indicators that knowledge management is earning its keep rather than demanding hard numbers that may be misleading.” For example, general counsel might accept a telling anecdote or two as better indicators of success than a precise but irrelevant number, perhaps such as the number of documents loaded in a database.

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