Montag, 11. April 2011

KM asks for value-based compensation

Do you earn what you deserve?
Strange question – difficult question – far-reaching question.
This is one of the old questions of Knowledge Management. Many methods have been proposed to measure this intangible asset (see Sveiby for Methods for Measuring Intangible Assets, and overview of 34 methods with links). Decision makers are keen to quantify and to calculate the effect of their measures, at last they are interested in the Return Of Investment. The fact that there is not general accepted and feasible way of measuring knowledge has put Knowledge Management a bit into the esoteric corner (some even provoke not to talk KM when executing, don't do KM), leaving the biggest company asset (knowledge) as the least managed one. Managers decided to see the question more as a philosophical one and put their efforts elsewhere.
Detour 1: From the theorectical point one can happily argue whether knowledge is the relevant parameter in the first place, or whether knowledge flow or speed of knowledge flow, reach of knowledge or the knowledge network is the key parameter, but also these are not very practical to quantify and to measure. End Detour 1.
Well, this is the beauty of twitter, at the same time Oscar Berg was retweeting and discussing: "“At work” now refers to a state or condition rather than a place. People don’t telecommute or telework..."
A completely different story? Not really, if we agree that the quote describes the typical work patterns of knowledge work. Knowledge work at all times, and the change is not the work patterns of knowledge work, but that knowledge work becomes the mainstream work pattern as we enter the knowledge industry large scale.
Detour 2: In minutes the list of impact areas grew in our conversation: work law, management styles, performance measurement, work equipment. You are very welcome to continue the list. End Detour 2.
Knowledge workers and even more Knowledge Citizens deploy different work patterns and different deliverables: knowledge, something that we have hard times to measure.
So if work for a Knowledge Citizen is a state of mind, and the work deliverable is knowledge, a rather glibbery fish to catch, for sure the compensation scheme of the attendance clock is inadequate – to put it mildly. The esoteric question of Knowledge Managers becomes the essence of what Human Resources over the globe and over many industries should think about.
(Another indication of the difficulties is another old problem of KM: How to incentivize Knowledge Sharing, Carrots and Sticks don't work)
The traditional effort based compensation is out-dated for Knowledge Citizens (For Newton’s famous apple, it didn’t take long to deploy the gravitational law).
And again an old quote serves for a new twist: “Knolwedge has no value” (in itself for the corporate, if not used). The value of knowledge for the company is the value that is created with the knowledge. The Knowledge Citizen deserves a value-based compensation. Of course in the corporate this is reflected to some extent (the CEO earns usually a tiny bit more than the junior engineer). But it is the definition of employment that the market is intermitted, while values are best determined by a market (remember the idea of the Knowledge Market / Marketplace).
I know we are travelling hard, but it might be worth it: I foresee that the knolwedge industry as relying on value-based compensation deploys self-employment and micro-entrepreneurship as the leading business model. Early indications these days run under the term “Open Innovation”.  Then the Corporate Knowledge Citizen would become a Global Knowledge Citizen. Wonder where this thought leads to?

Although they might not agree and follow my conclusions, this post is built on the extremely fruitful discussions with Kmbeing and Oscar Berg. Thanks!



  1. Hi Gerald, very interesting and thought provoking blog post, that, if anything, confirms one of the biggest issues that both KM and organisations, as a whole, have been enjoying for the last 17 years and counting. I think we need to start thinking of moving away from trying to measure what cannot be measured, i.e. knowledge (The fact that we have been all of these years without an effective method to measure it should give us all a hint that perhaps we shouldn't focus our energy and effort on what can't be done) and instead move into trying to measure the potential outcomes, the performance.

    To me, knowledge is a means, not a destination, nor the goal when conducting business. As such, knowledge work allows you to introduce that measurement of performance, versus measure of means or sheer presence, which surely haven't worked out really well. However, using knowledge to our advantage to generate a specific output and value / measure that one would probably put us in a much more advantageous position than what we are doing now.

    Which is also, by the way, the reason why I don't believe on applying all ROI models to new, fresh thinking coming from Social Computing. Again, social software tools are a means to achieve an end, not the final destination. We need to move pass that...

  2. @Luis
    "Knowledge has no value" - the theme is simplified and reduced, but means exactly what you have formulated, knowledge for a company is no purpose in itself, but must be used to create value (means, no destination).
    This misconception together with the pressure to view KM in terms of ROI-like measurements let to huge failure. Lessons from failure: Activity-based KM KPIs do not work:

    The more I follow the discussions on Social Media, there more I feel the discrepancy between the advanced thinking on KM and Social Media and the old-fashioned beliefs in management.


  3. Hi Gerald! Thanks for the follow-up comments; greatly appreciated! You are spot on! And the more we go forward the more accentuated would be that discrepancy; like I have mentioned in multiple occassions over in my blog, folks doing social media surely don't seem to like much KM, specially, the Management part, whereas KM folks seem to have an aversion towards social media because of the unstructured, chaotic flow of information.

    The two sides seem to be irreconcilable at this point in time and the funny part is that if you look into their own original premises and basic principles they are both one and the same, like I have mentioned in a recent blog post.

    That's why if we failed back then to measure KM effectively, because we always treated it as a final destination, versus a means, we are bound to repeat the same mistakes, apparently, with social media, if we are trying to measure it effectively. We shouldn't. It's the final destination that matters, not the means you use for it; they are just that: means to achieve something.

  4. @Luis
    your post that you mentioned - I just loved it. KM is dead - long live KM:
    Exactly as you said, they share the same principles, however have been manifestations in different situations.

    It is interesting, by emphasizing that KM and Social Media are irreconsilable, Social Media people are doomed to get caught in the same failures as KM did.


  5. Hi Gerald! Thanks much, once again, for the great comments and observations! Exactly! That was the very same premise under which I put together that blog post on KM, Social Business and E2.0 being one and the same, starting with the same principles from back in the day, which just recently I bumped into an interesting post from Patrick Lambe, indicating KM can be tracked back to about 50 years ago! Amazing stuff! And a clear reminder that perhaps we are not inventing anything new, but maybe augment what we already have!

    Either way, hope both sides would reconcile soon enough, before it is too late and we make the very same mistakes you have also hinted on your blog posts and we can move on further along... Keep up the great blogging! And thanks for the inspiration!


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