The Complete Guide to Knowledge Management: A Strategic Plan to Leverage Your Company's Intellectual Capital

Chapter 9. Measuring and Managing the Performance of Proper Knowledge Work

In this chapter you will:

Learn about current developments in measuring the effectiveness of knowledge management.

Gain tools for setting goals and objectives and measuring the performance of intangible assets.

Learn methods for measuring the dollar value of intangible assets.

Apply performance assessment to nonprofit units, including departments within organizations.

There is a commonly used business cliché that, unfortunately, is usually right: "If it can't be measured, it can't be managed." We therefore have to define various indicators to measure the knowledge work of an organization and its intellectual capital (IC) creation. However, unlike the customary accounting methods for assessing tangible financial capital, measuring intangible IC is much harder. This chapter describes the challenges and some of the methods to answer them.

The Challenge: Determining What You Need

A manager practicing knowledge management (KM) is looking for a system to measure the work of an organization or team, and assess the results of their efforts to increase their intellectual capital. The manager should expect this assessment system to fulfill two requirements:

• Management—to set goals and objectives for managing assets.

• Assessment of monetary dollar value—to know the actual influence of these efforts on company value.

These requirements are derived from a manager's experience with traditional accounting methods. These methods were ...