How KM delivers value by solving knowledge problems

Much of the value delivered through Knowledge Management comes as a result of solving problems.

“How do you show the value of Knowledge Management?” Yet another client was asking me the same question – how can you demonstrate the value?

I had just quoted to him Shell’s 2007 claim that they delivered $200m per year though their knowledge-sharing communities (for an annual investment of $5m), and he just could not see how that value could be measured.

The answer is quite simple.

Shell’s Communities of Practice are based on Pull – on Problem Solving. People in the Shell business units have a problem, they need to access knowledge of how to solve the problem, and they go to the Communities of Practice to find that knowledge. When they have found the knowledge and implemented the solution, they estimate how much time, money or risk that solution offered them.

Here’s an example taken from the document “Managing knowledge though new ways of working“.

You can see clearly how access to Community Knowledge allowed this guy to obtain a better deal with a vendor by accessing knowledge of data prices from the community. Demonstrable value added. Here’s another example

One man-month of effort avoided. Demonstrable value. Many more examples are recorded in the document linked above.

It is by adding up examples like these, that Shell came to the figure of $200m annual savings that they claim for knowledge management.

Part of the challenge for the customer, was that until that point, he had not made the link between Knowledge Management and Problem Solving. To him, KM was all about blogs and case studies – about Knowledge Push, and not Pull.