The "KM ROI" question – a problem, or an opportunity?

Your CEO comes to you and says “I like the idea of Knowledge Management, but you have to give me an ROI figure”. Is this a problem, or an opportunity?

At first sight this is a problematic request, as the ROI for KM is notoriously difficult to predict. If your manager wants you to sell KM on a firm ROI prediction, you have some difficult thinking to do.

However there are five things that you can do to make this question into a real opportunity for your KM program. These are as follows:

1) You can speak to the CEO. Top Management are talking to you. You have access to them, and they are listening to you. A conversation with senior management has opened up. As a KM sales person, you need to make the most of this, and you need to determine the selling point for KM.  ROI will not be the selling point – most firms buy KM on emotion and not logic – but management may still want to hear a convincing ROI to justify the investment.

2) You have the opportunity to show them some success stories which demonstrate an attractive ROI. KM can deliver fantastic ROI – our October 2012 Newsletter gave many examples of KM ROI and how it can be measured, and this blog has published a regular series of quantified success stories, with over 140 examples to date. There is plenty of evidence you can show them from industrial organisations where KM has paid back its investment ten-fold or a hundred-fold, and plenty of success stories you can use as social proof.

3) You have the opportunity to make a deal with senior management. Ask them for permission and support to pilot knowledge management in one part of the organisation, and to measure the return. You promise them ROI from the pilot, and if this ROI is big enough, you ask them for their continued support in return.

4) You have the opportunity to offer to use KM to solve some of their real problems. Don’t forget, KM works extremely well when applied at senior level – its not just for the frontline staff. Senior managers are knowledge workers too. If you can solve their problems through KM, they will become your greatest advocates.

 5) A big ROI gives you permission to ask for a big budget. Once your management realise how valuable KM can be, then they are more likely to make a sizeable investment. This could be the chance you were looking for to build a proper KM program with a good chance of success.

So look on this request as an opportunity to engage, and broker a deal, at the highest level.  Your aim should be to gain support for a business pilot, through which you can demonstrate ROI, and if that ROI is convincing enough, to gain further support for full KM roll-out.

The ROI conversation could be the best opportunity you are given to progress KM.