During a time of budget cuts you might be called upon to explain why Knowledge Management shouldn’t be axed.  What do you say?

Justifying why Knowledge Management is essential to your organization can be a difficult task.  However, failure to gain managerial and executive support for KM is a frequent cause of KM initiative and program failures.  To effectively justify the importance of KM, focus on the end results of KM:  operation efficiency, risk reduction, and competitive advantage through innovations.

In explaining the rationale for Knowledge Management, practitioners sometimes make the mistake of focusing on intermediate tactics.  When asked by leadership, “why is KM essential to our success,” KM practitioners might be tempted to cite the intermediate goals of KM such as employee engagement, community building and cutting across organizational boundaries.

While engagement and community building are valuable to an organization, they are the means for attaining higher goals.  Communities of practice cost time and resources and are not themselves an end goal.  All KM efforts must produce a return on investment outside of the intermediate goods KM produces like communities of practice, engagement of employees, and organizational unity.

Similarly, Knowledge Management buzz-phrases like “learning management,” “lessons learned,” “best practices,” and “benchmarking” are tactical means to an end and not the ultimate aim of companies. These KM byproducts exist solely because they support higher-level goals.  If these are cited as the primary rationale for sustaining a KM program, the program is much more likely to be axed when an organization’s “core goals” are in jeopardy.

Effectively communicating the value of KM means showing management and leadership that KM delivers cost savings through efficiency or risk reduction.  It also means showing how KM can increase earnings through innovations.  So how does one communicate the value of KM?

Try sharing the rationale for KM using simple, plain language.  You might try something like:

“Knowledge Management is an essential line of defense in our company because it ensures that we don’t waste expenditures repeating the same mistakes or inefficiently reinvent the wheel in our key projects.  On top of that, KM is our company’s strongest line of offense – the end result of sharing our knowledge is innovation. Nothing drives our success like the competitive advantage derived from innovation.”

To further bolster the case for KM, there is no better rationale than hard data and statistics.  By ensuring that your KM key metrics and performance indicators are carefully chosen and monitored, you will have evidence to support the case for keeping KM.

By effectively communicating KM verbally and backing-up those claims with data, the case for supporting KM in times of budget cuts can be clearly communicated to leadership.  Leadership will be much more hesitant to cut a KM program if they understand KM in terms of efficiency, protection from risks, and competitive advantage from innovation.

Rustin Diehl trains organizations in innovation sciences and practical innovation management.   For a list of future courses, see KMI Event Schedule.