Knowledge management describes the systematic process of finding, selecting, organising, distilling and presenting information so as to improve comprehension of a specific area of interest. It includes activities that help focus the organisation on acquiring, storing and utilising knowledge for such things as problem solving, dynamic learning, strategic planning and decision making.
An emerging set of organisational design and operational principles, processes, structures, applications and technologies that helps knowledge-workers dramatically leverage their creativity and ability to deliver business value1.
Increase in knowledge asset stock: measure of increase in the stock of knowledge assets, typically year-on-year
For example, % increase in knowledge assets (including patents, intellectual property)
Employee perception of managerial collaboration: a measure of whether employees believe management is creating a culture of sharing and appreciating knowledge between individuals, teams and functions.
Knowledge-process oriented structure planned and established: a measure of how the organisations is structured to deliver knowledge-based processes.
For instance, % of required changes satisfactorily implemented
Mentoring and relationship development for new-starters: a measure of whether less senior members of the organisation are supported by senior teams to share and develop organisation knowledge.
For example, % of employees with less than five years’ service who have a mentor and % of experienced employees who act as a mentor
Value adding processes: a measure of the increase in the number of implemented value-adding continuous business processes
For instance, organisations might maintain a register of new value adding continuous business practices implemented identifying the projected and actual present value of each initiative.
Understanding where knowledge sits and how it flows through an organisation can help an business remain agile and react more easily to change as well as preventing the loss of organisational knowledge when businesses are restructured or employees move on.
For practical guidance on knowledge management and how to carry out a knowledge audit in your organisation download the following CMI checklists.
Knowledge management checklist
Carrying out an information audit
For more information on understanding how intellectual capital and knowledge management impact the value or an organisation, download the following research summaries from CIMA below.
Tracing intellectual capital cash flows
Knowledge management and its impact on the management accountant
Understanding corporate value: managing and reporting intellectual capital