The Cost of Knowledge

“Knowledge management” in organizations has become synonymous with “knowledge searching.” Web crawlers and other data-mining programs swarm over terabytes of documents and e-mails looking for clues that can help connect information seekers with sources. Clever icons adorning desktops promise to instantly deliver users to the right expert. Organizations deploy network analysis tools to identify their key knowledge brokers—people who provide directions and access to knowledge repositories. All this costs lots of money: A recent IDC study predicts that sales of enterprise information-search systems will rise about 25% a year, from nearly $1 billion in 2005 to some $2.6 billion in 2010. Is this continued spending worthwhile? Maybe not. Our research on the costs of knowledge interactions, conducted through Babson College’s Working Knowledge Research Center, suggests that, valuable as these efforts have been to date, future payoffs will depend less on enhancing systems that track down information than on devising strategies to help employees use what they’ve found. As part of our study, we asked more than 200 knowledge workers in four very different organizations—the U.S. Defense Intelligence Agency, the testing service ETS, the drug firm Novartis, and the research institute Battelle—to keep a daily log over a ten-day period. For each of their knowledge interactions, they estimated the amount of time spent searching for knowledge, scheduling meetings with experts, eliciting expertise, and interpreting and applying the knowledge gained. All told, the participants recorded more than 3,000 interactions. We’d assumed—as many managers do—that the employees would put most of their knowledge acquisition efforts into finding out where information resided in the organization and then negotiating with each source for an opportunity to discuss it. In fact, as the chart shows, employees spent, on average, less than 17% of their time searching and scheduling, and more than 80% eliciting, interpreting, and applying. The results are consistent across organizations and for workers of all ages, positions, and lengths of tenure. This surprising finding suggests, first, that IT investments in search technologies appear to be working and that additional investments of the same kind are likely to yield only marginal benefits. Second, and more important, it suggests that managers should focus on understanding why some employees are more adept than others at gathering knowledge and customizing it for their own use. Our preliminary work indicates that some people have tacit skills that can be codified and taught to others. Until managers can make that happen, though, we advise them to seek out those in their organizations who consistently do a good job applying newly gained knowledge—the customer relationship manager, for example, who has a knack for understanding how the new information he has acquired about his company’s products will be relevant to his clients. Then watch how these individuals work, and look for common techniques. Chances are, you’ll find clues about how to profitably shift the focus of your efforts from knowledge seeking to knowledge application.

The Cost of Knowledge

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