7

METRICS FOR KNOWLEDGE

MANAGEMENT CAPABILITIES

CHAPTER SUMMARY

This chapter explores the kinds of decisions that are made

in core knowledge management functions. The chapter
describes commonly accepted knowledge management func-
tions. The authors suggest examples of decisions that might
be made in each function, and walk through the decision fac-
tors, how the decisions are typically made, who makes them,
and what measurements might be appropriate to the deci-
sions. The chapter also suggests how these measures might
improve the decision outcome. The authors explain how
readers might develop an organization-wide measurement
strategy for knowledge management. The chapter also high-
lights the importance of identifying stakeholders and decision
makers across the organization.

129
130 Designing and Tracking Knowledge Management Metrics

TRACKING THE PERFORMANCE AND

PRODUCTIVITY OF KNOWLEDGE MANAGEMENT
FUNCTIONS AND CAPABILITIES

When we talk about knowledge management functions or

capabilities we’re referring to those organizational process-
es that are specifically designed to increase the knowledge
capacity of an organization. There are different characteriza-
tions of knowledge management functions in the literature
(Bell, DeTienne, Dyer, Hoopes, & Harris, 2004; Bontis, 2001;
Dalkir, 2005; Earl & Scott, 1999; Gray, 1998; Herschel &
Nemati, 2000; Kerfoot, 2002; Leibowitz, 2002; O’Leary,
1998; Soliman & Spooner, 2000). For the purpose of this text
and to illustrate how to use the framework, we define knowl-
edge capabilities to include:

• Knowledge Strategy and Leadership

• Intellectual Capital Management

• Collaboration-Community Development

• Culture and Communication

• Knowledge Operations

• Knowledge Asset Management

• Knowledge Architecture

• Knowledge Technologies

• Organizational Learning.

We begin with the simple assumption that organization

should develop knowledge capabilities and functions across
the organization, and that these functions and capabili-
ties will be adopted across the organization. The first chal-
lenge we must address in establishing a metrics solution for
Metrics for Knowledge Management Capabilities 131

knowledge management function is to determine what exists

and the rate at which they are used across the organization.
A serious question must be posed where an organization
has or supports only the occasional knowledge manage-
ment project or initiative, or where these functions are so
varied and scattered across the organization as to challenge
any systematic measurement approach. It is unlikely you
will have a suite of fully developed knowledge management
functions, but you may have some degree of each capabil-
ity or a degree of support for some of the functions. You
can use a metrics strategy to determine what you have in
place. You can use a metrics strategy to determine your cur-
rent baseline. What you are likely to find at the outset is
that the functions listed above are treated as tactics rather
than capabilities. Where you have a tactical approach, you
have a starting point for raising awareness. Where there
is no organizational level awareness of and recognition of
these capabilities, organizations you might use your metrics
strategy as in internal working tool to raise awareness and
to track your own progress in establishing a full knowledge
management function.
We measure knowledge management functions and capa-
bilities because we want to track how they are used, what
is an effective approach, what it means to have an efficient
function, and generally their overall performance. We want to
offer the business assurances that the capabilities are efficient
and effective. If we expect the business to leverage these capa-
bilities assurances must be possible. Businesses must be able
to assume the capabilities are managed and measured with
the same rigor as other business processes. Knowledge capa-
bilities should contribute to the production and consumption
of knowledge capital by the business. Metrics should describe
the performance of these capabilities and they require a reli-
able and detailed description of the capability as processes.
132 Designing and Tracking Knowledge Management Metrics

KNOWLEDGE MANAGEMENT FUNCTIONS

AND CAPABILITIES – DEFINITION
AND CHARACTERIZATION

We must know what we mean by knowledge management

functions before we can assess the performance, productivity,
efficiency, or effectiveness of knowledge management func-
tions. Working from these definitions, the authors then offer
a strawman set of metrics that might be relevant to each func-
tion. These metrics should be taken as illustrative and rep-
resentative, and certainly not exhaustive. They serve to help
you frame your thinking. The reader will note that these are
primarily output or outcome metrics. Where we have fully
developed process models to support each function, we will
be able to define decision points and to work with knowledge
managers to define metrics for those points. In other words,
as your organization builds out these functions, you should
explore process-level metrics just as you did working with
business managers.

Knowledge Management Leadership

and Strategy Function

Leadership and Strategy (Table 7.1) focuses on the capabil-

ity to develop and promote a knowledge vision, to develop
a strategy to realize that vision, to communicate the organi-
zation’s commitment to the vision and strategy, leading by
example, identifying opportunities for knowledge interven-
tions, acting as a transformation agent in shifting the organi-
zation’s thinking from industrial and financial capital to
intellectual capital, and knowledge and intellectual policy
guidance and formulation.
Metrics for Knowledge Management Capabilities 133

Table 7.1. Sample Metrics for Leadership and Strategy.

• Creation of an organization-wide vision for a knowledge organization

• Organization-wide knowledge management strategy
• Number of knowledge interventions in business units
• Number of knowledge management functions supported
• Number of knowledge management champions at the executive level
• Number of knowledge management champions at the mid-
management level
• Level of understanding of knowledge management functions
across the organization
• Number of champions at the staff level
• Number of executives with knowledge management
responsibilities
• Extent of development of knowledge management strategic roles
• Extent of development of knowledge management business-aligned
roles
• Extent of universal knowledge management responsibilities
assigned to all staff

Knowledge Capital Management Function

Knowledge capital management (Table 7.2) focuses on manag-

ing an organization’s knowledge capital, including its human
capital, structural capital, and relational capital. Human capital
management includes understanding the theory of knowledge
and expertise, the economic view of knowledge and knowl-
edge assets, managing and investing in knowledge workers,
talent and competencies, the skills required to manage a global
workforce, a virtual workforce, and international workforces.

Collaboration and Community Building Function

Collaboration and community building has both hard and

soft competencies (Table 7.3). The soft aspects include foster-
ing inter- and intra-organizational collaboration, intra-unit
134 Designing and Tracking Knowledge Management Metrics

Table 7.2. Sample Metrics for Knowledge Capital

Management.

• Number and extent of knowledge management roles defined by

human resource management
• Number and extent of knowledge management competences
defined by human resource management
• Growth of tacit knowledge assets – by time period, by business
function
• Growth of skills and competencies – by time period, by business
function
• Creation of explicit information and knowledge products
• Creation of design manuals, procedural manuals
• Increase in stock of knowledge for a critical business area
• Acquisition of new knowledge assets for new business markets
• Use of knowledge assets in a given function
• Dormancy or archiving of knowledge assets

Table 7.3. Sample Metrics for Collaboration and Commu-

nity Building.

• Number of social groups supported by the organization

• Number of internal networks
• Number of cross-organization functional networks
• Number of external network connections
• Number of individuals engaged in networks, social networks
• Number of formal internal communities of practice
• Number of informal internal communities of practice
• Number of transactions in each type of network
• Average number of transactions per member
• Number of knowledge transactions recorded or encoded
• Number of knowledge exchanges leveraged

collaboration, encouragement of professional, knowledge

and social networking, developing facilitation, and resolu-
tionary skills among team members. The hard merics focus
on design and mpleentation environments and technologies
that foster collaboration – whether in physical or virtual
spaces.
Metrics for Knowledge Management Capabilities 135

Organizational Culture and Communication

Function

Culture and communications metrics (Table 7.4) focus on pri-

marily soft competencies such as fostering a knowledge sharing
culture, ensuring that the institutional ethics, reward systems,
and cultural artifacts all reinforce the value of knowledge and
innovation, Knowledge cultures also acknowledge multiple
cultural registers at work in a knowledge organization. This
capability recognizes the challenge of changing organizational
cultures, and the internal and external forces of change.

Knowledge Operations Function

Knowledge operations are defined as business operations which

are tightly integrated into the organization’s work processes

Table 7.4. Sample Metrics for Organizational Culture and

Communication.

• Number of knowledge communications at the strategic level

• Number of knowledge communications at the operational level
• Number of knowledge communications at the tactical level
• Number and nature of formal rewards systems for knowledge
exchange
• Number and nature of informal rewards systems for any
knowledge activity
• Organization’s reputation for knowledge sharing and promotion
• Organization’s reputation for knowledge transparency and access
• Organization’s formal cultural assessment profile – at the strategic level
• Organization’s formal cultural assessment profile – at the
operational level
• Organization’s formal cultural assessment profile at the unit level
• Team cultural profiles and balance
• Availability of organizational ethics statements
• Ethical behavior of leaders and managers
136 Designing and Tracking Knowledge Management Metrics

Table 7.5. Sample Metrics for Knowledge Operations.

• Use of knowledge assets in business process

• Number of decision-incident reports
• Formal representations of business process knowledge
• Number of procedural manuals created and usage rates
• Unit-level use of knowledge management metrics
• Business rules encoded and leveraged in business applications
• Process improvements achieved through increased use of knowledge
• Reduced time to market due to use of knowledge networks
• Reduced error rates due to front line staff consultations

Table 7.6. Sample Metrics for Knowledge Technologies.

• Number of business functions supported by knowledge technologies

• Technology support of knowledge management functions
• Rate of usage of knowledge technologies
• Rate of capture by knowledge management technologies
• Efficiency of knowledge management applications – reduction of
functional redundancy
• Rate of use of knowledge applications by business units
• Ease of use of knowledge applications
• Alignment of knowledge applications with knowledge culture
• Efficiency of investment in knowledge applications – value for
dollars invested
• Quality management of knowledge applications
• Governance structure for knowledge applications and technologies
• Level of engagement of knowledge managers in the governance
of knowledge applications

and rely on the use of specific organizational knowledge/capa-

bilities. Knowledge operations thus contribute to the alignment
of knowledge processing with the organization’s business goals
and objectives. It also includes decisions sciences and systems,
business architecture, and workflow management.

Knowledge Technologies Function

Knowledge technologies metrics (Table 7.6) focus primarily

on the design and adaptation of technologies to support and
enable knowledge work. This includes building applications,
Metrics for Knowledge Management Capabilities 137

delivering ­technology solutions, the seamless integration of

knowledge technologies into the business context, the con-
figuration of virtual environments and applications to sup-
port knowledge workers wherever they are working, and
the development of technologies to support the useful life of
knowledge assets and all knowledge management functions
and capabilities.

Knowledge Architecture Function

Knowledge architecture includes the capability to elicit

requirements, prepare functional specifications and design
solutions to challenges found in knowledge work. Knowledge
architecture metrics (Table 7.7) focus on data and informa-
tion architecture but primarily focuses on people, how they
work, how they think, how they create and test ideas. Knowl-
edge architecture metrcs also describe how general architec-
tural principles are applied to the business environments and
problems.

Table 7.7. Sample Metrics for Knowledge Architecture.

• Degree of functional integration across applications

• Ease of use of knowledge applications
• Ease of capture of knowledge assets
• Existence of knowledge architecture principles
• Existence of knowledge architecture governance models and
processes
• Number of knowledge architecture reviews and decisions
• Extent of involvement of knowledge architects in procurement
decisions
• Number of knowledge architecture design documents produced
• Involvement of knowledge architects in requirements elicitation
processes
• Involvement of knowledge managers in selection and testing of
new solutions and new procurements
• Ease of access of assets of different formats
138 Designing and Tracking Knowledge Management Metrics

Knowledge Asset Management Function

Knowledge asset management metrics (Table 7.8) focus on

knowledge representation, preservation, retention and loss,
mapping, diffusion and mobilization, transfer, knowledge
organization systems, knowledge asset governance, knowledge
quality, knowledge asset evaluation/ validation/ invalidation,
knowledge disclosure policies, and practices. This capabil-
ity includes all types of knowledge capital assets, including
human capital assets, structural capital assets, and relational
capital assets.

Knowledge Assessment Function

Knowledge assessment metrics (Table 7.9) focus on the results

of knowledge assessments, knowledge asset and knowledge
capability audits, benchmarking exercises, and any other
assessment exercise.

Table 7.8. Sample Metrics for Knowledge Asset

Management.

• Development of knowledge asset management tools and

methods
• Use and adoption rate of knowledge asset management tools
• Capture, management, and support of human capital assets
• Capture, management, and support of structural capital assets
• Capture, management, and support of relational capital assets
• Accessibility rates for all types of knowledge assets
• Availability rates for all types of knowledge assets
• Consumption and use of knowledge assets
• Evaluation of knowledge assets
• Assessment of useful business life of knowledge assets
• Retirement and archiving of assets exceeding their shelf life
• Management of all kinds of assets by formats
• Availability of knowledge disclosure policies
Metrics for Knowledge Management Capabilities 139

Table 7.9. Sample Metrics for Knowledge Assessment.

• Range of knowledge management assessment methods defined

and developed
• Range of knowledge management functional assessments
conducted
• Range of knowledge asset assessments conducted
• Knowledge audits methods developed
• Knowledge audits conducted
• Business focused knowledge metrics defined and adopted
• Knowledge management functional metrics defined and
adopted
• Knowledge asset metrics defined and adopted
• Knowledge management benchmarks established
• Knowledge assessments conducted by the business
• Knowledge assessments conducted by knowledge managers

Table 7.10. Organizational Learning.

• Learning plans developed for individuals

• Learning spheres identified by organization
• Number of formal learning activities reported by individuals,
by units, by functions
• Number of informal learning activities reported by individuals,
by units, by functions
• Types of learning events and activities reported across the
organization – diversity of experiences
• Number of in person learning activities
• Number of situational learning activities – in/on the job learning
events
• Number of individuals engaging in learning events – per unit, per
function

Organizational Learning Function

Organizational learning metrics (Table 7.10) focus on

organizational learning, group learning, individual learn-
ing, situational learning, lifelong learning, learning in vir-
tual environments, instructional design, and problem-solving
methodologies.
140 Designing and Tracking Knowledge Management Metrics

TRACKING LEADING AND LAGGING METRICS

FOR KNOWLEDGE MANAGEMENT FUNCITONS

The metrics listed above are illustrative and by and large rep-
resent lagging metrics for knowledge management functions.
In order to identify and expose the leading metrics we need
to have full process models for each of these functions. Where
organizational level knowledge capabilities exist, process
definitions and models can be created. These should be rep-
resentative of the way the organization performs them. There
are few process models of these capabilities in the knowl-
edge management literature though there is a rich discussion
of tactics. Once there is a draft process and definition, the
knowledge management professionals and practitioners can
define the stage gates, the inputs, activities, tasks, and outputs –
all of the decision points. With these models in hand, we can
explain how the decisions are made, who makes them, and
what measurements are appropriate to evaluating them. At
that point, we can leverage leading metrics to improve the
performance and productivity of the knowledge management
functions. We can translate the standard productivity and
performance metrics to knowledge management.

OPERATIONALIZING KNOWLEDGE MANAGEMENT

METRICS – ROLES AND RESPONSIBILITIES

The primary responsibility for this set of knowledge manage-

ment metrics lies with knowledge managers. The first step in
operationalizing these metrics, though, is the simple definition
and operationalization of the functions. Metrics strategies
can help us to track our progress in implementing knowledge
management. However, it is unwise to trust these metrics until
you have a reliable and sustainable knowledge management
Metrics for Knowledge Management Capabilities 141

capability. The metrics will be volatile and untrustworthy

until you are in a position to establish a realistic goal or esti-
mate a future value.

CHAPTER CHECKLIST

After reading this chapter, you should be able to:

• identify the knowledge management functions across your

organization

• determine whether you have sufficient functionality to

warrant knowledge management metrics

• determine whether metrics might help you to establish

knowledge management functions

• test the strawman metrics for each knowledge

management function

• develop process models for each knowledge management

functions

• identify decision points in each knowledge management

function

• define the performance and productivity metrics for

knowledge management function

• define roles and responsibilities for operationalizing

knowledge management functional metrics.

REFERENCES AND RECOM MENDED

FUTURE READINGS

Bell DeTienne, K., Dyer, G., Hoopes, C., & Harris, S. (2004).
Toward a model of effective knowledge management and
142 Designing and Tracking Knowledge Management Metrics

directions for future research: Culture, leadership, and

CKOs. Journal of Leadership & Organizational Studies,
10(4), 26–43.

Bontis, N, (2001). CKO wanted – Evangelical skills

necessary: A review of the chief knowledge officer position.
Knowledge and Process Management, 8(1), 29–38.

Dalkir, K, (2005). Knowledge management in theory and

practice. Oxford: Elsevier Inc.

Earl, M. J., & Scott, I. A. (1999). Opinion: what is a

chief knowledge officer? MIT Sloan Management Review,
40(2), 29.

Gray, J. M. (1998). Where’s the chief knowledge officer?

To manage the most precious resource of all. BMJ,
317(7162), 832

Herschel, R. T., & Nemati, H. R. (2000). Chief knowledge

officer: Critical success factors for knowledge management.
Information Strategy: The Executive’s Journal, 16(4), 37–45.

Kerfoot, K. (2002). The leader as chief knowledge officer.

Nursing Economics, 20(1), 40.

Leibowitz, J. (2002). The role of the chief knowledge officer

in organisations. Research and Practice in Human Resource
Management, 10(2), 2–15.

O’Leary, D. E. (1998). Enterprise knowledge management.

Computer, 31(3), 54–61.

Pemberton, J. M. (1997). Chief knowledge officer: The

climax to your career? Records Management Quarterly,
31(2), 66–70.

Skyrme, D. (2008). Do you need a CKO. Retrieved from

http://www. skyrme. com/insights/27cko. htm (2008-07-10).
Metrics for Knowledge Management Capabilities 143

Soliman, F., & Spooner, K. (2000). Strategies for

implementing knowledge management: Role of human
resources management. Journal of Knowledge Management,
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Stovel, M., & Bontis, N. (2002). Voluntary turnover:

Knowledge management–friend or foe? Journal of
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