Measuring return on investment for KM has always been a challenge. Recently, I received an e-mail from one of our members--Kevin Gannon of U.S. Navy Carrier Team One--asking about this topic.

One of our process masters ... found [an] article on KM ROI--very interesting.  There are a couple of "estimates" such as "average cost of turnover is 1.5 times the annual salary of the job," "it takes 13.5 months for a new employees to maximize their efficiency," "ROI for a brain-drain orientation project is 10:1," etc.  My question is: As we start trying to nail down ROI calculations, do you think it is fair to quote numbers like this?  That question might be too subjective--a better one might be: Do these numbers seem to match your experience in this area?

What I told him was this: Over the years, APQC has had the opportunity to do deep research as well as hands-on work with organizations that have succeeded in measuring the impact of their KM efforts.  These efforts were measured via targeted projects where knowledge flow and KM approaches (e.g., communities of practice, best practice replication) were embedded into the business workflow.  The results have ranged from a 50 percent return on investment within the first nine months up to a 5:1 return on continuous efforts. 

APQC is always looking for more effective ways to calculate ROI. If your organization has experienced an ROI from KM, we'd love to hear about the focus of your efforts and how you performed your calculations.

Over the past few months, a lot has been written about how the Internet and other technologies are affecting the way in which we read, think, and learn. One article that has generated particular attention is Nicholas Carr's "Is Google Making Us Stupid?" in the July/August issue of The Atlantic. Carr argues that, for most people, the Web is becoming the primary channel through which information is absorbed and processed. Although "having immediate access to such an incredibly rich store of information" provides many advantages, there is a tradeoff:

...what the Net seems to be doing is chipping away my capacity for concentration and contemplation. My mind now expects to take in information the way the Net distributes it: in a swiftly moving stream of particles. Once I was a scuba diver in the sea of words. Now I zip along the surface like a guy on a Jet Ski.

I've talked with a lot of people recently about the KM opportunities and challenges facing their organizations. One theme that emerged from these conversations is the pervasive struggle to promote knowledge sharing among various generations of employees. Repeatedly, I heard how the "younger" professionals, especially Gen Y and the Millennials, are difficult to engage--they work and learn differently, they don't value what's come before them, and so on. (Note: These are blanket generalizations. I realize that not all young professionals behave this way.)

Here's an excerpt from Jerry's Editor's letter:

Our new KM Edge groups on LinkedIn and Facebook are designed to help you connect with one another and share knowledge and expertise. We already have more than150 members in our LinkedIn group, so joining will put you instantly in touch with a large pool of professionals who share your passion for KM. Our Facebook group is smaller, but becoming a fan will let you access KM Edge updates directly from your Facebook account.

If you already have a profile on one of these sites, joining is easy--just click the links above. We look forward to seeing you soon on your favorite social networking site!

... after speaking quite succinctly about the futility of using traditional measures and biased surveys to measure KM impact in complex environments, he suggested using Sensemaker and the various methods from Cognitive Edge / Dave Snowden's work for narrative elicitation, capture and analysis to uncover the real impact of KM work.

Since assessing and proving the value of KM seems to be one of the problems we hear about most often at APQC, I thought it would share this with our audience. For more general information about measuring your KM program, check out our articles Can You Measure the Value of Knowledge Management? and Five Tips for Effective KM Measurement Systems. We also have a list of KM Measurement Tools and Resources to guide you to more detailed information on this topic.

Having returned from a recent benchmarking workshop conducted in Europe by Carla O'Dell, it struck me as timely to mention an observation from that trip in connection to a report produced annually by Bain & Company regarding the use of management tools.

  As one of several thought leaders in various fields assembled by an international business school, Carla was asked to teach a group of high-achieving partners from a global professional services firm how to conduct benchmarking studies. The Bain & Company report (available here) shows that benchmarking usage has increased over the life of the survey to become, with the exception of strategic planning, the most frequently used management tool in North America, Europe, and Latin America. So far, so good!

What I hope the junior officers get out of the internship week is:  a better understanding of the high level issues affecting the organization that junior officers rarely experience first hand (they typically just feel the after-effects), personal observation of the forums and interactions I use to help "steer" the organization, exposure to leadership styles and issues different from their own, and mentoring from a senior Navy officer. What I usually get out of the week is: exposure to a different point of view, some insight into what junior officers are thinking, and 360-degree feedback on my leadership style and effectiveness.

Over the next few weeks, you'll be seeing a lot more voices weighing in on KM topics via the KM Edge blog--including senior members of APQC's KM team, seasoned practitioners, and KM thought leaders.

Today, I'm writing to introduce our newest featured contributor. Capt. Ralph Soule is a career Naval officer who has been on active duty for 26 years. Since November 2007, he has been commanding officer and supervisor of shipbuilding, conversion, and repair in Newport News, Virginia. As such, he is responsible for the U. S. Navy's aircraft carrier and submarine ship construction, nuclear refueling, and repair programs at Northrop Grumman Shipbuilding, Newport News Operations.