Saturday, September 29, 2007

A capital idea

This week saw me start a new role, be offered another role and be invited to participate in some psychometric testing for yet another role. When it rains it pours.

But aside from that, I took some time out of a busy schedule to have hot chocolate (don't drink coffee) and some stimulating conversation with other Brisbane based KM practitioners at the KM over Coffee event that the QKM Forum has once a month.

After introductions and some initial discussion I raised a perception I have of how companies measure their performance. I drew the following diagram on a piece of paper.

It seems at the moment that everything is brought back to dollar amounts. Activities or programs undertaken in organisations that have a human capital or intellectual capital focus seem to have their performance measured financially. How much did we make? How much did we save? Did it effect the share price? What is the financial value/benefit?

I can understand why this is the case. It happens that financial performance is one of the very few performance indicators that transcends industries, geographies and scale. Profit, share price, assets, liabilities. All are measured in dollar amounts. It creeps into the knowledge management space because you find you have to talk in these terms to make sense or get the attention you require.

Example - Lessons Learned
How many times have we seen reusing knowledge/experience from previous activities expressed in terms of "We saved $X million", "We reduced our costs by half", "Our income increased by $Y".
Now I know a number of people have been trying to get organisations to adopt metrics for human capital, intellectual capital and other areas, that are not converted to financial terms. But there is a long road ahead to get them to any sort of level that has them even appearing in Annual Reports.


1 comment:

Stan Garfield said...

Hi, Cory.

I linked to this post today from my blog.