Sunday, January 6, 2008

The Value Proposition

As often happens when the ideas people meet the accountants, there comes the question: "What is the return we get for this investment?"

In KM this has been a very difficult question to answer because so many of the value levers are quite a way removed from the source of the value and they tend to be 'soft' rather than hard in nature.

Can we really measure how much more efficient it was to complete the task at hand with access to an up to date KM repository, People-finder or other system versus doing it the old fashioned way?

We know there is value of course, but it is not easy to measure.

When we look into the value of adding Social Networking features to our KM mix, the question arises once again.

In this case we are seeking to make an investment that facilitates how people build and use Social Networks so that we can reap the benefit of facilitating these connections.

To begin with we have to start with some sort of a value proposition.

Thinking about this recently, I came across a paper from 2003 on the subject by Ronald S. Burt called "Social Origins of Good Ideas" which you can access here.

In the body of this paper I read the following which seems to speak rather well to the value proposition we seek:

"People whose networks span structural holes have early access to diverse, often contradictory, information and interpretations which gives them a competitive advantage in delivering good ideas"

This is a very nice way of defining the value that the peoples personal networks offer outside of the organizational hierarchy wherein they work.

Further to this, the writer goes on to delve a little deeper into the actual process that makes this so:

"People connected to groups beyond their own can expect to find themselves delivering valuable ideas, seeming to be gifted with creativity. This is not creativity born of deep intellectual ability. It is creativity as an import-export business. An idea mundane in one group can be a valuable insight in another"

There you have it: creativity as a trading business, informally a network becomes an exchange or a market place of ideas, the members are the brokers.

There is a certain elemental truth to this that begins to seem blindingly obvious but, like most things, has to be defined in words for it to really come into view.

The logical conclusion you can draw from this would be as follows:

Proactively facilitating Social Networks inside an organization is valuable because they provide an alternate way to link individuals across disciplines that the organizational hierarchy may not recognize.

Further to this, facilitating the mechanisms by which participants can state with a degree of clarity, context and accuracy, the things they know and the ideas they have in such a way as can be easily transmitted to others across the network is the best way to achieve a strong value proposition for the network.

One self-limiting factor in the value of the network that appears in this consideration is the tendency for people to network most with like-people.

To the extent that this happens it would appear to reduce the value of the network if we are to believe that diversity is the key to old ideas from one discipline becoming fresh new ideas in another.

It would seem likely that there is a balance to be achieved between heterogeneity and homogeneity to best achieve the most fertile network.

There may be a way we can measure this and derive some sort of a balance coefficient that would help us manage the network to keep it in it's most productive state.

Of course that's all a bit far from the day-to-day of pushing forward with the best KM systems we can build, but it does provide a fascinating way to view the value of what we are building.

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