Sunday, October 12, 2014

Knowledge as Asset

Knowledge as the most valuable commodity -Peter Drucker

Knowledge is an asset to every organization and its integrity, availability and confidentiality can be crucial to how the organization functions or maintains its services and products. For fellow digital workforce, knowledge is the power; for digital business as a whole, knowledge is an asset. But how to manage such intangible asset more effectively?

Knowledge as the most valuable commodity. In his 1999 book a”Management challenges for the 21st century,” Peter Drucker forecast that "Knowledge" would become the most valuable "Commodity" of this century & knowledge workers would work for several organizations, so it's reasonable for it to become an asset. It will be a challenge to put an actual value on it because of the unlimited variants of knowledge. Could it be valued along similar lines to brands, being dependent on its long-term benefits?

Follow the business asset management principles, not practices: The idea of applying the asset management principles to arrange your own corporate knowledge strategy is worth deploring, although knowledge is more intangible, complex and dynamic compare to the physical asset. The key to ultimate business success today is intangible knowledge assets: intelligent people, smart data, agile processes and collaborative partners. This intangible asset and innovation capital drives the value, growth and performance of every organization today. However, information and knowledge are not managed or measured as well as it should or could be. Organizations should be able to put some measurable value on the information and knowledge assets because it is "vital" to the business.  If using the term ("asset"), it leads naturally to another important conclusion: that IM and KM shall be managed more holistically as a corporate asset; if done properly; it can turn the most valuable personally-owned information and knowledge assets into corporately owned assets. Without good IM and KM, this will never happen, so those personally-owned assets will go when the person goes and will be lost forever.

Establish the governance discipline in managing knowledge effectively. It is crucial to validate and establish governance and risk management for data, information, knowledge and wisdom. The valuation of such assets is crucial to the process so that knowledge is an asset and it has value. A simple example is knowledge that people acquire and maintain. We hire people with their experience, skills and generally their knowledge. Be fully cognizant of the complex nature of knowledge asset. The problem is that you cannot scan or treat knowledge as you would treat other "assets" via a reductionist/rationalist approach - a problem inherent to "resources" within the resource-based view of the firm. Basically, there are a few challenges in managing knowledge. 1). knowledge assets are a blend of resources, not a single asset, and, while you might deploy a person as an asset, they are limited by capability, which is more often than not ignored when taking an asset management approach to knowledge; 2). when speaking of knowledge, the firm does not always own the asset - therefore, the deployment has to consider agency and interdependency of ownership; 3) complexity requires the exploration of the interdependencies that contribute to the value of critical knowledge. 4). knowledge 'asset' scanning is vulnerable to the context of time and place - the value is emergent and not always known at the time of a reductionist scan. During the stage of knowledge as tacit or implicit, it is extremely volatile. 

There is no hard asset that you can buy today that will guarantee the success of your organization Data, information, knowledge and wisdom are the different stages of information life cycle that organizations need to manage more effectively and  improve its business capability maturity.


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