Knowledge Management for Professional Services conference 2006 Measuring the Value of the KM Strategy Avillion Hotel Sydney 27 February 2006 Chris Fletcher—Director, Knowledge Management Asia Pacific region Deloitte Consulting

The voice of the practitioner 2003…

Agenda Our business case for a new KM Strategy KM: Content, Culture, Connectivity How do you determine what is value in your KM Strategy? How do you measure value in your KM strategy?

Our business case for a new KM Strategy

KM: Content, Culture, Connectivity

How do you determine what is value in your KM Strategy?

How do you measure value in your KM strategy?

Deloitte is a very large professional services firm History of Consistent Growth and Financial Strength Assurance Financial Advisory Consulting Tax Full Range of Professional Services Revenue by Industry Manufacturing Financial Services Energy Health Care Public Sector Consumer Business Communications 21% 19% 9% 12% 13% 16% 10% Revenues of $16.4 billion with some 120,000 people in more than 150 countries

The challenges of building a KM strategy in an environment of discontinuous change are substantial Organisations don't always know what knowledge they want or need and the needs keep changing! When they do figure out what knowledge they need, they cannot get people to share, transfer or apply knowledge Crucial knowledge will get stuck in organisational silos Knowledge famine and information glut Knowledge is often transaction-based Speed and quality often suffer from a non-unified view of the customer and business External market factors change as markets become educated, information transfer speeds up but knowledge transfer slows down Workloads are soaring, people don’t have time to innovate or collaborate These things are not only true for service organisations

Organisations don't always know what knowledge they want or need and the needs keep changing!

When they do figure out what knowledge they need, they cannot get people to share, transfer or apply knowledge

Crucial knowledge will get stuck in organisational silos

Knowledge famine and information glut

Knowledge is often transaction-based

Speed and quality often suffer from a non-unified view of the customer and business

External market factors change as markets become educated, information transfer speeds up but knowledge transfer slows down

Workloads are soaring, people don’t have time to innovate or collaborate

Deloitte has had to face some further challenges occurring in the professional services arena After Arthur Andersen, the consulting playing field changed (most big firms planned spin-offs of consulting divisions) Deloitte focused energy on preparing to spin off Deloitte Consulting In 2003, Deloitte changed course and reintegrated Deloitte Consulting Management focus had to shift from a “clean split” to an “integrate again” equation This change of direction impacted through different structures/silos/cultures Lots of “stuff” available, how to get the “good stuff” Lots of confusion as to what Deloitte IP was and where to access it All this during a time of rapid growth . . .

After Arthur Andersen, the consulting playing field changed (most big firms planned spin-offs of consulting divisions)

Deloitte focused energy on preparing to spin off Deloitte Consulting

In 2003, Deloitte changed course and reintegrated Deloitte Consulting

Management focus had to shift from a “clean split” to an “integrate again” equation

This change of direction impacted through different structures/silos/cultures

Lots of “stuff” available, how to get the “good stuff”

Lots of confusion as to what Deloitte IP was and where to access it

The changes within Deloitte had to be played out on a global playing field Deloitte had a unique Knowledge Management Challenge . . . Latin America and Caribbean 55 Cities 28 Countries North America (United States, Canada and Mexico) 149 Cities 3 Countries Africa 48 Cities 23 Countries Asia-Pacific 121 Cities 27 Countries Middle East 32 Cities 16 Countries Europe 326 Cities 55 Countries Link 120,000 professionals in over 150 countries to the knowledge they needed Link 30,000 consultants to one global repository of all research, content, resources and learning through a common portal Develop collaborative communities related to different services and industries Collect, cleanse, enhance and distribute knowledge within client confidentiality limits Ensure content is relevant, current and continuously submitted Create vehicles for project knowledge sharing, for project-based innovation and for collaboration with clients

Latin America and Caribbean

55 Cities

28 Countries

North America (United States, Canada and Mexico)

149 Cities

3 Countries

Africa

48 Cities

23 Countries

Asia-Pacific

121 Cities

27 Countries

Middle East

32 Cities

16 Countries

Europe

326 Cities

55 Countries

Link 120,000 professionals in over 150 countries to the knowledge they needed

Link 30,000 consultants to one global repository of all research, content, resources and learning through a common portal

Develop collaborative communities related to different services and industries

Collect, cleanse, enhance and distribute knowledge within client confidentiality limits

Ensure content is relevant, current and continuously submitted

Create vehicles for project knowledge sharing, for project-based innovation and for collaboration with clients

In the face of discontinuous global change, Deloitte had to drill down into the real meaning of KM… An appropriate view of KM depends on your organisation’s knowledge maturity and strategic priorities… For Deloitte, we chose to focus on three key themes: Embed knowledge sharing within core values, daily processes, and organisational attitudes Define, capture, process, synthesize, disseminate and improve specific, focused, value-added content (both internally and externally authored content) Provide rapid people-to-content and people-to-people connectivity using world class infrastructure Most companies still focus on the content and don’t do justice to culture and connectivity

An appropriate view of KM depends on your organisation’s knowledge maturity and strategic priorities…

For Deloitte, we chose to focus on three key themes:

Our approach to Content places responsibility with the practitioner for contribution Received from practitioners Cleansed in India Reviewed for client confidentiality and ownership Packaged by issue and competency Searchable in the Knowledge Exchange Linked by client and type of work

Received from practitioners

Cleansed in India

Reviewed for client confidentiality and ownership

Packaged by issue and competency

Searchable in the Knowledge Exchange

Linked by client and type of work

Our approach to managing Deloitte’s talent and knowledge builds and reinforces our culture Our Culture and Values… are supported by our Talent Management approach: Outstanding value to clients Commitment to each other Integrity Strength from cultural diversity A strong spirit of collegiality KM Activities Support This Culture and Approach Acknowledge and reward knowledge sharing, responsiveness and a collaborative way of working in developing our people Make it easy to share (KM team will tag and load for you …) so that the right people with the right knowledge are deployed Communities, knowledge sharing and innovation events all build connections Focus on project scheduling preferences so that people can develop and be deployed to get the experience they want and need, keep us the “Best place to work ” Develop Deploy Connect Alignment Commitment Capability Performance

Outstanding value to clients

Commitment to each other

Integrity

Strength from cultural diversity

A strong spirit of collegiality

Acknowledge and reward knowledge sharing, responsiveness and a collaborative way of working in developing our people

Make it easy to share (KM team will tag and load for you …) so that the right people with the right knowledge are deployed

Communities, knowledge sharing and innovation events all build connections

Focus on project scheduling preferences so that people can develop and be deployed to get the experience they want and need, keep us the “Best place to work ”

Content is delivered via a portal with expanded search and easy contribute capabilities

So how did we get our KM Strategy to where it is today? Sponsorship Consulting Leadership agreed to globally share Intellectual Property; role of KM is to provide access to the “right content, at the right time, in the right format, and at the right price” enabling our practitioners to deliver greater value to our clients Vision To be recognized as the source of global consulting content and knowledge by converting project experience and individual expertise into organizational knowledge and intellectual capital Stakeholders Global, Competency, Regional and Country leadership have validated our knowledge sharing approach and provide “On the Ground” support extending beyond the financial Our Knowledge Brand Marketing and communications programs have reinforced the knowledge brand in consulting and recognition of the value knowledge sharing provides our practitioners Our practitioners Have articulated the “what’s in it for me” and the value of knowledge for our people Mission Statement To facilitate the exchange of content and knowledge to increase the value our practitioners deliver to clients

Vision

To be recognized as the source of global consulting content and knowledge by converting project experience and individual expertise into organizational knowledge and intellectual capital

Mission Statement

To facilitate the exchange of content and knowledge to increase the value our practitioners deliver to clients

How do you determine value in your KM strategy? One size does NOT fit all Value depends on: - Stakeholders - Articulated benefits - Value drivers - Knowledge Value continuum

One size does NOT fit all

Value depends on: - Stakeholders - Articulated benefits - Value drivers - Knowledge Value continuum

Understanding Value - Stakeholder Management Who ultimately is responsible for the KM Strategy? Can you identify the key stakeholders? Are there any decision makers not in the loop? Where are the detractors? What outcomes are appropriate for each group of stakeholders What are their expectations around knowledge?

Who ultimately is responsible for the KM Strategy?

Can you identify the key stakeholders?

Are there any decision makers not in the loop?

Where are the detractors?

What outcomes are appropriate for each group of stakeholders

What are their expectations around knowledge?

Understanding Value - Articulating benefits to be delivered My Knowledge Benefits Mutual Benefits Organisational Benefits Access to the latest thinking Faster access to knowledge Better Sharing Knowing who is doing what Novel approaches / new ideas Faster problem solving New hires becoming effective quicker Minimise duplication/ reinvention Better / faster innovation Improved client service Reduce knowledge loss Productivity performance

each organisation will have different drivers, but there are some consistent themes: Understanding Value – Identifying the drivers Management KM Organisation IP Protection Risk Management Organisational efficiency Knowledge currency IT Drivers

Management

KM Organisation

IP Protection

Risk Management

Organisational efficiency

Knowledge currency

IT Drivers

Understanding Value - The knowledge value continuum Knowledge linked to innovation ROI for benchmarks reported Building block in corporate strategy Senior management take ownership KM benchmarks established CKO role established Value of linked data recognised Systems to link and capture data developed Business units drive process Not recognised by the business as important No strategic visibility Business Imperative Collaborative tools Linked data structures “ One record – one update” Search engine driven Tacit knowledge exchanges Document Management Knowledge sharing tools – not linked or rationalised Explicit knowledge starting to be documented Taxonomies developed Common drives for information storage Spreadsheets Disparate repositories Ad hoc No common repositories Little connected data Connectivity Community based Boundryless Collaborative Team based Acknowledged value of knowledge Network of contacts developed Knowledge embedded in KPI’s Formal learning programs Data linked – information visible information starting to be shared No sharing Individual ownership of data Siloed Business Units Culture Current / Best of Breed Needs focused Business based Value added Accessible & Searchable Continually reinvented Tacit knowledge exploration Information linked to added value Knowledge flows developed Differentiation between explicit and tacit knowledge Knowledge taxonomies developed Needs begin to drive information flows Discrete information repositories Little value added Context around data developed Specific to individuals large volume disparate in nature Content Innovation Knowledge Information Data

Knowledge linked to innovation

ROI for benchmarks reported

Building block in corporate strategy

Senior management take ownership

KM benchmarks established

CKO role established

Value of linked data recognised

Systems to link and capture data developed

Business units drive process

Not recognised by the business as important

No strategic visibility

Collaborative tools

Linked data structures

“ One record – one update”

Search engine driven

Tacit knowledge exchanges

Document Management

Knowledge sharing tools – not linked or rationalised

Explicit knowledge starting to be documented

Taxonomies developed

Common drives for information storage

Spreadsheets

Disparate repositories

Ad hoc

No common repositories

Little connected data

Community based

Boundryless

Collaborative

Team based

Acknowledged value of knowledge

Network of contacts developed

Knowledge embedded in KPI’s

Formal learning programs

Data linked – information visible

information starting to be shared

No sharing

Individual ownership of data

Siloed Business Units

Current / Best of Breed

Needs focused

Business based

Value added

Accessible & Searchable

Continually reinvented

Tacit knowledge exploration

Information linked to added value

Knowledge flows developed

Differentiation between explicit and tacit knowledge

Knowledge taxonomies developed

Needs begin to drive information flows

Discrete information repositories

Little value added

Context around data developed

Specific to individuals

large volume

disparate in nature

Two ways to measure value: 1. Measuring outcomes – the extent to which a project achieves its objectives - serves as a proxy measure for success of KM initiatives - KM is then an integrated part of the project or process 2. Measuring activities – looking at specific KM practices applied to a project or process - what are the specific KM activities behind this practice and what was their effect? How can you measure KM value in your strategy?

Two ways to measure value: 1. Measuring outcomes – the extent to which a project achieves its objectives - serves as a proxy measure for success of KM initiatives - KM is then an integrated part of the project or process

2. Measuring activities – looking at specific KM practices applied to a project or process

- what are the specific KM activities behind this practice and what was their effect?

1. Measuring outcomes - collections

1. Measuring outcomes – the engagement lifecycle

1. Measuring outcomes – story telling Sites on the KX dedicated to telling the story of a project: - why the client needed help - how Deloitte provided assistance and - the tangible benefits the client experienced as a result of our work

Sites on the KX dedicated to telling the story of a project:

- why the client needed help

- how Deloitte provided assistance and

- the tangible benefits the client experienced as a result of our work

1. Measuring outcomes - Keeping KM “top of mind”

2. Measuring activities - Global KM metrics reports monthly Defined – Valid – Actionable - Reliable Global Leadership Service Line Leadership Contributions Qualifications Country Usage Regional Leadership

Consultant Contribute content as directed, participate in local KM initiatives Analyst Effective navigation, understanding and ability to contribute to knowledge system Senior Consultant Works with managers to identify & contribute “best” content, participate in local KM initiatives Senior Manager Promotes the importance of knowledge sharing in engagement start-up / close-out, ensures capture of qualification and deliverables and compliance with standards, acts as a knowledge connector Manager Is the knowledge leader on engagements and/or contributes quality content, captures lessons learnt, responds to RFI’s 2. Measuring activities – knowledge sharing behaviours Partner Actively promotes knowledge sharing, identifies and sponsors content coolections, methods, communities, comms. Discourages siloed knowledge

2. Measuring activities – surveying our people Survey of >30,000 practitioners 150 countries Confirmation of global KM strategy Roadmap for next 3 years Rich feedback from “the coal face”

Survey of >30,000 practitioners

150 countries

Confirmation of global KM strategy

Roadmap for next 3 years

Rich feedback from “the coal face”

2. Measuring activity - Marketing knowledge

Measuring the value of your KM Strategy One size does NOT fit all! Knowledge Management strategies WILL change and so will your definition of value The value of knowledge management needs to be understood as it relates to your business Measurement of knowledge value needs to be related back to outcomes and activities of the strategy Any piece of knowledge I acquire today has a value at this moment exactly proportioned to my skill to deal with it. Tomorrow, when I know more, I recall that piece of knowledge and use it better. - Mark Van Doren

One size does NOT fit all!

Knowledge Management strategies WILL change and so will your definition of value

The value of knowledge management needs to be understood as it relates to your business

Measurement of knowledge value needs to be related back to outcomes and activities of the strategy

Voice of the practitioner 2006…..