Conducting a knowledge audit: Part I

The first of a three-part series exploring the processes of conducting a knowledge audit. By Danny Budzak

Conducting a knowledge audit can sound like a monumental task. More often than not, such audits fail to get off the ground, while those that do often end in an unsatisfactory manner. What follows are some ideas about carrying out a piece of work that will bring benefits to the people who work in an organisation or those who interact with it as customers, suppliers or strategic partners. There is no single blueprint.

This article will appear in three parts. The first looks at some of the general issues and attempts some definitions. It sets the framework with some thoughts and suggestions of what the audit is, why definitions are important, demonstrating the benefits, a starting point, and outcomes. The second installment will consider the possible methods in more detail, with the concluding article will provide advice on how to leverage the audit outcomes to create and manage change.

Creating the project
Organisations differ from each other as much as individual people do. The culture in organisations varies much more than large, expensive tangible assets such as the ICT infrastructure. Switch jobs and lo and behold on the first day you will be using a very familiar suite of software applications; getting to grips with the way the new organisation works compared to the one you’ve just left will take much longer.

Even the mention of the k-word will have different reactions depending on where you work and what goes on behind the closed doors of the company walls. But read this in conjunction with the wider body of literature and at least you should have some extra clues and hints and tips. Your organisation may not have conducted a knowledge audit in the past, but there will have been plenty of projects. If the starting point is the knowledge audit as a project in its own right, then we already have some de-mystification. The project can be managed and organised according to known rules and it is also possible to then consider how the success of the project itself will be measured.

All good projects have senior management support, a sponsor, maybe a business case, possibly a project initiation document. Yep, we’ve all done our project management training. Excellent projects also have verve, style, enthusiasm, some originality and, most importantly, deliver something of real use to those who are affected by them.

Definitions
Language, as we are all aware, is one of those traits that distinguish us from the rest of the animal world. Yes, birds and dolphins sing, but they don’t write anything down and they do not, as far as we know, discuss abstract concepts such as knowledge management (KM).

Words matter, and exactly what words are used, in what order, to carry which meanings, are important. Am I alone in thinking that it is a favourite trick of some large IT vendors and management consultants to deliberately and wilfully use language in a different way to the rest of us? In polite society this can be described as “pulling the wool over someone’s eyes”, in less polite society there are various colourful words which describe this process. No one is impressed by people who take up valuable time talking the incomprehensible language of management speak. I gasp at some of the terminology that emerges in the world of work and the way that language is used to obscure rather than to clarify.

I would suggest at the outset that everyone involved in the knowledge audit spends some time defining what they think ‘knowledge’ and ‘audit’ mean. It is worth having clear explanations as to how ‘knowledge’ is defined differently to ‘information’ as this question will certainly get asked. For example, ‘8,000’ and ‘10,000’ are bits of data. ‘The plane is flying at 8000 feet, the mountain is 10,000 feet’ is information. That evasive action is needed is knowledge. Stories from within the organisation are also useful.

Maybe audit is the wrong term. Most people in organisations associate audits with things that accountants and finance departments carry out. The term can have negative connotations of snooping and prying, a process designed to find error and anomalies. Does this term increase the FUD factor (fear, uncertainty, doubt)? Possible alternatives to audit could be review, inventory, survey, roadmap, health check. All of these terms give clues to staff as to what will be covered. It can be a good idea to work this out at the start.

Make a list of terms that need definitions and then spend some time defining them. It will save much confusion during the project. The definitions will help to focus the purpose of the project, as well as give an indication of what the drivers and benefits are. I would suggest that terms that need defining include knowledge, information, and knowledge management. There are several others that could be added.

Why carry out a knowledge audit?
We hear much talk of the ‘knowledge society’ and the ‘information age’. Nothing new there. Medieval Europe or ancient Chinese civilisations were ‘knowledge societies’. They were predicated on the members of those societies having knowledge about agriculture, construction, pottery, textiles, mathematics, language and a great deal else.

One of the features that makes our current times different is the vast expenditure in business organisations on digital computing and communications. Increasingly, governments and management boards are asking to see proven returns on all of that investment. The reason why organisations are taking knowledge management seriously is because they want to raise productivity and they think that ICT can help do that.

It is also because knowledge is a central asset of all organisations, be they hospitals or steel manufacturers. Knowledge is a critical factor in production and underpins all service delivery. But knowledge management cannot happen effectively if the organisation is not clear about what knowledge it has, where it is, how it is being used, and how it can all be improved. Therefore, some investigation, examination or audit is necessary. The audit is the starting point for the wider work of knowledge management at both a macro and micro level.

What is the purpose?
The knowledge audit can have multiple purposes and again, it’s worth defining what these are at the start. The main purpose of the audit should be to define what knowledge the organisation needs to support its business, where that knowledge is, how it is being used, what problems and difficulties there are, and what improvements can be made.

An audit could also be undertaken to find out where new knowledge comes from. It could look at the flows of knowledge in and out and within the organisation. It can be useful to assess how knowledge is shared in both formal and informal ways and what barriers there can be to this. In a previous incarnation as a web developer, I learned a huge amount each lunch time in the canteen by sharing tables with people doing related but different ICT work. This type of informal knowledge sharing was nowhere near the radar of the corporate human-resources department, which was concerned with something they called ‘training’.

I also think it’s useful for raising awareness about what knowledge means to the organisation. Many people are knowledge workers without ever thinking of themselves in those terms. Many workers in organisations have a great deal of knowledge for which they get very little credit, status or financial reward for. I’ve done a lot of work in the public sector and I never fail to be impressed by the extensive local and people knowledge that front line members of staff have. Organisations that want to smarten up would do much better to listen carefully to what this group of people say rather than expensive external consultants.

Where is knowledge in the organisation?
This is one of the big questions the audit tries to answer. I would argue that knowledge is held in two key places. Tacit knowledge is the stuff in people’s heads; facts, opinions, ideas, memories, emotional responses, learned behaviour (cold drinks are pleasant on a hot sunny day). This is tacit, personal knowledge. If it is going to be of use to others, there needs to be some transmission mechanism. The knowledge needs to be articulated through conversation or it needs to be captured to become explicit.

Explicit knowledge is physically captured either on paper or digitally. It can include documents, databases, websites, maps, e-mails, books, reports, posters, flip charts, notebooks and so on. A knowledge audit that deals with these areas will be looking at the issues of content, retrieval, volumes, storage, custodians and governance issues.

What should the knowledge audit cover?
The audit should be concerned with how knowledge is moved around and what it is used for. Crucially, it needs to determine what knowledge the organisation needs to carry out its business. Some pieces of knowledge are more useful and valuable than others and this may be a consideration. Knowledge by definition is both formal and informal. Consideration should be given to looking at both types. A lot of knowledge can be transmitted through a medium such as e-mail, often in an informal but concise way; but does the organisation know about this and how to manage it?

So when a knowledge audit is considered, it’s about how all of the above are described, located, measured, organised and managed. The audit is looking to find out where the knowledge is, what it is used for, who has what knowledge, and how that is shared or secured.

The audit could simply involve looking at what is held in databases, the number of files and folders in the organisation, and the content of web pages. That would be an audit, but not a knowledge audit. Such an audit has to consider and involve people. The knowledge audit is not just looking at hardware, software and content; it wants to find out what people know and what they do with the knowledge they have. The knowledge audit is determined by putting people at the centre of the activity.

A knowledge audit can therefore be described as an inspection or examination into the knowledge needs of the organisation and the relationships between people, processes and technologies in creating and supporting this.

The audit could cover the whole organisation, or a component part. It is worth being mindful of the law of diminishing returns. Opinion polls do not sample the entire population – this would be far too expensive and time consuming. In general, a very small percentage of the total population can give surprisingly accurate forecasts about general election results, opinion on important matters and feedback on new trends and fads.

If a small sample is going to be used, think about who will be involved. As the notice in my local fish and chip shop says, “Do you want to speak to the person in charge or the person who knows what’s going on?”

What are the benefits?
Benefits need to be shown, and to be of any use, they have to be realised. There are multiple benefits to be reaped from a knowledge audit, not just one or two. The benefits will impact on staff in different ways. There should be benefits to people who interact with the organisation, including customers, suppliers and strategic partners. All of these should be mapped. There are various business benefits calculators that have been designed using an Excel spreadsheet and pivot tables. These can be used to show tangible and intangible benefits. Benefits can be observed and they can be measured. Some benefits can be given a financial value, but others are less easy to quantify, but may be of significant importance. For example, the knowledge audit may lead to improvements in knowledge sharing because barriers are identified and reduced or removed. This may reduce stress for staff. Difficult to measure, but no-one would argue that is not a benefit.

A list of benefits can be calculated with an impact assessment on people and systems. Don’t be shy about mapping out a big list. It’s great to be able to say that 87 different benefits have been identified rather than one or two.

For a large project a business case may need to be produced. In such cases, a benefits analysis will be invaluable. Examples of proven benefits can be used from outside the organisation. A good example is one from a local authority, where a lack of knowledge management in the organisation meant that no-one was able to show a link between increases in truancy and traffic accidents involving children.

In another example from a pharmaceutical company, a ‘knowledge base’ was created that helped deal with 90 per cent of inquires; this helped convince a wide layer of people that knowledge management was very useful, and helped support the case for knowledge auditing.

What is the starting point?
There is a presumption here that the knowledge audit has been resourced, has the support of the senior management and has some staff time allocated to it. If these have not happened, go back three spaces and think about how any project moves forward in the organisation. Or start by looking at the benefits. Proving that the audit can produce tangible and intangible benefits is an excellent place to begin. Identifying some major problems is another.

I once asked someone who was regarded as a good trouble shooter how he worked. He replied that he had just finished a job for a large organisation. When he arrived to be interviewed, he got there early and talked to the receptionist. He asked her what it was like working there and she said, “Fine, but no one ever tells you what’s going on.” He repeated the same question to someone in the lift who gave the same answer. He asked the CEO’s secretary and she said the same. Within ten minutes of being in the building he was able to identify a key problem simply through some informal conversation.

If you are doing a knowledge audit in your organisation you will probably have a good idea of many of the problems. If you’re doing this from the outside, you will get a good idea by asking some informal and casual questions. Either way, the problems are likely to come from a select list: Cultural problems about sharing within the organisation, bottlenecks, historical legacy, different and competing structures, splits caused by different locations, bad managers, organisational fault lines, duplication, lack of motivation, embedded bad practice, people fear they will lose power, not enough time to work on change, etc. Take your pick and add others that apply to your own place of work.

There will be some ideas about the problems before the audit even starts, but be ready for discovering new problems that were not anticipated.

What are the outcomes?
I like this story that emerged during a discussion at a knowledge-management workshop in London.

A very small and discreet knowledge audit had been carried out in an organisation. This covered a particular service in some detail. The person who carried out the audit was very skilful in creating an active interest in the project and was able to deliver a complete outline of the project to senior managers, highlighting some important facts and good stories. Buy-in was accomplished and the general perception was that the knowledge audit ‘was a good thing’.

This particular audit worked because the objectives were discussed in some detail before starting. It had a clear direction of what it wanted to achieve and a realistic expectation of what could be done given the time and resources. It had a low-key start with a high-profile finish. Much better than a project that starts with a fanfare and slowly disappears from view in apathy and disappointment.

It was also clear what the outcomes were going to be; a short written report and a presentation to two sets of senior managers; one group at a divisional level, the other at a directorate level. The purpose was to identify some of the issues around knowledge management, to show how these could be improved and to raise awareness about knowledge management in general.

These may not be the particular outcomes you want – but having a clear idea about outcomes at the start of the project can be very helpful in creating a clear focus.

Danny Budzak is director of The Information Design Company, an information and knowledge management consultancy.