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The Physics of Knowledge Management

        posted by , March 23, 2013

Knowledge is a valuable asset.

It's so valuable that many economists consider our economy to be essentially knowledge-driven.

Everyone will agree that knowledge has business value. Most will agree that it's important to manage knowledge as an asset. The problem is that it's difficult to estimating the business value of knowledge — how can knowledge assets be measured?

The answer to this question lies in the physics of the knowledge universe — the fundamental dimensions that give knowledge its value.

The value of knowledge is defined by a 4-dimensional universe of volume, velocity, quality and variety. Knowledge management improves the value of knowledge in each dimension.

1. Volume

The more knowledge you have the more valuable it becomes. For example, the internet derives its value from the enormous volume of knowledge it offers.

Knowledge management improves knowledge volumes by identifying, creating and retaining knowledge.

2. Velocity

The value of knowledge increases with its social velocity. If you discover a brilliant idea and hide it under your pillow it will have little value. If you share it with 100 people it will have more value. If millions of people can't stop talking about your idea it will have far more value.

Knowledge management improves knowledge velocity by facilitating knowledge access, search, communication, sharing and collaboration.

3. Quality

The value of knowledge increases with its quality. Examples of knowledge quality include validity, accuracy, impact and relevance.

Low quality data can be the source of strategy formation and execution failures. It can also result in failed programs, projects and processes. Knowledge management improves knowledge by validating, assessing, measuring and improving knowledge.

4. Variety

The value of data increases with its variety.

For example, mixing engineering knowledge and marketing knowledge may lead to ideas for new products.

Teams that focus on their own knowledge may miss out on insights from elsewhere in your organization.

Centralized, accessible knowledge management processes and tools improve knowledge variety.

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