06 July 2008

Managing risk from knowledge failure

Counting the cost of knowledge problems is always a tricky affair.

Knowledge itself is an intangible asset in the first place and despite some excellent work by Professor Karl-Eric Sveiby, Thomas Stewart and Professor Bill Martin (RMIT) and others like them, a lot of company boards and an even larger numbers of accountants still struggle to find a place for it in business plans and balance sheets.

Some say it is not a hard asset so it is impossible to place value against it. Others claim that while it costs real dollars to implement knowledge strategies, the use of the transferred knowledge is so complex in nature that the outcome is unmeasurable.

But should that cause us to give up and ignore knowledge problems in our organisations? It would seem we do this at our peril because a recent post by Graham Durant-Law about the B2 Bomber crash in Guam shows that while knowledge transfer and reuse can be hard to predict, it is very easy to discover when looking in hindsight. Read Graham's post here and take ten minutes to think about what disasters could happen in your organisation then what types of "knowledge failures" would create the conditions for them. You might just save yourself $1.4 billion!

Are you stuck for ideas or would like to share a past failure so others can learn? Check out The Mistake Bank - a web site with stories of failures, slip-ups and mistakes you might like to avoid.

3 comments :

John Caddell said...

Hi, Stuart, thank you very much for referencing The Mistake Bank in your post. I hope your readers know that all are welcome to join and learn, and to share their mistake stories for others as well.

Regards, John

Stuart French said...

No problems John.
I actually blogged earlier about the concept of it being OK to say "I don't know" and The Mistake Bank goes hand in hand with that sort of thinking.
Wish I'd thought of the idea myself!

Mireille Jansma said...

Hi Stuart,

Thanks, I didn't know The Mistake Bank. What way to learn better than by mistakes? BTW, some time ago ABN AMRO started the Institute of Brilliant Failures: http://www.briljantemislukkingen.nl/page/engelse-pagina/. Unfortunately, the content is in Dutch. But here's an English article by Gill Corkendale about this institute, published at the site of HBR: http://discussionleader.hbsp.com/corkindale/2007/06/in_praise_of_brilliant_failure.html.

Mireille

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