The Value of Knowledge: The Economics of Enterprise Knowledge and Intelligence
by Timothy Wood Powell (de Gruyter, 2020)
As my new book opens, I am riding NYC’s Number 1 subway uptown to Columbia University, where I will discuss my Value of Knowledge work with my students. A sudden pang of panic hits me. Who am I, a nagging voice inside me asks, to be lecturing students on the value of knowledge? These young people are giving up their evenings and weekends – not to mention a considerable sum of money – to augment their formal education. Surely, they must already understand the value of their sacrifice. Is my book – and a large chunk of my life’s work – for naught – and possibly even somewhat absurd?
A few stops later I leave the train to walk across the beautiful Columbia campus. My anxiety has resolved into the pre-show butterflies that fuel all good performances. I have by now recalled my earlier feelings of helplessness at seeing my clients and colleagues in the “knowledge” fields decimated during each of the recessions of 2000-2001 and 2008-2009. I have recalled my resolve to use the tools at my disposal – evidence-based research, a quantitative/analytic background and mindset, and a penchant for documenting my professional observations – to prevent that from ever happening again.
The book’s purpose
My conclusion is that, while knowledge professionals may hold the instinctive conviction that what they do has value, their clients-users-sponsors typically do not. These latter may require some convincing. And knowledge professionals, not being formally trained in the economics of knowledge and intelligence, too often lack the tools to:
- Rigorously assess their own performance.
- Increase their value to the organization.
- Effectively communicate that value in ways their audience will understand and reward.
My desire to redress these gaps forms the over-arching purpose driving my effort.
The knowledge time machine
One of the most rewarding elements of my research was conducting an “archeology” of the idea of the value of knowledge. Was this construct always important, and, if not, where does it come from? Modern thought about knowledge begins in the 1960s, with the work of Fritz Machlup and Peter Drucker. This is where my own professional foundations lie – and I wanted to test whether their original vision had been followed through in the present day.
Once I got rolling, I didn’t stop my time travel with the six decades we consider the modern (i.e., digital) knowledge economy. I went back to the Enlightenment of the sixteenth century – Francis Bacon and the origins of modern science. This was the birth of the “instrumental” view of knowledge – that knowledge attains value by helping us reach goals and solve problems.
Then I traveled back even farther – to the fourth century BCE, when knowledge was first described by Socrates and Plato. Their thinking forms the “classical” view – that knowledge has value in and of itself.
Structure and metrics
In addition to the quick time travelogue, the book has seven sections, each of which views the value of knowledge through a different lens or persona, that of the:
- Senior executive or board member.
- Knowledge producer.
- Knowledge manager.
- Knowledge user.
- Financial executive.
- Product developer.
- Enterprise strategist.
By the numbers, the book comprises 267 key concepts, 41 tables and figures (many of which can be directly adapted to one’s own work), 28 major value-building strategies, and ten core propositions that bind the whole thing together. Despite the reference to “economics” in its title, the book itself is largely non-mathematical; each of its half-dozen simple formulas is also explained clearly in words.
The book is based on my reading and research, on my lectures and workshops at Columbia, several other universities, and various professional forums, and on my half-century of clinical experiences with client organizations in a wide range of industries. Many of these casework insights are described in the book.
The “tentpole truths” supporting the basic thesis of the book are:
- Value is a function of benefits and costs – each of which may be either financial or non-financial.
- Knowledge has a “life cycle” of Production, Communication, Use, and Management.
- Knowledge produces value in being used or applied.
- Corrective actions (described in the book) can be taken to increase that value.
Knowledge metrics, both macro and micro, are discussed, as well as the role of knowledge in ISO standards and in the (US) Baldrige Awards for quality. There is an extensive list of sources cited, as well as a brief lexicon of value terms.
The Value of Knowledge has already been adopted as a required text for master’s degree students in Knowledge Management at a major US university. An even wider audience is being found among organizational knowledge practitioners worldwide, who form the core base of my clients, colleagues, and friends. It is available on Amazon in both hard-copy and electronic formats.
Could not agree more!
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