Capturing Intellectual Capital in Metadata
By Sid Adelman
In the 1964 movie Doctor Strangelove or How I Learned to Stop Worrying and Love the Bomb, the Doomsday Machine was maligned as being ineffective if your opponent was unaware of its existence – the result being the destruction of the world. So it is with intellectual capital and organizational knowledge. If this capital and knowledge is not made available to the rest of the organization, it’s worthless.
What is Intellectual Capital? It’s both organizational knowledge as well as industry knowledge. It’s the ability to apply skills to complex situations, it’s the cognitive knowledge through training and experience, it’s the system understanding of cause and effects, it’s knowing how the business runs, it’s knowing how to avoid the minefields, it’s the knowledge of how to find information; who knows it and where to get it. It’s been said that the power is not knowing all things yourself but knowing where to find the information. This intellectual capital is an organizational asset along with inventory and accounts receivable. The accounting community will not let it be shown on a company’s books but it’s sometimes part of the “goodwill” entry when a company is acquired.
Preserving Intellectual Capital
The problem today in many organizations is employee attrition; employees retire, resign, transfer to another department, or take a job with the competition. Average employee turnover rate is 14.4 percent per year, according to the Bureau of National Affairs.  These employees have knowledge about their job, the business processes, the data that supports their job, how to make things happen, and what works and what does not. Unfortunately they have no means – or incentive – to share their knowledge. Their knowledge has not been captured, their knowledge has not been transferred or made available to others, and this knowledge is lost to the organization. New regulations including Sarbanes Oxley require documentation of workflows and procedures. Security and privacy rules and concerns including HIPAA, Basel II, and the ever-present legal exposures require knowledge of how the organization is run. Global organizations have an even more demanding requirement given differences in language, accents, culture, time zones, and communication problems (phones, videoconferencing, email, conference calls, and the absence of the water cooler discussions).
HR Directors are very concerned with employee turnover; “it costs a company one-third of a new hire’s annual salary to replace an employee”. HR Directors therefore have been tasked to preserve the intellectual capital of their organization and corporate officers are bound to preserve the assets of the organization. Intellectual capital is such an asset. The challenge is to capture and leverage the knowledge, to expose it to the rest of the organization by providing a knowledge base that is easily searched. The solution is to capture knowledge from key employees, to store and organize the knowledge, and make it available to new hires or transfers (part of training), to existing employees, and to employees in other departments.
Intellectual capital can be captured in metadata which would include business definitions, valid values (domains), business rules, data ownership, data sources, data genealogy – how did the data get here, security and privacy, and data timeliness. As intellectual capital goes beyond classical metadata, you will want to capture organizational history, stories of success and failures, post-mortems, case studies, and corporate culture. In this process we will be expanding our notion of the types of information that can be captured in metadata. Intellectual capital can be captured in a data modeling tool, with user defined parameters, definitions, and notes. Intellectual capital could also be captured in a variety of metadata tools.
The types of knowledge that would be relevant are data definitions, business processes, business rules, technical knowledge, culture of the organization, management styles, culture of the industry, history with customers, suppliers, and partners, and how data flows through the organization. It includes how customer leads become sales, how the sales become orders, how orders generate invoices, how invoices are paid and how payments become revenue: in short, the Information Supply Chain.
The capture process would include structured interviews that would be specific to each department and specific to the types of knowledge the sponsoring manager would deem important. The results of the interviews would be validated for accuracy and usability. A capture mechanism would employ the capabilities of the data modeling tool or the metadata tool. The knowledge repository must be organized to make it useful and accessible. Employees accessing the knowledge base must be able to use a “Google” type of search using appropriate keywords. There is other enabling technology that can help with both capture and dissemination such as wikis, portals, threaded conversations, and C-maps.
Socialization of Knowledge
Knowledge builds off of other knowledge; it is cumulative. One thought or idea is built from preceding thoughts or ideas. The internet and computing technology offers many vehicles for the socialization of knowledge:
- Groupware and collaborative software
- Threaded conversations
- Email lists
- Online chats
- Social networking
- Concept maps (C-Maps) and mind maps
For example, you can use a wiki as an online encyclopedia; it can be authored by anyone and everyone. Anyone can edit someone else’s entry, therefore allowing knowledge to evolve and use prior knowledge as a building block. People therefore have a sense of ownership that they are personally contributing to the corporate knowledge base.
There are dozens of wiki “flavors” to choose from; some are open source, some offer hosting, some you host yourself.
Beware, however; most wikis are “roach motels”. Just like the song “Hotel California”, “…you can check in any time you like/ but you can never leave…” You can get the data in, but repurposing it or importing it to another application or use is not possible. This is something you should investigate when deciding to use a wiki. In many respects, wikis make great corporate business glossaries, but because you cannot repurpose the data, you can’t invoke the dictionary in other applications like a BI tool, for example. It would be nice to be able to get a description and a formula for a field appearing in the data warehouse, and then the user can understand the data more fully when making business decisions.
The Role of Governance
Data governance in the past has focused on control of data transactions. Transactions are the lifeblood of the company and therefore must be strictly regulated. Bad data must be prevented from entry into the system because it could seriously corrupt corporate data, reporting, decision making and the “bottom line.”
However, the corporate knowledgebase is fluid and must respond to the ebb and flow of knowledge throughout the enterprise. As a foundation of knowledge is laid, it must be able to be built upon by others.
Most of the intellectual capital resides in peoples’ heads, and one of the objectives of knowledge capture is to reach out and encourage people to share. Too much proactive governance up front will discourage people from sharing their information. Too many constraints upon entering information will make sharing too difficult.
A pilot would focus on an individual department such as Marketing, Finance, HR, or even IT. The purpose of the pilot would be to evaluate the usefulness of this initiative, to learn from its successes and failures, and to provide a template for the capture and dissemination of knowledge in other departments. The pilot would need a strong sponsor, most likely the department manager. The pilot would need a full-time team of two to four people, with the participation and sponsorship of the Chief Knowledge Officer. To get off the ground, part time does not work for this type of project. The department employees need to be sold on the pilot but not everyone in the department needs to participate and those who are reluctant should be able to opt out. The pilot project should be evaluated for the value it provides. The primary determinant would be the level of access to the knowledge repository. The knowledge repository would have to be maintained and kept current for it to remain valuable. This means ongoing responsibility for its care and sustenance.
This is an example of a pilot that could be instituted in the HR Department. Each of the following areas is ripe for the knowledge that could be captured:
- Employee and labor relations
- Employment regulations, state and federal compliance requirements
- HR policies and procedures
- Health, safety, and security issues
- Staffing: job analysis; succession planning, the changing and aging workforce
- HR development: training, employee development, management development, leadership development, performance evaluation systems and policies
- Compensation and employee benefits, incentives and reward structures
- Cultural changes
The value to the organization of such a knowledge repository is almost incalculable. Consider the collaboration and communication opportunities and peer relationships that could be established. The knowledge repository could be a resource database for various communities of interest. The opportunities for problem solving and interactive sharing are apparent. The knowledge repository could be used for training new employees or employees new to a department. The knowledge repository would be a ready reference when there are problems to be solved. The knowledge repository would house lessons learned on projects from post-implementation reviews including what went right, what went wrong and why with the creation of organizational best practices. Capturing intellectual capital and the resulting organizational insights could become core and important functions of HR Management. Metrics will be useful to indicate usage, to indicate what is and what is not being accessed, and also to give management a feel for the value of the knowledge repository.
This initiative will have acceptance problems and management needs to be aware of these problems. The major problem is that some employees will be reluctant to share their knowledge. Knowledge is a form of power, it represents importance, respect and can impact an employee’s continued employment. Some reluctance can be overcome by making the sharing part of the employee’s performance plans and performance reviews as well as public praise, acknowledgement, and listing author as the contributor. With common and significant incentives, individuals are more likely to share as they realize that “When you share, we are all smarter.” There will always be some employees who will never share, and there are those who are confident enough of their place in the organization that they would readily share. Teams that work well together will be more willing to share, certainly with each other and possibly with the rest of the organization. Another place to start would be employees who would be retiring soon and selected retired employees could be brought back for their knowledge. In addition, there will undoubtedly be security issues and possible legal restrictions. Certain parts of the knowledge repository would have security restrictions and an organization might expose itself to litigation based on the knowledge repository if, for example, a hiring best practice discriminated based on race or gender. If an employee believes that sharing could facilitate outsourcing his or her job to another country, no meaningful capture is possible and the employee couldn’t be expected to participate.
Intellectual capital and the knowledge repository can have a dramatic impact on any organization. However it will only be funded and supported if management recognizes the value of their employee’s knowledge and it will only work with appropriate incentives and an honest orientation on how it will be used.
We wish to acknowledge input from Michael Scofield, Laurie Duthie, UCLA PhD Candidate Charles Leo, PhD and HR Director, and The Wisdom of Crowds by James Surowiecki.
About the Author
Sid Adelman is a principal consultant with Sid Adelman & Associates, an organization specializing in planning and implementing data warehouses, performing data warehouse and BI assessments, and in establishing effective data strategies. He is a regular speaker at “The Data Warehouse Institute” and IBM’s “DB2 and Data Warehouse Conference”. Sid chairs the “Ask the Experts” column on www.dmreview.com, and has had a bi-monthly column in DMReview. He is a frequent contributor to journals that focus on data warehousing. He co-authored one of the initial works in data warehousing, Data Warehousing, Practical Advice from the Experts, and is co-author of Data Warehouse Project Management with Larissa Moss. He is the principal author of Impossible Data Warehouse Situations with Solutions from the Experts and his newest book, Data Strategy, was co-authored by Larissa Moss and Majid Abai. He can be reached at 818 783 9634and email@example.com. His web site is www.sidadelman.com.
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