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The Value of Knowledge Management 351

products developed? How much is invested in R & D?), customer loyalty, KM integra-
tion, leveraging of IT, and quality management.
Tiwana (2000) adapted Spendolini ’ s (1992) key benchmarking steps in order to
arrive at a better fi t with KM. These key steps can be summarized as:
1. Determine what to benchmark: which knowledge processes, products, services?
Why? With what scope?
2. Form a benchmarking team.
3. Select benchmarking short list — which companies will you be benchmarking
against?
4. Collect and analyze data.
5. Determine what changes should be made as a result of the metrics obtained.
6. Repeat when an appropriate amount of time has lapsed to measure progress.
Benchmarking is of greatest value when a company has clearly identifi ed its stra-
tegic objectives and they have thought long and hard about which best practices might
or might not be transferable and effective within their own particular context, with
its own KM drivers and constraints.

The Balanced Scorecard Method
The balanced scorecard method (BSC) is a measurement and management system that
enables organizations to clarify their vision and strategy and translate them into action
(Kaplan and Norton 1992, 1993, 1996). It provides feedback around both the internal
business processes and external outcomes in order to continuously improve strategic
performance and results. The BSC is a conceptual framework for translating an orga-
nization ’ s vision into a set of performance indicators distributed among four dimen-
sions: fi nancial, customer, internal business processes, and learning and growth. The
“ balance ” in the balanced scorecard refers to the way a balance is maintained between:
• Long-term and short-term objectives
• Financial and nonfi nancial measures
• Internal and external perspectives
• Lagging and leading indicators
• Objective and subjective measures
• Performance results and drivers of future results

Indicators are maintained to measure an organization ’ s progress toward achieving
its vision; other indicators are maintained to measure the long-term drivers of success.