Applying a systems thinking framework to assess knowledge assets dynamics for business performance improvement

Knowledge assets represent strategic resources and sources of organizational value creation. Their effective development and deployment is at the basis of organizational value creation capacity. However there is still a lack of applied approaches and tools explaining how knowledge assets dynamics take place in organizational value creation mechanisms. In particular, there is a managerial need to define decision-support frameworks that can enable managers to understand how knowledge assets interact each other and with organizational performance in order to support the achievement of company’s strategic objectives. A better understanding of why and how knowledge assets management initiatives can be turned into value creation mechanisms with positive impacts on business performance is fundamental to avoid misallocation of resources and to support management decisions.

This paper proposes a systems thinking-based framework, the Knowledge Assets Dynamics Value Map (KAVDM), to explicate the working mechanisms by means knowledge assets can evolve on the basis of knowledge management initiatives and affect business performance improvements. The KAVDM offers a holistic view of the mechanisms at the basis of how knowledge assets are translated into organizational value. It supports the explanation and monitoring of how knowledge assets are interpedently and dependently linked, and how the management of one knowledge asset activates flow dynamics, that influence both other knowledge assets and business performance. Using the KAVDM managers can reflect upon the knowledge components grounding a company’s value creation and assess their mental models and views of the reality. Finally, an application of the KAVDM within a construction company is presented and its main managerial benefits addressed.