Internal knowledge markets can facilitate information sharing within large organizations. The trick for executives is figuring out how to make them work.
The challenge of locating internal knowledge on specialized topics exists within any large organization. One way an organization can address this challenge is through an internal knowledge market, which i typically an IT-supported platform within an organization that matches knowledge seekers with knowledge sources and that includes material or social incentives to encourage information sharing. Early adopters such as Infosys Technologies, Siemens, McKinsey & Co. and Eli Lilly have demonstrated the value of internal knowledge markets for managing information flows within an organization. However, there have been challenges and complications in implementing internal markets. Based on an analysis of more than 5 implementations of various types of internal markets, as well as underlying economic theory, the authors provide guidance on how to design, launch and sustain internal knowledge markets.
The authors recommend using material and social incentives to encourage employees to participate in the knowledge market, but allowing the prices for knowledge to float. One approach is a “virtual currency”; for example, Infosys introduced a virtual currency known as “knowledge currency units” in its Internal knowledge market; KCUs earned in the internal knowledge market can be redeemed for cash and prizes. The authors also advise that executives organizing an internal knowledge market seed the market with high-value content and then subsidize community development of additional solutions.
When setting up internal knowledge markets, executive leadership should function less like a central planner than like a market maker or Federal Reserve, the authors argue. For example, in a well-designed internal knowledge market, gradually issuing additional virtual currency points to market participants should help grow the knowledge base in the market. To complete a market, participants should have the opportunity to not only acquire points by providing knowledge or answering questions but also to redeem points–whether for services, gift vouchers, answers to their own questions or other claims on company resources.