The discipline of knowledge
initiatives designed to maximize an organization's utilization of the knowledge and skills contained within it. It focuses on techniques to create, capture, share,
retain and leverage knowledge and skills within the organization by the developing and cultivating channels
through which knowledge is created, preserved and made available to achieve organizational objectives. Knowledge
management is not a technology in itself or a fixed set of methodologies. Rather, it’s a distinct practice that involves
people, processes and technology.
Knowledge management is not
just about knowledge. It applies equally to skills since skills are the behavioral extension of knowledge. In this discussion
the term "knowledge" refers to both knowledge and the skills that derive from it. Knowledge in itself regardless
of how exquisite it may be, is rarely a valuable asset to an organization unless its people exhibit the ability to effectively
apply the knowledge to achieve organizational objectives. A skill is more than simply “knowing how” to so
something. It denotes adeptness at carrying out the procedural steps for applying specific knowledge. Perhaps a more inclusive
term for knowledge management would be “expertise management,” or “capabilities management.”
Knowledge management has always existed in some form or manner. Initiatives such as formal training; coaching and mentoring programs;
corporate libraries and databases; apprenticeships; teams; and worker-to-worker job discussions are all examples of knowledge management activities.
Knowledge is the most
important asset for organizations today. Translating knowledge into innovation for
the purposes of achieving economic growth and social well-being has become the principal focus for many organizations.
Additionally there has been an ever-increasing demand on organizations to use information to meet customer requirements.
Successful organizations in today’s business
environment are knowledge-generating entities—“learning organizations” in the language of Peter Senge’s
Fifth Discipline. Being a learning organization offers a tremendous competitive advantage because while it is often
not difficult for new products and services to be copied, it is much more difficult for competitors to duplicate
the management systems, knowledge base and organizational environments that consistently generate innovative products and
services. As a result companies and institutions have developed management functions to establish and maintain organizational
capabilities intended to effectively position themselves to compete effectively in this new information age.
These management functions focus on expertise
relating to business strategy, vision and mission, training programs, information technology (IT) systems, leadership development programs, documentation process
and a host of other functions which constitute the internal knowledge structure of an
organization. The internal knowledge structure belongs to the organization and remains with the organization
when people go home or leave the organization entirely. It is the organizational knowledge that while created
by people, resides within an organization When new people enter an organization, the internal knowledge structure provides
the resources for helping to get them up to speed and for providing job support for the benefit of other people long after
the original creators have moved on.
Employee competencies on
the other hand, are knowledge and skills exhibited by the individual workers within an organization, either acquired through
the internal structure of the organization, through interaction with others employees. These are capabilities that exist solely
within the individual worker and go with the worker when he or she leaves either for the day or permanently. Examples
of employee competencies include, accounting skills, legal expertise, sales and marketing skills, technical skills and subject
An organization's inherent knowledge or intellectual
assets are often characterized as its intellectual capital. Intellectual
capital is knowledge that an organization can exploit for business purposes. Proprietary technology, patents, trademarks,
copyrights, research capability and other specialized knowledge are usually characterized as intellectual capital
and are usually administered within some form of knowledge management program. These assets are often called
intangible assets because they have no physical existence, unlike buildings, equipment and product inventories which
While intangible assets have value, some may be
more difficult to evaluate than others. Assets such as proprietary technology, patents, copyrights and trademarks are
assets to which it is generally pretty easy to attach a monetary value because there usually is industry-wide agreement as
to their business value, and as a result, they are actively protected and managed. Intangible assets associated with employee
competencies such as sales and marketing expertise, training and development abilities, research capability, management skills
and the knowledge and skills individual workers exhibit during the daily execution of their job responsibilities are much
more difficult to value or even to recognize for that matter, and consequently are not often aggressively managed as knowledge assets.
Such assets are often referred to as human capital.
Tacit vs. Explicit Knowledge
An important concept in knowledge management
is the distinction between tacit knowledge and
explicit knowledge. Explicit knowledge is formal knowledge
that can be put into words and written down, stored on a database and easily shared with others. It is
knowledge that transmitted in face-to-face communication, through manuals and through electronic media. It is hard and fast
with little room for nuances or personal interpretation. A selling skills training program based on a specific sales model
is an example of explicit knowledge. Each component or
step in the selling process is clearly defined and described and it
would be fairly easy for a learner to adopt and apply the elements of the program. The training program
could be implemented throughout an organization and it would be reasonable to believe that the training content would be adopted
in a uniform and consistent manner by all learners who were exposed to it.
Tacit (implicit) knowledge is informal
knowledge that one acquires on the job or in everyday situations rather than through formal instruction. It is practical know-how
that one gains on his or her own and is difficult to put into words or define even by those who possess and exhibit such knowledge.
It is usually unspoken and conveyed in an indirect manner and does not easily lend itself to be shared through traditional
training programs. A selling skills program for example, cannot teach a salesperson the correct way to respond to a particular
customer’s demeanor or attitude, or convey the most appropriate time or manner for closing the sale for each customer
the salesperson encounters.
These elements are examples of skills that
are gained non-consciously over time through observation and trial and error, and the possessor of such knowledge is usually
not aware of exactly what the knowledge consists of or how to explain it. We would, therefore, characterize such an individual
as being non-consciously competent. We could contrast this with the knowledge
and skill of a surgeon who knows exactly the specific steps that must be employed in a particular surgical procedure and can
clearly explain and demonstrate them to a medical student. We would say the surgeon is consciously
competent because he is acutely aware of what he knows and can explain it.
See Training & Development for more about levels of competency
Every worker in an organization possesses tacit
knowledge the application of which is usually of significant benefit to the organization. In many if not
most organizations, tacit knowledge is not captured and shared within the organization precisely because it can be so elusive.
It remains with those who possess and use it, and essentially walks out the door when these people leave the organization.
Knowledge management initiatives such as teams, mentoring, partnering, knowledge mapping and others
are knowledge management techniques that can be employed to help capture, translate and transfer tacit knowledge within an
Organizational effectiveness grows when people
within an organization know more that is useful to the organization and are able to put the knowledge into action.
The Value of Knowledge Management
Among the primary drivers for organizations to effectively manage
their knowledge are the following:
- facilitating employee access to a proliferation of data and information available within organizations
- leveraging the expertise of people across an organization
- achieving shorter new product
or service development cycles
- faster and more efficient learning and skill development
Such factors are key elements for gaining a competitive
advantage, and as such present strong motivations for implementing knowledge management initiatives. Additionally,
knowledge management initiatives can also lead to greater innovation, improved customer interaction outcomes, consistency
in organization-wide practices and procedures and knowledge uniformity across a global organization.
The principles of knowledge management can be
especially useful during down business cycles and during periods of rapid business growth. When an organization
downsizes, much critical knowledge and intellectual property are lost with the workers. When a business
expands, it often does so quickly, and it is extremely very difficult to hire enough people with the right expertise (knowledge
and skills) to get the internal structure to where it needs to be for maximum effectiveness. If effective
knowledge management systems for capturing and using organizational knowledge are put into place during good times, organizations
can much more successful in dealing with economic fluctuations. Because well designed knowledge management
initiatives can help organizations better retain and re-use both explicit and tacit knowledge, organizations can ramp up much
more quickly and cost-efficiently.