Knowledge Management – What, Why and How

We can say that there is more and more uncertainty in every business field today; markets, technologies, competitors, and products are changing overnight. In such an environment, the most important thing is the capability to change, which implies that the crucial advantage of an organization is knowledge.

What types of knowledge there are, what are the key principles of Knowledge Management (KM), what are the reasons and prerequisites to introduce knowledge management in an organization are just some of the questions that should be thoroughly analyzed and answered before starting to introduce knowledge management.

Types of Knowledge

One of the most popular categorizations of knowledge is to view it as either one of two types: explicit knowledge and tacit (implicit) knowledge.

The first category of knowledge includes the knowledge that we first think of when talking about Knowledge Management – explicit knowledge. This type of knowledge can be stored and found in documents, instructions, databases, and the like. It’s formalized and relatively easy to collect and store for further use. Thus, explicit knowledge encompasses data, information, and documents and is easy to share through common forms of communication and information technology.

In contrast, tacit (implicit) knowledge of the so-called “hidden knowledge”. Tacit (implicit) knowledge represents non-verbalized, intuitive, experiential, and practical knowledge held by employees. This is the kind of knowledge associated with personal experiences and values. Implicit knowledge is difficult to reach and cannot be stored in documents or databases.

Theorists Nonaka and Takeuchi consider this knowledge to be largely invisible – or tacit – and believe that explicit knowledge represents only the tip of the iceberg of knowledge. In fact, individuals use their tacit knowledge the most. It includes our skills and knowledge when it comes to doing things.

Key Principles of Knowledge Management

The principles of knowledge management depend on the type of knowledge they refer to, so there are two key principles.

The first principle is connecting people with information – known as collecting. It’s used to share explicit knowledge through the collection, organization, and use of content with the help of one of the Content Management tools. Explicit knowledge is easily expressed using a material record (manuals, written procedures, documentation, quality systems, databases, knowledge databases, archives, and libraries).

The second principle is connecting people with people – known as connecting. It’s used to share tacit knowledge and connect people (employees) and best practices through a portal/intranet, teamwork tools, or e-learning tools (business social networks).

The very implementation of the knowledge management system is not easy – it often requires significant cultural changes in the organization that will shift people from the principles of knowledge gathering (individual benefit and reward) to the principle of knowledge sharing (group benefit and reward).

When should an organization seriously consider initiating formal knowledge management?

Some of the reasons are:

• Company growth (number of employees, projects, products)
• Acquisition of other companies (or parts of other companies)
• Significant improvement and/or change of the production process
• The need for innovation and improvement of internal processes
• The need for implementing new technologies and technological concepts that are emerging (i.e. in the IT market)
• The need to understand new methodologies and good practices that are also constantly evolving in order to be able to successfully apply them in the business
• The need for having interdisciplinary experts (i.e. Software, Business and Enterprise Architects, Integrators and other specialists)
• The need to keep acquired knowledge in the company while transferring information and knowledge among employees

The main goal of the knowledge management system should be to gather as much knowledge as possible from employees. If the knowledge employees have is not used and shared, it does not bring any value to the company. This is especially important for tacit knowledge which includes experiences, attitudes, competences, and understanding. Personal contacts and teamwork are the best way to develop and share this kind of knowledge.

Prerequisites for Applying Knowledge Management

For a start, it is vital to align knowledge management strategies, plans, and actions with the general strategy of a company. This is a crucial prerequisite.

The essential prerequisite for applying Knowledge Management is also the selection of key competencies and knowledge domains for each organization.

Another important prerequisite is active management support, which means that resources for implementation are approved and dedicated, but also that real support in practice is given by example.

Additionally, it is a must to align Knowledge Management processes with HR processes; they should be incorporated into payment and the rewarding system as well as into productivity monitoring system.

The first steps toward Knowledge Management implementation should include:

• Dedication of the core team and responsible persons
• Selection of key Knowledge Management techniques and processes that will gradually be introduced into internal business processes
• Setting the plan on how to motivate and measure employees’ contribution to gain and share knowledge

The Magic Knowledge Management Triangle

To successfully implement knowledge management, you need to connect and manage people, processes, and technology.

• People – Encourage changes in individual attitudes and employee behavior and influence the change of culture through new processes and rules. Encourage and reward knowledge sharing, team spirit, collaboration, trust, and strengthen loyalty.
• Processes – Implement Knowledge Management techniques that carry out knowledge coverage such as Communities of Practice, After Action Review, Storytelling, Peer assists, Knowledge Harvesting, Knowledge Centres, and Mentor/Mentee Schemes. Promote creativity and innovation with techniques like Gamification, Game Storming, and Design Thinking.
• Technology – Choose the most suitable technology that provides support for the coverage of explicit and tacit knowledge (Expertise Locator/Who's Who; Knowledge Portal). Of course, information technology requires some kind of investment, so it is very important to choose one that suits the need of the organization.

This process should be properly managed to ensure implementation. It can be one dedicated Knowledge Management team or distributed responsibility among the owners of other processes who need to include knowledge management in their processes.

For Knowledge Management practitioners, knowledge is “the capacity for effective action” as said Ikujiro Nonaka in his Organization Science. 

In this sense, both explicit and tacit knowledge are important. In general, companies manage explicit knowledge significantly better than tacit knowledge. But knowledge management principles enable effectively dealing with both types of knowledge.

It is important to maintain the ability to change and develop competencies in new technologies, to improve the accumulation and sharing of knowledge as well as to build and keep the knowledge in a different business domain.

The development of knowledge management is highly connected with the company’s performance, namely by enabling the opening up of new niches or for inventing novel products or business models. Knowledge is the creator of value!