We live in a crazy time! Knowledge is available to anyone at anytime and it is simply impossible to keep track of everything out there. But knowledge and its effective use still remains an important part of a business’s competitive edge. It did so 10 years ago and it might even be more prevalent in this ‘connected economy’ where we give out free knowledge in the shape of high quality content as a marketing effort.

Knowledge Management TheorySo how do we obtain, manage, create and retain
knowledge in our businesses?

I’m going to split it into several blogs and first take a look at the theory of knowledge management; if we understand what it is and how it works, we’ll get a better feel of how to manage it in our own situations. Luckily I’ve written my thesis on knowledge management x years ago so all the proper research is already done (see the full thesis for all the relevant literature references)! Mind you, this was written with large corporate organisations in mind!

What is knowledge?

Knowledge is dynamic and is created by interactions among people and organisations.

It can be clarified by comparing it with the concepts data and information. Data is not synonymous with information nor is information synonymous with knowledge but they do have common relations. Data can be seen as a direct outcome of observations. The observed data will lead to information once it has been categorised and significance has been added to it.

An example: a telecommunications company gathers data about the amount of new connections made throughout the year. The meaning gained from the information might be the fact that more connections are made during the months of May and June. This information can become knowledge when predictions can be made from it; when a context can be given.

Also, because of the humanistic nature of knowledge, information can only become knowledge when people interpret it. In the example the prediction or context might be that people want to make more calls during spring because they will be outdoors more. The telecommunications company might thus use this knowledge to launch extra campaigns and promotions.

How Knowledge is carried in an Organisation?

The different type of carriers can be differentiated between explicit and tacit knowledge.

  • Explicit knowledge is knowledge that can be documented and which consists of formal models, rules and procedures. This would evidently be the knowledge carried by hardware, software and documents. Explicit knowledge is thus mostly data and information. Explicit knowledge is the type of knowledge that is learned in school and university. It implies accurate statements about for example material properties, technical information, and tool features.
  • Tacit knowledge is explained as knowledge that is retrieved by experience and that it is not codified or communicated but learned through the sharing of experiences, observation and imitation. In terms of carriers, the human brain carries tacit knowledge. Tacit knowledge is based on skills. It is rooted in the experience of individuals and consists of an individuals’ beliefs and perceptions making it very people-intensive. This means that people are very important to the organization, not only as a resource but also as accumulators and producers of intangible assets.

Three more typologies of knowledge apart from tacit and explicit knowledge exist, namely systemic knowledge, hidden knowledge and relationship knowledge.

  • Organizing knowledge in a systemic way will mean to let a knowledge employee be dependent on the knowledge of other employees and of all types of knowledge technologies to make use of his own knowledge.
  • Hidden knowledge is knowledge within a person that influences how that person thinks and act. It is how a person expresses and interprets new ideas.
  • Relationship knowledge implies the ability to create relationships with specialised people or groups of people in order to gain access to their expertise.

The table below shows the typologies and includes the relative ease of communication per knowledge type and how easy or difficult it is to attain and comprehend.

Knowledge Management

What does is mean to ‘manage’ Knowledge?

Knowledge management has been defined in literature in many different ways that have varied in both scope and focus.

Concerning scope, many authors describe it as an organisational competence to preserve or improve performance based on experience and knowledge. In terms of focus, various definitions emphasise organisational procedures and practices, performance development results, networking and collaborating procedures, practices used for storing, protecting and the distribution of knowledge and tools, systems and methods used to store data.

Knowledge management consists of two basic, and hopefully interacting, strategies, which are the codification strategy and the personalisation strategy.

  • The codification strategy focuses on the actual codifying of knowledge and storing it in databases from where the knowledge can be accessed.
  • Knowledge in the personalisation strategy is coupled with individuals who develop the knowledge and share it by means of personal interaction.

How Knowledge is ‘created’ and shared

The creation of knowledge happens through the interaction between tacit and explicit knowledge. This interaction consists out of different modes:

  • Socialisation (tacit to tacit knowledge):
    Knowledge can be shared by sharing experiences for example by individuals working closely together, internships, direct observation etcetera.  Social interaction is important in sharing tacit knowledge. This is since tacit knowledge is mostly acquired through experience rather than words.
  • Externalisation (tacit to explicit knowledge):
    To be able to use the new knowledge it must be translated into understandable and transmissible shapes that can be communicated and understood easily throughout the organisation. This externalisation will speed up the learning, transfer-, and innovation- processes in organisations. It can be attempted by conducting review meetings throughout a project for example.
  • Combination (explicit to explicit knowledge):
    Explicit knowledge is converted into more complex and systematic sets of explicit knowledge. Explicit knowledge is gathered throughout the organisation and pooled, edited or processed to shape new knowledge.
  • Internalisation (explicit to tacit knowledge):
    To create knowledge for innovation it has to be understood by all people involved. The embodiment of knowledge required for innovation is achieved by the internalisation activity. Here, explicit knowledge is shared throughout an organisation and transformed into tacit knowledge by people. The new explicit knowledge is institutionalised throughout the company for example by means of routinisation.

The Challenges for effectively managing Knowledge

Social challenges:

  • Tacit knowledge is dependent upon personal beliefs, experiences, values and attitudes which implies that it will lose much of its meaning when translated to explicit knowledge.
  • Firms run the risk of losing their competitive advantage if they were to translate all tacit knowledge but could also run the risk of losing knowledge when employees would switch firms.
  • Always aiming to codify tacit knowledge might lead to hinder the development of both organisational routines and communities of practice.
  • Knowledge on certain topics is often only kept by 1 or 2 individuals. This creates a high dependancy and thus a risk for the organisation.
  • Knowledge within organisations is often widely distributed and is difficult to locate and it is not extracted easily because it is embedded in various social networks and communities of practice. Knowledge management should thus contain a number of activities such as networking and developing social communities of practice.
  • Efficient transfer of tacit knowledge directly between people is often preferred though is dependent on the relationship people have and the involved trust and time that comes with that.
  • People need to have a shared mental model or system for effectively sharing tacit knowledge. This enables people to understand each other and to accept each other’s knowledge. To be able to share knowledge thus involves a shared understanding which will allow groups to understand each other and to be able to utilize another’s knowledge in their own setting.
  • Social interaction is also an important factor in the sharing of tacit knowledge. Teams that are based in the same location seem more likely to share knowledge.

Technological Challenges:

  • Much literature presumes that IT is the solution to the knowledge problem though they often tends to forget that not all organisations have the option to invest in an elaborate IT solution.
  • Apart from the expensive initial investment for relatively new firms with a relatively small knowledge base, much established organisations already use various systems to store knowledge but have difficulties linking systems, which means that knowledge still remains dispersed over the firm.
  • Another pitfall is for example the intranet on which much knowledge is published but often not updated or not structured enough so that it is difficult to find the necessary information.

To Conclude

Traditional epistemology (the theory of knowledge) has focused much attention on explicit knowledge. However, both explicit and tacit knowledge should be viewed as complementary and are both significant in the creation of knowledge within an organisation. There are also many pitfalls organisations can fall in when not effectively managing their knowledge base. Though the situations vary with size and type of organisation, it should be clear that sharing knowledge is significant if an organisation wishes to be successful and innovative.

This was a very theoretical view on knowledge management. In coming blogs I will dig deeper into practical application of all this theory and more specifically on how to deal with the challenges!

I’d love to hear from you

Are you in the field of Knowledge Management? Or have you found some amazing tool or solution in your company to deal with this? Share your experiences in the comments below!