What is Knowledge Management and Why is it Important to Your Company?
If you’re interested in learning more about knowledge management, or if you need more insight on why it’s important to your company, you’ve come to the right place. In this brief article, you will learn the basic definition of knowledge management, the two main types of knowledge and how your company stands to benefit from a knowledge management plan.
Let’s start with the definition. Knowledge management is the systematic management of an organization’s knowledge assets for the purpose of creating value and meeting tactical and strategic requirements. It consists of the initiatives, processes, strategies, and systems that sustain and enhance the storage, assessment, sharing, refinement, and creation of knowledge. In simpler terms, it is the concept in which a company consciously and comprehensively gathers, organizes, shares, and analyzes its knowledge in terms of resources, documents, and people skills.
The goal of a knowledge management system is to provide managers with the ability to locate and organize the relevant information and expertise required to address specific business tasks and projects, leading to greater productivity and longevity.
Understanding the two main types of knowledge will be crucial as you learn how to navigate the process of gathering and implementing knowledge as it relates to your company’s hiring, training and retention efforts.
What are the types of knowledge?
When it comes to knowledge in the workplace, there are two types: explicit and tacit.
Explicit knowledge is knowledge that has been documented as tasks and procedures, including reports, processes and policy manuals. This type of knowledge is also comparatively easy to record, quantify and express.
Tacit knowledge is unwritten knowledge that resides in the heads of the workers. It is commonly known as “know-how.” Tacit knowledge is also important and valuable to the company. Tacit knowledge is the most difficult to retain because it has not been explicitly written or articulated by the individual to others.
Each organization has unique ways of handling explicit and tacit knowledge. Many factors affect how knowledge is used, including:
- where organizations are in their life cycle
- type of business
- core competencies
- leadership, culture
- infrastructure
- marketplace competition
Effective knowledge management initiatives are designed to take critical tacit knowledge that is unseen and known by only one or a few individuals and turn it into explicit knowledge to be transferred to many.
Why is knowledge management important to your company?
Forty percent of the U.S. workforce is eligible to retire within the next five years according to a 2017 BLS study. Therefore, the importance of knowledge retention is a growing concern for organizations across industries. If properly implemented, knowledge management is a worthwhile investment that will promote efficiency, learning, innovation and competitive advantage.
In a study conducted by Ken Mall, Managing Partner of Workforce Development at EDSI Consulting, it was found that implementing effective knowledge management and retention strategies has a profound impact on organization performance. Three key areas of impact include:
- Cost Minimization
- Risk Reduction
- Organizational Disruption Avoidance
More information on Ken’s study can be found in his white paper.
At this point, you might be asking yourself, what does a solid knowledge management plan look like? Based on our industry experience, it’s a combination of people-centered, process-driven ways to capture valuable information for the long-term structural and cultural stability of the organization.