Knowledge Management (KM) - Collecting, Leveraging, and Distributing both Explicit and Tacit Knowledge Throughout Your Organization

Knowledge Management (KM) - Collecting, Leveraging, and Distributing both Explicit and Tacit Knowledge Throughout Your Organization

By Vadim Kotelnikov, Founder, Ten3 BUSINESS e-COACH - Innovation Unlimited!, 1000ventures.com
"Knowledge is of two kinds. We know a subject ourselves, or we know where we can find information upon it." – Samuel Johnson

Why Knowledge Management?
While most managers agree that managing knowledge is important, few of them can articulate what the value is or how to become a learning, teaching, or coaching organization. The majority of companies have their knowledge embedded in people and organizations. It is often intuitive, tacit, rather than explicit, and is rarely detailed enough to be especially valuable. Such knowledge often gets lost when someone leaves the company. "All too often, knowledge exists with multiple points of view instead of the collective best thinking. It is occasional but not integral to the business. And, most important, it is available but not used very much."7

Real Value of Knowledge
The value of knowledge is measured in its application. Knowledge has no intrinsic value of its own - it is only relevant when it is used. "The real value of it is only real if you change the way business is done."7

Knowledge Management versus Information Management
"Knowledge management" is different from "information management". While the former targets collecting and distributing knowledge - both explicit and tacit - throughout the organization, the latter deals mainly with documented explicit knowledge - or information - only.
Most companies create, have access to, and use plenty of bits of knowledge, but neither efficiently, nor effectively.
The increased emphasis on knowledge management is attributed to recent rapid developments in the following areas:
On a practical level:
Shift to the new knowledge-driven economy dominated by knowledge-based enterprises and information-intensive industries
Rapid advances in information technology.
On a theoretical level, increased emphasis on knowledge in the strategic management literature, in particular:
Popularity of the new resource-based view of the company
Postmodern perspectives on organizations

The Dynamic Theory of Knowledge Creation

The current paradigm in which organizations process information efficiently in an “input-process-output” cycle represents a “passive and static view of the organization.13 Organizational learning results from a process in which individual knowledge is transferred, enlarged, and shared upwardly to the organizational level. This process is characterized as a spiral of knowledge conversion from tacit to explicit. In the broadest sense, organizational knowledge creation may be explicated by the interchange between tacit and explicit knowledge.
Tacit knowledge is a subtle conception rooted in cognitive schemata referred to as “mental models” and is rather difficult to articulate.14 It is highly personal and hard to formalize, making it difficult to communicate or to share with others. Subjective insights, intuitions, and hunches fall into this category of knowledge.15
On the other hand, explicit knowledge is more easily transmitted as it is characteristically codified. As such, explicit knowledge is more easily processed and shared with others. Knowledge conversion initiates at the individual level as a “justified true belief” and is expanded through social interactions to include a diversity of perspectives that ultimately represent shared knowledge at the organizational level.13
According to the Nonaka's theory13, the process of knowledge conversion proceeds through four different modes:
Socialization (the conversion of tacit knowledge to tacit knowledge);
Combination (the conversion of explicit knowledge to explicit knowledge);
Externalization (the conversion of tacit to explicit knowledge); and
Internalization (the conversion of explicit to tacit knowledge).
During the socialization mode, tacit knowledge is transferred through interactions between individuals, which may also be accomplished in the absence of language. Individuals may learn and gain a sense of competence by observing behavior modeled by others. For example, coaching, mentoring and apprenticeships instruct tacitly through observation, imitation, and practice.16
The combination mode of knowledge conversion embodies the aggregation of multiple examples of explicit knowledge. Explicit knowledge may be exchanged during meetings or conferences in which a diversity of knowledge sources combine to shape a new and enhanced conception.
The externalization mode of the knowledge conversion spiral references the translation of tacit knowledge into explicit. Because the conversion of tacit to explicit knowledge involves the reification of an esoteric, cognitive abstraction into a concrete concept, metaphors are recommended as a way to facilitate this translation. Metaphors assist individuals in explaining concealed (i.e., tacit) concepts that are otherwise difficult to articulate by assisting individuals in forming impressions based on “imagination and intuitive learning through symbols”. In other words, metaphors create networks of related concepts as prototypes to facilitate the ability to understand abstract, imaginary concepts.
The conversion of explicit to tacit knowledge (i.e., the internalization mode) occurs through a series of iterations in which concepts become concrete and ultimately absorbed as an integral belief or value. Where externalization utilizes metaphors to facilitate knowledge conversion, internalization represents an active process of learning.16 In this mode, participant share explicit knowledge that is gradually translated, through interaction and a process of trial-and-error, into different aspects of tacit knowledge. Tacit knowledge is thus mobilized through a dynamic entangling of the different modes of knowledge conversion.13
Tacit Knowledge as a Source of Competitive Advantage
Tacit knowledge, or implicit knowledge, as opposed to explicit knowledge, is far less tangible and is deeply embedded into an organization's operating practices. It is often called 'organizational culture'. "Tacit knowledge includes relationships, norms, values, and standard operating procedures. Because tacit knowledge is much harder to detail, copy, and distribute, it can be a sustainable source of competitive advantage... What increasingly differentiates success and failure is how well you locate, leverage, and blend available explicit knowledge with internally generated tacit knowledge."3 Inaccessible from explicit expositions, tacit knowledge is protected from competitors unless key individuals are hired away.


The Process
The process component is the most commonly overlooked in knowledge management programs. Many knowledge initiatives are started at the grass-roots level with the expectation that people will automatically create and use knowledge. It takes a process however. "The most difficult process in many ways is the use process itself. This has to be engineered directly into everyday work process. On top of the work process, you must actually engineer the creation process."7

Case in Point General Electric (GE)
With Work-Out as part of its DNA, General Electric (GE) has become one of the most innovative, profitable, and admired companies on earth. At its core, Work-Out is a very simple concept based on the premise that those closest to the work know it best. When the ideas of those people, irrespective of their functions and job titles, are solicited and turned immediately into action, an unstoppable wave of creativity, energy, and productivity is unleashed throughout the organization. At GE, Work-Out "Town Meetings" gave the corporation access to an unlimited resource of imagination and energy of its talented employees.

Bibliography:
"Knowledge, Groupware, and Internet," Butterworth Heinemann, 2000
"The Role of Tacit Knowledge in Group Innovation," Dorothy Leonard and Silvia Sensiper, 1998
"Relentless Growth," Christopher Meyer, 1998
"Discovering Order in a Chaotic World," Margaret J. Wheatley, 2002
"The Challenge of Managing Knowledge," Laura Empson, 2003
"The Knowledge-Creating Company," Ikujiro Nonaka and Hirotaka Takeuchi, 1995
"The Centerless Corporation," Bruce A.Pasternack and Albert. J. Viscio, 1998
"The Knowledge Management Fieldbook," Buckowitz, W.R. and Williams, R.L., 1999
"Framework for Implementing Knowledge Management," J.A. Albers, 2003
"Knowledge Management System," Dan Mascenik
"Making a Market in Knowledge," Lowell L. Bryan, McKinsey, 2004
"Smart Business," Jim Botkin, 1999
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"The Tacit Dimension," Polanyi, M., 1966
"The Knowledge-Creating Company," Nonaka, I. & Takeuchi, H. 1995
"An Empirical Test of Nonaka’s Theory of Organizational Knowledge Creation," Richard G. Best, Sylvia J. Hysong, Charles McGhee, Frank I. Moore, Jacqueline A. Pugh
"Sustainable Competitive Advantage," Vadim Kotelnikov
"SMART Executive," Vadim Kotelnikov
"SMART Business Architect," Vadim Kotelnikov
"Systemic Innovation," Vadim Kotelnikov