Knowledge Management (Part 1): Why Knowledge Is the Most Important Resource in Your Organization

Annalena Simonis, Thursday 02 April 2020 | Reading time: 5 min.

What exactly is knowledge and why is it an increasingly important resource for companies? In this new blog series, you'll discover everything from basic knowledge about the topic to tips on how to apply knowledge management methods properly.

Every employee in your company carries knowledge and experience within them. But how can the company and all its employees benefit from that? What exactly is knowledge and why is the organized networking within the company so important? This new blog series will clarify important fundamental questions about knowledge management. It also shows how you can successfully integrate knowledge management and which methods are useful. Knowledge management is no longer a niche topic reserved for the IT department. As an introduction to this series, you will gain a deep expert insight into one of the most important resources in a company: knowledge.

 

What is knowledge?

In order to develop a comprehensive understanding of the importance of this topic for your company, it is important to understand what the resource knowledge actually is. From a scientific perspective, knowledge is defined like this:

"Knowledge is the understanding of or information about a subject that you get by experience or study." (Cambridge Dictionary)

Information is described as data set into context. Knowledge is the only resource that multiplies when it is shared. To achieve this, companies rely on knowledge management. As the name suggests, it deals with the management of knowledge. It includes all activities and methods that are intended to improve the handling of knowledge.

 

What are the different types of knowledge?

Depending on who has the information and to whom it is passed on, there are different types of knowledge:

Individual and collective knowledge

Individual knowledge is linked to a single person or exclusive groups of persons. Collective knowledge is available to the entire company and not just to individual managers or employees.

 

Implicit and explicit knowledge

Explicit knowledge is available to all employees and is accessible to everyone. This includes operational processes, project goals, strategic concepts and any other knowledge that you can document within the company. Explicit knowledge has the advantage that it can be easily reproduced formally - in writing or language - for example in the form of technical data sheets, formulas or even video tutorials. This facilitates the transfer of this knowledge. Personal experiences from decision-making processes and interaction with other people represent implicit knowledge.  For example, an experienced project manager develops his own feeling for time management because he knows from experience which processes take more time than others. Thus, he influences the project planning with his implicit knowledge. Creativity and interest are also connected to implicit knowledge. This makes it difficult to make implicit knowledge accessible to others. Often the person having the knowledge may not be directly aware of his own experiential knowledge. However, it is implicit knowledge that is particularly important for the company. It is important to identify this knowledge and make it accessible in order to avoid possible knowledge gaps when the employees with that knowledge leave the company or are otherwise unavailable.

One of the greatest challenges of knowledge management is therefore to transfer implicit knowledge into explicit knowledge.

 

Internal and external knowledge

Internal knowledge describes knowledge that is already available in the company. It is comprised of individual and collective knowledge. Most companies aren’t aware enough of the individual knowledge they already possess and don’t know how much they actually know and spend a lot of unnecessary funds to buy knowledge, e.g. by hiring consultants, they already possess.

This is contrasted with external knowledge, in other words knowledge that exists outside of the organization. The company has to gain access to this information via its environment - i.e. market, competitors, partners and other environmental factors. External knowledge can be tapped through research, but also through cooperation with various partners such as consultants, customers or suppliers. The goal here is also to transform external knowledge into internal knowledge in order to ensure the success of the company.


Also read other articles in this series: 

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