What Is Knowledge Management and Why Is It Important?

Knowledge Management refers to the capturing, controlling, sharing and efficient handling of information and resources of an organization. It allows the company to capitalize on its knowledge within a multidisciplinary approach to effectively and efficiently achieve its goals and objectives.

Before unfolding why knowledge management is paramount to succeed in 2020, let's discuss the beginnings of knowledge sharing to its paradigm and its logical conclusion. Every company must implement a concerted approach to capturing its organizational knowledge, to share and grow the knowledge to ensure to keep ahead of competitors.

A History of Knowledge Sharing

It was very inefficient…

Word of mouth was the only way to convey information in times gone by. It was very inefficient and as it passed from person to person, the message often transformed into something completely different. We probably all played games along these lines as children, often with very humorous results. Can you imagine running a company in this way?

Then came along the written word, and of course the need to be able to read. Information could now be provided in a very accurate way. In the grand scale of things, according to UNESCO’s “Reading the past, writing the future”, this method of communication only took hold in the world population from 1950 to 1985, by which time the literacy rate rose from 55.7% to 86.2% of adults being able to read and write. When you consider 1985 is not that long ago, it truly emphasizes that knowledge is power. It also emphasizes the key opponents to Knowledge management.

In 2020 already 58.7% of the population is connected one way ore another.

Now we are in the twentieth century. According to Internet World Stats, currently 58.7% of the world’s population has internet access. Will it take another 35 years to hit 85%? That’s a question for another day. Needless to say, information is now at the fingertips of anyone with a mobile phone, tablet, computer or even a smartwatch.

Knowledge which was once a bastion for the scholars or the powerful, is now available to many. Now the right information can be utilized at the right time with the right person to capitalize or mitigate any situation, assuming that the knowledge has been captured and shared accordingly.

Any captured knowledge needs to be validated and confirmed before being released into your processes and company.

A note about misinformation ~ As you can imagine, misinformation can carry a lot of power as well. It can lead people in a very different direction and actually cause massive failures. Fake news, for example, can appear real and be very subtly done, so can the DIY tips and tricks which can actually destroy the item you are trying to save. Needless to say, any captured knowledge needs to be validated and confirmed before being released into your processes and company.

Why Can a Lack of Knowledge Management be a Problem?

Not placing value on the right piece of knowledge.

To truly understand why knowledge management is paramount, or to be more specific, why not properly managing knowledge is a problem in 2020, you must first recognise the value of knowledge in your organization. Corporations are really good at placing value, depreciation and other financial figures to physical assets like vehicles, buildings, machines, etc. but the reality is that it’s much more difficult to place value on knowledge. It’s actually even more complex than simply placing value on the knowledge currently stored within the brains of your people because this doesn’t take into account the cumulative, or future compounded value of knowledge to the organization.

Not using the right techniques to assess uncaptured knowledge losses.

Let’s think about this for a second. A company hires a new employee right out of high school to perform a single task in the factory and over a 10 year period, that employee cross-trains in 5 other areas of the operation. I think we’d all say that this hypothetical employee has become an asset to the company and their team. A manager could theoretically sum the hours invested in the employees training, and multiply that by his/her hourly rate for a rough value. Simple, right? No. The official training provided to the employee is just the beginning. This employee has acquired much more knowledge about the job, process, tools, bureaucracy, people, etc. than they were taught. Even more importantly, all that knowledge has future value. If not properly documented and managed, new employees 10 years later will walk the same path as the original person. They will not only retrain on all the same official tasks but will need to slowly acquire the same tribal knowledge as the veteran.

Not being able to benefit from proper knowledge management.

The new employee is starting from zero when they shouldn’t need to. The future value of the veteran’s tribal knowledge is compounded because employee 2 can start further down the road. It’s compounded again because employee 3 can start with everything from the previous 2 and so on. Knowledge Value is really difficult to quantify and you probably don’t even know you’re losing it if you don’t take a minute to think through the problem. The good news is that it doesn’t have to be this way.

The Knowledge Management Paradigm

The Paradigm is an old one, we have all heard it before, ‘Knowledge is Power’. Why on earth would I document my knowledge? Anyone could have access to it. What differentiates me from others is my knowledge, why would I just give it away? This ideology is prevalent in all levels of society, especially within the working environment.

I am the only one who can fix the machine when it fails. It’s a classic example in which an employee protects their position in a company, by making themselves indispensable. If they documented their knowledge anyone could then fix the machine and they would then be replaced with someone at a lower pay scale.

At a different level, with the exact same reasoning. A business owner has developed an industry-leading technique, which pushes the company to the forefront of technology. The advantage the company has would disappear if they documented it. The business would not be able to profit at all if an employee walked away and started another company using that valuable information.

It’s this issue which holds companies back, repeatedly churning through the same problems time and time again. Never incrementally improving and slowly falling behind their competitors. Hoping that the next breakthrough will just suddenly come into existence.

Change the Mindset

If history has taught us anything, it is that each major step taken by humankind has come from the accumulation of many tiny steps. Humans didn’t just invent the internet over night. It took many thousands of tiny improvements to ideas and methodologies to get to where we are today.

So it is true in any kind of business, that documenting your current practises will lead to individuals finding a small improvement which can be applied immediately. Leading to new ideas and approaches. Each one being documented to allow another brain to ponder on the next incremental enhancement.

What is Knowledge Management?

Knowledge Management may be a generic term, but it probably refers to something very specific in different industries, companies, and even to different people. It’s not simply the documentation and management of some static knowledge state. It’s not a snapshot or a quick note. Effective Knowledge Management is a mindset and even a culture. If it were simpler, it wouldn’t be so important. Easily the most common failure in knowledge management initiatives is the failure to understand the full scope of doing it well.

As mentioned, a snapshot is not adequate. Knowledge is not static. Just like your organization, knowledge is a living, breathing thing. It evolves on a minute by minute basis in your manufacturing plants, in the aisles of cubicles where your Engineers and IT folks work. People adapt to problems and obstacles which they are confronted with constantly, which means they’re learning all the time. They’re learning how to do things simpler, faster, cheaper which happens to help the corporate bottom line. As mentioned in the Change the Mindset section of the article, recognizing the value of this constantly evolving knowledge base is the first critical step.

Knowledge Management means building reliable systems designed specifically to capture this tribal knowledge on an often, regular and recurring basis. This includes updating knowledge already documented, which can be effortlessly done with VKS Lite. It will facilitate the transfer of the tribal knowledge as well as it's management to an easier and more accessible digital platform for future employees. Without such a system in place, this effort, like all other efforts that are not well understood and resourced will fail and in the hyper-competitive global markets of today’s economy, that’s not an option.

3 Tips to Manage Knowledge

We all know that getting started is most frequently the hardest part of any project, and this one will be no different. The good news is that you have acknowledged the need to do something. Don’t underestimate the value of just acknowledging this. Many organizations won’t, and they’ll regret it down the road.

So, finally the HOW. How can be complex if you get too granular too early, so we’re going to avoid that. Besides, this paper is not intended to be that detailed. You know your team, facilities and policies so we’ll leave the detail to you. With that, let’s talk a bit in generalities.

The first question is, how or where do you start. First, it’s an acknowledgement by leadership in the organization that:

• Your people are the key to your success. Without acknowledging this first, you may be viewing your people more as physical assets like machines or trucks, which depreciate over time.

• The tribal knowledge is your most valuable competitive advantage. Your competitors are using the same processes, tools, machines, etc. but they don’t have your people's insights.

• Documenting this knowledge is an investment in the future of the company. This should be automatic given the first two acknowledgements. If it’s not, you may not be ready to start.

Beyond this acknowledgement, which by the way is a massive hurdle for many organizations, senior leadership must be prepared to:

Commit resources long-term to this work because it’s that important
Inadequate resources at any point, but particularly early in the work will dramatically increase the chances of failure.

Integrate this work into the fabric of the corporate culture
Companies succeed or fail on culture, and the value of knowledge must be part of that.

Hold leadership accountable for making this a priority
Leadership at all levels should prioritize this work. If it’s not important to leadership, why would it be important to anyone else?

Create and implement the processes that will streamline and systemize the capture of knowledge.

• Implement systems that make it simpler to capture knowledge. These could include LMS (Learning Management System) or Digital Work Instructions applications like Visual Knowledge Share and embed these into every team.

• Create SMART (Specific, Measurable, Achievable, Relevant and Time-bound) project objectives that hold teams accountable for achieving project goals. This includes prioritizing and organizing the information that needs to be gathered.

• Incentivize participation. We all know that tribal knowledge can be viewed as a competitive advantage for the individuals who own it. This is detrimental to the organization, so you’ll need to separate the two. Help your teams understand that the company benefits when all teams improve, and tie the company’s performance to incentives.

• Lastly, get to work. Execute your SMART plan and don’t stop. Remember, this is not a 6 or 12 month project. This is a permanent change in your organization and culture.

A Final Word for Knowledge Management

With the Industry 4.0 revolution along with the increase in data manipulation importance, in 2020 knowledge management is not just a passing fad. A fundamental key to any company's success is to capture, preserve and build upon their carefully collected accumulated knowledge.

There is a reason why ‘how to videos’ and ‘how to websites’ can be found covering every imaginable issue or problem. Society has found a way to communicate the best ways of doing any task and making hundreds of thousands of peoples lives much easier. I can guarantee every person reading this article has watched or read an article to help them figure out and fix something that has broken. So if you, the general population, see massive advantages in knowledge management and sharing, what is holding up your business from doing the same?

* Written with the collaboration of Shannon Bennett