Whether you're a sole trader, or running a business of any size, knowledge is one of your most important assets. Important enough that these days, it's crucial to develop clear systems for gathering, organising, and using knowledge.
We're all constantly being bombarded with massive amounts of information. So much, in fact, that according to one estimate, it's the equivalent of reading 174 news papers—from cover to cover— each and every day.
On a personal level, what do we do with all of that information? It's impossible to consciously take in and understand that much knowledge, so what we need are efficient systems for deciding what's valuable and what can safely be ignored. Our brains already do a good job in that department, helping us filter out the “junk” information that we don't need to know.
On a professional level, it's a different story. While our brains instinctively understand what kinds of knowledge are useful and what kinds aren't, the “company brain” isn't anywhere near as efficient. And the information overload that we're all experiencing—on both a personal and a professional level—makes it increasingly harder to pick out the useful information from the chaff.
Equally problematic is that companies don't always emphasise the value of the knowledge that is held by employees and by the organisation as a whole.
This is where knowledge management comes in. It's about helping individuals and organisations collect, store, organise, and use the information they have: to make information dissemination and training more economical, processes more efficient, decision-making more effective, and ultimately to stimulate business innovation and creativity, and enhance business performance.
The Value of Managing Knowledge
Imagine the following scenario: one of your most valued employees is someone who's been with your company for nearly two decades. They might be a personal assistant or office manager who has developed numerous protocols that ensure they get their work done efficiently and accurately. Or, they might be someone who works closely with your clients, and who has over the years built up a wealth of knowledge about those clients and their accounts.
In any such situation, it can't be taken for granted that the employee has written all of this information down. For example, someone who develops protocols for routine work tasks likely develops those protocols over time, and doesn't necessarily think of writing the information down unless they're in a training role. Similarly, some tidbits of client information are often things that aren't directly related to the account they have with your organisation, and therefore may not get noted down in a client file.
What happens if that employee leaves the company without passing that knowledge on to their successor? What if there are no protocols in place for the transference of knowledge?
Most executives and managers say that the knowledge held by their employees is their biggest asset. Not only that, but also that they don't know how to manage the knowledge their employees have.
Preventing Knowledge Loss
In the above scenario, there are a multitude of high-impact situations that could arise from the sudden loss of employee knowledge, from simple work inefficiency to client dissatisfaction and damaged client relationships. Effective knowledge management could prevent this scenario from developing, effectively nipping in the bud any problems that might arise in the future.
Knowledge Management Preserves Tacit Knowledge
Another major benefit of knowledge management is that it allows for the identification of tacit knowledge: the kind of intangible abstract knowledge that is often hard to get down on paper. Explicit knowledge, on the other hand, tends to be the kind of knowledge that is much simpler to articulate. Or, to put it in more concrete terms, explicit knowledge can be said to represent a final product, while tacit knowledge represents the processes that were used in the production of it.
In terms of knowledge management, it's often tacit knowledge that is lost via employee attrition and retirement—and it tends to be the case that the more tacit knowledge is, the more valuable it is to an organisation. This simple fact alone makes knowledge management a vital part of any organisation, at any level.