What Is Knowledge Management and Why Is It Important?

Knowledge Management is an important concept that influences corporate culture.

Hence, it is crucial to know what exactly it is as well as the potential advantages of it.

To further understand the concept, we listed 9 experts who explained what knowledge management is and why it is important.

Knowledge management (KM) is the process aimed at extracting, structuring, documenting, and storing employees’ explicit and tacit knowledge, which can be transformed into a tangible business asset and a competitive advantage.

For any organization, KM can become one of the key business processes because it helps:

• Centralize enterprise knowledge and make it accessible.
• Classify knowledge and make it easy to discover and use.
• Facilitate knowledge exchange between employees and teams, including remote and distributed ones.
• Minimize mistakes due to knowledge gaps.
• Avoid operational bottlenecks or stagnation due to knowledge loss (for example, when a key employee leaves the company).
• Increase the average level of enterprise knowledge and its quality owing to the knowledge openness and accessibility.
• Stimulate employees to share their experience and improve their knowledge through in-house and external knowledge management events and activities

In reality, many enterprises are trying to launch KM or at least to understand its importance. However, these initiatives are often limited to explicit knowledge management, which covers only already accessible and documented knowledge (guidelines, books, research, reports, etc.). That’s why KM typically reduces to document and content management.

Ideally, KM should focus on tacit knowledge, that stored in employees’ heads only and not (yet) documented, as it has the greatest value and is the hardest to extract.

To have such a two-vector KM process, it is not enough to implement a knowledge base or a similar type of software. Organizations need a dedicated KM team able to set up KM workflows, moderate all KM-related activities, communicate with knowledge owners, and form the KM backbone in an enterprise.

Knowledge Management (KM) is broadly defined as the process of creating and sharing information across the organization

Knowledge Management (KM) as a formalized discipline is relatively new and dates its origins back to the early 1990s even though its roots are ancient.

In the modern organization, nearly all employees are “knowledge workers” and their ability to effectively communicate and share its collective wisdom is invaluable and creates a competitive advantage.

Knowledge can be categorized as explicit and tacit knowledge.

• Explicit knowledge is rules and processed based and can be easily conveyed in a manual or similar documentation.
• Tacit knowledge is the know-how, best practices, and wisdom of the organization and is best communicated through personal communications and storytelling.

Modern organizations often struggle with effective knowledge management programs or the implementation of knowledge management software applications because they do not understand the difference between explicit and tacit knowledge. They want employees to share their wisdom but structure the programs to only share procedures.

To create wisdom where people understand how to operate in the “gray zone” organizations need to create learning environments where employees are strongly encouraged to both formally and informally share their experiences.

Related: What Is the Difference Between Knowledge and Wisdom?

Knowledge management is more than just storing information away for use, posting on a SharePoint portal hoping someone will read it, or email to a team.

It is about capturing to share the information or what is known, for positive use at personal and organization levels

Michael Polanyi determined there are two dimensions of knowledge conversion: tacit and explicit knowledge.

• Tacit knowledge is the knowledge you have based on your personal experiences.
• Explicit knowledge is documented or codified knowledge that people can access.

According to Ikujiro Nonaka, theorist for the dynamic theory of organizational knowledge creation, there are four modes of knowledge creation. One of the modes is “socialization.”

Socialization of knowledge is important because not only is it the sharing of knowledge, but it is the transference of the tacit knowledge to another person or at an even greater level, to a division or department of an organization.

Sharing and transferring of knowledge should occur at all levels.

No one wins by being the only one with the information and a team cannot survive with only a single point of knowledge. When knowledge sharing occurs, insight sharing occurs and the team sees trust in the relationship.

Unfortunately, some look at knowledge sharing as giving up their job security. This is the wrong approach to take. When you share knowledge, you empower others personally and professionally. They remember that and respect that. In turn, they empower others, which allows for the desired growth and can extend to organizational growth.

Knowledge management is important because sharing knowledge empowers people and the organizations they support.

On a personal level, knowing how to manage knowledge supports independence and self-confidence.

At an organizational level, based on a study I conducted in 2016 in the US ship repair industry, I quantitatively determined that knowledge management has a positive relationship with firm performance meaning the stronger the knowledge management is within the organization, the better the organization’s performance will be. Without purposeful knowledge management, we are at risk personally and organizationally to fail.

Finally, when an organization has a culture of purposeful knowledge management, such as what I experienced while in the Navy and as a contracted knowledge manager, there becomes a culture of organizational strength in motivated mission accomplishment and positive team perseverance.

It is a process of generating, collecting, organizing, and sharing quality resources and work content in an organization

Knowledge management is important in the business world today for several reasons:

• Information is one of the most important competitive advantages in the marketplace.
• Information overload makes quality information hard to find and easy to lose.
• When good ideas are documented and shared, people avoid having to solve problems from scratch and valuable time is saved.

Creative and useful ideas are generated by employees every day, and when this knowledge is captured and retained in an organized collection, these ideas become assets that keep on giving. This is the heart of knowledge management.

Organizations that excel at knowledge management stand upon a mountain of years of templates, blueprints, guides, examples, and roadmaps that make helping their future customers and clients easier, quicker, and more effective. This is why knowledge management is such a massive competitive advantage.

To approach knowledge management successfully, it’s important to remember three keywords: systematic, organized, and rewarded.

Systematic

Building knowledge management into the routine of doing work in an organization is the best way to make sure knowledge is not falling through the cracks.

For example, a knowledge management survey can be sent on a quarterly basis to employees to collect the latest successful processes, project samples, templates, approaches and frameworks that have been created, used, and added value.

This survey could also be included as a standard step when concluding a project. As a word of caution: Any confidential information in knowledge management content submissions should be removed before sharing with other employees.

Organized

As information is gathered from knowledge management collection processes, it is important that the artifacts are retained in an organized repository such as an electronic shared drive with folders for each department.

Placing time-stamps and the source’s name on the artifacts also makes it easy to find the latest content and connect with the originator about any potential questions.

Depending on the structure of an organization, a centralized or decentralized approach can be taken for organizing all of the knowledge management content that is collected.

However, another word of caution: Having too many separate or overly-specific knowledge management libraries in one organization can cause confusion, duplication, and wasted time searching for the right content.

Rewarded

Employees are busy and we cannot get around the fact that knowledge management is yet another task to take care of. As such, it’s helpful to acknowledge employees for taking the time to package up their great work for others to reference in the future.

One fun and easy way to acknowledge employees who contribute to knowledge management efforts is to do a quarterly gift card drawing from the names of all employees who submitted content. Another idea is to spotlight exemplary content in company meetings and recognize the employee or team responsible for the good work.

When done on a regular basis, these very presentations promote and contribute to the knowledge management process as well.

Knowledge Management is an excellent philosophy to use when running a business as an owner or manager.

It is the free sharing of knowledge and capitalization of info-based resources which has proven effective time and time again

Through this process, people gain valuable knowledge and skills and learn more about how to lead and control an organization or team. These skills are highly valuable in business, and for these reasons, knowledge management has to become a necessity for any business or operation.

One of the things that were missing in the traditional management philosophy was the realization that individuals and groups are better organized and more effective when information is treated as a resource to be distributed.

With information gathering and distribution methods becoming more and more common, organizations have evolved to be run by a more complex hierarchy that facilitates the better use of knowledge resources.

Five reasons to use knowledge management:

• Knowledge Management offers a vast array of the information set up into an operations management system that can be formed into an electronic database.
• Knowledge management leads to the improvement of organizational performance because information can be retrieved and disseminated quickly.
• With a knowledge-based view that links knowledge management and organizational performance firms can be advertised as a unique advanced system to communicate.
• Knowledge Management can be built into a learning management system and can show track-records of learning and developing that can be accessed easily.
• Personal Knowledge Management is becoming the norm as more executives are building upon prior skill sets to enhance leadership development.

It is the process of storing, sharing, managing and using the knowledge in an organization

In modern companies, knowledge management is all about sharing the right information with the right employees, at the right time.
Knowledge management is important because companies need to have their key information in one place.

For us specifically, that’s the information on our product, on our key benefits, on our competition, on our top priority customers, etc.

A knowledgebase is necessary for the entire team to be on the same page, across different departments.

For example, someone in marketing may need a crucial piece of information from the sales department. Without this information, they may end up ruining a potential high-value deal.

It is the organization of information (knowledge) for people within a group to access

In a company, each individual employee carries a wealth of knowledge. No two people have the same knowledge and experience. By working together to organize all that knowledge, companies can run so much more efficiently than when each person is left to fend for themselves.

For example, I might be an expert at making spreadsheets while my coworker may know fantastic networking tips, and another in our group may be a statistical genius. If I have a project where I need to use all three of those specialties, my work will be more effective if I can access the knowledge of others in the group.

I could have a conversation with each of them, and that would be beneficial, but in a large company with a lot going on, not everyone has time to explain the same thing 10 times a day. This is where Knowledge Management would help.

All that information could be stored for access by those within a group searching for an answer.

Knowledge Management is important because it can help each person to do better work, and it can save time and by saving time, save money.

Within the digital marketing industry, it is a critical system of resources, strategies, and tactics

Digital marketing is constantly changing and transforming, and what worked a few months ago may be completely irrelevant today (Google+, relevance on desktop shifts to mobile results, etc.).

Successful digital marketers keep track of dozens (or hundreds) of elements across the internet landscape; from search engines, ads, review sites to business listings and social media channels. All of this information needs to live in a dynamic environment and someone needs to communicate changes to the team.

Most digital marketing teams use a combination of project management and communications tools to keep digital knowledge up to date and relevant.

While some use “old school” tools like Office365 and Basecamp, niche marketing tools are also available. CoSchedule helps manage content projects, Loomly is available for social media managers, and Trello appeals to those who wish to use a Kanban management style.

For communication, tools like Slack, Hive, or Samepage help teams keep the most recent internal and industry conversations at top of mind and eliminate sorting through email chains.