Tax Access
Home About Us Contact    
Knowledge Management Guide
Medicare Levy Surcharge
Tax Office Hot Spots
Knowledge Management Guide
10 Things You Must Know

Knowledge Management is in the news – on the cover of business magazines, in the financial press and academic journals, and on consulting company websites. Let’s strip away the gloss and get back to the basics: what are the 10 ‘must-knows’ of Knowledge Management??

1. Knowledge Management defined
Knowledge Management (KM) is the process by which an organisation uses its intellectual or knowledge-based assets (such as expertise, innovation, knowledge, skills and creativity) to achieve its objectives.

2. Why KM is important
What do you rely on to achieve your business objectives? Increasingly, the answer to that question is "knowledge", "information" and "expertise". We devote considerable management attention to controlling our financial assets, and KM suggests that equal focus should be applied to how we achieve results from our intangible, knowledge-based resources.

3. The benefits of KM
KM helps companies to:

  • Know what they know
  • Use what they know to achieve their organisational objectives
  • Create new knowledge to achieve higher standards of performance

4. The consequences of not managing knowledge
Knowledge management failure is serious. You will:

  • Repeat commercially significant mistakes
  • Waste time and money ‘reinventing the wheel’
  • Lose valuable and hard-to-replace capabilities when key staff leave
  • Miss opportunities to convert good ideas to results for the organisation
  • Find out important information too late or not at all

5. The types of knowledge to be managed
Two types of knowledge can be differentiated. The first knowledge type – explicit knowledge – is easy to transfer from person to person, division to division, site to site, and company to company. In your business, explicit knowledge may reside in procedures, protocols, code, logarithms, formula, rules and instructions.

The second type of knowledge – tacit knowledge – is difficult to transfer from person to person, let alone site to site or company to company. Tacit knowledge resides in people, and is described by terms like ‘gut feel’, ‘insight’ ‘intuition’ ‘judgement’ and ‘a feeling for things’.

6. The importance of tacit knowledge
Which type of knowledge contributes most to achievement of your objectives?

You achieve your critical results from creativity, insight, problem -solving and getting things to work in practice. Because these capabilities are difficult to transfer from one person to another without close personal contact, they are examples of tacit knowledge.

Tacit knowledge is the source of sustainable performance excellence.

7. How tacit knowledge is developed and shared
Tacit knowledge (insight, judgement, and problem solving) is developed by experience. You do not become an expert by reading or study. You become an expert by doing, trial and error, day-to-day practical experience.

Some tacit knowledge can be converted to explicit knowledge. For example, you may be able to document the path you used to make a judgement. However, other tacit knowledge is so personal and complex that it is not accessible to words (Polanyi described this phenomenon succinctly: "We know more than we can tell").

You can facilitate the transfer of tacit knowledge from one person to another by providing close personal contact. Think of the master – apprentice relationship, where a novice works side-byside with a craftsman: observing, copying, refining, and trying again under the watchful eye of the expert. In contemporary workplaces, mentoring, coaching, work shadowing, job rotation and teaming are some of the ways used to transfer tacit knowledge.

8. The role of IT in KM
IT is an important enabler of KM. Its strength is organising and transferring explicit knowledge.

Many KM initiatives start with an IT phase – for example, developing an expertise locator or ‘Yellow Pages’ to help staff fund out who knows what in the organisation. However KM is not the same as IT: successful KM initiatives align people, process and technology.

9. KM’s biggest challenge
For once – consensus! In theory, and in practice, the biggest challenge in KM is the people part.

Effective KM depends on collaboration, knowledge sharing, commitment, initiative – often summing to a change in organisational culture. The world’s most advanced technology contributes nothing if people won’t use it. When asked what they would do differently in KM, the most common response from project leaders is "Pay more attention to the people issues".

10. A place to start in KM
Start with the business! KM is all about performance improvement. The link between your KM initiatives and your organisation’s most critical business objectives must be crystal clear. So look to your organisational objectives or your core processes and establish how you can underpin achievement through knowledge.


White Pages
Yellow Pages

Professional National Accountant
PNA Member of the National Institute Of Accountants