The Value of Knowledge

Customers consistently demand increasingly innovative products and services, delivered more quickly and cost effectively. The only way for an organization to respond to the increased complexities of these demands is by leveraging the efforts of its most experienced and capable members. Effective knowledge management implementations will accelerate how rapidly knowledge can be brought into the business process environment, accelerating the pace of innovation and delivery.

However, the initial advantage gained from leveraging knowledge will be relatively short-lived. The first organizations to harness knowledge effectively will indeed gain a competitive advantage from an increase in productivity. Eventually, this advantage will diminish as other organizations catch up. It will be innovation, driven by effective knowledge management, that will provide continuing competitive advantage. Organizations must foster an environment where continual knowledge creation, capture and dissemination produce a self-sustaining cycle of gains.

Organizations that excel at knowledge management make knowledge available to every employee at the point at which it will be most effective and valuable in enabling them to offer a particular product or service. Making practical knowledge available to employees, when and where they need it, will produce real, significant and measurable gains. If your employees cannot respond adequately to a customer’s request; if they respond adequately but take hours, days or weeks to figure out how to do so; if they cannot draw upon the experience of those who have already overcome similar challenges, your organization’s productivity and customer satisfaction will suffer.

Effective knowledge management focuses on business goals and business processes, makes knowledge available to employees when they need it, and does not simply share existing knowledge but creates new knowledge.

To achieve these goals, knowledge management must be equally concerned with information, knowledge artifacts and knowledge content. Explicit knowledge content is not the only form in which knowledge can be expressed. In order to facilitate knowledge creation, people must have access to the information and knowledge artifacts which are the building blocks of knowledge. It is by ensuring that employees have all the resources they need to do their jobs effectively, when they need them, that companies can cultivate knowledge creation as well as knowledge sharing.

The most significant gains achieved through information management have been in industries which deal primarily with tangible commodities. In these cases, information management has been able to harness and amplify the economies of scale inherent in the manufacturing and assembly processes.

Knowledge management, however, must deal with both an input and a subsequent output composed of an intangible quantity: knowledge. Unlike tangible commodities, knowledge suffers from inherent diseconomies of scale. Knowledge is internal to each human being. It is not easily mined, refined, and poured into moulds so that thousands of identical copies can be distributed. If knowledge management is to achieve similar economies of scale, these fundamental characteristics of knowledge must be taken into account.