Managing Corporate Knowledge
Mike Allison
What is Corporate Knowledge? Simply put, it is knowledge that belongs to the company. If the knowledge is recorded, it is called Explicit Knowledge. If it is simply in people’s heads, it is known as Tacit Knowledge.
Many organisations, large and small, have much more Tacit Knowledge than Explicit Knowledge. This is natural, since the owner of a small business is likely to be flat out getting products and services out of the door. In large companies, the knowledge is spread over many people. Employees cannot see the value to the business of what they know. Knowledge gained over time may be an advantage over the competition. Losing it may also be a risk.
What happens when an owner wants to retire? If a purchaser of the business is about to take over, chances are the Tacit Knowledge is about to disappear out the door with the previous owner. Similarly, when a long-term employee leaves, that Tacit Knowledge also departs – perhaps to a competitor.
According to the Longford Royal Commission, the loss of critical organisational knowledge was one of the underlying causes of the disaster. The risk was not considered during the relocation of engineers from the production site to Melbourne.
Another example we encountered was that of a client who had developed a specialised personal protection item for a high-risk situation. The person who developed this left, and the knowledge was lost. Over many months, a team of people had to reinvent the item, costing hundreds of hours of wasted time.
This is where your management system becomes relevant. The purpose of your management system is to control risk; one of these is the risk of loss of critical organisational knowledge. Indeed, organisational knowledge is a key component of your management system, operating in balance with the mix of procedures and documents, training and competence, supervision etc. When building Management Systems, we find many ways to capture Tacit Knowledge and make sure it is not lost to the company. Here are some examples of Tacit Knowledge with immense value to the company. Such knowledge should be captured to error-proof your organisation.
Tacit Knowledge |
Impact if Lost |
How to Capture |
Choice of chemicals for a formulation or process |
Thousands of dollars worth of experience and trial have to be spent again |
Prepare a table of formulations – make it password protected if it is a “Trade Secret” |
Special method to ensure a process works |
May be unable to process or at high rework cost |
Write it down or make a training video |
Contacts in the market |
Loss of present and/or future business |
Put them in Outlook or similar contacts manager and label / categorise |
Dangers to staff |
Potential injury and litigation |
Place in a Risk Register and develop treatments to avoid them |
The Management System should be used to make it easy to reach knowledge for all who need it to do their jobs. For example, process “recipes” should be part of Process Control Plans, complete with measures of the how much variation there can be in chemicals or components. Often, it’s not so much the “magic formula” as variation control that is the key to success.
Contact us to find out more.