Strategy Dynamics Briefing 85: Grasping tacit knowledge

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Briefing 78 explained the importance of the intangible resource of knowledge to the performance of a firm’s tangible resource-system. For effective learning, knowledge must be captured. Since we are concerned here with the ability to get things done, this discussion is about know-how (how to do things), rather than the know-what of factual information.

A framework for understanding better the effectiveness of group learning starts with a distinction between tacit and explicit knowledge. The discussion of the retailer’s building of a site-acquisition capability in recent briefings rather implies that all the activities in the process came to be defined, written down, and followed in detail. However, this was not the reality in that situation, nor is it generally the case, even in the most regimented process-driven teams.

Early in the retailer’s growth, the first few experts discovered problems in how they were doing the job, worked out better approaches, and discussed them with each other. Their discussion shared what is known as “tacit knowledge” — things that group members know how to do without recording them as “explicit knowledge” or rigorously observing them.

Organizations constantly move many small pieces of knowledge from tacit to explicit, either in a deliberately planned manner or because it seems to make sense. How well this process works is of considerable importance to the effectiveness with which groups and organizations learn.

To make this phenomenon concrete and amenable to analysis and deliberate management, it is possible to survey a group at a point in time and have them record (see figure 1):

  • things individuals know but have not shared
  • things people know and have shared, but not recorded
  • things the group has recorded, but do not use
  • things that are recorded and regularly used

Figure 1: Know-how moving from tacit to explicit and from individual to shared. (Click image to view larger)

Know-how moving from tacit to explicit and from individual to shared

This is a resource-development chain similar to others explained in Briefings 36-44. To make this system work, knowledge is first shared amongst individuals – it flows from being held by individuals to being shared, but still tacit. Next certain know-how that seems worthwhile to document is recorded, that is made explicit. There is no guarantee, however, that know-how about how best to do things will be adopted by everyone, even if it is highly effective, so finally some explicit knowledge moves to being adopted.

It is assumed in Figure 1 that individuals and groups make use of the tacit knowledge early in the chain, but this is not necessarily the case either, so a complete model would need additional stocks of unused, tacit knowledge. Two further things can happen to these knowledge items:

  • They can move backwards as well as forwards along the chain. Embedded knowledge can fall into disuse, or shared, tacit knowledge can be forgotten by the team but not by a particular individual.
  • Knowledge can fall out of the chain altogether, with know-how being lost because individuals or groups forget about it, because people leave, because knowledge becomes obsolete, or for other reasons.

There is no presumption here that all knowledge necessarily should move forward along the chain. It is costly in both effort and money to share, record and disseminate knowledge, and much knowledge is not of sufficient impact to be worth this investment.

Until next time…


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Making knowledge shared

Organizations have found some remarkably effective ways of disseminating know-how. At the extremely simple end of the scale is a solution discovered by one law-firm, concerned that different groups of lawyers were not sufficiently aware of each others’ knowledge. Strategic Management Dynamics book cover Their solution was monthly “speed-dating” sessions, at which people moved from partner to partner every five minutes, during which time each had to tell the other important know-how about both legal practice and client development. At the more sophisticated level, organizations with a strong technology base, such as 3M Inc and CSC operate internal “technology fairs” where groups show off their knowledge to others who may then combine what they find with other knowledge they possess to move further forward.

This briefing summarises material from chapter 10 of Strategic Management Dynamics, pages 660-662.

Read more about the book on our website

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