Knowledge is power is undoubtedly one of the most famous phrases of the information age. If you are interested in knowing how much knowledge is at our disposal, here’s a clue. Prior to 1900, the amount of knowledge produced doubled every century. 45 years later, human knowledge doubled every 25 years. By 1982, knowledge doubled every 12 - 13 months; in 2020 it was down to every 12 hours. In essence, the amount of knowledge that took nearly 100 years to amass in 1900 only takes 12 hours (or less) today. (Source)

Since knowledge is steadily growing, there is a need to organize it so that it’s easy to access, share, store and utilize when needed. Failing to do this will make it difficult to get the right knowledge when needed. Imagine a large company like Facebook which generates 4 petabytes (a million gigabytes)  of data per day. Without proper knowledge management, finding the right information is akin to finding the proverbial needle in a haystack. 

Poor knowledge management leads to inefficient knowledge sharing and according to this report, US companies lose millions from inefficient knowledge sharing. How? Two major ways are employee onboarding, and productivity. Startups are not exempted from these statistics. Using the productivity cost calculator (all other values assumed to be constant), a startup with 10 employees loses between 25,000 to 30,000 dollars annually by failing to share knowledge. How do you prevent this loss? The answer is knowledge management.

What is a Knowledge Management System?

A knowledge management system is one that allows an organization to effectively manage the knowledge generated within and outside the organization. Three basic types of knowledge are recognized and they are; Explicit, implicit, and tacit knowledge. Explicit knowledge is knowledge found in books, media, databases, etc. that’s to say they are codified knowledge. Implicit knowledge is practical knowledge while tacit knowledge is intuitive knowledge.  Confusing? Let me explain further. 

The Three Types of Knowledge Explained

We start acquiring knowledge through schools. The form of knowledge acquired this way is called explicit knowledge. It’s easily accessible and easy to extract as well. We can transfer this knowledge from books to our phones and other means of storage. Now let’s say you get a job in an organization relevant to your field of study because you have enough explicit knowledge. During the course of your job, you begin to gain another form of knowledge known as implicit knowledge. 

This is the practical aspect of explicit knowledge. Implicit knowledge can be gained by working alongside more experienced colleagues in your field. Then finally after years on the job, you begin to possess the last form of knowledge known as tacit knowledge. This is gained by experience and is very difficult to teach to another. The best way of transferring tacit knowledge is in a mentor-mentee relationship. 

Tacit knowledge is why some investment decisions by seasoned investors like Warren Buffet are not so obvious to even the most learned investor. It is also the reason why you can’t replicate your grandmother’s favorite recipe despite knowing the process

A good knowledge management system accounts for all three types of knowledge.

Knowledge Management Processes 

Knowledge management can be represented in 4 major stages- Acquisition, Storage, Distribution, and Application - that all together create NEW knowledge. There are also 2 major factors that influence these processes and their effective use of it - those are Socio-Cultural Factors and Technology.

Let’s look at the different stages of knowledge management;

Knowledge Acquisition 

Here it’s important to identify the knowledge that is needed and then where it can be acquired. This knowledge could come from external sources like customers, and experts, or internal sources like the employees of the organization. For example, an organization could realize that its sales are decreasing over time. This is a big problem and an external expert is invited to assess the situation, identify the cause and propose the solution. Alternatively, a company could reach out to its existing clients and ask for feedback. 

This could be really valuable information to understand their needs and provide better services. Of course, the most valuable source of knowledge will be found in the minds of the company employees, especially those who have been working with the company for some time. One way of acquiring this knowledge is through interviews or debrief sessions with key employees. Once acquired, the knowledge can then be stored in databases or knowledge management platforms and this takes us to the second step of knowledge management;

Storage and Organization

At this stage, the organization has one goal in mind and that is to preserve the knowledge it has acquired. By now, most of the acquired knowledge has been converted into shareable formats which are then stored. This could be a template or form that needs to be filled in every time the new customer is onboarded. Or it could be a workflow document that needs to be followed for a specific project.

The storage acts as a central repository of knowledge with an output and input interface. The output interface allows stored knowledge to be accessed by anyone who is in need of the knowledge such as an employee or customer. While the input interface allows the organization to easily feed new knowledge into the system to improve over time.

After acquiring and storing the knowledge, the next step is to set up appropriate channels through which knowledge flows within the organization. The transfer of knowledge in and out of the system plays a central role in the third stage of knowledge management which is; 

Knowledge Distribution

Knowledge distribution involves making relevant knowledge accessible to those who need it within an organization. To do this, there are two things involved; first, you need the right technology in place to make sure accessing relevant knowledge is smooth and easy to speed up employee productivity. Secondly, you need the right organizational culture that promotes collaboration and not a competition among employees. 

This is because no matter how effective the knowledge acquisition phase has been, there are bound to be knowledge gaps that occurred during the conversion of tacit or implicit knowledge into explicit knowledge. The reason is that tacit or implicit knowledge is difficult to retrieve from the minds of those who possess it and for an organization to ensure that knowledge is distributed effectively, it must cultivate an environment that encourages - collaboration, socialization, and learning among its employees. 

Knowledge Application and the role of Organizational Culture and Technology

Some organizations encourage competition among their employees because it is believed to stir innovation and creativity. However, such a culture could interfere with knowledge distribution because the employees believe that their knowledge makes them an asset to the organization. Eventually, the organization suffers a major setback because it has to rely on a few employees with the right knowledge as compared to having several employees who can get the job done. 

A collaborative culture on the other hand will motivate employees to socialize with each other and share knowledge thereby creating an organization with several highly skilled employees leading to higher organizational productivity. With the right culture and technology in place, knowledge can then be effectively applied to improve overall organizational productivity. Employees will be motivated to team up and solve problems thereby creating new knowledge.

How Knowledge Management can be applied in a Startup

At this point you may be thinking to yourself, how can I apply this to my startup? There are a number of ways such as - creating an internal database for information sharing, training, and onboarding new employees, a self-service portal for your customers, in sales as well as product development.

Internal database for information sharing, training, and onboarding  - When employees have to spend time searching for information, then they tend to be less productive, and that costs the startup a lot. A startup does not have the luxury of time and money. It is up to the founder to make it easy for his employees to get up to speed with what is going on in the company. A good place to begin is by setting up an internal database. 

A good database will drastically reduce decision-making time because an employee won’t have to wait until told what to do in a fairly regular situation. It also cuts down the need for an unnecessary chain of command reserving that for more serious decisions. Training and onboarding new employees is easier and takes less time when there is a central repository where all relevant onboarding information can be accessed. 

Self Service Portal- Customer service is extremely important to a startup because it cost more to gain a new customer than to retain one. Being a new business, customers are likely going to have so many questions about your services and products. But startups do run on the bare minimum number of staff (because it is cost effective). So how do you avoid overburdening your staff, and at the same time provide fast and reliable customer service? The short answer is by having a self-service portal with answers to frequently asked questions. A good knowledge management tool will provide feedbacks on customer satisfaction which can be used to improve the process. 

Marketing - Startups are all about marketing and making their brand known. But keeping up with the process gets difficult with time from a creative perspective. This is why it is a good idea not to do away with your campaign materials as they could serve as a source of inspiration in the future or even repurpose for a different campaign. The same goes for product development. After putting a lot of effort and time into creating different designs and concepts, you only have to go with one. But that does not mean the other designs are of no use. It is always good to have a backlog of information to infer future designs rather than trying to come up with new ideas from the scratch. 

Conclusion

This article is a deep dive into knowledge management and we’ve briefly touched on the most important things every entrepreneur should know. For a startup, it is easier to have a good knowledge management system from the very beginning as the benefits are staggering. There are a number of KM tools out there that offer competitive packages and rates. If you would like to know our opinion on which tools are the best for your startup, then kindly reach out to us and we will be glad to help. 

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