How is knowledge created in your organization? You collect data. How do you process data into information? And how does information become knowledge? How does your organization acquire know-how and experience from knowledge? It is through the application of know-how and experience that you can finally make a difference.
The knowledge, know-how, and experience that exist in your organization are necessary, valuable, and difficult-to-replace resources. Yet neither the knowledge, nor the know-how, nor the experience are kept in any inventory list, nor are they posted on the balance sheet.
Costs for knowledge acquisition flow directly into the income statement as expenses and visibly influence earnings, while the benefits of knowledge acquisition are only indirectly reflected.
Try to value your organization’s knowledge, expertise and experience. Analogous to the quality management methodology, you can “book” costs of knowledge, know-how, and experience acquisition as preventive measures, which you can contrast with the costs of internal failures, reworking, tolerance violations caused by lack of knowledge which then lead to commercial losses, and weakened resilience. Such a representation will help you optimize the total.
Important to your organization’s effectiveness and resilience is how you manage knowledge and expertise. Whereas until the 1990s attempts were made to make as much knowledge in the organization as possible explicit through documentation, the trend today is to make the knowledge and know-how available in the organization through networking. The knowledge remains implicit, but is collectively available and retrievable in the processes. The networking of knowledge and know-how carriers also opens up the advantage that procedures in your organization can adapt and develop in an agile manner to changes.
Knowledge management is highly relevant for making correct decisions in the organization and specifically game theory models are interesting for developing effective strategies. However, it is also becoming increasingly important to motivate employees.