This guest post comes to us from Dania McDermott. Dania is a content marketing writer with roots in the world of customer success. She’s a big believer in putting users first and applies this credo to creating content that helps B2B brands rank and read better.
Knowledge is more than power, it’s a necessity. In today’s knowledge economy, timely access to information can make or break a company’s ability to stay competitive.
But as organizations generate reams of data, lags in institutional knowledge keep employees in limiting loops. According to McKinsey, the average knowledge worker spends almost two hours of each workday looking for information.
These knowledge gaps become distractions. These distractions add up.
One report estimates the average large business in the U.S loses $47 billion in productivity per year as the direct result of poor knowledge sharing.
To succeed in the long-term, organizations must empower their workforce with a unified knowledge management system that helps them make smarter, speedier business decisions.
In this article, we’ll define knowledge management, share a few ways it helps teams level up, and review some notable organizations proving its value.
What is Knowledge Management?
Knowledge management (sometimes referred to as “KM”) is a fancy term for any system that helps people within an organization document, distribute, and access important business knowledge and information.
Knowledge Management can range from simple systems like writing and sharing things in Google Drive to complex machine learning systems that standardize data in real-time.
Simple or not, the most successful knowledge management systems have a common goal: collecting and preserving knowledge specific and relevant to an organization and its teams.
Known as proprietary institutional knowledge, this can include anything from how and when to process a refund to appropriate escalation paths during a crisis.
In practice, most organizations approach knowledge management from the following vantage points:
- Technological: What technologies enhance knowledge sharing and creation?
- Organizational: What processes will best support ongoing knowledge capture?
- Ecological: How do our teams interact within the ecosystem of our organization?
- Cultural: How can our company culture facilitate and encourage knowledge sharing?
Some organizations may need to focus more on culture and less on technology, while others may find their knowledge sharing practices and team communication need the most attention.
Wherever your organization lands, anyone considering knowledge management will need to consider people, process, and technology.
How Knowledge Management Helps Teams Level Up
A strategic knowledge management system brings far-reaching benefits. Here are a few ways effective knowledge management practices help organizations become more successful.
Reduces interruptions that threaten productivity
Interruptions erode productivity. A UC Irvine study found it takes almost 25 minutes to fully resume a task after an unrelated interruption.
In the workplace, interruptions often stem from a lack of information. Whether it’s a Slack message or a direct trip to someone’s desk, people who can’t find answers will usually turn to their colleagues for help. Whoever offers it will need time to regroup after the interaction––time that could be better spent getting something done (or taking a real break).
With a centralized knowledge management system in place, people find most answers on their own, enabling everyone to work more efficiently.
Minimizes the risk of misunderstandings
Misunderstandings between colleagues can undo progress, breed resentments, and hurt customers. They can also hurt your bottom line. In a survey of 400 organizations, Holmes estimated employee misunderstandings cost a combined total of $37 billion.
These misunderstandings included “actions or errors of omission by employees who have misunderstood or were misinformed about company policies, business processes, job function, or a combination of the three.”
The implications are clear: What we don’t know can hurt us. By ensuring company-wide access to team policies and procedures, organizations that lean into good knowledge management reduce the odds of costly mistakes.
Protects against employee attrition
When a member of your team leaves, they often take valuable institutional knowledge with them. The loss can be especially pronounced when experienced or senior employees move on.
In best-case-scenarios, departing employees train successors before they leave. But even these instances have limits. Some knowledge is tacit and thus harder (if not impossible) to teach.
To combat attrition-related knowledge loss, organizations must think long-term by fostering a corporate culture that rewards knowledge creation and sharing instead of knowledge hoarding.
Reduces onboarding and training friction
A negative onboarding experience can send your most talented new hires packing. Almost one-third of new employees are willing to quit within the first 90 days, according to HR Dive.
New hires crave order, structure, and clarity. When a new member of your team encounters one-too-many undocumented processes, it impedes their ability to learn. It also guarantees that seasoned employees bear the brunt of their questions, pulling them away from their own work.
At the other end of the spectrum, an overzealous new employee may take matters into their own hands, causing a cascade of otherwise preventable mistakes.
When done right, your knowledge management system should complement onboarding and training efforts. Offer strategic resources that empower new hires to answer their own questions and build confidence from the start.
Enables better communication within and across teams
Communication gaps between and among teams can make it difficult for individuals to find reliable business information.
For instance, if your engineering team manages bugs in a system your support team can’t access, this will hurt the support team’s ability to communicate timely updates to customers.
Similar issues occur when sales teams don’t understand how an organization’s product or service works. Without this visibility, they can’t accurately communicate its value to prospects––a misstep that will inevitably come up should they become customers.
An effective knowledge management strategy solves for these gaps in two ways. First, it promotes transparency by ensuring company-wide access to the right information across all teams. Second, it asks each team to take the lead on content creation, completeness, relevance, and accuracy to keep everyone accountable.
Knowledge Management in Action
The global knowledge management market was valued at around $206 million in 2016 and is expected to grow at a compound annual growth rate (CAGR) of 22 percent between 2017 and 2025. Teams are increasingly turning to knowledge management because it allows them to move faster and focus on the right things.
Here are some notable examples of teams and organizations that benefit from good knowledge management:
When Hurricane Katrina hit in 2005, Southern Co. had already spent a year expanding their knowledge management system to meet worst-case-scenarios. As the leading electricity provider for the Gulf Coast region, this meant building a content management system that provided engineers with instant access to design plans needed to restore service. As a result of their efforts, Mississippi service was restored in 12 days instead of the projected 28.
Pratt & Whitney
Pratt & Whitney is an aerospace manufacturer known for its success with KM. The company’s journey began with the realization of a common problem: Half of its engineering team could retire in a few years. To prevent critical knowledge loss, Pratt & Whitney embarked on an integrative, holistic knowledge management strategy that helped save an estimated $25 million.
Amazon’s use of knowledge management techniques has helped the company transform from an online bookstore to the number one e-commerce retailer in the U.S. Whether it’s the ability to search millions of products from a single interface or to get personalized recommendations that connect users to relevant products, Amazon owes much of its growth to surfacing the right information in the right ways.
Putting it together
If knowledge is power, information is liberating. The goal of any knowledge management system isn’t to push knowledge workers towards forming perfect, instant judgments––it’s to free them from the informational scavenger hunts that keep them from pursuing more meaningful work. That’s where innovation happens.