Why Knowledge Management is the Key to Long-Term Value Creation
The popular myth about goldfish is that their memory only lasts 3 seconds. While this has been disproven, it’s still a great analogy for a very common business problem. Despite the vast sums of money spent on hiring, onboarding, training and developing talent, most companies don’t do nearly enough to capture, cultivate and share the insights and knowledge that their employees create on a daily basis. They want to build long-term value, but only have a short-term memory, and that is a massive missed opportunity.?
Knowledge management is one of the most important and frequently underutilized tools for building enterprise value. It refers to a range of practices that enable businesses to capture, store, and share knowledge generated by employees. This knowledge can then be used to optimize business processes, drive better performance, and create value for customers.
While we often hear of knowledge management in the context of Fortune 500 companies (Walmart, IBM, GE, Proctor & Gamble and Seimens are all known for successful knowledge management programs), this practice can pay major dividends for companies of almost any size, with mid-market companies likely having the most to gain.?
Value at every stage of the employee lifecycle
One of the most significant benefits of knowledge management is that it speeds up the onboarding of new team members. When new employees join an organization, they often have to spend significant time and effort getting up to speed on the company's processes, policies, and structures. However, with a robust knowledge management system in place, new employees can access critical information more quickly and easily, reducing the time it takes to become fully productive.
Knowledge management offers significant productivity benefits throughout the tenure of your employees, regardless of how? unique their role is in the organization.? For those with peers performing similar functions, it offers a channel to share learnings and best practices (“two heads are better than oneâ€). Beyond their specific function, a proper knowledge management program reduces the time spent chasing down information, resolves dangerous assumptions and misperceptions, and stimulates new ideas and opportunities. It also reduces time and resources wasted in “reinventing the wheel†(when employees unknowingly invest in pursuing ideas that have already been proven or disproven by others in the organization).?
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Another important benefit of knowledge management is that it protects the organization against losses when existing employees leave, whether they resign or are terminated. When an employee departs, they take with them a wealth of institutional knowledge, experience, and expertise. Outgoing employees are often asked to document this knowledge just prior to their departure, but by that time they usually lack the time and/or interest to do it effectively. Without a way to capture and share this knowledge, the organization risks losing valuable insights and processes that are critical to its success.
Use it, don’t lose it
Despite the importance of knowledge management, most companies have not established consistent systems or processes to capture and share knowledge. Many businesses rely on informal methods such as email, chat, or informally structured meetings to share information, which can be ineffective and inefficient.
Furthermore, even companies that attempt knowledge management often have trouble getting their employees to consistently use these systems. This is why it is critical to combine knowledge management systems with the proper information architecture, documentation process, and training. By ensuring that employees understand the value of knowledge management (both to the organization and to their own career success) and have the tools and training they need to use it effectively, businesses can maximize the benefits of this critical tool.
Every day that goes by, your company is losing valuable knowledge. If that bothers you, reach out and let’s talk.