What is knowledge in business?
Business knowledge is an important strategic asset. It is a sum of skills, experiences, capabilities and expert insight, which you collectively create and rely on in your business. As a shared resource, knowledge shapes and affects all the activities in and around your business.
Types of business knowledge
Knowledge can exist in many forms, but will usually fall under one of three main categories:
- Tacit knowledge - personal know-how or skills rooted in experience or practice (eg aesthetic sense or intuition). Tacit knowledge is difficult to write down, visualise or transfer.
- Explicit knowledge - articulated knowledge recorded in documents, memos, databases, etc. Explicit knowledge is easy to store, distribute and communicate.
- Embedded knowledge - skills and understanding locked in processes, products, rules or organisational culture (eg informal routines, codes of conduct, organisational ethics).
Knowledge can belong to individuals or groups within your business, or exist at the organisational level. You can also share it with different organisations.
You can apply business knowledge in many organisational areas and competencies, from financial management and organisational governance to market analysis, strategic planning, and human resources. See more on strategic planning for business growth.
Examples of business knowledge
Examples of knowledge that already exists in your business include:
- the skills, competencies and experiences of your workforce
- the designs and processes for your goods and services
- the industry or market data you've gained from research
- your files or documents (electronic or otherwise)
- your customer data or information on suppliers and stakeholders
- your plans for future activities, such as ideas for new products or services
Importance of business knowledge
Knowledge has great value since it is inherently unique to your organisation. It shapes and drives your business activity, your ability to sell or do more, and stand apart from your competitors.
Individual knowledge is easily lost, especially when key employees leave. Make sure that your employees share knowledge and skills, and pass them on to their successors wherever possible. For example, you can:
- hold brainstorming sessions
- organise training courses
- maintain up-to-date documentation about processes and procedures
See more on sharing knowledge in business.
What is knowledge management in business?
Your understanding of what customers want, combined with your workers' know-how, can be regarded as your knowledge base. Using this knowledge in the right way can help you run your business more efficiently, decrease business risks and exploit opportunities to the full. This is known as the knowledge advantage.
Effective knowledge management makes it possible to create, transfer and apply knowledge at different levels in a coherent and productive way. Read about the advantages and disadvantages of knowledge management.