CollaborativEye

Why aren't there any books on how to ride a bike? (OK -- I found one on Amazon, but work with me...) You can read and learn from books on molecular biology, cost accounting, and computer programming, so why not something as simple as learning to ride a bicycle? The truth is, you don't really KNOW how to ride a bike, until you've been on it, fallen off a few times, and become personally engaged with the bike. Philosopher Michael Polanyi called this "Personal Knowledge" in his ground breaking book of the same title back in 1958. Fast forward 50 years to several McKinsey studies in which three types of knowledge interactions as posited: transformational, transactional, and tacit. Transformational interactions change raw materials into finished goods; transactional interactions involve knowledge which can be codified and explained as a process or set of steps (e.g closing the books for the month, or entering sales data into a CRM system). Tacit interactions, on the other hand, are much more complex, ambiguous, and involve what Polanyi called personal knowledge. Tacit knowledge requires judgement, context, and interaction with others to determine the best solution. For example, how should you respond to an irate customer? What features should be included in the next release of product X? Which logo treatment is best? What investment fund is most appropriate for this customer?

McKinsey research indicates that 70% of all jobs created since 1998 involve tacit knowledge interactions as their primary component. However, only 24% of software spending is aimed at improving tacit knowledge interactions! No wonder we feel that we are getting further behind even though we have more and more technology at our disposal!

The implications of tacit knowledge on business cannot be overstated. Organizations which successfully improve the productivity and effectiveness of their tacit knowledge workers will be able to build competitive advantage which will be difficult for others to copy. There will be no "play book" to copy -- rather the competitive advantage is built into the tacit interactions between employees, customers, partners and the ability to innovate and come to the right solution to a problem more quickly.  How can business leaders improve their organization's tacit knowledge effectiveness?

1) By providing the tools where interactions and collective knowledge are encouraged and preserved.  Technology examples include collaboration platforms such as blogs, wikis, instant messaging, knowledge management platforms, etc. The goal is to make collaboration  so simple and pain free that it increases meaningful, shared communication dramatically. And no, email is obviously not the answer.

2) Exploring communication platforms that can capture experience, context, and nuanced judgement more successfully than stand-alone text. For example, listening to a set of successful conversations between a customer service rep and an irate customer may be much more effective than reading a 10 page paper on customer service protocol. Or another example, providing tutorials on the use of a CRM system which show exactly how to perform an operation, complete with screen recordings, and audio narration discussing possible exceptions, alternate approaches, and considerations.   

3) Clear the decks for more tacit knowledge interaction by reducing the burden of transactional interactions. Very little time should be spent learning how to fill out an expense form or learning how to run a monthly report in the ERP system. Companies must provide focused, on-demand learning that provides employees with transactional knowledge when and where they need it.