Knowledge Management and its impact on Innovation

Knowledge is the most powerful tool, let´s manage it efficiently in order to create a positive impact on our organization.

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3 years ago, when I was about to complete my post grad in International Economics, my professor asked me to decide my dissertation topic. I told her I would like to spend a year researching on something which would create extra value within any organisation.

So we decided to find out a bit more about Knowledge Management and how it can have an impact on any organisation, in particular, in terms of innovation.

Let´s share the 6 lessons I learnt while researching about Knowledge Management and Innovation:

1. Knowledge is power

When companies and organisations speak about the secret of their success, they usually say: low costs, competitive advantage, market leadership, innovation...but what is behind those aspects? Yes, Knowledge!

Several studies have shown that Knowledge is the most powerful tool if it used correctly.

Most of the companies manage data, but only those who are able to transform date into information and then in knowledge would be the only ones in creating extra value.

2. Knowledge management applies to each step in the innovation chain

KM is not just tool; it is also a culture, by creating a culture of knowledge management, we will increase our capacity to innovate.

In order to innovate, organizations should be able to do 3 things:

• Be able to identify internal and external knowledge but not only these, but also resources.

• Transform explicit knowledge into tacit knowledge.

• And convert individual knowledge into organizational knowledge.

It seems easy but it isn’t! Studies show there are still companies which are not able to identify their own resources.

3. Sharing and promoting knowledge

When we speak about sharing knowledge, it is necessary to mention that is the most powerful knowledge management practice.

Talking to some managers and team leaders, they told me “the worst ever employee I had were those who were selfish and did not want to share their knowledge, expertise...”.

Several works have found that sharing knowledge is totally linked with high levels of motivation, performance... The implementation of a culture where knowledge is shared will lead to an increase of the innovation process.

Workers share knowledge by preparing written documentation such as lessons learned, training manuals, good work practices or articles for publication.

4. Avoid Knowledge Loss

Workers come and go, some workers retire...or even have you already thought what would happen if any of you colleges had an accident? Are companies ready to overcome these situations?

We have to ensure that knowledge remains within the organisation. How can we achieve that? By having knowledge management practices in place:

• Providing training to expand our knowledge. Some managers ask: What if we train them and they leave? The answer is: What if you don’t and they stay?

• We have to make sure knowledge is stored correctly: training materials, procedures, lessons learnt...

• Teamwork as part of the daily basis.

• Tandem learning (is an efficient KM technique. An expert and an “apprentice” are working together for a longer period in order to organise the transfer of specific (tacit) expert knowledge)

By putting in places these practices we will protect our firm from loss of knowledge.

5. Interaction: IT + Human Capital

Some studies investigate the influence of knowledge management on innovation in the private and public sector. They show that knowledge management contributes to innovation performance when a simultaneous approach of “soft human resource management (HRM) practices” and “hard IT practices”.

So the key point in the next few years in terms of innovation is how companies are going to interact with new IT features (Artificial intelligence, Innovation labs...) and if they will have in place the right structure, people to implement them.

6. Management of internal + External Knowledge

Throughout this article we have been focused on the importance of managing internal knowledge: sharing or avoiding knowledge loss, but this is not going to be enough, in order to achieve high level of innovation performance organizations will need to be able to manage external knowledge.

This external knowledge will cover areas where a lack of knowledge is identified within the firm. Organisations can also cooperate with other firms sharing resources toward a common goal. Universities can also develop a key role by researching and sharing their findings. We can also manage external knowledge by attending seminars, workshops or arranging TED events where knowledge is shared and innovative ideas flow everywhere.