Page 282 - Operations Strategy

dEvEloPIng oPERATIons CAPAbIlITIEs 257
● Tacit knowledge is knowledge that is in people’s heads rather than written or for-
mally articulated or described. It is often based on nuanced information that is
difficult to explain to another person by means of writing it down or expressing it
verbally. An example of tacit knowledge that is often used is the knowledge of how
to ride a bicycle. If you can do it, it is easy to understand, but explaining how to do
it in precise terms is very difficult (or almost impossible without a one-to-one dem-
onstration, and is difficult even then).
● Explicit knowledge, by contrast, is that which is set out in definite form. It can be
transmitted in formal, organised language. It has been ‘codified’. That is, it has been
arranged into systematic language. It is probably included in manuals, records or
process maps. Explicit knowledge can be relatively easily communicated between
individuals formally and systematically.
The practice of improvement (at least as operations managers are concerned) relies on
the continual transformation of experience (tacit knowledge) into a formal, recognised
‘better way of doing things’ (explicit knowledge). The activity of managing how knowl-
edge is formalised in this way is called ‘knowledge management’ (often abbreviated
10
to KM). It is an idea that became popular in the early 1990s and means, ‘the process
11
of capturing, distributing, and effectively using knowledge’. It is an approach that tries to
bring together the way information (both tacit and explicit) is recognised, recorded,
evaluated, retrieved and shared. Among the first types of operation to formally use KM
were professional services such as consultants. Intellectual capital (IC) is their principal
resource, so they realised the potential of the internet for collecting knowledge and
connecting together their, often geographically spread, staff.
In the early days of KM it was often seen as a way to improve the productivity of knowl-
edge workers. Not having to ‘reinvent the wheel’ and building on the previous experi-
ence of colleagues would reduce the learning curve time and improve efficiency. More
recently, KM has also been seen as a facilitator of product, service and process innovation
because of its potential to combine ideas from all parts of an organisation and its external
contacts. In addition, especially in regulated markets, KM can enhance compliance, par-
ticularly if KM is used to help monitor knowledge access and, as a result, minimise risk.
KM has two distinct, but connected, functions:
● It collects knowledge together, often codifying tacit into explicit knowledge. This
involves recording knowledge gathered – sometimes directly from a specific experi-
ence, sometimes from individual staff’s more general tacit knowledge. Collection
and codification allows anyone with access to the knowledge base to search for, use
(and reuse) the knowledge whenever and from wherever it is needed. This requires
the building of large information repositories such as databases (both internal and
external).
● It connects individual staff (who themselves are holders of tacit knowledge) with the
formal codified knowledge that has been collected, and to each other. Connecting
individuals together is particularly important because it is not always possible to
completely codify tacit knowledge into explicit knowledge. People need to interact
with the tacit knowledge that is embodied in the people who have the understand-
ing derived from direct experience in order to gain the insights that may not be
obvious in its formal codified form.
These two components of KM have the obvious potential to prevent the underutili-
sation of an operation’s fund of knowledge, but the combination of collection and

M07 Operations Strategy 62492.indd 257 02/03/2017 13:06