Knowledge Management Protects Against Mission-Critical Knowledge Loss

By Robert Mayfield, PhD

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The cost of poor company knowledge management is high and getting higher. On the other hand, organizations that embrace effective knowledge management processes have a competitive advantage. Effective knowledge management practices can prevent embarrassments like the one recently faced by AIG, when the CEO argued that large bonuses were needed to retain key employees who wrote financially binding contracts so complex that only they understood them.

Few power generating companies have procedures in place to facilitate knowledge transfer, so employee turnover erodes organizational knowledge. The loss of industry and institutional knowledge can reduce productivity and may mean a loss of market position in a very competitive market.

Electric and natural gas utilities are looking at upwards of 45% of the workforce reaching retirement age within the next six to seven years. This does not mean that all who are eligible will retire, but many will. Managing knowledge is more difficult, and more important, when organizations face layoffs and the scarcity of trained, qualified workers, as is the case in the power generation industry.

Managing Explicit and Tacit Knowledge

Knowledge management is the practice of using proven tools and approaches to locate, refine, transfer, and apply the knowledge and experience available to a company. Knowledge management is not just about information systems and information technology. It’s also about the social and cultural components of the organization. A power company’s strategic planning should include developing a knowledge management system to capture both the explicit and tacit knowledge of employees that is specific to critical assets of the company.

Explicit knowledge is articulated, easily documented, shaped, and codified and can be expressed in formal and systematic language. The power generating industry’s traditional training programs address the explicit knowledge contained in written documents, technology manuals, policies, and procedures.

Tacit knowledge is harder to capture and transfer to new employees because it involves both cognitive and technical elements and is based on action, experience, and involvement in a specific context. Tacit knowledge is highly personal and hard to formalize, making it difficult to communicate or share with others. It is often unspoken or unwritten. It consists of a technical dimension often referred to as know-how and a cognitive dimension that includes schemes, mental models, and beliefs.

Tacit knowledge can be subjective and hard to formalize and communicate. However, mentors may be willing to share their tacit knowledge with new employees, and companies should encourage this.

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