Are your company and product/service decisions optimized to their fullest potential? Are your decisions informed and backed by crucial information? They should be!
Your business depends on good decision-making to grow and expand, boost ROI and revenue, and streamline efficiency. If your leaders and team members make essential—or even minor—decisions without data backing them, you risk making costly errors.
And in business, no matter your industry, one wrong decision can cause major setbacks.
Training your staff on effective decision-making is essential, but knowing how knowledge management enhances it is arguably even more important. This is because it gives your team a leg up in the decision-making process with quick and easy access to the information they need to make the best possible decision in every business area. Here’s what you need to know.
What Is Knowledge Management?
Knowledge management (KM) covers the processes of capturing, organizing, searching for, and sharing your company’s collective knowledge and insights. A knowledge management system is an online database or library of that collective information, organized and structured for quick and easy access. It’s an excellent way to organize content and provide company-wide access to important information.
With effective knowledge management processes (and the technology to support them), more than 70% of businesses report increasing efficiency and productivity by 20% or more. This is because your employees aren’t wasting time looking for the information. They’re able to quickly find the data and context they need to make informed business decisions–and get more time back to focus on executing those decisions.
How Does Knowledge Management Enhance the Process of Decision-Making?
According to Gartner, 65% of the decisions we make in business today are more complex (meaning they involve more choices or stakeholders) than just two years ago. As a result, there’s no room for error in the decision-making process, and it’s important to have a knowledge management system that arms everyone with the information and resources they need to make informed decisions.
A knowledge management system provides access to reliable data, increases efficiency, streamlines the decision-making process, reduces duplication of effort, and ensures that decisions include the most up-to-date information. By implementing a knowledge management system into your decision-making process, you can improve the quality and efficiency of decision-making across your organization.
Access to Accurate Information
Without a centralized source for company knowledge, employees may dig through various content repositories, search their email inbox, or ask a coworker for the information they need–and there’s no guarantee that what they find will be accurate or up to date. A knowledge management system allows you to keep information consistent and current across your organization so employees can be confident that the answers they find are correct.
Quality Information Strengthens Competitive Advantage
The information in your KM system is a unique collection of your organization’s collective intelligence and is indicative of the talent, knowledge, skills, and insights from within your company. It’s quality information your competition can’t reach on the web, meaning the competitive advantage is yours and yours alone.
Less Time to Find Information
As much as 20% of your staff members’ workdays consist of searching for information. By streamlining the process for finding information, a searchable KM system helps employees work more efficiently and gives them more time back for the critical thinking required in decision-making.
Empowers Employees to Make a Decision
When staff members can look up information in a KM system, they are less reliant on asking their peers or managers for help. This gives them a greater sense of autonomy and increases job satisfaction because they’re more empowered to make decisions that are appropriate to their roles and responsibilities.
Grows Confidence of Employees
Confidence can make or break decisions because those who make decisions without it tend to overthink their choices, while those with more confidence—particularly those with all the information they need—increase the chances of making the right decision. In fact, an academic study published in the Journal of Neurophysiology examined confidence-related decision-making and found that confidence increases the likelihood of correct decisions and decreases errors.
Better Trained Employees
Knowledge management affects all business areas, including employees’ onboarding and training processes. When your newest employees have access to the expert insights, information, and guidance of your highest-skilled employees, they’re able to get up to speed faster and start making important decisions in their roles.
Avoid Duplicative Work
Without a centralized KM system, employees don’t always know what information exists across the organization, and they may end up duplicating something that’s already been done as part of their decision-making process. A KM system allows them to search everything that’s been documented across the organization so that they don’t have to start at square one with every decision.
Challenges Incorporating Knowledge Management Into the Decision-Making Process
Businesses face a few challenges when trying to incorporate knowledge management into their decision-making process. As Bernice Johnson Reagon once said, “Life’s challenges aren’t supposed to paralyze you; they’re supposed to help you discover.” The key to overcoming these common challenges is to get familiar with the difficulties many companies face so you and your staff can work as a team to overcome them together.
Here are some common challenges to look out for and how to remedy them.
Discomfort/Lack of Understanding
One of the main challenges companies face when incorporating knowledge management into the decision-making process is that not all employees may be comfortable with or even understand how to use knowledge management tools. For a knowledge management system to be effective, your employees need to be able to access and use the information it provides. This is where open communication and training can make all the difference.
Having a process to ensure employees are adequately trained in using your knowledge management system is crucial because discomfort often comes from a lack of understanding and experience. Lack of understanding is easy to resolve when employees have the tools and resources to get more familiar with the system and the best practices for using it.
Not All Data Is Created Equal
The problem most businesses face is that not all data is created equal. For obvious reasons, current information is more valuable than old data, just as relevant data is more valuable than irrelevant data. And you must determine which is which in your KM content.
The challenge is that it can be difficult to determine which data is relevant and which to include in the decision-making process. However, a KM platform with a powerful search engine can help team members quickly hone in on the information that’s most relevant to them in the moment, even if they don’t know the exact keywords used in a file name or article title. Additionally, content contributors can take steps to ensure their content is organized and structured in ways that will be useful to decision-makers. For example, market research team members might include bulleted lists of recommended next steps for different stakeholders when they publish a new research report, or department heads might create and share content feeds with their teams using criteria that is highly relevant to that group.
Some business leaders may worry that implementing knowledge management technology will be difficult and time-consuming. Companies are often concerned about the internal resources they’ll need to commit to a new knowledge management initiative, especially if it will involve migrating content from different systems and training employees on new technology.
The key is to work closely with your chosen software company to get the implementation done quickly, efficiently, and at the right time. It’s also important to consider the long-term benefits of implementing a knowledge management system. While setting up the technology may require an upfront time commitment, you’ll save a lot more when your employees can do their jobs more efficiently.
Up-to-Date, Accurate, and Comprehensive Information
Another key challenge is ensuring that the data and information available to team members is up-to-date, accurate, and comprehensive. Bad data isn’t just a challenge in KM, either. It’s a common challenge in all areas of the digital world, with 87% of companies admitting to following insufficient data before realizing it, 20% stalling their productivity after finding out their data was incomplete or inaccurate, and 12% reporting a loss in revenue due to insufficient data.
And since your team members base decisions on the information provided in the KM platform, you must ensure it is as up-to-date and reliable as possible. Under normal circumstances, this could be time-consuming and tedious. However, you can overcome this challenge by having a system in place to update and verify the accuracy of knowledge regularly. Ideally, your knowledge management platform should allow you to automate the repetitive parts of this process (e.g., scheduling content to be reviewed or unpublished once it goes out of date).
Despite these potential challenges, there are many benefits to incorporating knowledge management into business decisions. With the right tools and training, employees can quickly become comfortable with this system. And when employees regularly tap into the information that exists across the organization, your company’s knowledge becomes a true source of competitive advantage.