The Importance of Knowledge Management in the Age of Turmoil

The past several years can only be described as tumultuous. Companies—and their employees—have endured a years-long pandemic, remarkable technological advances, a dramatic shift in remote and hybrid work, a steep rise in inflation rates, and countless other business changes and challenges. 

Fortunately, companies have one unique resource to help them navigate these constantly changing circumstances: their employees. Each individual in a company brings a unique background, experience, and know-how to their role. And by putting those people together, you create an incredible wealth of knowledge, which becomes the lifeblood of your organization. 

But that collective knowledge is only valuable if it is shared between team members. If people hoard their knowledge—and keep it only to themselves—no one else can benefit from it. And using outdated information for solving problems or making decisions (known as knowledge inertia) hinders innovation and growth. 

Therein lies the importance of knowledge management: By creating a more effective way to organize, store, and spread information across teams, departments, and entire organizations, each employee can benefit from every other individual’s knowledge. And together, that equips employees to perform their roles more effectively and efficiently, which leads to a wealth of other benefits, like more innovation, enhanced customer satisfaction, and improved employee morale.  

Prioritizing knowledge management and creating a culture of knowledge sharing is often easier said than done—but it is well worth the effort. Below, we take a deep dive into the importance of knowledge management, as well as how to promote it across your teams and overcome common challenges.  

What Is Knowledge Management? 

Knowledge management is the process of identifying, organizing, storing, and exchanging information between people, teams, and departments within an organization. This includes both explicit and tacit knowledge—or, in other words, information that is straightforward and easily documented, as well as knowledge that is gained from personal experience and is more difficult to articulate. 

Organizations typically use a knowledge base to support knowledge management. A knowledge base provides a centralized place to store company information, where all employees can easily access it. 

Why Is Knowledge Management Important?

Effective knowledge management across an organization can provide each individual employee with access to up-to-date, accurate company information—but the advantages go even further than that. A few key benefits of knowledge management include: 

• Increased efficiency and productivity: A recent study found that employees spend an average of 3.6 hours per day searching for information, and other research indicates that wasted time costs companies an average of $1.7 million per year for every 100 employees. This leads to decreased productivity and employee frustration, which can snowball into overall dissatisfaction. Knowledge management makes information convenient and easily accessible, empowering employees to be more efficient and productive. It also enables organizations to retain knowledge of experienced employees even if they leave to pursue other opportunities or retire.
• Easier and more informed decision-making: When employees don’t have access to adequate information, they can’t make informed decisions. Consider a customer support agent, for example. If he doesn’t know the company policies regarding refunds, he may incorrectly deny a customer’s refund request—and cause the issue to erupt into a much bigger problem. With access to up-to-date and accurate company information, employees can make informed decisions quickly, which provides significant long-term benefits. In fact, companies that rely on data in decision-making are 2.8 times more likely to report double-digit year-over-year growth.
• Improved collaboration: According to McKinsey research, 58% of Americans work remotely at least one day per week. Companies must now consider how to not only encourage collaboration between on-site employees, but across remote workers as well. A thoughtful knowledge management strategy can give all employees—both on-site and remote—easy access to trusted, accurate information and a shared understanding of projects and problems, so they can work together more effectively. 
  
• Enhanced employee morale: There are few things more frustrating than not knowing how to do your job—and not knowing where to find the information you need to figure it out. One of the advantages of knowledge management is that it puts information at your employees’ fingertips, so they have everything they need to perform their roles proficiently without spending hours searching for how-to documents. This can ultimately boost morale and employee satisfaction.
• Greater creativity and innovation: Too often, companies do things a certain way simply because that’s “just the way they’ve always done it.” Prioritizing knowledge management and a knowledge sharing culture, on the other hand, encourages dialogue and information exchange between employees, which can spark new ideas and perspectives, leading to innovative and creative solutions to company challenges. 

Challenges to Effective Knowledge Management

While the benefits of knowledge management are clear, it doesn’t come without challenges. Here are a few of the obstacles you may face when developing and implementing knowledge management strategy:   

• Lack of knowledge sharing culture: For an organization to truly benefit from knowledge management, knowledge sharing must be part of employees’ day-to-day lives—but if it’s not already ingrained in your organizational culture, it can be easy for workers to overlook. Rather than focus on documenting and sharing knowledge, many workers (understandably) choose to prioritize their main job responsibilities or inadvertently waste time searching for information that turns out to be outdated or irrelevant.  
  
• Lack of dedicated knowledge management resources: Effective knowledge management requires an established framework that outlines the processes, strategy, tools, and people required to make the initiative work. If you don’t have those resources, it’s easy for knowledge management to fall by the wayside.
  
• Poor communication between employees, teams, and departments: Individual teams and departments often work in silos, without a deep understanding of what anyone else is doing. This can easily lead to information hoarding, rather than encouraging those employees to share information and build collective knowledge within the company. 
  
• Poor user experience with knowledge management tools: The tools you use for knowledge management—such as a knowledge base—can have a big impact on the success of your initiative. If the platform or tool is inconvenient or hard to navigate, employees will be less likely to use it.
  
• Lack of trust: Trust plays an important role in knowledge management. Employees must trust that they can share ideas without being criticized and be confident that the information won’t be misused. If workers do not feel that they can trust their colleagues or leadership team, they may be hesitant to collaborate. 
  
• Time constraints: Knowledge management requires employees to take time away from their regular, core responsibilities. For example, to document tips, best practices, or procedures, customer support agents must take time away from answering the phone. This can temporarily increase call wait times and has the potential to impact customer satisfaction. This can, as a result, make it difficult for some departments to prioritize knowledge management.
  
• Unclear objectives and ownership: Who is responsible for documenting knowledge? What are the goals of your knowledge management initiative? Without clear objectives and ownership, these initiatives can be disorganized and ineffective.
  
• Adoption challenges: Adopting a new platform for knowledge management can be difficult and time-consuming, and it often requires significant IT resources to implement—especially for large organizations with a diverse set of technical requirements. 

Though the challenges may seem overwhelming, there are, fortunately, many strategies you can use to overcome these issues and promote effective knowledge management. 

Strategies for Promoting Effective Knowledge Management

So how do companies that want to build collective knowledge actually meet that goal? They can encourage knowledge management with the following strategies: 

Develop a Knowledge Sharing Culture

Within your organization, knowledge should be considered a valuable resource to be shared, and knowledge sharing should be celebrated. Creating this mindset could involve recruiting members of the leadership team to serve as champions of the knowledge management initiative, rewarding employees who participate with bonuses or swag, or recognizing workers who actively share information through emails or shout-outs during companywide town hall meetings. 

Use Technology

The right technology can make all the difference in the success of your knowledge management initiative. A robust knowledge base can make it easy for employees to contribute information and find the knowledge they need to perform their roles better. For instance, some platforms include deep search functionality that indexes every word in every file—including audio and video. A purpose-built platform like Bloomfire will capture common questions and answers from employees, and support you in generating a comprehensive FAQ section. These types of features make it easier and more convenient to access company knowledge, and save subject matter experts’ time, as they don’t have to answer the same questions over and over again. 

Promote Learning and Development

Employees will naturally use a knowledge base more often when they feel proficient with the technology and processes. To encourage this, offer learning opportunities that allow workers to maximize your organization’s learning base and knowledge management framework. This could be an internally developed program or an established certification program from a reputable company like the Knowledge Management Institute.  

Foster Community Engagement

To build trust among your workforce, encourage employees to interact with other departments and find ways to share information. By facilitating cross-organizational conversations, you can help foster community, employee engagement, and a learning culture within the company.  

Establish Clear Ownership

Part of building an effective knowledge management framework is clarifying who owns particular information. For example, the HR team may be responsible for all company policies, while the product marketing team owns all in-depth product information, brochures, and instructional guides. With this framework established, everyone will know exactly who to ask or where to look when they have questions or need help understanding something.

Organizations, and the employees within them, possess lots of knowledge—but too often, it goes unshared, gets lost in people’s inboxes, or gets saved in a never-ending labyrinth of folders, to the detriment of the entire company. With a clear understanding of the importance of knowledge management, your organization can begin to develop and implement a framework where each employee feels comfortable and freely shares their knowledge. And that will ultimately lead to a wealth of benefits, from increased productivity to an empowered and action-oriented workforce. 

To help build your knowledge management strategy and engage your employees in knowledge sharing, download our guide, “The Ultimate Knowledge Engagement Workbook.” And if you want to learn more about how Bloomfire is purpose-built to provide you confidence in your Knowledge Management system, you can find that info here.