Innovation System:

Knowledge Management

Managing Tacit Knowledge

A Tremendous Resource for Innovation


By: Vadim Kotelnikov

"You learn by association, without knowing what you are looking at."

Tacit Knowledge as a Source of Competitive Advantage

  • Individual tacit knowledge – is not publicly available except as embodied in people

  • Collective tacit knowledge – is woven into the fabric of an organization and is not easily imitated

Distinguishing between Data, Information, and Knowledge

  • Data – symbols or facts out of context, and thus not directly nor immediately meaningful

  • Information – data placed within some interpretive context, and thus acquiring meaning and value

  • Knowledge – meaningfully structured accumulation of information; information that is relevant, actionable, and based at least partially on experience

Distinguishing between Explicit and Tacit Knowledge1

  • Explicit knowledge – can be formally articulated or encoded; can be more easily transferred or shared; is abstract and removed from direct experience

  • Tacit knowledge – knowledge-in-practice; developed from direct experience and action; highly pragmatic and situation specific; subconsciously understood and applied; difficult to articulate; usually shared through highly interactive conversation and shared experience.



Organizational Barriers to the Sharing of Tacit Knowledge2

Tacit knowledge is difficult to share because it cannot be documented explicitly. Tacit knowledge resides in human minds, in habits, and in relations.  It is highly individual, personal and hard to formalize. It is learnt through personal experience, practice, observation, and reflection.

Hierarchies, when they implicitly assume wisdom accrues to those with the most impressive organizational titles

Strong preferences for analysis over intuition discouraging employees to offer ideas without "hard facts" to back it up

Penalties for failure discouraging experimentation

Strong preferences for a particular type of communication within working groups

Fear of failing to express the inexpressible when trying to convert tacit knowledge into explicit one

Inequality in status among the participants is a strong inhibitor for tacit knowledge sharing, especially when exacerbated by different frameworks for assessing information

Uneasiness of expressing emotional life experiences rather than intellectual disagreements

Distance, both physical separation and time

Application of Tacit Knowledge in Innovation2

  • Problem solving – experts, as opposite to novices, can solve a problem more readily as they have in mind a pattern born of experience, which they can overlay on a particular problem and use to quickly detect a solution

  • Problem finding – linking a general sense of intellectual or existential unease to radical innovation: creative problem framing allows the rejection of the "obvious" answer to a problem in favor of asking a wholly different question. Intuitive discovery is often not simply an answer to the specific problem but an insight into its real nature.

Tacit Knowledge as a Source of Competitive Advantage

Tacit knowledge underlies many competitive capabilities. The experience, stored as as tacit knowledge, often reaches consciousness in the form of insights, intuitions, and flashes of inspiration.


The marvelous capacity of your mind to make sense of your previous collection of experiences and to connect patterns from the past to the present and future is essential to the innovation process. "The creativity necessary for innovation derives not only from obvious and visible expertise, but from invisible reservoirs of experience."1

Tacit knowledge, or implicit knowledge, as opposite to explicit knowledge, is far less tangible and is deeply embedded into an organization's operating practices. It is often called ''organizational culture'. "Tacit knowledge includes relationships, norms, values, and standard operating procedures. Because tacit knowledge is much harder to detail, copy, and distribute, it can be a sustainable source of competitive advantage... What increasingly differentiates success and failure is how well you locate, leverage, and blend available explicit knowledge with internally generated tacit knowledge."3

Inaccessible from explicit expositions, tacit knowledge is protected from competitors unless key individuals are hired away.

Managing Tacit Knowledge

Managing tacit knowledge is a significant challenge in the business world – and it requires more than mere awareness of barriers.

During the new idea generation – divergent thinking – phase, people create a wealth of possible solutions to a problem. "Chaos succeeds in creating newness because it takes place in a system that is non-linear".4 In a well-managed development process, where a group of diverse individuals addresses a common challenge, varying perspectives foster creative abrasion, intellectual conflict between diverse viewpoints producing energy that is channeled into new ideas.1

Mechanisms by which collective tacit knowledge is created and tapped include:

  • Brainstorming – gathering together a set of experts with diverse skills, preferably including client representatives. Main rules to be followed during the idea generation phase: defer judgments; build on the ideas of others; one conversation at one time; stay focused on the topic; and think outside the box - encourage wild ideas. All ideas should be recorded and discussed during the selection – convergent thinking – phase.

  • In large organizations that are conceived as a collective of communities,  separate community perspectives can be amplified by interchanges in order to increase divergent thinking. "Out of this friction of competing ideas can come the sort of improvisational sparks necessary for igniting organizational innovation".1

Managers and innovation team leaders can use tacit knowledge to aid convergent thinking by creating guiding visions and concepts for teams involved in innovation.

Innovation Process: Diversion and Conversion of Ideas

"The process of innovation is a rhythm of search and selection, exploration and synthesis, cycles of divergent thinking followed by convergence".2

Divergence, or creative synthesis, is the interlocking of previously unrelated skills, or matrices of thought. As soon as a sufficient choice of innovative ideas has been generated, a solution – convergence upon acceptable action – needs to be defined and agreed upon. Confining the discussion here to managing the tacit dimensions of knowledge three types of tacit knowledge – overlapping specific, collective, and guiding – need to be managed... More





Robert Kiyosaki quotes

Don’t be addicted to money. Work to learn. Don’t work for money. Work for knowledge.






  1. "Knowledge, Groupware, and Internet", Butterworth Heinemann

  2. "The Role of Tacit Knowledge in Group Innovation", Dorothy Leonard and Silvia Sensiper

  3. "Relentless Growth", Christopher Meyer

  4. "Discovering Order in a Chaotic World", Margaret J. Wheatley

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Creativity Management

Knowledge-driven Enterprise

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