Why is Knowledge Management important?

UPDATE Nov 2015: If you are interested in an ongoing conversation about Knowledge Management and how to apply it, please check out our newly launched online magazine RealKM!

(Editor's Note: This document is based on an internal explanatory document developed for my employer's intranet. Comments and feedback on appropriateness and accuracy are welcomed.)

Knowledge Management (KM) is a discipline that improves the ability of organisations to solve problems better, adapt, evolve to meet changing business requirements, and survive disruptive changes such as staff turnover.

Knowledge Management recognises that organisations are a complex system made up of both the people that work for the organisation, and the processes, procedures and information systems that drive our actions.

The revolution in communications over the past 50 years (email, internet, telephone and fax) now allows people to talk directly to each other without the use of intermediaries such as managers or team leaders. This allows organisations to be more efficient by bringing together needed expertise and knowledge on demand.

However, with this new approach, knowledge gained and lessons learned are not always shared across the organisation. In other words, some people may know the solution to a particular problem, but the organisation as a whole may not be aware. This can lead to loss of critical knowledge when staff leave, and for inefficient practices to remain despite better solutions being available.

Modern organisations need to build a new culture that promotes knowledge sharing and constant learning while preserving and recording appropriate information. This is essential in order for corporate knowledge to be effectively retained and enhanced.

The key objective of Knowledge Management is to enhance knowledge processing. Organisations will have realised this objective when they:

  • correctly identify problems that need solving as they occur
  • have robust information location and retrieval channels to enhance individual decision making
  • embrace effective knowledge creation processes
  • ensure that created knowledge is shared with and integrated across the whole of the organisation

Methods that can help to achieve these goals include:

  • making better use of collaboration and communication tools
  • creating and promoting internal communities of practice
  • fostering the identity of virtual teams
  • using KM techniques such as Before Action Reviews (BAR), After Actions Reviews (AAR), pre-mortems, and retrospects during change activities
  • encouraging the use of a common language (eg corporate glossary, classification and/or taxonomies)

Benefits of implementing effective Knowledge Management include:

  • fully and accurately informed employees, clients, and stakeholders
  • improved team effectiveness and delivery of outcomes
  • an organisational culture devoted to continuous improvement
  • an organisation that is resilient and adaptable in the face of change
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Mark Gould (not verified) — Fri, 03/07/2009 - 18:04


I like a lot of this, and I like the way you drew it out of Ray Sims's 43 definitions (as you described on the ActKM list a couple of days ago). Obviously I don't know your organisation, but as phrased it wouldn't work in mine because it isn't clear what all this means for individuals.

As an employee in this organisation, what can I expect to see that is different as a result of this KM approach? What will be the obligations on me? What benefits will I get? How will my work be supported (or challenged)?

You also talk of a "new approach. " Is there a risk that people might contrue this to mean that things are currently not working properly? Would they agree with that, or would it be a surprise to them?

Stephen Bounds — Fri, 03/07/2009 - 22:32

Hi Mark,

Thanks for your comments. I agree that what I have written isn't something that you can take to employees and expect them to "get it". However, that's quite deliberate.

What I have tried to do with this exercise is establish principles of Knowledge Management that can be used as the basis for an organisational strategy.

Using my preferred 7 step method for creating strategy, what I have described in this post is the Objectives, Benefits and Principles for Knowledge Management.

I have not described the Strategies, Responsibilities and Goals, since these must be tailored to suit the specific organisational context.

I don't know if you plan to attend KM Australia this year, but I will be presenting ... how to develop practical strategy and tactics from a principles-based KM framework such as this one will be the main focus of my talk.

Andrew Hawadi (not verified) — Fri, 20/01/2012 - 17:23

Hi Steve,

Thank you very much for this article. I wanted to ask you if you have any information about Knowledge propagation in an Organisation from a BI (Business Intelligence point of view).



Anonymous (not verified) — Mon, 29/07/2013 - 14:41

Thanks for your condensed article, I was woncering if you have article regarding knowledge management in bureuratic system like Foreign Service Office. The case, obstacles and references.

thank you

Stephen Bounds — Mon, 29/07/2013 - 16:03


I don't have anything specifically relevant. You might want to refer to the Irish Foreign Affairs case study (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1543873) for one example. That said, as with the linked paper above, most efforts I've seen within Foreign Affairs agencies focus on KM as a technology change exercise, instead of a holistic KM initiative.

If you're interested in discussing further, send me through your details on http://knowquestion.com.au/contact and any specific questions you have.

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