Tacit Knowledge: What it is and How it Benefits Businesses

Written by: Josh Brown

Published: February 01 2020

What is Tacit Knowledge

The knowledge possessed by your team members is one of your organization’s most valuable assets.

This just makes sense:

The more organizational knowledge your team has about the products and services you offer, your customers’ needs, and your industry as a whole, the more productive and successful your company will be.

Now, in many cases, the knowledge possessed by your team members is easily documented and communicated. This knowledge—known as explicit knowledge—can take the form of step-by-step instructions, concrete answers to frequently asked questions, records of customer interactions, and more.

Sometimes, though, the knowledge held by your employees is a bit more difficult to communicate or document.

But, it’s not impossible to do so.

In this article, we’re going to dig deep into the concept of tacit knowledge.

Specifically, we’ll discuss:

  • What tacit knowledge is
  • Why capturing tacit knowledge is essential to your company’s success
  • How to capture tacit knowledge and convert it into concrete, explicit knowledge


Let’s dive in.


What is Tacit Knowledge?

Tacit knowledge refers to the knowledge, skills, and abilities an individual gains through experience that is often difficult to put into words or otherwise communicate.

Tacit knowledge is sometimes known by a few alternate terms, such as:

  • Experiential knowledge
  • Tribal knowledge
  • “Know-how” knowledge


The term “tribal knowledge” refers to the fact that tacit knowledge often spreads throughout an organization without being documented—and possibly never actively pointed out or discussed.

(Source)

Similarly, “know-how” refers to the idea that, sometimes, an individual just can’t explain how they know what they know (or know how to do). For example, a professional golfer may be able to hit a ball 300 yards down the fairway, but may not be able to communicate a complete break down every single thing they do when swinging a club to make it happen.

A few, more pertinent examples of tacit knowledge:

  • Being able to identify the exact moment a prospect is ready to hear your sales pitch
  • Knowing just the right words to use within your copy to attract and engage your audience
  • Knowing which specific piece of content to deliver to a customer based on their expressed needs


In contrast, explicit knowledge related to the above examples might be:

  • The stages of your documented sales process
  • Your brand’s content style guide
  • Your brand’s content library and its specific content


Sometimes you’ll see the terms “tacit knowledge” and “implicit knowledge” be used interchangeably—but that’s not entirely accurate. In the simplest of terms, implicit knowledge is explicit knowledge that hasn’t yet been documented. For implicit knowledge to become explicit knowledge, it’s just a matter of recording the knowledge verbatim.

(Again, as we’ll get to, capturing tacit knowledge is a much more involved process.)

One last thing to mention, here:

When defining knowledge as explicit or tacit, we don’t take an “either/or” approach. Rather, we look at each piece of knowledge possessed by an organization on a continuum of sorts.

Say, for example, we’re looking at your sales team’s documented process for pitching to a customer. 

Here, the overall document clearly states the steps to take throughout the process—an example of explicit knowledge. But, within each step, there may be certain “know-how” pieces of info that your sales team may understand on an intangible level—but that might not be so clear to others who don’t have your sales team’s experience and expertise.

At any rate, tacit knowledge is the unseen force that enables your team to operate to the capacity it does. While your organization’s tacit knowledge is vital as it is, it becomes even more valuable once you document it…


Why You Need to Capture Your Organization’s Tacit Knowledge

Now that you understand what tacit knowledge actually is—and how difficult it is to capture—you might be left asking:

Why should my organization bother capturing our tacit knowledge and codifying it into explicit knowledge in the first place?

To be sure, there are many benefits of capturing tacit knowledge, such as...


Communicate Organizational Knowledge More Effectively

Earlier, we mentioned that tacit knowledge is sometimes referred to as “tribal knowledge”, as team members often “absorb” it simply by gaining more experience working within an organization.

The thing is, though:

Relying on this osmosis-like transfer of knowledge leaves up to chance whether it actually happens or not. Unfortunately, even your longest-lived employees may not gain the tacit knowledge needed to best do their jobs.

Worse yet, it may be the case that your team members don’t know what they don’t know. Basically, this means they’ll continue to use a sub-par approach to their duties simply because they aren’t aware that there’s a better way to do them.

(Source)

(This especially applies to remotely-operating teams, as employees have minimal interactions with one another—meaning much fewer chances to exchange and absorb knowledge.)

That said, the main benefit of being able to transfer tacit knowledge is that it makes this information visible and accessible to all members of your team. It also clarifies any confusion or uncertainties your team members may have about a given process, allowing them to dig into the “nitty-gritty” details to cement their understanding for good.

The ability to capture your tacit knowledge also allows you to onboard new employees more efficiently. The typical onboarding process involves teaching newbies what the steps of various processes are. Injecting tacit knowledge into the mix allows them to get a feel for how to optimally perform these tasks.

Similarly, codifying your tacit knowledge adds value to your current, explicit knowledge content. For example, you might supplement a standard operating procedure document with a video in which an employee demonstrates the procedure in action.

In supercharging your current knowledge content, your team will be better equipped to tackle any and all processes they’re responsible for. This can lead to a massive spike in productivity throughout your organization.

Injecting tacit knowledge into your external knowledge base will have a similar effect on your customers. Here, your knowledge base content won’t just tell your customers what to do—but will also explain just how to do it. This will equip them to get the absolute most value they can from your products or services.

Overall, tacit knowledge becomes useful and valuable to others only when it’s shared by those who possess it. By documenting it concretely, you allow each of your team members to share their tacit knowledge with ease.


Differentiate Your Company from Your Competitors

As we mentioned earlier, the ability to store and share tacit will better equip your organization to serve its customers—and can also better equip (and enable) these customers to solve their own issues as they wish. With a comprehensive knowledge management system full of “know-what” and “know-how” information, both your support staff and your customers will always be able to find what they need to overcome the issue at hand.

If your customers can always get the info they’re looking for when engaging with your brand, they’ll have every reason to trust you over your competition moving forward.

What’s more, simply showcasing your tacit knowledge to your audience—even if they don’t necessarily need it at the moment—helps position your brand as a team of experts. If your competitors don’t offer similar content to showcase their value, you’ll already have a pretty hefty advantage over them.


Gain Knowledge Capital and Retain Organizational Knowledge

We’ve established that your organization’s tacit knowledge is a valuable asset.

And we don’t mean this symbolically, either.

Your team’s documented tacit knowledge is proof that your team knows what it’s doing, and that your company is a valuable entity.

For employee candidates, it provides insight into your organization’s vision, goals, and capabilities. This can attract high-quality candidates looking to work with a team as skilled and dedicated as they are.

For investors and other stakeholders, it’s proof that they can continue working with your business with confidence—and that doing so will pay off in dividends.

And, if your goal is to eventually sell your business, your documented tacit knowledge offers buyers proof that your company is made up of a highly-skilled and knowledgeable team of employees.

Knowledge capital is also valuable to your organization, as well. 

As we said earlier, documenting tacit and other knowledge makes employee onboarding much easier. The other side of this is that you’ll also retain previous employees’ knowledge once they leave your organization. This can help your current employees pick up the slack as you search for a replacement hire, and also enable your new employees to hit the ground running.


Increased Productivity & Organizational Innovation

Since you’ll have collaboratively developed and demonstrated best practices and optimal approaches to tasks, you’ll almost certainly perform at a much higher level.

Moreover, this type of knowledge sharing and knowledge transfer where individual team members can learn from each other's experiences and mistakes will allow employees to spend less time and energy on ideas that don't work. This open exchange of ideas and experiences allows employees to gain new perspectives and see things from different angles which can lead to breakthroughs, “aha moments,” and other outside-the-box ways of thinking.


Documenting your organization’s tacit knowledge may take some effort, but doing so is always well worth it.

That is, as long as you approach the process in a strategic manner...


Two Keys to Converting Tacit Knowledge Into Explicit Knowledge

Okay, so:

We know what tacit knowledge actually is.

And we know why it’s important—even essential—for your team to document it.

Now, let’s talk about how to actually do it.


Create an Environment Centered on Continuous Learning

Your first order of business will be to get your team focused on collecting and documenting tacit knowledge as a matter of course.


Audit Your Current Knowledge Content and Identify Knowledge Gaps

To get started, here, you’ll first need to audit your current knowledge content—both related to tacit knowledge and overall. As a team, comb through your knowledge content, assessing each piece for:

  • Comprehensiveness: Does the content cover every aspect of the topic? Is anything left unsaid or unexplained? Do words fall short of truly showcasing the knowledge in question?
  • Digestibility: Is it easy to read or otherwise consume the knowledge content? Is there a more effective and efficient way you could communicate the information in question?
  • Applicability: Does your knowledge content allow the user to take action? Will taking said action lead them to the outcome they expect? Do they need anything else to move forward productively?


You also want to think of any knowledge-related questions, comments, or feedback you’ve received from your team or your audience. Similarly, you can look at your team’s and individual employees’ performances to see where improvements need to be made.

The goal here is to identify two key things:

  • Knowledge and skill gaps within your organization that could be filled by documenting tacit knowledge
  • Gaps within your knowledge base, again to be filled with documentation of tacit knowledge


Build Intentional Learning Into Your Processes

Because of its intangible nature, it’s easy to overlook or take for granted the tacit knowledge flowing through your organization at all times.

So, it’s vital that your team becomes more intentional in their efforts to identify and capture any sort of learning that takes place throughout a given process.

The key to building this intentionality:

Create opportunities for your team to share their knowledge, expertise, and experiences with one another.

Guided experiences, for example, allow veteran employees to not just share information with new employees, but also actively train them to adhere to best practices for certain processes.

Here’s how a guided experience works:

  1. The new employee observes or shadows an experienced employee as they go through a given process
  2. The new employee then goes through the process, with the expert providing guidance and feedback along the way
  3. Once they’ve completed the task, the pair will discuss any challenges, problems, or other issues that may have come about
  4. The newbie then assumes the role of the expert, providing guidance to the expert (playing the role of an inexperienced employee learning from the newbie’s directions)
  5. The expert will gauge the new employee’s understanding of the process—tacit knowledge and all—and will discuss their assessment with their partner


You might also create knowledge cafe sessions, which are aimed at facilitating team-wide discussions on specific topics.

Here, the process is as follows:

  1. After breaking into small groups, your team members will begin exploring the many facets of the topic at hand. During this time, they can write, draw, list, brainstorm, or do anything else that’s conducive to the creation and spread of tacit knowledge.
  2. After a period of time, certain members of the group will rotate out, while others will stay put. Once new groups have been formed, those that stayed will review the previous discussion, then new members will discuss theirs. This process can be repeated until everyone has rotated to all groups.
  3. The group as a whole will come back together for a “town hall”-like meeting. This wrap-up discussion will be about reflecting on new knowledge, insights, and other such information, as well as any breakthroughs that may have occurred throughout the session.


Finally, you’ll want to focus on documenting tacit knowledge whenever discussing lessons learned with your team. This means thinking more abstractly about the intangibles and “know-how” exhibited by your team that led to a positive (or not-so-positive) outcome. From a-ha moments to on-the-fly changes to your procedures, there will likely be a number of things worth discussing that otherwise typically go overlooked.

Before moving on, note that, to create an environment focused on continuous learning, you may need to realign your employees with your company’s overall vision. Without taking this critical step, it will be difficult for your team to even recognize tacit knowledge in the first place—let alone effectively document it.


Inject Storytelling Into Your Knowledge Management System

Now that you’ve identified, fleshed out, and solidified your team’s tacit knowledge, you’ll need to find a way to codify it so that it more easily be documented.

This is where knowledge management (KM) comes in. 

Knowledge management tries to find ways to visualize tacit knowledge and convert it into explicit knowledge to better enable knowledge sharing and knowledge transfer with other individuals within a group. 

The key to doing this:

Storytelling.

As opposed to explicit knowledge (which can be communicated in concrete terms, such as a step-by-step list), tacit knowledge is best understood through experience. 

In lieu of actually providing an experience to your learner, the next best thing is allowing them to experience it vicariously through your team members.

The idea here for your audience to be able to see themselves doing the things being discussed within the content. It allows your team to convert their experiential learning into immersive content to be experienced by others. More than just reading the steps of how to troubleshoot an issue, you want them to actually picture themselves fixing it in real life.

Storytelling content centers around the actions, thoughts, and ideas a veteran employee exhibits as they go through a certain process. Again, in addition to explaining how to go about the process, the content will dig into any insights or a-ha moments uncovered along the way.

Often, storytelling content takes the form of an interview, but is a bit more open-ended. On one end, the interviewer/content-creator will loosely guide the conversation in order to weave a powerful story. On the other, the interviewee/expert will have plenty of opportunity to dig into the intangible aspects of the process that can’t be documented otherwise.

Because of this “intangible-ness”, the most effective way to deliver storytelling content is through video. That way, your user gets visual, audio, and textual content surrounding a given topic—all meant to create the immersive experience we mentioned above.

Once you’ve created this content, you can then add it to your current—and more explicit—content within your knowledge management system. By providing both explicit and tacit knowledge to your knowledge management system, you add even more value to an already-invaluable resource.

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