Knowledge management is a popular topic and generally discussed in relation to an information technology initiative. My belief is that the success of knowledge management has more to do with culture than it does with technology.
First, let's define knowledge, and then we will get into why knowledge management is so important. There are basically two types of knowledge: explicit or open (core) knowledge, which is static, and tacit or unspoken knowledge, which tends to be dynamic. Core knowledge is much easier to capture and store due to its static nature, and here is where technology can play a significant role in capturing and sharing that knowledge. On the other hand, tacit knowledge tends to come from the edge and is continually changing.
Much of the knowledge in CPA firms tends to be tacit knowledge because of the culture and the belief than knowledge is power. For at least the past 10 years, accounting firms have been talking about knowledge management; most have done a poor job of capturing the tacit knowledge and a few have been able to capture the core knowledge through their document management systems. Even for those that have captured knowledge, it has often been difficult for others to locate and utilize it.
Why is it important to capture knowledge, especially tacit knowledge? Here are a few of the more important reasons:
1. The workforce is aging and valuable knowledge will soon walk out the door.
2. New client services generally come from those with tacit knowledge (within or outside of the firm).
3. Your firm's future success will be determined by its access to intellectual capital.
4. If the firm knows what its employees know, it will be much more successful. Knowledge is the asset (intellectual capital) that walks out the door every night.
5. Selling time conflicts with the knowledge management approach. There is never any time to coach people on the importance of learning and sharing knowledge in firms that are only focused on selling time.
Knowledge management is not a new technology that can simply be installed, but there are systems like Microsoft's SharePoint and CCH's Knowledge Connect that provide structure and help capture, store and distribute the knowledge in a just-in-time fashion. Knowledge management is a firm project and not an IT project. If you place the responsibility on the IT department, at best you will have a document management system and not a knowledge management system.
If knowledge management is cultural, how can firms enhance or change their cultures successfully? I believe it starts at the top and has much to do with attitude. Lifelong learners tend to share, with the attitude that by doing so, they will continue to grow. If your firm and its employees are protective of their knowledge, a system will not fix the problem. On the other hand, if the firm is willing to share internally and externally, the culture is already in place and can be nurtured successfully, with technology as the accelerator.
Let me provide three examples regarding tacit knowledge. The first comes from our experiences at the Boomer Technology Circles (external tacit knowledge); the second comes from firms that take the time to complete after-action reviews (internal tacit knowledge); and finally how we utilize book reports to share tacit knowledge in our own organization.
Our Boomer Technology Circles focus on bridging the gap between management and technology. Participating firms have varied experiences, talent and projects they are currently focusing on. We capture this tacit knowledge through relationships and the Boomer Knowledge Network, allowing firms to share and have access to the leaders in multiple areas of expertise. No firm has all of the knowledge and experience, but together they have access to far more knowledge than they have internally. This, coupled with their access to business partners, provides tacit knowledge and resources that are typically unavailable to an individual or firm. We utilize videos, articles, forums and guides to capture how the best are getting better.
After-action reviews come from the U.S. Army, and are one of the most important things learning organizations can do. According to General Gordon R. Sullivan, one of the authors of Hope Is Not a Method: What Business Leaders Can Learn from America's Army, the questions you should ask after the engagement are:
1. What was supposed to happen?
2. What actually happened?
3. What were the positive and negative factors here?
4. What have we learned and how can we do better next time?
Learning not only corrects things, but also corrects thinking. At least 50 percent of the time should be spent on what to do about the situation and how you can learn and improve. Too many accountants view this type of event as a performance review, rather than a teaching moment. Determining who is responsible for entering this information into a knowledge management system, how it can be searched and how the lessons can be taught in future training is the key to capturing this form of tacit knowledge.
Lifelong learners are readers. It is impossible to read every book, but it is possible to share the knowledge gained from books through the use of book reports. At Boomer Consulting, we utilize a reporting format that stresses a short bio of the author, a 100-word overview, five main points, how the book is applicable to our firm and the industry, and personal notes about what I learned. This has proven a great way to quickly share tacit knowledge. We store the information in SharePoint, which is accessible by any of our team 24/7. We have also utilized book summaries from companies like www.getabstract.com and www.summary.com.
Knowledge is unlike many other assets. If I give you my car, you will have a car and I won't. With knowledge, if I teach you, we will both have more knowledge. Training and learning is a two-way street. Your firm's culture, not its technology, will be the determining factor in how it manages knowledge. With that said, technology is an accelerator for those firms with the right culture.
Gary Boomer, CPA, is the president of Boomer Consulting, in Manhattan, Kan.
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