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  July 3rd, 2020 | Written by

Why Knowledge Management is Important to the Success of Your Company

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  • Knowledge, in of itself, is not enough to satisfy the vast array of changes in today’s organization.
  • When business leaders ensure executive success they increase control and lesson operational risk.
  • The knowledge within organizations needs to be reconfigured to meet environmental changes and new challenges today.

Executives today are more focused on strategic management decision making due to the hypercompetitive global environment and the public and private sector evaluation and opinion. Executes still wonder where is knowledge and how can it be captured, utilized, and enhanced when it comes to decision-making. Executives found that within organizations, knowledge resides in various areas such as management, employees, culture, structure, systems, processes, and relationships, and its role is to enhance organizational functions.

Executives across the globe have found that knowledge is critical to business success. Knowledge, in of itself, is not enough to satisfy the vast array of changes in today’s organization. Therefore, knowledge management is only a necessary precursor to effectively managing knowledge within the organization.

First executives must understand the concept of organizational knowledge itself. Organizational knowledge cannot merely be described as the sum of individual knowledge, but as a systematic combination of knowledge based on social interactions shared among organizational members. Executives can categorize followers based on their human knowledge which focuses on individual knowledge and manifests itself in an individual’s competencies and skills. Executives, being more conceptual, agree with Haridimos Tsoukas who determines organizational knowledge as a collective mind, and Kiku Jones and Lori Leonard who explain organizational knowledge as the knowledge that exists in the organization as a whole. Most importantly, organizational knowledge is owned and disseminated by the organization.

The key take-away for executives is that knowledge is a resource that enables organizations to solve problems and create value through improved performance and it is this point that will narrow the gaps of success and failure leading to more successful decision-making. The key is for executives to convert individual knowledge into valuable resources to ensure that the knowledge is actually helping the organization grow both professionally for individuals and profitably for all stakeholders.

Companies are increasingly investing in knowledge management projects. But knowledge management in companies is still quite limited. Knowledge management can help companies identify their inefficiencies in organizational processes, and subsequently recover them on an instantaneous basis which enables executives to prevent further operational risk. The question remains. How does knowledge management impact executive success?

Executive success is tantamount to organizational performance and in many cases, their salary is concurrently determined on organizational success. By combining knowledge management and executive success, executives are able to answer the questions necessary to apply knowledge management without having to delve through all the models and theories to find what works well for them and what does not. Knowledge is firstly accumulated by creating new knowledge from organizational intellectual capital and acquiring knowledge from external environments.

This knowledge exchange with external business partners develops innovative environments that can enable executives to create a more innovative climate in companies. The knowledge management process enhances the capabilities of executives to play the role of inspirational motivation, which enables executives to directly set highly desired expectations to recognize possible opportunities in the business environment. The knowledge exchange also positively contributes to executives to develop a more effective vision, including a more comprehensive array of information and insights about external environments.

Executives then integrate knowledge internally to enhance the effectiveness and efficiencies in various systems and processes, as well as to be more responsive to market changes. Knowledge integration focuses on monitoring and evaluating knowledge management practices, coordinating experts, sharing knowledge, and scanning the changes of knowledge requirements to keep the quality of their products or services in-line with market demand. It is apparent that knowledge integration activities can help executives assessing the required changes to keep the quality of both products and services at maximum levels. Furthermore, a systematic process of coordinating company-wide experts enables executives to propel the role of intellectual stimulation, which creates a more innovative environment within companies.

Executives must also curtail knowledge within organizations. The knowledge within organizations needs to be reconfigured to meet environmental changes and new challenges today. What worked yesterday or a few years ago is changing rapidly as technology has increased in a prolific way. Knowledge is globally shared with other organizations through domestic and global rewards such as the Malcolm Baldridge Award in the United States and the Deming Award in Japan. However, past studies have posited that companies might lack the required capabilities or decide to decline from interacting acting with other companies or even suffer the distrust to share their knowledge. Therefore, expert groups may not have sufficient diversity in order to comprehend knowledge acquired from external sources.

Based upon these limitations whether natural or caused, networking with business partners is a key activity for companies to enhance knowledge exchange and it should not take an award to be the impetus to initiate interaction. Ergo, networking with external business partners may enhance executive success, thereby empowering executives to better develop strategic insights to develop a more effective vision incorporating various concerns and values of external business partners.

The knowledge transference among companies itself improves the effectiveness of learning, which in turn enables executives to empower human resources by creating new knowledge and solutions. Thus, I suggest that networking takes place among companies in both domestic and international markets which may lead to enhance the effective use of leadership. Therefore, if executives in senior positions effectively use knowledge management then they may be able to improve executive success through increased learning opportunities.

In conclusion, this article actually investigates the crossover potential of scholarly research and how it can be applied in the organizational boardroom. I offer practical contributions to managers at all levels of the organization. This article introduces a new and dynamic perspective of knowledge management within organizations, and adds to a relatively small body of literature but pays homage to the scholarly contributions. I stress that knowledge is a strategic resource for organizational portfolios.

This article suggests that knowledge management constitutes the foundation of a supportive workplace to improve executive success and reduce operational risk. The key here is that there are positive effects of knowledge management on executive success. I highlight the direct impact of knowledge management on executive success by facilitating important components of performance. When business leaders ensure executive success they increase control and lesson operational risk. In fact, I suggest that if knowledge management initiatives are not completely in favor of supporting organizational processes, companies may become obsolete, taken over, or acquired.


Mostafa Sayyadi works with senior business leaders to effectively develop innovation in companies and helps companies—from start-ups to the Fortune 100—succeed by improving the effectiveness of their leaders. He is a business book author and a long-time contributor to business publications and his work has been featured in top-flight business publications.