In this short post we dive deeper into the art of “Knowledge Sharing”. It is one of the most underestimated cost factors and undervalued assets. Therefore it deserves more attention and subsequently companies should invest more in this practice. To start with we pinpoint the basics of the concept. Next, the costs of inefficient or insufficient sharing is discussed. Finally, the benefits and value it brings to companies is lined out.
We’ll guide you through the following topics in this 5 minute read.
- What is considered knowledge sharing?
- What are the costs of inefficient and insufficient knowledge sharing?
- What are the benefits of effective knowledge sharing?
The knowledge economy
The last 20 years or so, the economy evolved from a tangible to an intangible economy. The value of the largest companies nowadays consists for almost 90% out of intangible assets. These assets are
- Brand equity
- and of course: knowledge & expertise.
Because of their intangible nature they are very hard to valuate but more importantly: hard to manage and exploit.
If we focus on knowledge & expertise, we see that only 5% of it is documented in hard copy or data. The rest sits around in people’s heads, waiting to be used and in best case: shared.
A whopping 95% of knowledge is therefore much harder to locate and visualize but is absolutely unvaluable. This is what we call tacit knowledge, where we will focus on in another blog.
“95% of organizational knowledge is tacit. Hard to locate, valuate and visualize.”
Now, just to get the bigger picture. Humans are information addicts and this addiction has grown explosively. The average American brain consumes 34 gigabytes worth of information every single day. But this was in 2009! Back then this was a 350% increase in 30 years.
With the massive technological, digital and social evolution we’ve seen in the past 12 years you can imagine this number to be through the roof right now.
The human being therefore absorbs countless amounts of information and knowledge, but is often unable to share and exploit this.
“The average American processes 34GB worth of information every day. And this was in 2009.”
Companies also create, consume and amass mountains worth of knowledge over the years. Therefore, this forms an enormous asset but is undervalued and overlooked way too often.
The economy has really evolved into what we call a knowledge economy in which companies and employees must learn to live or live to learn.
“Knowledge is power.” a wise man once said. This is true, more than ever before. But this knowledge is only valuable when shared and that is where most companies fail.
“Knowledge is only valuable when shared”
Knowledge sharing definition
Sharing knowledge and the value it creates, is something that everybody can get behind but mostly fail to accomplish. A report of Panopto of 2019 states that more than 8 out of 10 employees say that sharing knowledge is critical to increase productivity, but still companies fail to do so. That is why companies lose vast amounts of money every year in terms of productivity loss, time, employee turnover, etc.
But what is considered ‘knowledge sharing’? The World Bank gives following definition:
“Knowledge sharing is a subset of knowledge management encompassing the exchange of knowledge (information, skills, experiences, or expertise) within and across organizations.”
If this process can work efficiently and is managed correctly, it can create an almost unbeatable competitive advantage. But managed inefficiently, it induces great losses and costs.
The Panopto Report
A report by Panopto called the Workplace Knowledge and Productivity Report has shed a light on the enormous losses companies make each year due to inefficient knowledge sharing. And the craziest part: they don’t even know it.
Here we put out the most important facts and figures the report produced, combined with other relevant research. Let the numbers sink in. 👇
- The average large U.S. business loses 47 million in productivity each year due to inefficient knowledge sharing
These costs mostly come from time waste and the chain reaction it creates. Knowledge workers waste 5.3h every week
- Waiting for the right information
- Recreating already existing knowledge
- Doing needless research.
A study by McKinsey accompanies these numbers by stating that employees spend 1.8h each day searching for information, that’s almost a whopping 25% of your workday.
That wasted time translates into:
- Delayed projects
- Missed opportunities
- Frustration among employees
- Significant impact on the bottom line.
Harvard Business Review says that Fortune 500 companies are losing 31.5 billion dollars each year through the incapability of sharing knowledge.
All the numbers are pointing in the same direction. Take action!
- Every coworker holds 42% ‘unique knowledge’ which is lost when they leave the company
Employee turnover costs the company therefore tons of cash in lost know-how, expertise, etc. That is why an efficient knowledge sharing is very important to keep this unique know-how and expertise within the company to some extent.
Stay tuned for a next blog on how you can implement and support a knowledge sharing culture. 🔜
- 60% of employees finds it very hard and even nearly impossible to get job-related information from their colleagues.
More than half of employees doesn’t get the information they need from colleagues. Because of this 8 out of 10 employees get frustrated.
In high-turnover companies employees are 65% more likely to say they cannot get the information they need. Frustration and retention are therefore linked and can be countered with a more efficient knowledge sharing.
“The average employee spends 25% of his or her workday searching for information.”
But enough about the costs. Let’s take a look at what value knowledge sharing can create. What are the benefits of knowledge sharing?
When the unique knowledge of employees can flow freely and easily through the organization, it fosters productivity.
Knowledge management built on a culture of knowledge sharing, transparency and trust is a major factor in upping productivity.
But besides productivity it can create so many more direct and indirect advantages to make your company:
- More competitive
- More attractive
- More valuable
- More future proof and innovative
- More agile
Here we pin down the 8 biggest advantages of knowledge sharing you should keep in mind.
- Create best practices and make them re-usable
When knowledge and expertise gets shared efficiently among coworkers, best practices can be distilled from it. When problems get solved these processes can be refined and re-used in the future.
- Better and faster decision making
It goes without saying that when knowledge is freely available, better decisions can be taken faster. Double win! The right information at the right time plus real experiences can be used to improve this process.
- Stimulate innovation and growth
Innovation is knowledge sharing. Bringing together different people, ideas, opinions, expertise, etc. brings new insights and fosters creativity. By stimulating knowledge sharing you automatically create a culture of innovation, which is almost a synonym with growth.
- Create a more flat, transparent and agile work environment
Forget silo’s. Agile and flat companies are the future. Connect the right experts across the department borders and create cross-functional dream teams. With all the needed expertise at hand and combined, your company will be ready to answer the most complex and fast changing market needs.
- Boost your customer service
Take your customer experience to a new level by offering the most complete solutions possible and being able to answer clients’ needs and questions fast.
- Reduce loss of valuable unique knowledge
Helping people makes happy people. Just by sharing knowledge people will learn from each other, spreading valuable know-how within the company. Secondly, this will result in less turnover and being able to keep on to unique knowledge longer.
- Foster a knowledge sharing community
By making knowledge sharing the new business as usual this will foster a real change of culture. Take this momentum and create a knowledge sharing community and reap the benefits.
- Support a happy workforce with more engaged employees
Employee engagement is at an all time low with only 1 out of 3 employees being engaged at their job. This results in high turnover rates and has a very negative impact on job satisfaction and productivity.
By allowing and supporting people to share their expertise with their peers, they automatically become more engaged at work. Helping people make happy people.