Tacit versus explicit knowledge and why it matters

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    Back Story


    In the late 1990's a colleague I worked with at an investment bank introduced me to the concepts of knowledge management.  He was a big fan of a Japanese scientist called Nonaka and explained why tacit knowledge is more important than explicit knowledge in large organisations.  I kind of understood what he was telling me, but it wasn't until I bumped into a book by Kevin Carson about six years ago I realised how important these ideas really are. One chapter in this book starts out with:


    One of the executive vice-presidents of the Union Carbide Corporation...

    remarked in a private conversation that he and his colleagues "had no idea how to

    manage a large corporation." He said they simply did not know enough of the

    corporate workings, nor did they know what to do even if a clear problem was



    And it was in this book I first read about Fredrich Hayek and realised that Nonaka's work is really a packaging of Hayek's theories. Hayek predicted the fall of communism because rigid central planning and command and control structures just can't 'see' all the knowledge in a society that contribute to everything it produces.  Although command and control is still the predominant model of organisation in business and government, I think we can all agree that it's deeply flawed and increasingly irrelevant in what is now a deeply connected, networked economy hence a chapter in a book I wrote many years ago titled 'A word to the wise, decentralise' about why open source has been so successful.  I sometimes use this little diagram in my presentations to describe the difference between tacit and explicit knowledge.


    tacit knowledge.PNG


    Anyway, my point is that Hayek's work heavily influences my thinking on all things social collaboration.

    Hayek's work has recently been very insightfully explained in plain English in this recent article;


    The Different Types of Knowledge in Society


    Firstly, there is what Hayek called "scientific knowledge" that is formally learned through the educational process. This is the kind of special knowledge that the lawyer or the medical doctor or the financial accountant acquires through his years of academic study at institutions of higher learning. This is a knowledge that in principle any one of us could acquire if we devoted the time, effort and discipline to obtain it through the educational process. Clearly, since each of us has only limited time and interest to give to mastering these kinds of knowledge we rely upon the "purchase" of them through market exchange, as when we hire the lawyer to handle a legal problem for us or employ the trained physician to diagnose and cure a physical ailment.


    Secondly, Hayek argued, there is "the knowledge of the particular circumstances of time and place." There are many aspects and elements of useful knowledge that are not learned in the formal educational process without which much in everyday life could not be successfully performed if we did not learn them "on the job," if you will.


    Read the whole thing here.