What is Tacit Knowledge?

Tacit Knowledge is knowledge that is difficult to write down or share verbally; it can only be learned by doing or by observing. It is skill, or what we know how to do, rather than facts. Examples include how to drive a car, how to speak Japanese, or how to dance tango. An individual learns tacit knowledge through his or her own personal experience, but acquiring this knowledge and passing it on to others requires interpersonal contact

How Tacit Knowledge is Obtained

The term ‘tacit knowledge’ was first used by chemical engineer turned scientist Michael Polanyi in his 1958 book Personal Knowledge: Towards a Post-Critical Philosophy. He asserted there was a type of knowledge that we could not articulate.

Tacit knowledge is often expressed in:

• Behaviors

• Actions

• Habits

• Routines

• Instincts

• Responses

• Intuitions

You cannot simply instruct a person through a course to obtain tacit knowledge. Although studying the facts and details about a subject is a prerequisite to obtaining tacit knowledge, spending time learning on the job and gaining personal experience is what raises the knowledge quality.

It’s more difficult and time-consuming, but that’s why it’s so valuable. Some ways to obtain tacit knowledge include:

• Simplifying processes

• Going through experiences

• Trial and error

• Experiments

• Capturing data throughout a research period

• Documenting findings, then using the information to strategize

Explicit Knowledge

Explicit knowledge can be taught, shared, and explained easily with instructions. It requires little supervision or previous knowledge and experience.

For example, building furniture from IKEA. Other examples include:

• Maps

• Handbooks

• Cookbooks

• Instruction manuals

• Operation manuals

Compared to tacit knowledge, explicit knowledge is vastly more straightforward. It does not require deep thinking.

Tacit Knowledge

Tacit knowledge (also known as implicit knowledge) is a form of knowledge gained through personal experience. It differs from person to person, making it complicated to explain. While tacit knowledge often provides different contexts to problem-solving, it poses complex challenges and obstacles when people try to address where the other is coming from.

For example, consider two people working different roles at the same marketing firm. When asked the same questions, an SEO marketing specialist will answer differently from an email marketer because they have different experiences. They will likely answer based on their unique understanding and backgrounds.

Even two people working at the same company and the same job will experience things differently. The difference is amplified further when considering other traits like race or gender.

Why Companies Should Focus on Capturing Tacit Knowledge

1. It Allows You to Learn from Others’ Experiences.

The beauty of tacit knowledge sharing is that it addresses knowledge gaps and lets you learn from others’ experiences. When you open yourself up to others’ points of view, you gain the knowledge to improve your business and its practices.

Injecting tacit knowledge into standard operating procedures (SOPs) gives more context on how things are done, which is especially useful for remote onboarding.

2. It Helps You Communicate More Effectively.

The thing about tacit knowledge is that you can’t explain how you learn it; you simply absorb it by gaining experience within an organization.

Therefore, relying on an osmosis-like knowledge transfer does not guarantee it will happen. Your team members may not know what they don’t know and continue using their usual approach instead of going with the better way to do things.

Many misunderstandings occur in large companies when two divisions expect outputs that conflict with each other. For example, the customer service and marketing teams may not agree with the results the sales team has in mind.

Misunderstandings are an uncomfortable but necessary part of corporate life. Think about it — there would be no innovation if everyone agreed with each other. Additionally, disagreements stemming from differences in tacit knowledge also force people to communicate more effectively.

3. It Teaches You to Value Different Perspectives.

Human capital is a company’s most important asset, and leveraging each employee’s experience and perspective is one of the best things a company can do.

Any company can teach technical skills, but each person’s tacit knowledge and experience are more valuable.

4. It Differentiates Your Company from Competitors.

Incorporating tacit knowledge gives your company a competitive advantage. Not only does it contribute to better decision-making, but it also equips your company to serve its internal and external stakeholders better.

Moreover, developing the best practices and demonstrating the optimal approach to tasks allows you to operate at a higher level, contributing to increased productivity.

Today, tacit knowledge is a business’ most valuable untapped resource. When employees leave, they take their tacit knowledge with them, costing companies up to 213% of an experienced employee’s salary to find a replacement.