Managing Knowledge as a Growth and Management Tool

What do we really know when we say we know?

by Bruce W. Marcus
Professional Services Marketing 3.0

The road to knowledge management, now well-traveled, seems to end with the science of acquiring and retrieving data. The end of that road, which was built mostly by the brilliance of computer scientists, stops where a clear understanding of the meaning of useful knowledge begins.

Bruce W. Marcus

Bruce W. Marcus

More for CPA Trendlines PRO members:  The Secret Formula for Getting New Clients  What We’ve Learned Since Accounting Marketing Was Legalized  • Do Accounting Firms Really Want an ‘Image’? • What Accounting Firms Need to Learn from Personal Financial Planning Specialists • The Delicate Art of Positioning Your Firm in the Mind of the Prospect  • Even a Random Disaster Can Be Controlled with Risk Management • 

But with the growth of knowledge management as a discipline in many aspects of professional practice, some definitions may help forge a new direction for knowledge management that not only move the subject to a new realm of discovery, but may help find ways to make knowledge more useful as a management and marketing tool. We now seem to know a lot about gathering data, and are learning to turn data into knowledge. Knowledge must now be adapted to work for the firm, and especially for the firm’s leaders.

Understanding information allows you to focus your management and marketing efforts to meet the specific needs of managing a firm, improving productivity, and designing marketing programs to meet the needs of specific markets. Well founded information can make the difference between management and marketing effectiveness, and wasteful and expensive efforts, with a lower return on the investments of time and capital.

What Is Information?

First, we know that data is not information, and information is not knowledge. Data, we know, are basic facts – unalloyed, with little or no value outside their own existence. To say, for example, that a tree is a tree merely defines that object. It says nothing of its structure, its purpose, its value. It tells us nothing about forests or forestry, or uses of its leaves or trunk. That a tree is a tree is data, not information.

Information is when we integrate the existence of a tree with the existence of, say, furniture. Then the facts of a tree take on a new meaning.

Knowledge is when we take the information about the tree and the furniture and use it to inform either forestry or furniture manufacture.

Knowledge management is when we when we codify knowledge and convert it to useful information.

What Is Knowledge?

Theoretically, knowledge may be defined as information that is now, or may in the future be, useful in a specific context. Knowledge may also be abstract, with no immediate use or application, in which case it may serve as a foundation for an ultimate use. For example, when the laser was discovered in the AT&T labs a few decades ago, it was merely a scientific phenomenon, with no apparent practical use. The uses emerged and were developed much later.

In a business context, knowledge is information that can be applied for a specific and useful business purpose. For example, the demographics of a particular market are raw data. Analyzing that data in terms of the ability to make decisions about serving that area is information. Knowing how to apply that information to make those decisions is knowledge. Knowing how to deliver knowledge to those who can use it most effectively to meet a specific objective is knowledge management.

Knowledge – cognition – in this context, has specific properties that must be understood if the subject is to have any practical value.

  • Knowledge is dynamic. Its value and quality change constantly. An illustration of dynamic information is an address in space (See page xx).
  • Even with the common language needed for communication, we know that this dynamic must be recognized if knowledge is to be useful. Knowledge is subject to…
  • Changing sources of input
  • Changing input from the same sources
  • Changes precipitated by the use of knowledge
  • Changing needs for the same information or data
  • Knowledge is cumulative. Nothing is often known by just one person—nor is it ever known in entirety. For example, what bits of knowledge did the Wright brothers bring together to make an airplane? Or Edison, Bell, or Morse, for their inventions?

The same knowledge can serve different purposes. For example, an area’s demographics may help the marketing department define the nature of a product. That same demographic information may help the finance department determine the cost of serving that market.

  • People process information differently. Each person receives information through a screen of personal experience and prior knowledge. Give two people the same information about a company and its investment potential, for example, and one will choose to buy the stock and the other to sell it.
  • Another form of knowledge is tacit knowledge – what we know only intuitively, but can’t test pragmatically. For example, Freud’s view of infant perception and psychology could only be surmised, but not tested. But if we build a system predicated on that intuition, and the system works, then we may assume that the intuition may be valid.
  • Merely accessing knowledge can changes the nature and value of that knowledge. For example, accessing information about a company’s stock can change the value of that information, both in the way it’s perceived and in the way it’s acted upon. Another example is in the botanical Raowolfia, whose medicinal properties were known by researchers in India and reported in Indian scientific journals, but unknown abroad. When it was discovered by drug companies in the United States, Raowolfia became the foundation for the pharmaceutical Reserpine.
  • By the same token, knowledge about a market for your services becomes meaningful only when it’s used to define a marketing program in terms of the needs of that market.
  • The practical application of these concepts is a function of context. Knowledge of itself is one thing to a philosopher, another to a scientist, another to an artist or writer or journalist, and another to a functioning professional, a firm’s management, or a firm’s marketers.

Cognition for cognition’s sake is a fine abstraction and academic exercise, like any pure science. Cognition to serve a process is a different science, although the two need not be mutually exclusive. But the danger of analyzing and philosophizing beyond usefulness can dilute the currency of the information.

We are concerned here with the use of knowledge in a business context – gathering, formulating and applying knowledge to the uses of managing a company or professional firm, and using knowledge competitively.

Clearly understood, a system of making knowledge useful in a business context, based on the principles described here, can be developed successfully. Is knowledge management complex? Not really, when it’s developed on a step-by-step process. The important thing is that it works.

Click to Buy

Click to Buy

Bruce W. Marcus is a pioneer in professional services marketing and coauthor of “Client at the Core.” This is adapted from his new book, “Professional Services Marketing 3.0,” available for purchase here.