Tacit Knowledge, as a competitive advantage, remains a highly misunderstood topic in business due primarily to the difficulty in spotting, acknowledging, and then measuring this form of knowledge. Because managers, who preempt application, see tacit knowledge as a threat, leadership is required to implement its benefits. Tacit knowledge relies upon people implementing daily processes and procedures. Tacit knowledge as a competitive advantage requires freedom to improve those processes and procedures of daily work to understand how to improve. The principles of tacit knowledge are discussed and enhanced by Ambrosini and Bowman (2001) providing excellent discussion material for leaders to contemplate.
In detailing an operational definition of tacit knowledge, Ambrosini and Bowman (2001) designed a definitive definition for tacit knowledge as “context specific, … [generally] acquired on the job or in particular situations.” Proceeding further, Nonaka (1991) reiterated that tacit knowledge is “… deeply rooted in [both] an individual’s action and commitment [to] a profession, product, market, work group, or team.” Tacit knowledge contains elements of “practical knowledge” and remains “difficult to describe” unless the knowledge is described as a “process” to perform work. Taken together, tacit knowledge is a person’s commitment and knowledge gained in experience to understand processes and improve the same.
Let’s use an analogy to drive this point home. John works for call center A; Mark works for call center B. The leadership in call center B is very demanding, but rewards those who meet the challenges and provides freedom for front-line personnel to meet customer needs. Call center A does not demand much from front-line personnel except to perform their jobs as dictated, and managers are in place to ensure the job is done and nothing more. Both call centers have high employee churn numbers, both call centers are matrix driven, and performance is measured in seconds; both call centers compete with each other for the same customer base.
Because Mark has freedom and call center B is willing to reward, Mark has been focused upon improving daily operations and customer support. Mark sends several ideas to his manager and onto senior call center leadership. Several of Mark’s ideas find their way into organizational change and are implemented.
John has a personal desire to see call center A succeed and develops ideas to improve customer support while decreasing organizational inertia. John’s manager sees these ideas, discovers the ideas are good, and decides to take them as their own. John is pressured to leave call center A over the next 8-10 months; by this time, the ideas are practically worthless and cannot be implemented due to shifts in business conditions.
Tacit knowledge was at play in both scenarios. Call center B employed tacit knowledge to compete. Call center A employed tacit knowledge to thwart and denigrate. Herein also lies the leadership challenge and the need to understand and implement the principles of combining competition, collaboration, compromise, and cooperation, also referred to as the “Principle of 4-C’s” (4-C’s). Thomas (1992) extols the virtues of combining competition, collaboration, cooperation, and compromise as a tool to achieve success in conflict resolution, organizational improvement, and people development.
The continued application of all four principles, cooperation, collaboration, compromise, and competition, provides fertile ground for resolving problems and advancing organizational objectives. These 4-C’s must work together with no single principle more important than the other. Like the four-legged stool my grandmother used to reach high cupboards, the stability of the stool depended upon all four legs to ensure strength and flexibility to work exactly. Compromise and competition do not work without collaboration and cooperation. They are all interconnected, and the business leader, wanting to lead well, would remember this relationship.
Collaboration is strengthened by cooperation, compromise, and competition. Competition must end in collaboration, cooperation, and compromise; in fact, competition will breed collaboration and cooperation to reach a compromise, before those being competed against provide collaboration, cooperation, and compromise, and remain attached and honored as successful means to reach the desired win-win agreement. The fires of competition are crucial to purifying those collaborating, compromising, and cooperating into a single honed unit that can more effectively work together. Cooperation can do nothing without the shared responsibilities of collaboration and compromise; when competition is added, the cooperation is strengthened. Compromise without cooperation or collaboration is ineffective, and competition is an added value to ensuring stronger compromise. None of these can stand alone without elements of the others to support, edify, and multiply; along with the stated relationship comes the knowledge that if the agreement is not win-win the agreement is a straight lose scenario.
The inherent discussion above is condensed from Thomas (1992), who advocated this combined approach to organizational design as a masterstroke to getting people working together. The same basic philosophy can be seen in the writings of Goldratt and Cox (2004), Lencioni (2002), Lundin, Paul, and Christensen (2000), Boynton and Fischer (2005), and Boylan (1995), among many others. Notably, these principles have been understood throughout time. Jucius (1963), in speaking of the broader issues in personnel management, understood the combined power of collaboration, cooperation, compromise, and competition and wrote extensively about how to use these effectively in the organization. Cruickshank and Davis (1958) understood these principles to be a combined and more effective tool than separate strategies of the same general direction and strove to ensure business leaders understood the practical application and inherent need for the organization to adhere to these principles as a combined effort of all organizational members. McNichols (1963) endeavored to keep these items combined in the minds of executives; thus, empowering them to discover solutions employing all the strengths in the consolidated collective use of competition, collaboration, compromise, and competition. The empowerment felt combining these tools elevates the individual focus into a collected focus, and the solutions for an organization are improved dynamically.
Examples of the combined efforts of collaboration, competition, compromise, and cooperation are found in the writings and research of Collins (2001 & 2006), Collins and Hansen 2011), and Collins and Porras (1994). These books contain many organizational examples of companies employing the combined strategy as outlined and collectively harnessing the power in cooperation, compromise, collaboration, and competition to make the long-lasting change from “Good to Great” organizations. Collins (2001) discusses Walgreen’s transformation and employs the combined power into the new highly successful Walgreen’s store model. Mitchell (2003) discusses the same principles as CEO of Mitchells/Richards Clothing Stores. By embracing the combined power contained, this CEO has kept the family business growing. Both organizations, Walgreen’s and Mitchells/Richards, embraced the energy of collaboration properly supported by compromise and collaboration and invested in internal and external competition to drive the needed organizational changes. What Collins proves is that the collective power is not particular and rare, but available to all who choose to combine not separate, collect not disburse, connect and retain not divide, partition, and mutate. Leadership demands higher practical performance than management (Robinson, 1999; Punia, 2004; and Mintzberg, 1980).
The ability to rise higher must include all the attributes, strengths, and collective power found in collaboration, competition, cooperation, and most especially compromise. Having standards does not mean compromising personal or organizational standards for collaboration. Having standards is the discovery of common ground in collaborating for a common goal, enhanced in the fires of competition.
How does a leader begin to take tacit knowledge and combine it with the power of cooperation, competition, collaboration, and compromise, to achieve positive results; the answers are quite simple.
- Allow and encourage idea submission. As a small business consultant, I am continually amazed at how many ideas are already in the minds of current employees to improve the organization. Open lines of communication in the organizational hierarchy for ideas to percolate. Train the employees to use these lines of communication. I cannot count how many times I have heard frustrated employees say, “I do not know who to submit my ideas to.”
- Train people to think and improve. Quality control is not just for the quality group to monitor. Quality assurance is a minute-by-minute process every employee should be engaged upon to help the company improve. Train this principle from day one with new employees and revisit this idea at least quarterly and every time idea submission drops.
- Competition is for external forces, but the 4-C’s principle is for everyone internally. Why have customer service teams competing against each other creating division and chaos inside the company? While sometimes healthy, many times petty in-house competition does nothing but destroy, denigrate, and deride already stressed and harried people. Stop tearing the company down in the front-line; cease the petty competitions between teams.
- Rewards and awards must contain value to the individual or they are meaningless. I worked with an employee who had an award from a previous employer on his desk. The award was a horse’s rear-end in bronze, and the employee was exceedingly proud of having been part of the team that won that particular award. The employee had not worked for that company in 20-years, but remains proud of that award and the reward that came along with it. I was also part of a call center that handed out awards that went into the trashcan before the end of the award ceremony. Rewards and awards must be valuable to the recipient. To make this happen, choose to build people by showing the award and reward. Why is the Stanley Cup in the NHL so coveted? Individual teams and players are inscribed permanently as a reminder of greatness; more importantly, everyone in the NHL sees the cup. This is a pattern that can be and should be replicated in the call center; just do not let the competition become chaotically competitive or meaningless and petty. Remember, many teams in the NHL have never won the Stanley Cup.
- Tacit knowledge has value. Cherish this knowledge as the genetic power of the company to thrive. Ask questions, listen to the answers, and remember the person providing input. Too often the person providing input is not recognized, and this failure to recognize contributions does tremendous harm to morale, dampening desire to contribute, and removing further access to potentially amazing results.
5.5 Let the tacit knowledge and award/reward systems live. Tacit knowledge has a life cycle as sure as every product, service, work process, and daily procedure. Allow change to live, allow knowledge to live, and allow the freedom to change to meet new needs. This is probably the most important point in this list of actions leaders can take to employ tacit knowledge as a competitive strategy. Recognize the life cycle of ideas and stop being afraid of employee freedom and change.
Ambrosini, V., & Bowman, C. (2001). Tacit knowledge: Some suggestions for operationalization. Journal of Management Studies, 38(6), doi: 0022-2380
Boler, J. (1968). Agency. Philosophy and Phenomenological Research, 29(2), 165-181.
Boylan, B. (1995). Get Everyone in Your Boat Rowing in the Same Direction. New York, New York: Barnes & Noble.
Boynton, A., & Fisher, B. (2005). Virtuoso teams: Lessons from teams that changed their worlds. FT Press
Collins, J. (2001). Good to great: Why some companies make the leap…and others don’t. New York, NY: Harper Collins Publishers.
Collins, J. (2006). Good to great and the social sectors: A monograph to accompany Good to great. London: Random House Business.
Collins, J., & Hansen, M. (2011). Great by choice: Uncertainty, chaos, and luck: Why some thrive despite them all. New York, NY: HarperCollins.
Collins, J., & Porras, J. (1994). Built to last: Successful habits of visionary companies. New York: Collins Business Essentials – A Collins Business Book: An Imprint of Harper Collins.
Cruickshank, H., & Davis, K. (1958). Cases in management (2nd ed.). Homewood, Ill.: R.D. Irwin.
Goldratt, E. M., & Cox, J. (2004). The goal: A process of ongoing improvement. (Third Revised ed.). Great Barrington, Massachusetts: North River Press.
Hickman, G. (2010). Leading organizations: Perspectives for a new era (Second ed.). Thousand Oaks, Calif.: Sage Publications.
Jucius, M. (1963). Personnel management (5th ed.). Homewood, Ill.: R.D. Irwin.
Lencioni, P. (2002). The five dysfunctions of a team: A leadership fable. Hoboken, NJ. John Wiley & Sons.
Lundin, S. C., Paul, H., & Christensen, J. (1996). Fish! A remarkable way to boost morale and improve results. New York, New York: Hyperion.
McNichols, T. (1963). Policy making and executive action; cases on business policy (2nd ed.). New York: McGraw-Hill.
Mintzberg, H. (1980). Structure in 5’s: A synthesis of the research on organization design. Management Science (Pre-1986), 26(3), 322. Retrieved from http://search.proquest.com/docview/205849936?accountid=458
Mitchell, J. (2003). Hug your customers: The proven way to personalize sales and achieve astounding results. New York, NY: Hyperion.
Punia, B. K. (2004). Employee empowerment and retention strategies in diverse corporate culture: A prognostic study. Vision: The Journal of Business Perspective, 8(81), 81-91. doi: 10.1177/097226290400800107
Robinson, G. (1999). Leadership vs management. The British Journal of Administrative Management, 20-21. Retrieved from http://search.proquest.com/docview/224620071?accountid=458
Thomas, K. W. (1992). Conflict and conflict management: Reflections and update. Journal Of Organizational Behavior, 13(3), 265-274.
© 2016 M. Dave Salisbury
All Rights Reserved