Why is Knowledge Management So Difficult?

The “big idea” with knowledge management is that in a fast-moving and increasingly competitive world, a firm’s only enduring source of advantage is its knowledge – the knowledge of its individual employees, and the knowledge that gets built into its structures and systems. Consulting companies and R&D organisations have known this for years, but increasingly even “old economy” firms in oil, steel and consumer products are recognising the importance of knowledge assets as the source of their success. The problem with knowledge management is that most companies struggle to make it work. A Bain and Co. study found that while some companies were “extremely satisfied” with their progress in knowledge management, the majority expressed a below-average level of satisfaction. And in a survey of European and US companies (Ruggles 1998), the results were even more worrying. Only 13% of respondents rated their ability “to transfer existing knowledge within the organisation” as good or excellent, and “measuring the value of knowledge assets and/or the impact of knowledge management” was rated good or excellent by only 4% of respondents.