Knowledge Capital vs Organizational Memory

Knowledge Capital is the set of intangible assets acquired through knowledge creation, extraction, sharing and learning processes performed either in isolation by a knowledge worker or collaboratively in groups to determine insights which are more robust to risk, and assumingly lead to better decision making.

Only a part of the Knowledge Capital is in Knowledge bases (explicit knowledge), the other is the sum total of managed expertise, where managed expertise is the talent pool whose value is correctly identified, whose expertise is regularly extracted and put to good use in a timely fashion across the organization.

Knowledge Capital is useable knowledge and hence knowledge workers who can tap into other experts to carry out their own activities in a ‘better’ way are treating these experts as an asset.

Knowledge Capital can be however, acquired over a time period by estbalishing certain structures and adopting certain practices or it can also be purchased as part of M&As.

Organizational Memory on the other hand, although might appear similar to Knowledge Capital. It is the art and science to institutionalize knowledge from experts and knowledge bases into the organizational culture. And this art and science cannot be acquired through M&As but has to be organically developed. This requires setting up the right environment where knowledge capital is acquired. This also includes setting up the right incentives and rewards for experts to directly contribute to the knowledge capital. It includes the motivation and mandate to utilize the knowledge capital and treat it as a critical asset in carrying out activities. It includes fostering a knowledge intensive culture where knowledge sharing is merit over credentials. Organizational Memory is sticky, hard to lose even when experts leave the organization, others can come in and easily be ramped up to replace the previous ones. That is, Organizational Memory directly contributes to the organization’s brand. The art and science of organizational Memories is often lost in M&As and what corporationns acquire is only the Knowledge Capital without the Memory, the soul.

This is why, many times, the acquired corporate loses its mojo, innovation drops, and the phrase big fish eats little fish (only to kill it) seems more appropriate regardless of the intentions of the M&A.

The art and science of Organizatonal Memories is where cultural and change management initiatives operate on and are the most critical processes and activities towards business improvement.

In Summary, Knowledge Capital is managed by Organizational Memory.

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