Understanding tacit knowledge

Startups contain a lot of knowledge. While it’s easy to document knowledge like product specifications, customer profiles, pricing, and processes, some organisational knowledge is difficult to write down and, therefore, goes under appreciated. We call this tacit knowledge.

Tacit knowledge is unwritten, unspoken, and often unconscious knowledge. One’s individual experiences and intuitions form the basis of tacit knowledge. When thanks to their experience, someone handles a situation effectively without knowing how to clearly explain their process, this is thanks to this unconscious knowledge.

As great as it would be to solve all problems with clearly defined processes and documented knowledge¹, the reality is that most organisational knowledge tends to be tacit. So, companies should factor this into their ways of working. Research has demonstrated the value of tacit knowledge in organisations in two ways. First, by measuring the impact of knowledgeable employees leaving the organisation² (we’ve all experienced this first hand). Second, by showing the effectiveness of various methods for encouraging tacit knowledge development³. This latter point is good news for startup leaders because it tells us that, while it may be difficult to write down this type of information, it’s still possible to encourage it to spread.

Tacit knowledge is not easily shared or articulated, as it often requires personal contact, regular interaction, and trust to effectively transfer from one person to another. So, the best way to spread it is to encourage personal contact and regular interaction and to build trust within teams.

First, teams should tackle work in groups. Engineers should participate in pair programming. Salespeople should listen in on each other’s calls. Customer service agents should tackle tickets in pairs. Coupling new recruits with experienced employees is especially important for tacit knowledge transfer, so include this practice in your employee onboarding process.

Second, teams should share their work with others. Engineers should demonstrate what they’ve built and explain the decisions they made along the way. Salespeople should demonstrate how they won their deals. All-hands meetings are a great forum for this type of knowledge sharing.

Third, encourage cross-functional collaboration. Time with an engineer will teach a support agent why the product works as it does. Time with a salesperson will teach an engineer what customers care about. Many startups go too far to insulate teams from internal distractors. While you don’t want teams constantly harassing each other when they could solve problems independently, you also don’t want silos. Pay attention, and you may realise some of the best performers are employees with good relationships outside their immediate team.

Fourth, hire for tacit knowledge. People with experience in similar businesses targeting the same customer profile will likely come with valuable tacit knowledge. If you find someone with fantastic tacit knowledge that enables them to ramp up quickly in their new role, hire some of their former colleagues.

Lastly, get your hands dirty as a leader. In the early days of a startup, even founders can lack the depth of tacit knowledge required to succeed. First-hand experience selling, supporting and designing your product will build the type of knowledge you’ll later need to transfer to others.

Because people learn tacit knowledge by osmosis, the methods above are especially beneficial for remote teams. A lack of tacit knowledge transfer may partially explain why some studies report that remote work leads to fewer innovations⁴ despite delivering greater productivity⁵. If your team works remotely⁶, ensure that time spent together maximises the type of collaborative activities outlined above.

Footnotes