Knowledge-based management

Knowledge management in the digital transformation

Dec 17, 2025

Klaus North

#Knowledge Management, #Learning Organization, Knowledge Work, #Management, #Business

Download Summary Map

Brief summary

Knowledge-based management describes a strategic approach in which knowledge is understood as a central production factor. It shows how organizations systematically build, share, measure, and secure knowledge to achieve long-term competitiveness, innovation, and value creation. It presents structures, roles, methods, and cultural prerequisites that effectively integrate knowledge into strategy, processes, and daily work.

General ideas

Knowledge is a key production factor for achieving organizational goals.
Unique products and services are created through targeted, developed knowledge.
Knowledge can only be measured indirectly through financial indicators.
Balanced Scorecard and Knowledge Balance Sheet are key instruments for measuring knowledge.
The ability to generate, transfer, and secure knowledge globally will be crucial for companies.
Self-management is a core competency for knowledge work.
In knowledge-centric companies, reputation is built through the sharing of knowledge.
Employees should be able to manage their own learning.

Knowledge Management

Knowledge management refers to all measures by which an organization provides the necessary knowledge to achieve strategic and operational goals.

Goals of knowledge management:

Acquire knowledge.
Develop knowledge.
Transferring knowledge.
Securing knowledge.

Factors that promote knowledge:

Create incentives to share knowledge.
Leadership through example.
Establish structures for knowledge creation and knowledge transfer.
Use financial and non-financial incentive systems.
Introduce a Knowledge Market.
Build networks of people with similar problems.
Establish communities of practice.
Utilize job rotation between departments.

The Digital Knowledge Society

Demographic change, digitalization, and global competition are increasing the importance of knowledge in companies. Knowledge-oriented organizations are consistently building their structures around knowledge.

Key questions for companies:

What significance does knowledge have for the company?
What are the learning objectives?
What knowledge is available or needed?
How is knowledge treated as a resource?
How is the company organized around knowledge?

Key areas of knowledge:

Context:	External changes that create opportunities or risks.
Market:	Markets and growth areas of the organization.
Customers:	Current and future customer needs.
Products:	Differentiation and added value through products and services.
Processes:	Efficient, high-quality, and continuously improving workflows.
Technologies:	Technologies and methods that need to be mastered and further developed.
Organization:	Structures, culture and leadership for long-term competitiveness.

The Knowledge Ladder

The knowledge ladder describes 7 stages of knowledge development with the goal of competitiveness.

Steps of the knowledge ladder:

Sign:	Individual characters without meaning.
Data:	Ordered symbols without interpretation.
Information:	Embedding data in a context.
Knowledge:	Purposeful linking of information and tied to individuals.
Action:	Visible application of knowledge.
Competence:	Acting appropriately based on knowledge.
Competitiveness:	Consistently applied core competencies.

Strategic knowledge management plans backwards from competitiveness, "downwards" on the knowledge ladder.
Operational knowledge management plans from baseline data upwards. Moving "upwards" on the knowledge ladder.

Goals of knowledge management:

Strategy: Knowledge and learning become part of the corporate strategy.
Leadership: Leadership combines knowledge, learning, and performance.
Collaboration and networks: Internal and external cooperation is specifically promoted.
Knowledge transfer and skills development: Skills are systematically developed and transferred.
Building and retaining information and knowledge:
Information and knowledge are made available in a structured manner.

Criteria for knowledge as a competitive advantage:

Added value for customers.
Scarcity compared to the competition.
Difficult to imitate.
Low substitutability.

Organizing to gather knowledge

A knowledge-based company must find a balance between these two concepts:

Stability and renewal: Employees need to know what is changing and what remains constant.
Cooperation and competition: Cooperation is preferable if it increases competitiveness.

The four dimensions of organizations:

Hierarchy and function: Combining different knowledge and skills.
Processes: Pooling knowledge to create customer value.
Projects: Pooling knowledge to solve specific problems.
Knowledge: Building cross-functional knowledge structures and a common language.

Companies usually have weak structures in the knowledge dimension.

Entrepreneurial Corporations:

Companies build knowledge with a focus on its market value.

They consist of 3 roles (entrepreneur, coach and manager) and 3 processes (entrepreneurial, integration and renewal)

	Entrepreneurial process	Integration process	Renewal process
Entrepreneurs on the front line	Recognize and pursue opportunities. Initiate and promote new ideas.	Sharing knowledge and resources through collaboration.	Maintaining energy and commitment from the bottom up.
Coaches at the management level	Evaluate, develop and support initiatives.	Connecting and integrating knowledge and resources across disciplines.	Create and maintain organizational flexibility.
Top Management	Establish strategic goals, priorities, and a guiding vision.	Develop and establish shared values.	Balancing short-term results with long-term ambitions.

Knowledge is human.

Augmentation:

Augmentation describes the support of human work by intelligent systems.

Five augmentation strategies:

Moving forward through the development of intelligent systems.
Scaling up by delegating routine tasks.
Intervention through monitoring and training of intelligent systems.
Stepping back by utilizing human social and emotional skills.
Specialization in non-automatable niches.

Roles in a knowledge-based company:

Knowledge practitioners: Perform specialist tasks and continuously build expertise.
Knowledge engineers and entrepreneurs: Pooling knowledge and translating market needs into solutions.
Visionaries and context shapers: Identify opportunities and create framework conditions.
Information intermediaries and infrastructure managers: Develop and operate information and communication systems.
Supporting functions: Ensure smooth operations and a positive external image for the company.

Middle Up Down Management:

Basic idea: Middle managers play a central role in knowledge creation.
Role distribution:
- Top management formulates visions.
- Middle management translates knowledge into concepts.
- Operational staff implement these measures.

Conditions for managing knowledge workers:

Clear expectations.
Suitable tools.
Deployment based on individual strengths.
Recognition and appreciation.
Support with learning.

Strategies for personal information management:

Remove unimportant information regularly.
Reduce the flow of information.
Store information in a retrievable way.
Set clear boundaries.
Develop resilience in dealing with knowledge.

Competence management:

Areas of expertise:
- Professional competence as domain-specific knowledge.
- Methodological competence for communication, projects and processes.
- Social and personal skills for cooperation and adaptability.

Steps in competency management:

Define goals.
Define the scope.
Ensure governance.
Develop a competency catalog.
Define target profiles.
It is about capturing profiles.
Provide IT support.
Visualizing competencies.
Update profiles regularly.

Incentives for employees to share knowledge:

Extrinsic incentives:
- Money through salary, bonuses and stock options.
- Security through pensions and loans.
- Status through symbols, titles, and formal recognition.
Intrinsic incentives:
- Social contact through shared activities and communities.
- Performance through feedback, recognition, and constructive criticism.
- Self-realization through autonomy and participation.
- Learning through challenging tasks.
- Career development through advancement opportunities.
- Expanded roles through job rotation

Creating and distributing knowledge

Types of learning objectives:

Know How: Operational skills in processes.
Know Why: Values, norms, and principles of behavior.
Know What: Strategic objectives.

Push and pull systems:

Push System: Knowledge is actively distributed to ensure availability and standardization.
Pull System: Employees independently retrieve knowledge as needed.

Methods for learning and documentation:

Working Out Loud: Work is openly shared as it is created. Learning, feedback, and relationship building take place continuously.
After Action Review:
Structured reflection on planning, actual progress, causes, and potential improvements. After each activity, it is recorded what happened, why it happened, and what can be improved.
Lessons Learned:
Each project is systematically reflected upon.
- What was good?
- What was noticeable?
- What was bad?
- How was the collaboration?
- What was missing?
First, everyone documents their questions individually, then they are discussed in the group and the results are recorded.

Transfer Stories:

Structured knowledge transfer to new employees.

Process:

Identify and visualize knowledge needs.
Exchange of experiences through narrated practical stories .
Structured documentation.
Use in a safe environment.
Transfer workshops with follow-up questions.
Regular follow-up.

Knowledge development cycle:

Determine knowledge needs.
Evaluate existing knowledge.
Building new knowledge.
Making knowledge accessible.
Maintain and preserve knowledge.

The knowledge market

The knowledge market treats knowledge like a market-based commodity.
Values define the framework for action.
People act as both providers and users of knowledge.
A platform makes visible who offers which knowledge.
Processes and tools ensure that knowledge is practically usable.

General conditions:	Knowledge is embedded in values, leadership behavior, roles, competencies, and incentive systems that reward collaboration and shared success.
Actors and rules:	A knowledge market is built with clearly defined players, measurable goals and rules that balance the supply and demand of knowledge.
Instruments and processes:	Knowledge management is firmly integrated into everyday work through processes, organizational structures, media and IT infrastructure.

How a knowledge market works:

Offers and needs are recorded.
These are collected visibly and arranged thematically.
Topics are reviewed and evaluated together.
Those seeking knowledge come into direct contact with knowledge providers.
Solutions are discussed and refined in small groups.
Open questions are collected centrally.
Results are documented and shared digitally.
Contributions can be rated and recognized.
Follow-up activities will be bindingly defined.

Measuring and securing knowledge

Knowledge balance sheet:

Measuring intangible knowledge about business success.
Defines vision, strategy, and measures.
Supportive processes for human structure and relationship capital.
Continuous adjustment based on results.

Balanced Scorecard:

Consideration of the current and target state of a company from 4 perspectives:
- Customer perspective
- Financial outlook
- Internal processes
- Learning and Development

Measures to protect knowledge:

Motivation:	The company demonstrates that it values the knowledge of experts and actively supports knowledge transfer.
Recognition:	Successful knowledge transfer is rewarded through recognition, incentives, or target agreements.
Integration into working groups:	Experienced employees are integrated into teams so that knowledge about daily collaboration is passed on.
Pull principle:	Successors actively acquire the necessary knowledge themselves. The responsibility for documentation does not lie solely with the experts.
From leadership to advisory role:	Experts are gradually transitioning from leadership roles to advisory and mentoring functions.
Future orientation:	The focus is on the knowledge needed for future tasks, not just on past activities.
Integration into business processes:	Knowledge transfer is directly integrated into ongoing operational workflows.

Implementation of knowledge management

Key steps:

Raising awareness and analyzing knowledge gaps.
Derivation of a knowledge strategy from the business strategy.
Creating a supportive framework.
Integration of external knowledge.
Systematic competence development.
Intergenerational knowledge transfer.
Promoting creativity and innovation.
Learning in and from projects.
Integration into processes.
Promoting personal exchange formats.
Structuring of documents and systems.
Building trust and openness.

Implementation components and tools used:

Knowledge strategy:	Strategic knowledge analysis or knowledge balance sheet. Identification and communication of core competencies. Competence centers for key topics. Personnel development aligned with core competencies and knowledge objectives.
Learning and skills development:	Skills and competence management. Identification and integration of key personnel. Communities of practice and peer learning. Learning in and from projects through debriefings and lessons learned. A culture of learning from mistakes. Idea management and continuous improvement.
Knowledge-oriented culture and leadership:	Working Out Loud and informal exchange formats. Cross-level dialogue such as skip-level meetings. Integration of knowledge sharing into performance reviews. Job rotation and team-oriented work methods. Time is scheduled in advance for knowledge exchange.
Knowledge identification:	Yellow Pages and employee profiles. Structured onboarding concepts. Knowledge transfer in transition situations through transfer stories, knowledge relay, and debriefing.
Information availability:	Role-based information structures. Pull-oriented access to information. Targeted push distribution of selected information. Intranet relaunch and decentralized data concepts. Document management systems. Wikis and blogs. Regular information cleansing.

Savitteri Systems