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(Tacit) Knowledge Is Power

Posted on by Brandon Klein

(Tacit) Knowledge Is Power

Bottom Line: Companies gain a competitive advantage when different divisions, such as sales and marketing, share non-quantifiable information. But to support the flow of this all-important tacit knowledge, managers must encourage social ties and cross-functional relationships.

Salespeople occupy unique positions in their companies, transcending traditional organizational borders. In a business-to-business context, they have one foot in their home office and the other in their clients’ conference rooms. And in a business-to-consumer model, they play a vital frontline role as customers increasingly demand sophisticated or tailor-made solutions to their needs. As a result, salespeople have a rarefied access to corporate, customer, and even competitor data. But how can they put this boundary-spanning knowledge to the best use?

To be sure, explicit data (such as sales figures or consumers’ shopping patterns) can be codified into spreadsheets or databases and therefore easily integrated into a company’s IT setup for further analysis and review. But another type of information that salespeople can glean, dubbed tacit knowledge, can’t simply be written down or quantified. It’s the look on a negotiator’s face, the ability to speak a different language, or the learned experiences gained from working with a partner. And research suggests it can potentially improve firms’ efficiency, value creation, and financial performance.