It is relatively easy to learn and imitate another company’s core competency or capability if it comes from explicit knowledge, that is, knowledge that can be easily articulated and communicated.
This is the type of knowledge that competitive intelligence activities can quickly identify and communicate.
Tacit knowledge, in contrast, is knowledge that is not easily communicated because it is deeply rooted in employee experience or in a corporation’s culture.
Tacit knowledge is more valuable and more likely to lead to a sustainable competitive advantage than is explicit knowledge because it is much harder for competitors to imitate.
As explained by Michael Dell, founder of the Dell computer company, “others can understand what they do, but they can’t do it.”The knowledge may be complex and combined with other types of knowledge in an unclear fashion in such a way that even management cannot clearly explain the competency.
Tacit knowledge is thus subject to a paradox. For a corporation to be successful and grow, its tacit knowledge must be clearly identified and codified if the knowledge is to be spread throughout the firm.
Once tacit knowledge is identified and written down, however, it is easily imitable by competitors.
This forces companies to establish complex security systems to safeguard their key knowledge.