“Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world,” argued Albert Einstein. Do you agree?

During the past decade, Knowledge Management (KM) has become a popular new management discipline. In Thailand, the KM concept has received a lot of attention in business circles and public sector institutions alike, emphasized by the setting up of an Office of Knowledge Management and Development (OKMD) under the Thai government some years ago. So is Knowledge Management really the call of the hour, or is it just another management fad that feeds an army of consultants and IT service providers? Make up your own mind — here are six thoughts for you to consider.

1. Move from the Knowledge Economy to the Creativity Economy

Nearly three years ago, chief editor Bruce Nussbaum commented in BusinessWeek: “The Knowledge Economy as we know it is being eclipsed by something new — call it the Creativity Economy. Increasingly, the new core competence is creativity — the right-brain stuff that smart companies are now harnessing to generate top line growth. The game is changing. It’s about creativity, imagination, and, above all, innovation.” Clearly Nussbaum not only agrees with Einstein, he also wrote the obituary for the KM concept. Why?

Almost by definition, KM is passive; it attempts to preserve the existing knowledge of an organization. I argue that rarely does it create any new value for customers. And, in itself, KM does not increase a firm’s profitability. However, the active concepts of imagination and creativity enable a company to create meaningful novel customer value and produce tangible innovation results that boost its growth and profitability margins.

Question for business leaders: How does KM affect the bottom line of your company (except in increasing your costs)?

2. Understand the relationship between KM and Innovation

In the age of value creation, what really matters is not how you manage knowledge, but rather how you apply it to create meaningful value that sets you apart from the herd. Thereby, in the creation process, knowledge is a necessary, but far from sufficient component. Here remember Einstein: “Imagination is more important than knowledge. For while knowledge defines all we currently know and understand, imagination points to all we might yet discover and create.”

My tip: Distinguish between means and meaningful ends. Don’t worship the servant, but honor the master.

3. Manage wisdom instead of knowledge

Nowadays, we are afloat in a sea of information, in an ocean of knowledge. Globally, more than 3,000 new books are published — daily. Internet users conduct about two billion searches each day; every thirteen-year-old can find almost all unclassified knowledge. So in this abundance of data, how do you manage knowledge? And how do you select which knowledge to manage? While pondering on these questions, consider the advice of George Bernard Shaw: “Beware of false knowledge; it is more dangerous than ignorance.”

My tip: Refocus from knowledge to wisdom in line with Martin H. Fischer: “Knowledge is a process of piling up facts; wisdom lies in their simplification.” Preserve the wisdom from your employees, customers and other external stakeholders, and be careful not to lose these gems of wisdom in tons of data in a KM System.

4. Remember the story of the hare and the tortoise

KM is rather static in nature by attempting to capture all the knowledge at a given time. However, we are living in times of exponential change, where knowledge is quickly outdated. In their book Funky Business, Jonas Ridderstråle & Kjell Nordström describe the fallacious focus on KM as a critical competitive ability of companies in modern business as follows: “All modern companies compete on knowledge, but knowledge is perishable. We must treat it like milk — we have to date it. Unless we use the knowledge of our firm, it becomes sour and loses its value. Continuous innovation, both revolutionary and evolutionary, is a necessity.”

My tip: Use your knowledge while it’s fresh. And watch its expiration date.

5. Move from knowing to experience

“To know and not to do is not yet to know,” goes a Zen saying. If you want to learn how to swim, you can read tons of books about swimming, watch the Olympics in the summer, and then might know a lot about swimming. But unless you get yourself wet and swim, you don’t really know. Other famous creators like Johann Wolfgang von Goethe (“Knowing is not enough; we must apply. Willing is not enough; we must do.”), Kahlil Gibran (“A little knowledge that acts is worth infinitely more than much knowledge that is idle.”) and Albert Einstein (“The only source of knowledge is experience”) also emphasize the importance of doing.

My tip: Do and experience to really know.

6. Recognize that Un-knowledge is more important than knowledge

A famous definition of knowledge is attributed to the Polish astronomer Nicolaus Copernicus: “To know that we know what we know, and to know that we do not know what we do not know, that is true knowledge.” When we do an innovation project with THINKERGY, one key objective of the initial exploration phase is to make our client realize how little they really know about their innovation challenge by compiling an “Un-Knowledge List.” Then, we help them to extract new evidence to close the discovered knowledge gaps and perceptual blind spots to gain novel insights.

My tip: “Knowing many things doesn’t teach insight,” cautioned the Greek philosopher Heraclitus 2,500 years ago. To stimulate breakthrough ideas, gain insights by addressing your un-knowledge instead of your knowledge. “Wealth in the future flows directly from innovation, not optimization; that is, wealth is not gained by perfecting the known, but by imperfectly seizing the unknown,” noted Kevin Kelly of Wired magazine.

Conclusion: “I know nothing except the fact of my ignorance,” said Socrates. Knowing that even one of the greatest philosophers of humanity knew nothing, I ask you: Do you still want to manage nothing? Or, together with Socrates, shall we acknowledge our ignorance?

© Dr. Detlef Reis 2008. This article was published in parallel in the Bangkok Post under the same title on 16 June 2008.