What is the Data, Information, Knowledge, and Wisdom (DIKW) Pyramid?

The DIKW Pyramid represents the relationships between data, information, knowledge
and wisdom. Each building block is a step towards a higher level - first comes data, then is
information, next is knowledge and finally comes wisdom. Each step answers different
questions about the initial data and adds value to it. The more we enrich our data with
meaning and context, the more knowledge and insights we get out of it so we can take
better, informed and data-based decisions.

Knowledge Pyramid, Wisdom Hierarchy and Information Hierarchy are some of the names
referring to the popular representation of the relationships between data, information, knowledge
and wisdom in the Data, Information, Knowledge, Wisdom (DIKW) Pyramid.

Like other hierarchy models, the Knowledge Pyramid has rigidly set building blocks – data
comes first, information is next, then knowledge follows and finally wisdom is on the top.

Each step up the pyramid answers questions about the initial data and adds value to it. The more
questions we answer, the higher we move up the pyramid. In other words, the more we enrich
our data with meaning and context, the more knowledge and insights we get out of it. At the top
of the pyramid, we have turned the knowledge and insights into a learning experience that guides
our actions.

How to Scale Data Up the Knowledge Pyramid

So, let’s have a look at the individual components of the Knowledge Pyramid and how we move
from one to the next.

Data

Data is a collection of facts in a raw or unorganized form such as numbers or characters.

However, without context, data can mean little. For example, 12012012 is just a sequence of
numbers without apparent importance. But if we view it in the context of ‘this is a date’, we can
easily recognize 12th of January, 2012. By adding context and value to the numbers, they now
have more meaning.

In this way, we have transformed the raw sequence of numbers into

Information 

Information is the next building block of the DIKW Pyramid. This is data that has been
“cleaned” of errors and further processed in a way that makes it easier to measure, visualize and
analyze for a specific purpose.

Depending on this purpose, data processing can involve different operations such as combining
different sets of data (aggregation), ensuring that the collected data is relevant and accurate
(validation), etc. For example, we can organize our data in a way that exposes relationships
between various seemingly disparate and disconnected data points. More specifically, we can
analyze the Dow Jones index performance by creating a graph of data points for a particular
period of time, based on the data at each day’s closing.

By asking relevant questions about ‘who’, ‘what’, ‘when’, ‘where’, etc., we can derive valuable
information from the data and make it more useful for us.

But when we get to the question of  ‘how’, this is what makes the leap from information to

Knowledge

“How” is the information, derived from the collected data, relevant to our goals? “How” are the
pieces of this information connected to other pieces to add more meaning and value? And,
maybe most importantly, “how” can we apply the information to achieve our goal?

When we don’t just view information as a description of collected facts, but also understand how
to apply it to achieve our goals, we turn it into knowledge. This knowledge is often the edge that
enterprises have over their competitors. As we uncover relationships that are not explicitly stated
as information, we get deeper insights that take us higher up the DIKW pyramid.
But only when we use the knowledge and insights gained from the information to take proactive
decisions, we can say that we have reached the final – ‘wisdom’ – step of the Knowledge
Pyramid.

Wisdom

Wisdom is the top of the DIKW hierarchy and to get there, we must answer questions such as
‘why do something’ and ‘what is best’. In other words, wisdom is knowledge applied in action.

We can also say that, if data and information are like a look back to the past, knowledge and
wisdom are associated with what we do now and what we want to achieve in the future.

What Is Organizational Knowledge, and Where Can I Find It?

Organizational knowledge is the sum of all knowledge contained within an organization that can
provide business value. It may be gained from intellectual property, product knowledge, lessons of
failure and success, conferences, or customer communications, just to name a few sources.
Knowledge is always learned, preserved, and transmitted by people, so it’s the key responsibility of
Human Resources (HR) to help manage this knowledge.

One approach to capturing organizational knowledge is through repositories as part of

a knowledge management effort. This is crucial if you want to avoid losing 42% of company
knowledge relevant to a job role every time an employee leaves. And because the average new
hire spends 200 unproductive hours on the job due to a lack of access to relevant knowledge, it’s
well worth the time spent investing in this important area of HR.

Types of Knowledge

Knowledge can be divided into three main types:

Explicit Knowledge

Explicit knowledge is easily documented and indisputable, like procedures and policies, product
and service functionality, step-by-step tasks, research, and content. It’s most likely to be
documented by technical writers, content strategists, instructional designers, and information
architects.

Tacit Knowledge

Tacit knowledge is a learned sense of practical know-how, which is hard to articulate, such as

how to repair a computer system. It’s the realm of your subject matter experts; held inside your
employees’ heads; and transmitted through training, mentorships, and communities of practice.
According to Nonaka & Takeuchi, “Tacit Knowledge is the knowledge of experience, and tends
to be subjective and physical. It is about ‘here and now’, relates to a specific practical context.”

Implicit Knowledge

Implicit knowledge, or embedded knowledge, is intuitive and embedded experience. It’s

ineffable, but you know it when you see it, such as the experience of senior employees, subject
matter experts, the nature of professional relationships, and institutional processes. It’s
transmitted through social relationships.

Sources of Knowledge

Now that we know what types of knowledge to look out for, we’ll go through potential sources
of knowledge. Knowledge can be found almost anywhere in your organization and comes in
many tangible and intangible forms. For example:

 Individual—a person’s notebook, loose documents and files, customer queries and
complaints, or an individual’s memory. These are good sources of tacit knowledge.
 Group/Community—communities of practice, communities of excellence, project
teams, internal teams, training groups, mentorship programs. These are good sources of
explicit, implicit, and tacit knowledge.
 Structural—routines, processes, culture, traditional ways of doing things, IT systems,
suppliers. These are sources of implicit knowledge.
 Organizational memory—the knowledge of your entire organization. It can be
contained in guidelines, regulations, reports, market research, records, and data. These
are good sources for a combination of tacit and explicit knowledge.
An illuminating example of individual, organizational, and structural sources of tacit and implicit
knowledge is that which could have prevented the BP oil leak of 2006 at Prudhoe Bay. The leak
was not discovered for 5 days and led to fuel shortages at U.S. gas stations—not to mention
900,000 liters of oil being dumped into the ocean.

The reason behind this disaster? An experienced and qualified employee with specialized
knowledge had left the company, and the employee was not replaced for budgetary reasons. This
meant that there was no one to prevent the disaster from happening.

Failing to document this kind of knowledge creates the risk that future employees will repeat the
mistakes of the past and that hundreds of millions of dollars will be lost. And yet one-third of HR
professionals say that their companies do not collect and share specialized knowledge.

Repositories of Knowledge

So what can we do right now to document such important and specialized knowledge within our
organizations? That’s exactly what knowledge repositories were made for.

The definition of a knowledge repository is “a computer system that continuously captures and

analyzes the knowledge assets of an organization,” says Chris Kimble, Associate Professor at
Kedge Business School.

Knowledge can be captured in many places, but it is most likely to be held within a knowledge
management system (KMS). KMS repositories include:

 Documentation of any kind

 Internal knowledge bases
 Customer-facing knowledge bases
 FAQs
 Intranets
 Onboarding materials
 Training materials
 Webinars
  Case studies

Other repositories can include:

 Databases
 Internal collaboration tools
 Ticketing systems
 Wikis/communities/forums

There exists a wide range of ways to document your knowledge, but even the best technologies
in the world must be combined with proper investment in a corporate culture that prizes and
fosters knowledge sharing among employees. Your people are your most valuable assets when it
comes to knowledge management.

Providing Business Value

Hopefully, you now have a better understanding of the definition of organizational knowledge,
as well as its common sources and repositories. Sixty-three percent of employees want to work
for companies in which unique knowledge is preserved, so knowledge management is a core way
that HR can provide key business value, as it improves employee retention.

Remember, like the tribe of elephants, effective transmission of knowledge depends on

communication between individual members of the tribe. This is best achieved by a knowledge
sharing program. Choose the right knowledge repository for your needs to capture this
specialized knowledge being shared by your employees.

Emil Hajric is the Founder of Helpjuice, a leading knowledge management platform used by
large and midsize enterprises. He is an expert in knowledge management and the author
of Knowledge Management: A Theoretical and Practical Guide for Knowledge Management in
Your Organization.
What is Knowledge Management?

Knowledge management is the conscious process of defining, structuring, retaining and sharing
the knowledge and experience of employees within an organization.

The main goal of knowledge management is to improve an organization's efficiency and save

knowledge within the company.

Often it is referring to training and learning in an organization or of its customers. It consists of a

cycle of creating, sharing, structuring and auditing knowledge, in order to maximize the
effectiveness of an organization’s collective knowledge.

3 main areas of knowledge management

1. Accumulating knowledge

2. Storing knowledge

3. Sharing knowledge

The goal is to enable organizational learning and create a learning culture, where the sharing of
knowledge is encouraged and those who seek to learn to better themselves find it easy to do so.

When thinking about knowledge management, it is helpful to consider the types of knowledge
and how possible it is to share that knowledge within an organization.

Tacit knowledge and explicit knowledge are the two main types of knowledge covered within
the definition of knowledge management.

 Tacit knowledge is more intuitive, less easy to package and share with others. Examples
of tacit knowledge are innovative thinking and understanding body language.
  Explicit knowledge is information that is easily codified and taught, such as how to
change the toner in a printer and mathematical equations.

Successful knowledge management will improve an organization in several ways. It will ensure
that the specialized knowledge of employees does not leave with them, or go unutilized by other
employees who would benefit from that knowledge.

It allows for better situational awareness, as well as opening doors for learning about best
practices, lessons learned, and overall organizational improvement.

Knowledge management framework

 People - Knowledge management must be prioritized within the company, and an ethos
of sharing knowledge must be built into the DNA of the company and incentivized.

 Process - There needs to be a clear system for all steps of knowledge management, while
also leaving room for innovation.

 Technology - Technology supports knowledge management, allowing knowledge to be

searched for, found, and accessed within knowledge management systems. Technology
also allows people to communicate better.

 Governance - The organization’s governance must prioritize and reward knowledge

sharing. Without this step, instituting knowledge management systems will be a battle.

Organizations that take full advantage of knowledge management are better able to react quickly
to changing market conditions, offer better services to their customers and increase their
innovation and efficiency.

Why is knowledge management important?

Knowledge management is important because it boosts the efficiency of an organization’s

decision-making ability.
In making sure that all employees have access to the overall expertise held within the
organization, a smarter workforce is built who are more able to make quick, informed decisions
that benefit the company.

Innovation is easier to foster within the organization, customers benefit from increased access to
best practices and employee turnover is reduced.

The importance of knowledge management is growing every year. As the marketplace becomes
ever more competitive, one of the best ways to stay ahead of the curve is to build your
organization in an intelligent, flexible manner. You want to be able to spot issues from a distance
and respond quickly to new information and innovations.

Companies begin the knowledge management process for many different reasons.

1. A merger or acquisition could spur the need for codifying knowledge and encouraging
teams to share their expertise.

2. The imminent retirement of key employees could demonstrate the need to capture their
knowledge.

3. An upcoming recruitment drive shows the wisdom in using knowledge management to

assist in the training of new employees.

Benefits of knowledge management

1. More efficient workplace

2. Faster, better decision making

3. Increased collaboration

4. Building organizational knowledge

 5. Employee onboarding and training process is optimized

6. Increased employee happiness and retention, due to the valuing of knowledge, training,
and innovation

Knowledge management is an important tool in any company that wants to increase their bottom
line and market share.

Knowledge management process

In organizing the knowledge management for an organization, there is a four-step knowledge

management process that can be followed.

1. Discovery

(How will knowledge inside the organization be discovered?)

In every organization, there are multiple sources of knowledge.

In this step of the process, the sources of knowledge are identified, as well as where critical
knowledge is kept, what can be learned from this knowledge and if there are areas in which
knowledge can be lost during the process.

The discovery process is helped by a solid understanding of the knowledge flow of the
organization.

2. Capture

(How will new and existing knowledge be stored?)

Every organization contains a vast amount of knowledge, and it must be stored and organized in
a deliberate manner.
By creating a system that is mapped and categorized, knowledge is more easily accessed and the
organizational structure is increased.

This can include scanning documents, using metadata and indexing.

3. Process

(How best can this knowledge be synthesized and incorporated?)

This step involves a deep analysis of the knowledge gathered in the previous two steps.

The organization must organize and assess the knowledge to see how best it can be folded into
the structure of the organization.

This step is when an organization should be establishing and promoting a cultural shift toward
knowledge sharing and developing employees to be innovators.

4. Share and benefit

(How best can individuals within the organization access this knowledge?)

The point of knowledge management is to enable easy access to knowledge within the
organization.

Building a system that works is the first step, but individuals need to understand how to use that
system.

Implementing training programs can help increase the understanding of knowledge management
systems.

Once the system is being used, the company benefits from increased efficiency, better decision
making, and more innovative employees.