Holding commonly understood values and assumptions allows us to function quickly and reliably without debating each issue or forming a new process for each action. But when the environment changes or the process becomes inefficient, neither individuals nor organizational leaders may be able to recognize the need for change. The speed of change in this knowledge era requires that we place greater importance on the systemic renewal of the tacit knowledge for the sustainability of the firm. Renewing tacit knowledge means finding ways of making meaning from knowledge. In order to create value in intellectual capital, we must understand how knowledge is formed and how people and organizations learn to use knowledge wisely.
Data arrive in our lives and on our desks as dispersed elements.
It is only when we compile this data into a meaningful pattern that we have information. As information is converted into a valid basis for action, it becomes knowledge. Upon achieving wisdom, we implicitly know how to generate, access, and integrate knowledge as a guide for action. As individuals and organizations move through the constructs from data to wisdom, their depth of meaning increases and their interpretation shifts from being highly explicit at the data stage to entirely tacit at the point of wisdom. A firm's tacit knowledge, as embedded in its culture, provides the nodes or entry points through which information is transmitted and processed into knowledge.