Why It’s Important to Know the Difference Between Tacit and Explicit Knowledge

by | Jun 23, 2022


By the time you’re an adult, you’ve acquired a ton of knowledge, from interesting facts about the thickness of hockey rink ice to knowing how to safely drive in the snow. How have you learned all that you have? Some things you learned formally through explicit learning like how to do math or how to change a bicycle tire. Other things, you just pick up through experience and you probably can’t point to how you learned them.

So, how do we gain knowledge? Two main ways: study or experience. These two ways of gaining knowledge roughly translate into the two categories of knowledge: explicit and tacit.

Explicit Knowledge

Explicit knowledge are those things that can be written down and codified in a document. It is knowledge that can be transferred without knowing about a subject and can be expressed in a straightforward manner and shared between people. It’s the stuff you learn in school, books, and training. It’s objective. Usually logical. So-called “book learning.”

When we train new employees on the specifics of trusts, taxes, and investments we’re transferring explicit knowledge to them. Reading a non-fiction book about investments, watching a YouTube video about how to do a dumbbell exercise, and watching a history documentary are all examples of acquiring explicit knowledge.

Tacit Knowledge

Tacit knowledge is what you gain from personal experience. It oozes into you from living life. It can be difficult to articulate and you may not be able to explain how you know it.

Most of what we know is tacit. The art of driving a car, the nuances of body language, knowing how to lean into a turn on a bicycle (or powered scooter!), knowing when a flip a pancake, and understanding when it’s best to listen rather than speak. Another is example is that a golfer may be able to explain some basic aspects of how to swing a club well, but the ability to hit a ball 275 yards is largely a result of tacit knowledge developed through trial and error experience of thousands of swings.

A great example of tacit knowledge is language. We can speak using proper grammar and syntax without being able to state the underlying rules. For example, famed economist F.A. Hayak noted,

The child who speaks grammatically without knowing the rules of grammar not only understands all the shades of meaning expressed by others through following the rules of grammar but may also be able to correct a grammatical mistake in the speech of others.

Tacit knowledge also comes from our social group — it is our tribal knowledge. A key characteristic is that it is challenging to deliberatively transfer this knowledge to others — it usually is just learned by our own experience and interactions with our tribe. An organization’s culture is primarily based on tacit knowledge.

Why the Distinction Between Tacit and Explicit Knowledge is Important

In their book Made To Stick, Dan Heath and Chip Heath talk about the “Curse of Knowledge.” What they mean is that once you know something, it’s hard to remember what it was like not to know It’s why experts often make no sense — they forget how little most people know about their subject. It makes communication challenging between those with knowledge and those without that knowledge. Jargon and acronyms that make sense to one person may sound like a foreign language to the other. I was reminded of this when my daughter read a draft of my book (about investing) and asked what I meant by the word “portfolio” — something that I just assumed everyone would understand (thanks Claire!).

The curse of knowledge is especially a problem where one person has tacit knowledge and others do not. How can you convey knowledge that you don’t realize you have or how you acquired it? This is a problem in businesses and organizations. There is a ton of shared knowledge among team members — some of it explicit that can be passed on by deliberate training and education — but much of it is tacit knowledge and hard to pass on to newbies.

It is important to understand that newer employees will have a tacit knowledge deficit. It will just take time for them to acquire through experience the tribal knowledge that others in the organization possess.


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