Know-How: Meaning, Examples and How Companies Keep It

Know-how is one of those words everybody uses and few people stop to define. It shows up in job ads, sales decks and contracts, and it usually means the same thing: someone does not just know that something is the case, they know how to get it done. This guide explains what know-how means, how to write it, how it differs from knowledge and skills, which types exist in a company, what the law protects and what it does not, and six steps to make sure your team's know-how does not walk out of the door with one person.

What does know-how mean?

The Cambridge Dictionary defines know-how as practical knowledge and ability, and in its business English entry as practical knowledge, experience and ability. Wikipedia treats it as procedural knowledge: the knowledge exercised in the performance of some task. Knowing that snow is white is descriptive knowledge. Knowing how to change a flat tire is know-how.

The practical part is what matters. A person with know-how can do something: set up a machine, close the month without errors, keep a difficult customer. Theory alone does not get you there. It takes practice and experience before knowledge turns into ability.

Know-how or know how: which spelling is right?

As a noun, know-how takes a hyphen: she has the know-how. Without the hyphen, know how is a verb phrase: she knows how to fix it. The noun is uncountable, and the Cambridge Dictionary marks it as informal.

Where the term comes from

The noun grew out of the verb phrase and is recorded in American English from 1838. The idea became a topic in philosophy through Gilbert Ryle. In The Concept of Mind (1949) he separated knowing that something is the case from knowing how to do something, a distinction that psychologists and neuroscientists have taken up as well.

Know-how vs knowledge, skills and tacit knowledge

Know-how is one kind of knowledge. In writing on the knowledge economy, Lundvall and Johnson sorted knowledge into four broad categories, each of which answers a different question. The examples in the table are our own.

In everyday use, know-how often means the whole package: someone who has really mastered a job knows the facts, the method, the reasons and the right people.

And skills? The words overlap. A skill usually names one thing a person can do, while know-how tends to mean the combined knowledge, experience and ability behind doing a whole job well.

What matters in practice is the link to tacit knowledge. Know-how is often tacit, which means it is difficult to transfer to another person by writing it down or explaining it. Our guide to tacit knowledge shows what that looks like at work and how to capture as much of it as possible.

Types of know-how in a company, with examples

The legal encyclopedia of Cornell Law School notes that it can describe the actual creation of a product or something more strategic like the management of a business. A simple way to sort it is by what the know-how is about. The examples are invented and show what this can look like in a small company.

Where know-how lives in a company

Four places are worth telling apart:

• In people's heads: experience, judgement, contacts. This part leaves when the person leaves.
• In team routines: ways of working that a team has mastered without ever writing them down. They last as long as the team stays together.
• In documents: procedures, checklists, templates. They stay, but they go out of date when nobody maintains them.
• In tools: settings, macros and templates in your systems. They stay too, but often only one person knows why they are set up that way.

The people who hold most of it are your key people. Three questions help you find them: Who gets called when something goes wrong? Which task is left untouched when a certain person is on holiday? And which task has no instructions because the same person always does it?

Is know-how legally protected?

Not automatically. Know-how is not a registered right like a patent or a trademark. According to Cornell's Wex, know-how may or may not be legally protected: if it meets the requirements for a trade secret, the law protects it, but much know-how will not qualify. That is why companies also rely on contracts with employees and business partners. The World Intellectual Property Organization (WIPO) lists what in general qualifies information as a trade secret:

1. It is commercially valuable because it is secret.
2. It is known only to a limited group of persons.
3. The rightful holder has taken reasonable steps to keep it secret, including confidentiality agreements for business partners and employees.

Two limits are worth knowing:

• No exclusivity: a trade secret owner cannot stop others from using the same information if they developed it independently.
• Information is protected, people's abilities are not: the EU Trade Secrets Directive states in Article 1 that it offers no ground for limiting employees' use of experience and skills honestly acquired in the normal course of their employment.

Trade secret law varies from country to country, so treat this section as an overview and not as legal advice. The practical consequence is the same everywhere: confidentiality can keep a formula or a customer list away from competitors. It cannot keep an experienced person's ability in the building. That part of your know-how is only safe once it has been passed on.

How to keep know-how in the company: 6 steps

1. Find out who holds it

Make visible who can do what. The simplest tool is a skills matrix: people in the rows, tasks in the columns, a level in every cell. Every task that only one person can do on their own is a risk.

2. Name the critical know-how

Not everything needs to be captured. Ask each key person: what would go wrong in the first four weeks without you? The answers are rarely the daily routines. They are the rare tasks, the exceptions, the contacts and the reasons behind decisions.

3. Write down what can be written down

Tasks with fixed steps belong in a standard operating procedure. Our SOP examples show the format. The overview of a whole workflow belongs in process documentation. Keep both short and test them with someone who has never done the task.

4. Pass on what cannot be written down

Judgement is learned on real cases. Working side by side and job shadowing, where one person watches another at work, are made for this. The guide to knowledge transfer gives an overview of all methods.

5. Build a second person

Every critical task should have a backup who has not just watched it but done it. Plan fixed occasions, for example every third month end close or the holiday cover.

6. Hand over deliberately when someone leaves

When someone resigns or retires, every week counts. An employee handover document records ongoing tasks, contacts and background. What happens without one is described in our guide to knowledge loss when employees leave. For a rough estimate of what a departure can cost, use the free knowledge loss calculator.

The bottom line

Know-how is the practical knowledge of how to get something done, and that makes it more than facts: it combines knowledge, experience and ability. In a company it sits in routines, documents and tools, but the most important part sits in the heads of individual people. The law protects secret information, not the ability a person takes with them. If you want to keep your know-how, you need to do both: keep confidential things confidential and spread the ability across more than one head. Start with the simplest question: which task can only one person on your team do today?