The use of tacit knowledge within innovative companies: knowledge management in innovative enterprises Ragna Seidler-de Alwis and Evi Hartmann Abstract Purpose – The purpose of this paper is to examine the use of tacit knowledge within innovative organizations. It addresses what organizations can do to promote knowledge sharing in order to improve successful innovation. Compared to available research material on explicit knowledge, the use of tacit knowledge within companies is relatively unexplored. The use of tacit knowledge is assessed with special emphasis on its significance and implications in the innovation process. Design/methodology/approach – Existing research is structured with the objective of examining how companies make use of tacit knowledge. Key levers for tacit knowledge management are identified and the positive impact of tacit knowledge on innovation success disclosed. Findings – The role of tacit knowledge in innovation management is analysed. Creation, availability and transfer of tacit knowledge within an organization are highlighted. Competitive advantage will be gained when companies value their tacit knowledge because explicit knowledge is knowledge we are already aware of and is public by its nature. Tacit knowledge can be the source of a huge range of opportunities and potentials that constitute discovery and creativity. Practical implications – As this paper focuses on the transfer of tacit knowledge, barriers to successful knowledge transfer are described and success factors are explored which help to secure and improve the transfer of tacit knowledge. Originality/value – It is proven that tacit knowledge has a crucial influence on the success of innovation processes in companies and plays a vital role as a company resource and success factor. Keywords Tacit knowledge, Knowledge management Paper type General review 1. Introduction More than ever companies are forced to renew their product portfolio. Only with new products can they sustain their competitive position by increasing revenues and profit, leading to an improved company value. But do firms have the right conditions and environment to enable them to maximize innovation success? Many researchers admit that tacit knowledge forms the foundation for building sustainable competitive advantage. The objective of this paper is to examine how tacit knowledge transfer affects the company’s innovation capability. The authors stress the role of tacit knowledge as one key lever for achieving innovation success. They analyzed the existing published material on innovation management and tacit knowledge, focusing on the transfer of tacit knowledge, by reflecting barriers and relevant success factors to tacit knowledge transfer. To achieve innovation success a smooth interplay between tacit knowledge and innovation management is required. The paper is organized as follows: First, it provides an overview of the literature on tacit knowledge management with special focus on the evolution and vitalization of tacit knowledge. Then the authors outline the innovation waves in different industries and the complexity and importance of the appropriate organizational structure to enable innovative DOI 10.1108/13673270810852449 VOL. 12 NO. 1 2008, pp. 133-147, Q Emerald Group Publishing Limited, ISSN 1367-3270 j JOURNAL OF KNOWLEDGE MANAGEMENT j PAGE 133 Ragna Seidler-de Alwis is Professor at the Institute of Information Science, University of Applied Sciences, Cologne, Germany. Evi Hartmann is assistant professor at the SVI-Endowed Chair of Purchasing, Logistics and Supply Chain Management, Supply Management Institute, European Business School, Wiesbaden, Germany.