Turning Experience into Knowledge

Conducting after-action reviews as a practice management technique

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As tax professionals, we are committed to learning. We keep up to date with changes to the tax code. We subscribe to magazines, get newsletters in our email, follow blogs, and get exposed to tips and news through social media outlets such as Twitter and Google Plus and LinkedIn. The question is, how do we manage what has been described by Professor John Lavine as "an ever-rising tide of information?"

I turned to Ron Baker with this question. He's a CPA, and a consultant to CPAs and other professional practices, and host of the podcast show The Soul of Enterprise: Business in the Knowledge Economy. He's also an expert in knowledge management. He clued me into another source of information that is important to pay attention to.

Just as we manage information coming from external sources, it is also important to create knowledge by reflecting on our own experience. This experience-based knowledge is called "intellectual capital." Intellectual capital is all the know-how that helps you and your firm make money. Intellectual capital includes all the facts and knowledge that sits inside your head; it includes your networks of customers, vendors and professional colleagues; and it includes tangible objects like job aids, operation manuals, and documented procedures. One goal, Baker argues, is to get knowledge out of our heads and into a documented format.

That sounds like a good idea. How exactly do we go about doing this?

The best way to do this is to conduct after-action reviews. The US Army developed after-action reviews after the Vietnam War as a way to boost morale, Baker told me. An after-action review is a formal way for a person, or a group of people, to reflect on a project.

It's best to conduct an after-action review shortly after a project is completed. You basically ask yourself (or your team) four questions:

  • What were the objectives of the project? What did you expect to happen?
  • What actually happened?
  • Why was there a gap between what you expected and what actually happened? Draw out any implications, whether positive or negative.
  • What can we do better next time?

Then, the next time you start working on a similar project, look up and read previous after-action reviews for that type of project.

By documenting your experiences, and by actively learning from your experiences, you will learn to identify faulty assumptions. You will also start to identify what works for you, and what works for different types of clients, and what works in different situations. Over time, you'll develop a set of best practices that works well for you and your clients.

You'll be tapping into a type of knowledge that cannot be found on the Internet or in a book or in a magazine. Everything that can be found on the Internet, or in a book, or in a magazine or CPE class or Webinar is what is called "explicit knowledge." Explicit knowledge is "something we can read, documented, low bandwidth," says Baker.

Distinguished from explicit knowledge is tacit knowledge. Tacit knowledge is "tricks of the trade," Baker says, they "come with incredible experience and wisdom." Being able to quickly read through a letter from the IRS to pick out just the relevant information is one example of tacit knowledge.  The skill doesn't reside in knowing how to read, or in knowing this or that fact; it's a skill that resides, as it were, in the eye, which somehow knows just where to look or just what it's looking for.

The goal is to "get tacit knowledge out of people's heads and put it into explicit knowledge," Baker says.

Typically, tacit knowledge is shared in social situations, by talking with someone. And that's exactly the power behind after-action reviews. By getting your team together to talk about a project and document that into an after-action review, you are harnessing the power of group dialogue to make your tacit knowledge more explicit. After-action reviews are a structured way to "draw on all that wisdom and experience of your colleagues," Baker says.

Some tips: "Don't spend more than an hour on after-action reviews," Baker advises. And make it a habit. The more you after-action reviews you create, the more skillful you and your team will become in reflecting on your experience and documenting your collective wisdom. Future projects should become more effective, and create better value for your clients. Finally, experiment with different ways of recording your After-Action Review. Try documenting it in writing, or recording a video, or making an audio recording. And then refer back to it before working on another project of the same type. "We never want to build the same bridge twice," Baker said.