With the current downturn in the economy, many companies are starting to feel a little less secure about their market positioning than they were a year ago. And understandably so — extra cash is becoming tough to come by in almost any company.

We’ve seen banks fail outright, and we’ve seen many companies trying desperately to cut costs; and, in more than one place, I’ve heard the same discussion — can knowledge management save a failing company? Well, the short answer seems to be ‘no’, and the long answer is a decisive, yes, you guessed it, ‘maybe’.

Let me first say that (while I’m not any kind of expert in failing companies or in turning said companies around), that there can be any number of reasons why a company fails. If we’re talking about a start-up, the ‘maybe it was just a bad idea’ reason seems to often be an obvious culprit.

Yet if we’re talking about an established company whose business has suddenly (or even gradually) started to turn, I would argue that there is usually a complex set of interdependent factors that contribute to this turn (while there are examples of singular causes, I would suggest they are more the exception than the rule).

Let me put it this way: a business that’s sick or dying can be sick or dying from many different causes, and they may exacerbating each other. Market pressures from an increasingly global business, inventory problems and low morale may all be manifesting themselves in the organization, but which is really the root cause of the company’s decline? It’s often hard to tell the symptoms from the disease.

Enter knowledge management, which happens to come in so many different flavours that what one company may call knowledge management, another organization may call something else entirely. Knowledge management also rarely sits in the same place in any two organizations.

So while knowledge management will occasionally be the medicine that heals a sick organization, applying the wrong medicine to the wrong illness can still be fatal. A misformed or inappropriate (for that particular organization) KM program can actually make things worse — while also costing you money.

Not to mention the fact that attempting to apply knowledge management principles as a short-term fix for long-term problems is doomed from the outset — while some quick fixes are sometimes the best way to go, they rarely have anything to do with knowledge.

Yet before I sound like I’m spelling out a no-hope situation for knowledge management to improve an organization, I should also say that it goes without saying that the right medicine for the right illness can work wonders — but over the long term, your organization still has to work at staying in good general health.

And KM, applied preventatively, is always going to be more effective than trying to do it after things go wrong.