Leaders also help their organizations better adapt to the environment by assisting workers to become better learners. To accomplish this, the leader manages knowledge and cultivates a learning organization. Knowledge management (KM) is a concerted effort to improve how knowledge is created, delivered, and applied. When knowledge is managed effectively, information is shared as needed, whether it be printed, stored electronically, or rests in the brains of workers.

Managing knowledge helps create a learning organization—one that is skilled at creating, acquiring, and transferring knowledge and at modifying behavior to reflect new knowledge and insights. Knowledge management in the form of knowledge sharing has surged in importance in recent years because so many baby boomers are retiring, resulting in tribal knowledge leaving the firm. A key part of the knowledge transfer program is for older workers to share useful knowledge with younger workers before the former depart. Technical knowledge is often included in knowledge sharing.

The relevance of knowledge sharing to the organization is reinforced by the negative impact of knowledge hiding. When knowledge is hidden, colleagues are less likely to generate creative ideas, and the knowledge hider might also experience less creativity.