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Many terms commonly used in the field of knowledge management (KM) have multiple uses and sometimes conflicting definitions because they are adapted from other research streams. Discussions of the various hierarchies of data, information, knowledge, and other related terms, although of value, are limited in providing support for KM. The purpose of this this paper is to define a new set of terminology and develop a five‐tier knowledge management hierarchy (5TKMH) that can provide guidance to managers involved in KM efforts.

The 5TKMH is developed by extending the knowledge hierarchy to include an individual and an innovation tier.

The 5TKMH includes all of the types of KM identified in the literature, provides a tool for evaluating the KM effort in a firm, identifies the relationships between knowledge sources, and provides an evolutionary path for KM efforts within the firm.

The 5TKMH has not been formally tested.

The 5TKMH supports a KM life‐cycle that provides guidance to the chief knowledge officer and can be employed to inventory knowledge assets, evaluate KM strategy, and plan and manage the evolution of knowledge assets in the firm.

In this paper, a new set of terminology is defined and a 5TKMH is developed that can provide guidance to managers involved in KM efforts and determining the future path of KM in the firm.

This paper aims to examine the current thoughts on knowledge management (KM) and to develop a metaphor to combine these thoughts in a new way that effectively conveys the different types of knowledge and ways of managing it.

The literature on the transition of data to knowledge is reviewed. A popular paradigm in KM states that data are integrated to create information and information is integrated to create knowledge. This paradigm is represented as a pyramid‐shaped hierarchy with knowledge at the top, information in the middle, and data on the bottom. Why this paradigm is a simplistic and limited view of knowledge and KM is discussed.

The “explicit islands in a tacit sea (EITS)” metaphor is explained and discussed in the context of knowledge and knowledge management (KM).

The EITS metaphor more accurately and completely describes knowledge in the context of KM. The practical implications of this metaphor are its flexibility and transparency of the transitional actions that affect the evolution of data to knowledge.

The EITS metaphor is an evolution of the prevailing frameworks and removes the apparent limitations in earlier frameworks. The paper provides a paradigm shift in the discussion of KM.