Knowledge Management

Knowledge is the only input that can deal with radical change in any market.

Customer strategy driven by knowledge = opportunity.

The theory of knowledge management had its beginnings as far back as 1960. Business visionary Peter Drucker recognized knowledge as a resource that would be the new cornerstone of modern business.

Where labor and natural resources were the keys to success in the Industrial revolution, knowledge would replace them as a key to productivity gains.

Drucker points out that the productive use of knowledge is the real source and maybe the only source of sustainable competitive advantage that is left.

In the "era of the customer" information must be used to improve processes products and service customized to specific segments. Exploit existing knowledge for producing better processes, products and services and finally to innovate using advanced knowledge.

The Japanese use the term Kaisen – continuous improvement; to describe the process that they used so effectively to produce products and win competitive advantage even though they did not invent the knowledge.

Knowledge of what customers want and the flexibility to respond is where smartly run companies will excel.

It will be the knowledge of people empowered by technology and not technology by itself that will be the competitive advantage.

Such terms as Data warehouses and expert systems and artificial intelligence have tried to turn this data into knowledge with poor results.

The results have shown that technology is a great enabler of turning data into knowledge but is not the driver of knowledge. Technology alone can be duplicated in another environment therefore losing its competitive advantage.

The ATM machine was seen as a great competitive advantage in its early introduction but it really was a hardware and technology device that was easily copied and universally applied.

Competitive advantage based on the use of unique knowledge will give a company a sustainable edge.

Technology is an excellent tool to organize data into information and then use all information available to make the best most informed decision possible. However the decisions will be made by people not computers.

Knowledge management really draws from a companies full sources of information.

Sources can be sales data as the economy changes, but also and this is where knowledge management crystallizes as a management philosophy, by the use of its intangible assets. These assets are comprised in a great extent of a Corporations knowledge workers.

Artificial intelligence was once thought to be the tool that changed the face of business and decision making. However after countless millions of dollars and effort by scientists it was discovered that computers could not think like humans. Because of this awakening technology can only be an enabler for converting data into information.

It will be the combination of technology and human knowledge that will turn data from all facets of an organization into information, that when combined with tacit information (information that can not be extracted such as experience feelings or hunches) that can be quickly organized and shared to address common problems.

This whole process of decision making will vary greatly from business to business and will create the sustainable competitive advantage.

While knowledge management can be seen as a process rather than a technology one important ingredient must exist. If customer knowledge is without a direct link to the business strategy it will not be effective.

For instance if a company wants to dominate a certain customer segment it must center its knowledge management around that end.

Knowledge of customer expectations must be shared and easy to access to fit the business objective.

Another example may be that a company wants to position itself as having great customer service. Help desk and support people must be able to respond quickly to any customer inquiries or other problems. The service department has to be empowered with fast information concerning a particular customer's configuration and any other useful information to meet this goal.

Many vendors are promoting their products as full knowledge management solutions but an off the shelf software package can not ever be thought of as a full knowledge management solution. 

An important factor in knowledge management is the face to face contact between knowledge workers. Certain experiences that can not be documented must be shared to be effective. Knowledge of customers is a competitive advantage that is hard to duplicate.

Because Customer Knowledge management is seen to be a process and a mindset rather than a technology the company must create a culture where sharing information is encouraged. A culture where failures and successes must be shared and not punished is critical. This represents a big challenge for some entities.

Human nature dictates that knowledge painfully acquired is not volunteered to be given away. Some managers or other high positioned workers actually ascended to their positions by having more knowledge than other workers.

This will be where the real effective companies will win. If upper management can create a corporate culture that can be implemented where sharing knowledge and creativity is not only encouraged but rewarded then the quick transfer of critical knowledge can be seen as a real competitive asset.

Taking this point further a company that utilizes Knowledge management effectively must agree upon where the Knowledge gaps are. These are the areas where your weaknesses are. The company must agree that that is where the most improvement will be needed for the best competitive result.

Upper management must also buy into knowledge management for real results to be achieved. The company must not become a firm that merely uses knowledge but one that is a truly learning corporation.

Copyright © 2003, thecustomerconcern.com.  |  Last updated Oct. 2003
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