Principle 5: Improved Decisions (Item 9)
Effective use of facts, data and knowledge leads to improved decisions.
You should treat knowledge as a major company resource and manage and
leverage off your company's knowledge. You need knowledge
- about your market
- about what is happening around you
- about your customers and their needs
- about your employees and their needs
- about how you do things and why
- about decisions you have made and why you made them
- about what you are intending to do.
That knowledge is the lifeblood of a successful company.
Just as information is produced when you analyze data, you produce
knowledge when you learn. In Principle 8 ('Innovation') we describe
the importance of learning. The knowledge produced by your learning
is a company resource that must be available in a useable form for decision
making.
Most often, the knowledge previously gained by the company is lost,
not available or disregarded. If you ignore your prior learning, you
may have to pay the school fees again.
Every company contains knowledge obtained from its business experience
as well as the experiences of every person associated with it.
You should:
- identify your sources of knowledge
- validate what you `know'— ensure that knowledge is soundly
based and not hearsay, old paradigm or based on invalid assumptions
- generate knowledge and intellectual capital — generate
and build knowledge by analyzing data, information and what you have
learned in business experience; learnings by improvement teams; from
the expertise of people within the company; from courses, conferences,
market analysis, research findings and reviews, etc
- manage knowledge - capture, store (in checklists, databases,
etc) and share knowledge; embed knowledge in the company's procedures
and systems; be able to retrieve the knowledge you want when you want
it; be able to find research and policy information
- use knowledge - use knowledge in decision making, strategy
development and other activities to improve company performance
- encourage sharing knowledge
- leverage your knowledge — use knowledge to add to the
company's value; prepare for future challenges and provide value for
all stakeholders; exploit innovative thinking and experience
- retain company memory - retain the experience of those who
leave the company
- safeguard your knowledge – protect your intellectual
property and intellectual capital
- develop and retain core competencies – develop and retain
the underlying skills, knowledge and experience that the company is
very good at doing — those things that make it special and different
from other companies; make the most of these core competencies and
increase them
Checklists, forms and standard operating procedures are very useful
ways of capturing knowledge. A checklist or standard operating procedure
can be used to store experience and expertise in a way and at a time
when it is not urgently required so that it can be brought to hand when
it is. Even experts can forget things – especially when under pressure.
A form can be used to capture the expertise of experienced personnel
so that less experienced people can record customer information.
Checklists, forms and standard operating procedures are the simplest
forms of expert systems. They can be designed and compiled by experts,
so non-experts can use them. Even without the experts being present.
An excellent way of using company learning.
We are amazed at a trend we see in companies. It appears to show a
considerable lack of understanding of what is meant by `knowledge' or
`learning'. An emerging trend is to call the company's librarian or
Information Technology manager, the `knowledge manager'. Or the education
and training coordinator, the `learning' coordinator.
There are at least five major sources of knowledge:
Experience: Having done it or something like it before. This
includes professional and all other types of education and training;
on-job experience; life experience; family experience; reading.
Network: "Someone in your network knows the answer",
or has experience at how to do it. As a rule of thumb, this works more
than 80% of the time. Someone among the people you talk to most of the
time has done "it" before or knows how to do "it".
Find them. Ask for help. (Asking for help often allows people to volunteer.)
Position: People often know more about what is going on because
of their position in the company – meetings they attend; the network
they are in. "Being in the know". It is the responsibility
of all people to share their knowledge so that others can make meaningful
decisions. Bosses who hoard knowledge often do so because they have
to be the one with the answer. (In the section below, we discuss the
habit of confidentiality and how damaging that can be to companies.)
Location: People in head office often know more of what is going
on than in some remote branch office on the other side of the country
or the other side of the world.
Personality type: The different personality types will place
more value on different types of knowledge. Some value practical experience
as the only source of know how, others value theoretical analysis.
We remain astounded at the failure of companies to fully utilize the
experience and learning of their employees. We see repeatedly employees
with extensive skills and experience in their communities, but who have
no credibility in their companies. The man who is the president of his
local Apex club, the woman who has raised five kids, the woman who coaches
softball or teaches aerobics, the woman who runs a care center for homeless
or disabled people. We seldom, if ever, see these abilities recorded
on any company `skills register'.
Probably the biggest overlooked and untapped source of knowledge is
`parenting'. Most employees are parents. Parenting takes much the same
skills as managing – encouraging, coaching, enabling etc. Why not
use (and build) those skills. There would be a real win-win here: employees
would get better parenting skills and companies get to recognize and
use a wealth of potential.
This is a tough one. Some discussions and written material are often
classed as confidential and given a limited distribution. And rightly
so. You probably do not want your opposition to know what you are doing
– timing can be very important in announcing decisions or actions.
No one likes to have a confidential discussion then find it in the newspaper
the next day.
Treating all discussions by executives or the Board as confidential
is a habit. A habit that can be very damaging to the company. There
is no doubt that keeping some things confidential is sometimes necessary.
Keeping all things confidential is very damaging of trust. It says very
loudly that "we the executive don't trust you". Employees
respond to that lack of trust by withdrawing – enthusiasm, resourcefulness.
However, consider the effect of making the discussion confidential.
It means that everyone not included in the confidential discussion is
now working without relevant knowledge. In many companies, this means
that all vital knowledge is held by a trusted few at the top. Everyone
else in the company is denied knowledge often essential to do their
job, make useful decisions or offer suggestions.
Employees will understand when occasional strategic issues are dealt
with confidentially. However, when it is a habit, it puts in place a
huge barrier.
Confidentiality is often used when the executive of a company is doing
something that is unethical, unlawful or that the other stakeholders
will not approve of.
Companies should get out of the habit of "everything is confidential".
Consider exactly what information really does need to be confidential.
What is the real risk of telling everyone? Use confidentiality sparingly.
Shareholders. If the company uses confidentiality as a habit,
it could be hiding information and decisions from you. They may be selling
core competencies, feathering their own nests, lying about company performance.
Sell your shares.
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