Introduction
As a specialized firm in education and knowledge administration we have identified a problem: “A large percentage of organizations are not clear or do not know the value of knowledge in the field of business”, and the recommendation has even been recurring to us “Do not use the term knowledge” with reference that using it generates confusion.
However, we have 2 options: 1.- Just not use it or 2.- Help our clients and the business community in general to understand its value and the importance of taking it into account for business competitiveness issues.
We opted for the second option, help our clients.
What is knowledge?
At Great Plan we define knowledge as:The set of information, skills and the experience accumulated by the people who form or were part of the organization.
Deepening in the definition of the concept “knowledge”, the word that gives it a strategic meaning is “joint”, since the information by itself or the skills of the collaborators are not knowledge, they are elements that when they are combined is when they generate knowledge.
Now, the concept of “knowledge” that we have provided can be classified according to the level of profit generated by the business.
What is the classification of knowledge?
We could go into hundreds of levels or hierarchies, but we have decided to delimit it to only 2:
1.-know-how
2.-Key-critical Knowledge.
What is know-how?
The know-how translates into the “know how” of the organization, i.e.the very essence of business.
This type of knowledge is of strategic level.
This involves the entire organization and is often seen as complex, but it is not.
Here are two examples of what could be considered know-how:
- It is the understanding that a coffee company has about how to be a leading competitor, through its logistics capacity to maintain a presence at different strategic points at a global level.
- The understanding of a sports footwear brand on how to generate emotional marketing campaigns and its alliances with manufacturing suppliers at different geographical points.
What is the Key-Critical Knowledge?
The key-critical knowledge translates as knowledgekey – critical of the organization, that is,Information, skills and experience within an organization that are considered essential and essential for its operation.
This level of knowledge is found in specific areas or processes of the organization. It does not mean that one area should be considered more important than another. However, the level of impact in ensuring that the business can deliver its service or core product can definitely vary between one area or another or the other business process.
Here are some examples of what could be considered a Key-Critical Knowledge:
- Giving continuity to the example of the coffee company, an example of key-critical knowledge could be the operation of the software that was designed internally to generate real-time monitoring of the efficiency of the routes for the distribution of product shipments.
- In the case of the shoe brand, it could be the knowledge on the part of the financial team together with the data science and business development teams to determine the investment in advertising in each of the different regions where the brand is sold.
What terms are knowledge often confused with?
Understanding and delving into the concept “knowledge” allows us to have a frame of reference on what it is, however, we consider it of high value to also mention the concepts with which it is usually confused: intellectual capital, intellectual assets and intellectual property.
- intellectual capital.
Intellectual capital is more related to: Positioning, reputation, branding, public relations, contracts, among others.
- intellectual assets.
Intellectual assets are more related to: Inventions not yet patented, processes, competencies and skills to develop a task, operation manuals, information, among others.
- intellectual property.
Intellectual property is more related to: Patents, intellectual property, designs, copyrights, databases, industrial secrets.
While all of the above mentioned terms are of value to the business and can be considered intangible assets, none of them are self-knowledge, but all together are part of business knowledge.
That is, knowledge is part of the main assets of the business.
What are the main assets that a for-profit organization has?
When talking about business assets, it is usually perceived with less value to Intangible assets, but they are the same and in some cases of greater importance than tangible assets.
But what are the main assets that a business owns?
1.- Tangible assets:real estate, inventory, machinery and equipment.
2.- Financial assets: cash and its equivalents, accounts receivable and investments.
3.- TECHNOLOGICAL ASSETS:Hardware, software, data.
4.- Natural assets:land, minerals.
5.- Intangible assets: Trademarks, patents, copyrights and of course, knowledge.
How much is knowledge worth?
Knowledge is not usually cataloged at the same level of value as other assets. largely due to the ignorance of how to assign it a specific value.
As there is no simple rule to quantify the value of the knowledge that the organization has, it is usually chosen to avoid entering an unknown field.
To exemplify or tangibilize the value of knowledge a little, we will use the examples that we previously used.
The value of strategic knowledge Know-how
For the sneaker company that we mentioned above, it can be relatively easy to measure the value of your inventory of raw materials or finished products, as well as the cost of an advertising campaign.
However,What is the value that they could assign to the knowledge they have accumulated over the years about their community of users and the subtlety of the design of the emotional messages that will be impregnated in their campaigns?
On the one hand, the man-time hours and the level of investment that were made to reach these conclusions could be calculated, but this would not be their real value, it would be an estimate of what they have spent to reach this information.
On the other hand, what could be the value of knowing precisely which suppliers to assign their contracts to manufacture their products?
The success of this organization depends largely on the value of its advertising messages and strategic manufacturing alliances, but what is the value of this knowledge?
The value of the key-critical Knowledge
In the specific case of the company that sells coffee, assuming that a key-critical knowledge is the design of routes for the correct distribution of its product uninterruptedly How much is the knowledge of designing or redesigning distribution routes for the organization?
We could venture to think about the value of the software used and the number of people who are part of the area, but this would be an operating cost and not the value of key-critical knowledge as such.
If this key-critical knowledge were lost, it could even be quantified the hourly losses caused by the interruption in the delivery flow of the product, but we would continue without properly knowing the value of this specific key-critical knowledge.
Now, the question for the managerial positions isIs there only something strategic should be attended to when its value is known exactly?
We know the answer is no Unfortunately, the vast majority of organizations attend to the preservation of their knowledge in depth until after experimenting lossesMillionaires by not being able to guarantee continuity in the delivery of your business core.
To close this idea, which we consider to be of the utmost importance to illustrate the value of knowledge, we will use the following 2 examples:
First example: Disney’s purchase of Pixar.
When Disney’s Pixar purchase was made, what was it really buying? Technology, software, rights to the films Pixar had produced to generate sequels?
In the event that the Pixar team decided to leave the organization after its purchase, they would probably be prevented from being a direct competition for contract matters, but what Disney would have been with an operations manual?
The reality is that Disney was willing to pay an exorbitant sum for the knowledge that the people who made up Pixar possessed and that they had tried to replicate without success in previous years.
Second example: companies with millionaire operations without physical infrastructure.
How much knowledge is worth to an organization that bills millions annually, but does not have tangible assets, own technology, or natural assets of any kind?Will the knowledge that these organizations possess have any value? O Is the value of the knowledge of these organizations higher than that of organizations that do have other assets?
LA response is no, they simply give you more care and manage it in a better way.
What is the importance of managing, preserving and accessibility of knowledge?
Manage, preserve and access knowledgeit is whatProvides continuity in delivery to the client of the service or core product.
a recurring errorIn organizations, it isThey confuse documentingand compile informationwith managing and managing your knowledge.
We have met dozens of global brands that allude to having control of their knowledge, but when we delve into we realize that they have repositories of information and in some cases they have repositories of solution to specific problems that they can resort to when and only if the same is presented again problem.
Having an information repository is certainly valuable, but that doesn’t mean the organization is managing, managing, and transferring its knowledge.
Some organizations have confined digital spaces to protect the history of projects that their teams have carried out over time. This information, although valuable, is inert letters if the lessons learned are not capitalized, said lessons are democratized, the tools are accessed to replicate good practices and the personnel are enabled to be able to replicate what is considered a value generator for the business.
Although some of these protected projects had a limited lifetime, others became part of the daily operation of the business. But, as we said,The fact that the information is protected does not mean that the organization is managing and democratizing its knowledge.
From our vision as specialists in the field, managing and managing knowledge means that the organization has specific actions to:
1.- Anticipate and/or react professionally to the constant changes that the organization is experiencing.
2.- Form teams capable of evaluating and validating before implementing, achieving certainty in the investment that the organization will make.
3. Form knowledge management teams (GTC® cells) with critical thinking to analyze, diagnose and act with certainty, even in complex and/or ambiguous situations.
4.- Create evolutionary solutions, contemplating their implications and adoption strategies.
5.- Determine the appropriate mechanisms and strategies for the organization to access knowledge.
When an organization attends to the actions described above, it can be said that it is an organization that is actively working on managing, preserving and democratizing its knowledge in favor of competitiveness and the evolution of the business.
At Great Plan we understand that global organizations are exposed to constant changes and that they work daily to achieve maturity in their competitiveness and evolution strategies, which is why we gave ourselves the task of creating a solution to help our clients preserve, accessibility and evolve your knowledge. This is how we designed theGTC® programbased on theEDDIT® model.
GTC® is a program that provides organizations with a work model that gives them autonomy to preserve, create and transfer their knowledge.
Its purpose is to form teams capable of implementing theEDDIT® modeland thus contribute to the continuity in the delivery of the business core, the evolution and business competitiveness.
TheEDDIT® model, is a set of processes and tools to create, manage and evolve knowledge.
