Capturing Knowledge

The key to making knowledge-management systems work is cultural

As a part of the implementation phase of your strategy, put in place a system to make the most of the valuable knowledge within your organization. The main function of this system is to capture important knowledge and store it in a form that you can easily access in the future. You can store it simply on paper or in files, or in electronic documents or knowledge-management software.

Tailor the system you use to the importance of the information you are storing. For example, firms for which knowledge is of great advantage, such as international law firms, often invest a considerable amount of money in bespoke knowledge - management systems; smaller firms can achieve good results with word-processing and spreadsheet software.

The key to making knowledge-management systems work is cultural -- you need to create an environment in which sharing knowledge is both encouraged and rewarded.

ACTION POINT: Encourage and reward the sharing of knowledge.

Types of Knowledge

Tacit knowledge is instinctive or learned

Knowledge is divided into two classes: explicit or tacit. Explicit knowledge is knowledge that is easy to write down and transfer to other people: the process to be followed in producing a customer invoice, for example, or the way to assemble five components to build a product.

Tacit knowledge, by comparison, is knowledge that is not easily passed on. A flute player, for example, can tell someone else how to position their fingers to make each note, but not how to bring it all together in giving a fine performance. Tacit knowledge is instinctive or learned through years of experience, and it cannot be passed on quickly or sometimes even at all.

ACTION POINT: Capture your explicit knowledge, capitalize on your tacit knowledge.

Managing Knowledge

important knowledge that can give a competitive advantage exists within all organizations

The implementation of a new strategy is an uncertain time -- you have made changes and your team are having to deal with new challenges. Some people may decide to leave, and if they do, any knowledge they have -- knowledge that could give you a competitive advantage -- will leave with them and be lost to your organization.

In some types of business, it is easy to see where knowledge is a source of competitive advantage. An accountant who has superior knowledge of taxation, for example, is best placed to save their clients money. However, important knowledge that can give a competitive advantage exists within all organizations. You may have someone who recognizes the best-quality fish on the market and buys it at the best price, or someone who has superior knowledge of donors and can attract income to a charity. As a strategic manager, it is important to look at your team and others in your organization and identify who has important knowledge, so that you can make sure that you keep it during strategic change.

ACTION POINT: Build a team that has specialists with specific important knowledge for your business.

Maintaining Morale

Reaching each target can give a great sense of satisfaction to your staff and help to inspire confidence.

Measuring your progress toward targets has the additional benefit of boosting staff morale. You already know that change may involve a period of uncertainty for all. You role as a confident and visible leader through strategic change can be enhanced by setting realistic targets and then collectively achieving them.

Reaching each target can give a great sense of satisfaction to your staff and help to inspire confidence. For example, if you set an interim target for your team to decrease their processing time by 4 percent during year one and they achieve a figure of 4.5 percent, they are more likely to give that little bit extra in the following years to help you reach your overall objective.

Measure progress with the following:

• Identify the final target of your strategic plan -- what are you aiming to achieve, and by when.
• Identify important targets along the way, and key turning points along the journey.
• If your targets or milestones are far apart, look for intermediary targets.
• Put in place a system to report the progress toward each target.
• When you achieve a target, share it with your team and celebrate success.

ACTION POINT: Keep your team motivated by celebrating milestones when they are achieved.

Planning and Execution

Strategy must result in giving the customers better value than the competitors do.

Establishing a solid strategic direction is critical. Therefore, it is the prime responsibility of management. Our strategy must take into account the industry, the customer, the competitive environment and lead to innovation. We must recognize that our competitive edge today won't be tomorrow. We must constantly search out new sources of competitive advantage.

We must regard competitive weaknesses in our products, services, and support as a crisis. Closing the gaps must become top priority. Strategy must result in giving the customers better value than the competitors do. We must be personally committed to serving customers better and providing them better products. Strategy, if complete, must result in taking the competitive advantage to market quickly; frankly charging forward with these promising ideas and "new-found" approaches.

The business plan or strategy must be in writing or it has no value. Regardless of its complexity, a good plan properly thought through can be put down to a few paragraphs, not pages. It only becomes useful if it can be grasped in a few minutes.

Fact based decisions are crucial to good planning. However, what is presented as facts frequently turns out to be only: apparent facts, assumed facts, reported facts, hoped-for facts. A really good manager can distinguish the difference between real and not real facts.

A commitment to achieving plans is essential to successful execution. Managers should never be pressured into making unrealistic commitments, but once commitments are made they should always be fulfilled. To many broken commitments creates a sloppy attitude in the organization that permits rationalization of failure.

ACTION POINT: Plan and execute innovation.