25 January 2007

Knowledge-driven, not simply customer-driven.

There are numerous hurdles/blocks for converting an organization to become “knowledge-driven”; but if we look at the fundamentals for commercial success, we see that it is the right way to go to efficiently leverage organizational resources (mostly the human part) and sustain competitive advantage through creativity and innovation.

Firstly, some of you might be thinking: surely “customer-driven” is the way to go, knowledge being “only” a mean to an end. There is some truth in this view. Indeed the customer’s satisfaction is often considered as the ultimate objective for all corporate projects and operational activities. It is also correct that organizational knowledge is to be used to facilitate this endeavour.
However, is satisfying the customers really the drive for share-holders? No, they are driven by increased market share, increased profits and revenue and increased growth potential/forecast.

Now, you might say: hold on, if you don’t satisfy your customers you wont get these increases! Yes and No.
Firstly, this view actually supports my first point: that a satisfied customer is a mean to an end, not the end of the means (if I can put it this way).
Furthermore, being customer-driven often leads to a short-term view: it is about “pleasing them enough to enable us to make our sales target for the month [or the year]”. The long-term repeat business isn’t necessarily cared for.

For long-term competitive advantage and growth, what is instead needed is to view the customers not “simply” as purchasers of goods and services but as “collaborators”. The customer participates (directly or indirectly) in as many stages of the product cycle as possible. The idea is to build a long-term partnership between the organization and its customers. The message to the customer becomes “we are partners/collaborators in this on-going endeavour to please you while at the same time growing our business”.

This approach aims at more than satisfying the customer, therefore at delivering above his/her expectations. To achieve this, the organization needs to know well its customers (who they are, their cultural/social background, what they like/want, where/how they live, where/how they travel, etc…). Similarly (and this is where it gets really interesting) the customer needs to know well the organization (its products/services – past, present and future; its mission/goals; its history; its point of sales network – incl. of course its website; its successes and - yes why not – its failures; and lastly but certainly not least, its people).

Knowledge is then at the centre of this collaborative relationship, hence the knowledge-driven approach.

Now, before enabling your customers to “know” your organization well, the organization must first know itself well. An organizational culture valuing knowledge-sharing is needed.
Then, in order to sustain such a collaborative relationship with your customers, your organization will require continuous innovation, and not just in the product design department! Innovation must be encouraged in all functions. Everyone without exception can be creative/innovative. Innovation is fuelled by sharing knowledge/experience and by effective collaboration across departments and borders.

This is where Knowledge Leveraging (or the so-called Knowledge Management) comes in...

Peter-Anthony Glick


At 8:47 AM, Anonymous Rick said...

Very intersting point providing further thinking...

At 9:58 AM, Blogger Peter-Anthony Glick said...

Thanks Rick (any chance of knowing your last name?). Yes, I've been doing a lot of thinking since that post. My last input is the realisation that SOA is perfect to facilitate this collaboration btw the front-line and the customers (see my last posts).


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