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Knowledge Symptoms
Direct quotes from: Osland, Kolb, & Rubin, “Organizational Behavior: an experiential approach.” 2001, 7th Ed., Prentice Hall, 38-40.
Knowledge Symptoms
Symptom
Description
You repeat mistakes
"Your best teacher is your last mistake," Ralph Nader once told me. He, of course, has made a career out of publicizing companies that display this knowledge problem. It's rampant. Negligence lawyers don't wear Gucci loafers because companies make mistakes; they wear them because companies make the same mistake twice. The nature of icebergs being what it is, for every million-dollar lawsuit there must be tens of millions lost or wasted from repeated mistakes that are dumb but not tortious (actionable).
Why does it happen? Fear, I'd guess, is the No. 1 reason: fear of being embarrassed, chewed out, or worse. Many people and companies are so busy trying to hide boners (from the boss, from stock analysts, from customers and competitors) that they tuck away the learning along with the evidence.
You don't, obviously, want to encourage goofs just to learn from them. But the best way to avoid repeated errors is to study failure as assiduously as success. The history of medicine shows that you can learn as much from autopsies as you can from cures.
You duplicate work
"Reinventing the wheel" is the inevitable phrase, and most companies spend so much time doing it you would think they were suppliers to Schwinn. A classic example: You inspect the goods before you ship them, and your customer inspects them again after they arrive. Worse, you do the same thing in-house. Usually the underlying cause is a knowledge problem: Customer and supplier either don't know what each expects of the other, or they don't trust each other because they haven't shared processes or results.
People fail to copy success for the same reasons that they succeed in copying mistakes: They're afraid or embarrassed to ask. Sometimes the problem is in systems and structures: They don't know where to look or looking takes too much time or they have no place to store corporate memory. Sometimes the problem is what one might call an overdeveloped engineer's mind: I know Eddie already did this, but I can do it better.
You have poor customer relations
If you're not selling schlock, why does a customer get peevish? Probably for one of three reasons, all knowledge problems. First, communication at the point of sale: Either he didn't understand what you were selling or you didn't understand what she was buying. Second, service: If I get the runaround when I have a problem, chances are the people who answer your 800 number are little more than switchboard operators, who don't know what they should.
The third reason is subtler and more interesting. Knowledge work tends to be custom work, or at least customized. That changes the nature of the transaction. You don't sell janitorial ser- vices the same way you sell mops. Too often salespeople are in a hurry to hear "yes" so they can write up the order. (Too often their incentives encourage that practice.) Result: You talked about the sale but not the deal.
Good ideas don't transfer between departments
This is the most common knowledge problem of all: How do we get people to share ideas rather than hoard them, to accept ideas rather than reject them? There's no easy answer. Says Hewlett-Packard's, CEO, Lewis Platt: "Knowledge transfer is a problem that yields to ten different initiatives, not one." Here's a starter kit:
Set an example: Great bosses love teaching; great teachers produce great students. Once, interviewing AlliedSignal CEO Larry Bossidy, I confessed not knowing what working capital was. Bossidy positively lit up, grabbed a sheet of paper, scooted around the table, and taught me; his pleasure in teaching turned an interview into a sharing of minds.
Nudge: Nothing will get the troops to use the Lotus Notes database faster than a leader who asks at a staff meeting. "I'd like to hear everyone's thoughts on Kay's posting about the situation in Germany. Bill, let's start with you: What do you think we should do?"
Create incentives: Says Robert Buckman, CEO of specialty-chemical maker Buckman Lab- oratories: "The most powerful incentives you have are salaries and promotions." Buckman makes sure-and makes it known-that he hands them out based substantially on how well people share and borrow ideas.
Benchmark: Be sure Phoenix knows it has twice as much bad debt as Dayton-and reward both if they close the gap.
Make it fun: When you return from a convention, which do you write up first, your expense account or your trip report? Which contains more creative thinking? Which is read more attentively? One group at Monsanto makes knowledge sharing fun by arming people with snazzy new Kodak digital cameras when they go on trips; when they get back, they show their pictures at the next staff meeting.
You're competing on price
No company wants to find itself in a commodity business. What makes the difference? Why could an executive in General Electric's lighting business-light bulbs, for Pete's sake-tell me, in a mock-serious tone, "Cutting prices is not a core value of the General Electric Co.," while some companies making computers-computers, for Pete's sake-are forced to do just that?
The answer is almost always knowledge, or the lack of it. Whatever you sell, you can get out of the price game if you and your customer ride the learning curve together. Everything you learn about a customer-from how he likes pallets stacked to what his plans are is an opportunity to make it harder for competitors to horn in. The result: margin.
You can't compete with market leaders
Sometimes the big guys win because they've got something you ain't got, like prime-rate loans or Super Bowl-size ad budgets. But don't blame your problems on scale until you have explored this question: What do they know that we don't know? Toyota, Wal-Mart, and Southwest Airlines are just three examples of formerly small companies that outwitted bigger competitors.
You're dependent on key individuals
Remember the old Allan Sherman song? Oh, salesmen come and salesmen go And my best one is gone I know And if he don't, come back to me I'll have to close the factory...
Nothing's more dangerous than depending on a few key people. Usually this signals too little teamwork or an absence of ways to encourage star performers to reveal the secrets of their success.
Note, though: The fault may not lie in your stars. Sometimes people have greatness thrust upon them because others are unwilling to achieve it themselves. HP's Lew Platt says, "You've got a knowledge problem when decisions are made too high in the organization." When things come to Platt's desk that shouldn't, he takes it as a sign that people lack knowledge that would let them think for themselves.
You're slow to launch new products/services or enter new markets
It's obvious that being slow to market is a knowledge problem. But diagnosing its cause can be tricky; as with referred pain, the source may be far from the symptom. It could be a weak lab, a sludge-slowed commercialization process, a rigid budget bureaucracy, failure of competitor and market intelligence, or something else.
You don't know how to price for service
Do you build the cost of service into your price? Sell a service contract? Bill by the hour, the day, the job? Let someone in the distribution channel handle it? Can you clearly explain why you do what you do, or are you just following industry practice?
Of all the symptoms on Smith's list, this intrigues me most because the underlying knowledge problem is least self-evident. Here it is: If you don't know how to price for service or why to charge one way versus another, it's a sign that you don't fully understand what your customers do with whatever you sell them. Some customers just buy on price. More often, however, they are buying the solution to a problem. They don't want drills; they want holes. One adhesive company, Smith says, knew a way to help customers speed up assembly lines with the added benefit (for customers) of using less glue. But its sales force had no idea how to value and price this knowledge; worse, the reps were paid by the pound. If you know what customers are re- ally paying for, you'd know better who should pay what.
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Prepared by Andy Farnsworth
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