It is a general observation that most of what people claim to know as fact, is based on hearsay, prejudice, “common knowledge”, the internet and other untested and unproven sources. Unless knowledge has been acquired through direct education or verifiable sources, the greater part of people’s knowledge is thus unreliable and frequently wrong. These observations are just as true for most organisations, but should be of particular concern to any commercial business and especially commercial managers.
Just how much does the average business or commercial manager know about their business, their market and their customers which is actually true? Is that knowledge based on evidence or is it memorised common knowledge of individuals?
Decisions in business should be made on the basis of firm knowledge and information. In practise it is more often the case that business decisions are made on assumptions rather that verifiable knowledge. Anticipating and satisfying customer requirements, not only requires knowledge of the customer, the market and the competition, but also the “know-how” that comes from experience which is not easy to replicate. But how can the extent of an organisation’s corporate knowledge and “know-how” be assessed?
It comes as a surprise to many organizations, that the greater part of their corporate knowledge which is necessary for the continued success of their business, is not readily accessible. While many organisations may have an archive of important data on their customers, their market and other subjects, the fact is that much of the important knowledge on which the organisation relies for its successful operation, resides in the experience and personal knowledge of its workforce.
Such information is rarely written down or recorded, and while businesses may have specific procedures for employees to follow, situations and experience often results in their modification on application. Problems arise through the natural turnover of staff, when important and experienced employees leave or retire, so that vital knowledge is lost. When individual employees with unique knowledge and experience become crucial to the running of the business, organisations often struggle to manage when those individuals are absent for any reason. Business organisations need to recognise that while replacements may be qualified, they will not have the accumulated experience specific to the particular organisation.
For the commercial manager, responsible for all those business operations that support and satisfy customer requirements, maintaining and retaining the necessary corporate knowledge and experience while of great importance, is frequently given a low priority.
In terms of an organisation’s strengths and weaknesses, the extent of corporate knowledge and experience can be an intangible but very important strength. Conversely, if much of that knowledge and experience resides with only a few individuals, it should be regarded as a distinct weakness. Probably one of the most tired but frequently used expressions in business and government is “lessons will be learned”. However, only individuals can learn lessons, and when those individuals move from the organization, so the corporate lessons and memory move with them, so that lessons have to be re learnt, and frequently the “wheel re-invented.
Unless the commercial manager, takes steps to ensure that such knowledge and understanding of the business, the market, its customers and the commercial environment in which it operates, is up to date, wrong assumptions will be made and poor decision making ensue. While experience will always reside with individuals, corporate knowledge should be maintained and accessible within the organisation. Corporate managers need to establish as far as possible the nature, extent and location of the organisation’s corporate knowledge, as well as what is known and unknown. The effectiveness of business decision making is firmly based in the depth of the commercial function’s knowledge of its market, competition and its own procedures.
In order to keep the corporate knowledge base accessible and up to date, commercial managers should undertake on a regular basis, a detailed “Commercial Audit”, or “Marketing Audit” as it was more frequently known. The purpose of such an audit is to establish the depth of knowledge that the organisation has and to highlight those areas where its knowledge is limited or non-existent, so that decisions may be based on confirmed information rather that assumptions or guesswork.
A Marketing Audit is a “self administered” method for identifying and realizing under-utilized marketing resources, comprising the analysis of the market, the business, the organizations own strengths and weaknesses , the economic environment, the marketing environment and the competition. The process should include questions on the marketing strategy and the planning process, the product/service range, company performance (in terms of strengths weaknesses) the market size and structure the buying process and the competitive climate as well as many other areas where knowledge is essential or desirable for informed decision making. The most important questions that need to be asked are “How do you know? Where is the evidence?, Can it be verified?
While it may not be possible to secure the knowledge of experience of individual employees, commercial managers should strive to maintain and develop the necessary corporate knowledge and “know-how” essential for the future of the business.