The big questions for today........

• Why must I think seriously about becoming a knowledge organisation?
• What is a knowledge organisation?
• What sorts of tools do I need to manage one?

Why must I think seriously about becoming a organisation?

• What was the price of your school shoes? Who made them?
• How expensive was your first television set compared with today? or first PC/ or video?
• What 'runners' did you wear to tennis when you were a kid? Are they still made today? How much does that brand cost now?
• What are some other good examples of how value in some items has changed?
• What is happening?
• When you go to Bali or Hong Kong, what can you buy at very low cost?
• What do $2 dollar shops sell?
• Where are your silk shirts made?
• How little have you paid for a silk shirt and how much?
• What is the difference between them?
• What did Blundestone Boots do right?

The force is upon us all

• Employee power
• Customer power
• Innovation
• Globalisation
• Speed and size of change
• Information and Communication technologies
• New bio and other technologies
• Lack of controls of Intellectual Property (IP)
• Enormous manufacturing capacity, at low cost, increasing quality in low wage and populous countries

"If everyone can get the materials, the money, the machines, then the unique assets are what bring success – often the intangibles: experience, design, logistics, brand."

The reality is

• New entrants and new competitors from anywhere in the world will find a way of taking your customers in ways you may not have thought about or are not positioned to respond to.
• We need to see better than our competitors where customers, marketplaces and technologies are taking our future.
• We need to be receptive to the challenges and able to move fast and take advantage of the opportunities.

What is a knowledge organisation?

The sum of an organisation's patents, processes, employees skills, technologies, information about customers and suppliers, and old-fashioned experience.

But much knowledge is tacit and even this soft squishy stuff must be identified and leveraged – put through the tacit to explicit cycle.

(Stewart, Thomas A, Intellectual Capital: the New Wealth of Organisations)



Knowledge capital is

• Human capital is the capabilities of individuals to provide solutions to customers; it is the source of innovation and renewal, but smart people don't make smart enterprise....
• Leveraging knowledge needs structural assets such as information systems, laboratories, competitive and market intelligence, knowledge of market channels, and management focus which turn individual know-how into the property of a group.
• Customer capital is the value of an organisation's relationship with the people with whom it does business.

How does a customer capital manifest itself

• Brand equity is one form of customer capital.
• But customer capital also shows up in customer relations, cross-selling, referrals – most importantly it is manifest in learning, access and trust – the company is learning with and from its customers and suppliers.
• ........shared knowledge is the ultimate form of customer capital.

What do we pay for in a brand?

NIKE:

• Costs $5 to manufacture
• Priced at $100 plus in the sports shoe shop
• How is Nike advertised? What is the meaning in the brand?
• Nike – a shoe maker that makes no shoes – its work is R&D, design, marketing and distribution – all knowledge-intensive services – which has US$334,000 in sales per employee compared with US$248,000 median for Fortune 500 companies.

SWATCH:

• Which is the more successful strategy?

Key messages

• Knowledge is more valuable and more powerful than natural resources, big factories, or fat payrolls. In industry after industry, success comes to the companies that have the best information or wield it most effectively.
• These companies have something more valuable than physical or financial assets – they have knowledge capital.
• Knowledge capital is the sum of everything everybody in a company knows – the managers challenge is to channel this value into the strategic actions that customers value most.
• Key reference: Intellectual Capital – The New Wealth of Organisation by Thomas A Stewart.