Q1: What are the biggest threats for my business stemming from the knowledge economy?
Q2: What would my business look like if I was competing on the basis of knowledge?
Q3: What are the three key pressing actions I must take now to prepare my business of the knowledge economy?

Q1: What are the biggest threats for my business stemming from the knowledge economy?

• New competitors?
• Substitute products and services?
• New ways of doing business that leave me out in the cold?

New competitors and new basis of competition

• Fierce competition from China.
• Danger of becoming a "me too" industry.
• Price competition.
• Competitors are able to offer greater diversity, but the conundrum is that customers .are demanding specialist products and solutions.
• Brand is more important and competitors have a stronger brand.
• Competitors are becoming smarter, they don't seem to face the same limitations on capital or face the same barriers of access to capital as we do in Australia – and they can deliver faster.

Globalisation

• Experiencing more competitors in a globalising world marketplace and these competitors are offering customers better and faster ordering and supply systems.
• Global competitors are larger with more knowledge and greater critical mass.

Importance of technology

• Technology is important but it costs a lot for a small business and needs up-front investment long before value is realised.

New ways of organising to compete

• Outsourcing & manufacturing off shore is taking work away from Australian manufacturers.
• Need to make sure all stages of the supply process are effective and well managed.

New ways of doing business

• Experiencing a loss of competitive advantage due to leakage of information through the internet – and on the internet information is given away for free.

Importance of information and Intellectual Property (IP)

• My firm lacks competitor and market knowledge.
• The challenge is how to capture information on what competitors are doing.
• And how to predict what is going to happen and catch-up with the leaders.
• And knowing how customers' habits are going to change.
• Managing IP is a key competence.
• Protecting IP – but perhaps we put too much effort into protecting secrets instead of getting out into the market quickly.

People and culture

• Cultural inertia - the wrong culture for the knowledge economy, old fashioned thinking can create significant resistance to change.
• People move on and take their skills with them.
• Need to convince workers and management of the need to work co-operatively and share information and ideas in order to become a smarter organisation. Workers and management need to align to the long term benefit and the key issues for the organisation in order to ensure their own survival as well as that of the company.
• Inappropriate organisation of work – the Taylorist model is prevalent but no longer relevant to a knowledge organisation. Individualism prevents the full benefits of micro workplace and training to be reached.
• Unionisation of the labour market is still an issue holding back some organisations
• A major threat to the business is if management do not recognise the cost of lost opportunities in knowledge management.
• Poor internal communication is weakens knowledge capture and management.
• "Knowledge hogs" create islands of knowledge but do not design structures and processes to enrich the organisation as a whole and encourage others to learn and share ideas.
• A priority is retaining, recording and accessing the wealth of knowledge of every member of staff, and sharing it across the organisation. Today we can see staff not wanting to share all they know with colleagues for fear of losing their job.
• The reluctance of the Australian culture to sell or promote themselves or their product.

Complexity of business and pace of change

• The difficulty experienced in trying to pick the correct winning strategy from the plethora of ideas and often conflicting ideas that abound in workplace management theory.
• It is difficult to market your business in a simple manner – it requires experience and specialist knowhow and can be very expensive.

Power of the customer

• The knowledge economy is making the customer able to determine not only the specifications of the product, its quality and delivery time etc but also the price. The customer has too many options to choose from ( ie domestic and overseas suppliers) and due to the size of our economy our businesses are unable to put the squeeze on our suppliers in order to match overseas competition. This leaves domestic manufacturers with few options with which to negotiate.
• Customers want low lead times, instant response, on time, customisation and no inventory yet they will not compromise on getting the lowest price. These are the contradictory influences in which the manufacturer/supplier must operate.
• Companies offering greater levels of customer service are a major threat.

Insufficient resources

• In a climate of this level of change and complexity many businesses are too small or have insufficient capital to invest to compete.
• Decreasing ROI and no economies of scale in the business lead to a downward spiral that is hard to reverse.
• Hard to get the skills needed for the new basis of competition.

Q2: What would my business look like if I was competing on the basis of knowledge?

Participants identified key elements of their new business strategies and organisation design as:

Redesign the organisation structures and develop networks and alliances

• Joint ventures to capture and leverage intellectual property knowledge.
• Strategic alliances- look for "win-win" situations in shared machinery and equipment with customers.
• Secure and enhance supplier relationships – require care, shared information.
• More diversified organisation to achieve flexibility and speed to market.
• Partnerships and strategic alliances to provide a total solution to customers, for example alliances between the manufacturer and the service provider.

Manage knowledge

• Build the structures and networks to share knowledge internally.
• Management should know the capabilities and skills within the organisation.
• Make the business more knowledgable of itself and its competitors and customers.
• Management has possibly failed if intellectual capital is held only by management without all staff involved.
• Design processes and structures to use knowledge more creatively.
• Capture staff input to a "Future IT knowledge exchange".
• Need to develop in the workplace the right environment to tap into knowledge assets of individuals, this should happen through channels both informal and formal. This will encourage development of tacit knowledge.
• The need to maintain an openness to ideas and trends whilst staying in business today.
• The capacity to separate the wheat from chaff idea to find the real pearls of wisdom amongst the plethora of management theories and business tools that are available.
• A new means of accounting for knowledge value.
• Strengthen links between shop floor and management.
• Invest in education and skills development.
• Develop a culture of sharing, lateral thought and ideas exchange within the firm – not just creation of a 'guru'.
• Open discussion and ideas from staff and all stakeholders.
• Greater investment in R&D.

Work hard to achieve a high level of customer service

• Know customers – look past the obvious.
• Rapid changes in the customer base require greater knowledge of trends and of customer needs.
• Speed to market, and speed to meet changing customer needs.
• Product diversification to meet customer needs.
• Value-add to the customer by knowing their aspirations, needs and challenges – sell intangibles and not the product.
• Look for new ways of delivering products offering greater flexibility for customers.

Look for new points of customer value in the product or service

• Whole-of-life costings and service.
• Total solutions for customers.
• Reduce the risk to the customer by ensuring the total process is managed – and sell reliability rather than a product brochure.
• New business on the internet.

Differentiate products and services

• Licensing of new technologies and ideas to differentiate products.

Apply information technology to manufacturing processes and information and communication systems

• An IT system to exchange information on a wide scale – national and global.
• A computer on every desk.
• IT on the shop floor needs improvement and to be more user friendly.
• IT in R&D, admin and management.
• Leading with IT tool kit (infrastructure).
• Co-opt staff to support the new technology and recognise their technology skills in remunerations and rewards.
• Create links between the factory floor and the technologist to get the value out of the investment in the technology.
• Technology plus training to engender support of staff and make it user friendly.

Reassess the strategic focus of management

• Shift in focus from manufacturing to management issues.
• Less measured / manageable risk.
• Recognise the need for a shifting skill set and manage people and human resource processes to support this.
• Ability to contextualise overseas experience and best practice into an Australian setting. Differences in tax, tariff, labour law etc often make overseas practices next to impossible to implement.
• Cost based accounting practice that satisfy domestic legislative requirements does not generate the process control information that enable domestic practitioners to optimise their processes so new more effective measures need to be adopted.
• It is necessary to be able to find a way to win at both the tactical and strategic level at the same time ie win both the battle and the war.

Q3: What are the three key pressing actions I must take now to prepare my business of the knowledge economy?

List of actions proposed

• Rationalise the supply chain of information to my business.
• Find a way to put in a knowledge sharing network within my organisation and
• find someone to sell this internally.
• Manage contacts and partnerships more strategically.
• Manage intellectual property to retain ownership.
• Re-educate the workforce.
• Develop more customer focus.
• Employ the right mix of thinkers and doers – look for thinking people who are practical.
• Develop better global knowledge and undertake a competitive analysis.
• Establish partnerships with customers and suppliers as an integral part of the business to achieve better information and feedback.
• Develop strategic plans.
• Improve/elevate communication within company/clients/suppliers.
• Involve all staff , even truck drivers for feed back.
• Analyse business (audit)
  • Strategic direction
    Where are we
    Where do we want to be
    Where do we need to be
    How do we get there.
• Generate and implement and review IT plan and integrate with Business Plan.
• Focus on marketing.
• Latest technology
• How can it assist my company
• How to fund growth.
• Establish a repository of knowledge similar to the BOSCO Manufacturing example and find a way to ensure that the knowledge is added to, accessed by and absorbed by the work force at all levels.
• Create a learning environment where individuals take a really responsible approach to whole of life learning, not just rely on 'management' to provide (and to think for them).