All businesses have access to an extensive pool of knowledge - whether this is their understanding of customers' needs and the business environment or the skills and experience of staff. Show
The way a business gathers, shares and exploits this knowledge can be central to its ability to develop successfully. This doesn't just apply to huge multinational companies. Knowledge management can benefit everyone from a local newsstand to a manufacturing firm. This guide explains the basic sources of knowledge available to your business, how you can best harness and exploit this information and how to create a knowledge strategy for your business.
What is knowledge in a business?Using knowledge in your business isn't necessarily about thinking up clever new products and services, or devising ingenious new ways of selling them. It's much more straightforward. Useful and important knowledge already exists in your business. It can be found in:
The challenge is harnessing this knowledge in a coherent and productive way. Existing forms of knowledge
Your understanding of what customers want, combined with your employees' know-how, can be regarded as your knowledge base. Using this knowledge in the right way can help you run your business more efficiently, decrease business risks and exploit opportunities to the full. This is known as the knowledge advantage. Basic sources of knowledgeYour sources of business knowledge could include:
Exploiting your knowledgeConsider the measurable benefits of capturing and using knowledge more effectively. The following are all possible outcomes:
Make knowledge central to your businessIn order to manage the collection and exploitation of knowledge in your business, you should try to build a culture in which knowledge is valued across your business. One way to do this might be to offer incentives to staff who supply useful market news or suggest ways customers can be better served. You can use these knowledge management practices throughout your organisation to build better processes. As part of your knowledge management, you should also make sure that any intellectual property that your business holds is protected. This means that you have the right to stop competitors from copying it - and also allows you to profit by licensing your business' knowledge. Protecting and exploiting your knowledge base will be more effective if you develop efficient systems for storing and retrieving information. Your files - whether stored digitally or on paper - contain knowledge that you can use to make your products, services, systems and processes better and more customer-focused. Keep knowledge confidential. Your employment policies play a central role in this. For example, you might get staff to sign non-disclosure agreements (also known as confidentiality agreements) when they join the business as this ensures that they understand the importance of confidentiality from day one. Employment contracts can be written to reasonably limit your employees' freedom to quit and work immediately for one of your rivals (restraint of trade clauses) or set up a competing business to yours in the vicinity (restrictive covenants). Sharing knowledge across your businessIt's essential to avoid important knowledge or skills being held by only a few people, because if they leave or retire that expertise could be lost to your business. If you have efficient ways of sharing knowledge across the business, it will be more widely used and its value and effectiveness are likely to be maximised. Knowledge sharing Consider the best ways of sharing new ideas and information with your staff. You may already have regular meetings when you can brief employees and ask them to share ideas and best practice. You could consider holding innovation workshops or brainstorming sessions at which staff are given the freedom and encouragement to think of ways in which the business could improve. It can also be a good idea to create a knowledge bank containing useful information and instructions on how to carry out key tasks. Putting this on an intranet is ideal as it will encourage staff to post news or suggestions. Knowledge management Technology alone isn't the answer to sharing knowledge - it has to be managed carefully so that information is channelled properly. You may decide to appoint a senior manager as knowledge champion for your business. See the page in this guide on how to make knowledge central to your business. Incentives and training Remember that offering staff incentives to come up with suggestions for how the business can be improved is often an effective way of getting them to use and share knowledge. Don't forget the importance of training in spreading key knowledge, skills and best practice across your business. Create a knowledge strategy for your businessIf you want to get the most from your business' knowledge, you need to take a strategic approach to discovering, collating and sharing it. This is done via a knowledge strategy - a set of written guidelines to be applied across the business. If your strategy is to be effective, you must make sure your senior managers are committed to it and are fully aware of the benefits it can bring. Discuss with them the best ways of collecting and using knowledge. You may decide to appoint a senior manager as knowledge champion for your business. For more information see the page in this guide on how to make knowledge central to your business. When you're drawing up the strategy you need to:
You should also identify the value of knowledge to your business. Think of ways you could exploit your knowledge for financial gain - perhaps by gaining a larger market share, developing new products, or selling or licensing your protected intellectual property to others. Ensure this fits in with your overall business plan. Using information technology to gain and manage knowledgeInformation technology offers powerful tools to help you gain and make the best use of knowledge. Some of the systems can be complex to set up and time-consuming to maintain. You need to choose systems that fit with your business and that will improve it without becoming a burden. You may find it useful to consult an IT specialist. Types of information technology
Original document, Importance of knowledge to a growing
business, © Crown copyright 2009 Our information is provided free of charge and is intended to be helpful to a large range of UK-based (gov.uk/business) and Québec-based (infoentrepreneurs.org) businesses. Because of its general nature the information cannot be taken as comprehensive and should never be used as a substitute for legal or professional advice. We cannot guarantee that the information applies to the individual circumstances of your business. Despite our best efforts it is possible that some information may be out of date. As a result:
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