Do you really know what you think you know?

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. In recent years, many organisations have been run on minimal staffing, and this is especially the case in small businesses. While minimal manning makes sense in terms of efficiency and controlling staffing costs, it has inherent dangers, when individual employees become crucial to the running of the business because of their unique knowledge and experience. When individuals are away on holiday or sick leave, organisations often struggle to manage because a particular individual has specific knowledge and experience which is essential for the efficient running of its operation. Using experienced and qualified interim executives may help to ameliorate the problem when individuals are absent, but they do not have that specific experience and knowledge on which the organisation relies. Business organisations need to recognise that nobody is irreplaceable, but while the replacement 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 is of great importance, although one which frequently is 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, if any of those individuals should leave the organisation.
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 nonexistent, 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.

While the commercial manager may not be able to secure the corporate experience held by individual employees, they do have the ability to maintain and develop the necessary corporate knowledge and “know-how”, through the regular application of a Marketing Audit.

N.B. For all the questions that you are ever likely to need for an effective marketing audit, the best source to refer to “The Marketing Audit Handbook” Aubrey Wilson, published by Kogan Page 2002

© N.C.Watkis, Contract Marketing Service 13 Mar 15

March 16, 2015   Posted in: business development, business efficiency, Business Marketing, business performance improvement, business performance management, business performance measurement, marketing management, Uncategorized