Knowledge Is The Value Of Your Business

Our economy is overwhelmingly a service economy.  The last statistic from 2006 showed 84% of Americans are in the service business.  This was a 4% increase from 2000.  In layman’s terms, this means that 1 out of 6 people you shake hands with actually make a physical object.  Everyone else deals in knowledge.  They are knowledge workers.

Peter Drucker coined the term, “knowledge work.”  He stated, “In knowledge work…the task is not given; it has to be determined.”  It is how millions of people work today.  They move information, data and ideas to some decision or action to make money.  It is happening in a rather rapid pace and our conditioning has caused us to become aloof to the mechanics.

Those who are able to manage, distribute and leverage knowledge quickly, broadly and in a controlled fashion are rewarded with more business, bandwidth, opportunity and cost savings.  Those that merely work in an unexamined fashion are prone to being left behind quickly.  The game has become around speed, agility and knowledge.

Information Flow

Here are the steps for how money is made today:

  1. Make a decision to do something
  2. Raw information is accessed
  3. Meaning has to be ascribed to the information
  4. A decision has to be made about the meaning
  5. Action must be taken towards a result
  6. Results lead to monetary advantage
  7. Recourse to step 1.

The old paradigm worked differently.  Information was organized into folders, file systems, and structures.  The organization helped, because opportunities were predictable and things did not change.  We knew that information was relevant because new opportunities were not popping up continuously.  Thus, deciphering between what was able to produce a result was done up front.

Today, organization is driven by immediacy and need.  As we make a decision, we align the information.  It is at our fingertips now.  Organization matters only for a purpose of temporal desire.  After a project or a result is accomplished, the building blocks become irrelevant again.  Later they may contribute to different purposes.

We have an abundance of raw data and information.  It is at our fingertips.  It is an unprecedented time in history.  The democratization of information has leveled the playing field.  Everyone has access to information.  The people who get results in this economy align information quickly and move it to action.

Bill Jensen said in his book, Simplicity,Every 1100 days your ability to transform information into work becomes twice as important.”  Thus, three years ago, you could be half as fast as today.  Three years from today, you better be twice as fast.  Agility and speed are critical for success in a knowledge economy.  General Eric Shinseki stated it best, “If you don’t like change, you’re going to like irrelevance even less.”  Information is flowing faster and is highly modular, temporal and utilitarian at best.


Value of A Business

A business is nothing more than a system.  It is what brings together the tangible and intangible ingredients to create value for a customer.  Value is perceived by the customer.

If you wanted to open a coffee house, you could order the same beans as Starbucks and the same dishware.  You could put your brand on it.  However, having all the instruments and material goods does not necessarily deliver the same service.  How they deliver the goods in an integrated fashion is what draws the customer.  Coffee is not enough.  Understanding correct temperatures for optimum bean flavor is not enough.  The method, culture, and process must be part of the mix.  It is the knowledge that Starbucks has nurtured.

The list can go on.  Having the same supply chain as Dell does not mean a company can sell the same amount of computers.  It is the way they engage the market and their approach to service which are part of the mix.

All businesses have the same access to the hard goods.  What drives the increased value is not the raw goods.  It is the knowledge how to deliver the goods into a service that drives higher perceived value.  Apple computers do not have 40% more metal and plastic in them.  They have 40% more value perception.  They are a culture.  They are an experience.  They are people who are nonconformists.  It shows up in packaging, customer service, emails communications and every touchpoint the customer has.

The value of a business is its knowledge.  The knowledge it has creates the culture, momentum,  and method of how they create value.  An employee who moves from Google to Microsoft has to embrace a new knowledge.  The cultures are far different.  The way they do business is part of how knowledge has been nurtured.

For a small business, the value of its business is the method that has been developed.  If the method is known, reproducible and ultimately, scalable, then the business becomes the true product.  Scalability is the true test of a business.  If the business model is scalable, then it is proof of repeatable and rewarding value.

The barrier to scalability is often from a lack of defined methods, procedures and robust systems.  There is not a prescribed way of doing things.  People guess rather than know what is the resonant way of doing business.  It is why most businesses are unable to grow.  There is not a knowledge access or transfer from within the company systems.

Knowledge Systems

Information that was relevant six months ago is old news today.  Purposes are continually changing.

If we can guess what three years from now will look like, we can only guess that it will be completely different.  The cell phone we have will be gone.  We will have new computers, software and tools.  Walking around with a Palm Pilot today would look silly.  The systems and the speed has changed.

Thus, the true value of a business today, lies in its knowledge systems.  The system must have criteria congruent with a fast-moving knowledge economy.  It must be:

  • Agile – able to adapt and change quickly
  • Accessible – Gaining information whenever and wherever a person needs
  • Collaborative – Real-time change, revision and refinement ability
  • Controlled – Ability to secure, share or distribute based on simple rules

The music industry is a great example of evolution centered around media forms – tapes, 8-tracks, records, CD’s, etc. – to virtual distribution.  Music exists anywhere anytime and meets this criteria, a.k.a., iTunes.

Likewise, the knowledge of a business is continually being refined and used.  It must exist beyond media and in distribution systems.

Enter Google Enterprise Applications

Google has emerged as the paradigm for speed.  From their simple approach to online search, Google’s architecture was built for speed.  Google continued to evolve their core approach to information management and developed multiple applications including an enterprise suite of business productivity products.  Google Enterprise Applications enables knowledge sharing and collaboration on an unprecedented level for an organization.  All the information flow from documents, calendars, emails and problem solving is accessible and distributed for a company’s scalability and success.

As companies are continually refining their approach and how they execute, Google Docs is a powerful online suite of tools within the Google Enterprise Application suite which stores important company information from the user and group level.

Storage and Collaboration: Control of sharing, distribution and collaboration are instantaneous and reversed quickly.  A person in San Francisco and another in Boston can work on a spreadsheet together in real time to make plans for an event.  It can be saved, archived and searchable by a newcomer to the company.

Process Documentation: As the company’s knowledge base increases, its value increases.  A new person to the culture can look up any process that has been documented.  Rollbacks to previous revisions can easily be accomplished.

Sales Leverage: A person who wants to give a first-time sales presentation that has worked fifty times for another person in the company can now leverage the success from his counterpart.

Knowledge Resource: Knowledge is now reused rapidly.  As problems arise and new opportunities present themselves, knowledge workers in an organization contribute to and consume the collective knowledge base.  Collaboration fosters opportunity for the organization to grow.

In a world where the value of a business is beyond the material goods that constitute its feel, the methods of success that can be documented and accessed are critical.  Google Enterprise Applications is built for the new economy now and years from now.  It resonates with the only sure aspect of today: change.  For that, the right system used in the right way will not only help a business to evolve, but to be valuable both in money and appeal.

Published by Don Dalrymple

I partner with founders and entrepreneurs in startup businesses. I write and consult on strategy, systems, team building and growing revenue.

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