As we move further into the information age with the advancement of technology each year, an interesting truth about business is emerging: a greater reliance on people.
While computing power can move information and data around the world faster than a click on a keyboard, only people can turn that information into a tangible asset. Only people can take raw data, organize it, and combine it with intelligence and expertise, creating real value.
Employees possess an important means of production: their knowledge. There have been many attempts to create knowledge through artificial intelligence and expert systems but they have not been successful because computers cannot have hunches or instincts and cannot learn from good and bad decisions.
Those who actually do a job know more about it than anyone else. Employees who actually interact with customers know them better than anyone. This includes the CEO, senior executives, managers. Customer-facing employees (CFEs) know what customers want and don’t want because they work with them every day.
Management must use the knowledge of employees and constantly ask, “What can we learn from you?” What can you tell us about customers and what tools do you need to serve them better? Many good customer service employees become less motivated when they feel that managers don’t want their opinion or don’t place any value on it. Big mistake!
While many facts about a company can be documented, much of its experiences reside in the heads of its employees. Very often, a company’s competitive advantage lies in its knowledge workers. When the person with critical knowledge quits and joins a competitor, that knowledge goes out the door. It is well documented that the loss of a key employee can result in the departure of key customers and significant loss of revenue.
Workers, who accumulate specialized knowledge, will not be easily attached to a company. Ultimately, they will go where they can achieve the most satisfaction.
The deep skills, reputation and experience of employees often represent an advantage that competitors will find difficult to replace.
The companies that will truly thrive are those that can harness employee knowledge through information technology in ways that are immediately applicable. This could include satisfying the right customers in the right way at the right time.
Unlike the assets of labor, capital, and land, knowledge is an infinite resource that can generate increasing returns through systematic use and application.
By sharing knowledge, a company can help its employees do their jobs better, faster, and more efficiently. Knowledge can provide the perfect link between business strategy and technology investment.
In many service industries, the ability to identify best practices and spread them across a dispersed network of operations or locations is a key driver of added value.
As business visionary Peter Drucker said
“The ability to survive and thrive comes only from a company’s ability to create, acquire, process, maintain, and retain old and new knowledge in the face of complexity, uncertainty, and rapid change.”