Being on the cutting edge

The good news in twenty-first century business is that you do not have to be rich in financial terms to be knowledgeable and competitive. A little ingenuity can go a long way. In the knowledge era, know-how and ingenuity has become the major barometer for national, regional and business wealth. In most developed economies the majority of wealth is now in the form of human capital, intellectual capital and talent rather than physical capital such as plant and equipment.

Knowledge and being on the cutting edge is without doubt the key competitive advantage not only for private sector, but also for all forms of government- and community-based organizations.

The benefits of creating a smarter business can be vast and can include a long list of benefits such as superior insights into customer behaviours, more finely tuned service delivery and repeat business. A better understanding of the marketplace and trends ensures a better cycle of innovation and operational efficiency through a more responsive decision-making process, thereby greatly assisting your chances of being successful by the better use and mix of talent, intellectual capital and customer relationships. This normally translates into a business model where you are doing things better, faster and cheaper.

In saying this, it is understandable why creating a smarter business through a better use of knowledge and innovation does not occur naturally. It is not an easy task to set the agenda overnight. Even a seasoned decision-maker or manager can struggle as they try to make sense of what needs to be done. However, from observing the field for over a decade I believe there are some basic principles that can help in this endeavour.

To start with, good implementation has less to do with cash flow and budgets , and more to do with enterprise and clear thinking. You need to be acutely aware of your business, its operating environment and how you rate in the delivery of service and product performance. The bottom line may be different between corporate, government and community businesses but the need for honest assessment of performance and how you position your knowledge does not diminish. Every business plan needs to deliver a healthy balance of responsiveness and pragmatic action.

Creating a business requires a special brand of leadership that constantly reminds people of the value of knowledge, while making it easier for them to do their job and make a worthwhile contribution. Just telling them to be smarter or more creative will drive them crazy unless you back this up with procedures, methods and processes to help them contribute. In some cases you may need to appoint people to be specialists in the roles of competitive intelligence, knowledge creation and talent management, but more often than not you will need to foster a business culture and attitude whereby everyone sees these outcomes as part of their everyday job.

Needless to say, the leadership of senior management is paramount. To win the knowledge game you need to be much less concerned with cost saving, risk minimization and the bottom line, and be more concerned with the smart use of knowledge, deeper thinking and better application. As discussed, winning the knowledge game needs a sharp focus, motivated people to participate, and systems and infrastructure that are user -friendly. Whatever the state of the economy and your current cycle of business, know-how is the only thing that will help you move forward.

In this regard, all businesses need to constantly explore three cutting-edge questions:

• What are the current capabilities of the business/organization?

• What will be the issues facing the business in the immediate future (say two years )?

• What are the gaps in your capabilities and what needs urgent attention?

It is worth noting that the suggested two-year time frame may be too short- term in some markets, while in other markets it may be far too long. So your experience is important here. The key to sustaining excellence is patient, strategic and careful intelligence, rather than relying on luck.

Being on the cutting edge requires that different parts of the business are talking and collaborating. Teamwork is everything. You need to organize well-designed consultation and feedback processes so that the latest trends in marketing research, customer satisfaction and business planning are in the engine room of the business brain.

Here are a few examples of how smart observation has helped some businesses to stay on the cutting edge and in tune with their marketplace:

• A sales representative noticed a competitor had changed its supermarket product stacking strategy and discussed it back in the office.

• A health organization discovered that a recent government study on world trends in hospital infections had found a statistically significant increase in infections in the last twelve months.

• An independent study in the mobile phone industry discovered that lead times to answer customer calls were worse compared with its two major competitors .

• A government employee discovered that the funding for their department was likely to be cut by 10 per cent in the next financial year.

• A business developed a list of web site addresses that gave them a quick weekly scan of their environment, including competitors, existing and potential partners , suppliers, customers and opinion leaders .

Of course, building your capability is one thing, but managers also need to ensure that there is adequate security and counterintelligence. PricewaterhouseCoopers estimated in 1999 that theft of intellectual property cost Fortune 1000 companies US$45 billion. No doubt the figure has grown significantly since then. So it is imperative to have a risk management strategy to defend your trade secrets and proprietary knowledge. This will be explored in much more depth in Chapter 10. However, for now we need to consider what security audits and systems checks may be necessary in your business. This would include limiting availability of sensitive knowledge, screening sensitive conversations, briefing key personnel on security issues, knowing how to handle the media and being prepared to establish confidentiality agreements with your business partners.

When it comes to competitive intelligence a clear policy is imperative, for example, for explaining ethical or legal practices and that there are easy ways to input into the business brain. The input can be helped by producing an easy to use system including simple worksheets to complete, either on paper or by digital means, rewarding contribution and coordinating ideas on key issues. Remember, knowledge can be inaccurate, biased or late, so make sure you do your double-checking. In some cases, you may find it easier to outsource competitive intelligence to an external provider. However, be careful, as often a third party may not have as good an understanding of your business and you may lose the benefits of cost savings and objectivity.