When politicians talk about a ‘knowledge economy’, it sounds like information is gold. A durable good that can be stored and trickled out to the market to keep its value high.
Just a decade ago it might have been true. If you came up with a new product, process or business model, you probably had a few years grace before it was replicated. With the wind behind you, you could create a defensible position, for a while at least.
Technology has changed this.
Knowledge isn’t durable like gold. It’s a fast moving consumer good. A low-value, high-volume commodity. The power in knowledge today is not in holding it but managing its flow. Getting it into your business quickly, extracting its value, and moving on.
Most businesses don’t get this. And it’s not the leaders’ fault. We’ve spent years being conditioned into the idea that there is fundamental value at the heart of our businesses. That the way to improve them is to optimise what we do. Boost margins here. Squeeze costs there. Sell more. Charge more.
This is old thinking. Today, agility trumps optimisation.
The value at the heart of your business is constantly being eroded. The gold turned to lead. The power drained from the knowledge.
Technology has lowered the friction in the flow of information to the point where goods and ideas can flow much more easily. Between organisations and across borders.
Other people can do what you do. They can do it faster and cheaper. And do it in completely different ways through totally new channels. Threats can come from nowhere and become existential in a matter of months.
If you want to succeed and sustain in this fast-changing environment you have to make changes.
First, you need to make sure that you are exposed to the information that matters. That inside your market, and in adjacent or relevant markets, you are watching what is happening and taking that learning into your business. Listening to customers, listening to peers, looking for threats and opportunities around the corner. It’s too easy to run with your head down, focused on the challenges inside the walls of your own organisation.
Second, you need to ensure that information flows fast. From the customer, to the decision makers and back again. One of the first questions I ask new clients is about the length of this round trip. The real answer is often around 12 weeks. Too slow.
Ensure that you collect relevant data from your organisation. From customers, partners, departments and suppliers. Make sure that you share this information with the right people, in real time, with maximum clarity. No manual processing. No subcommittees and tiers of review where all meaning gets polished from the data.
Finally, make sure that you equip the people who matter with the power to respond. Take decisions yourself or push power to the edge. Enable people to act on the evidence that they see in a time frame that makes sense. Clue: that time frame is short.
Technology will help you to do some of these things. A well-designed customer interface. Integrated software systems. But these things only add value in a properly-structured organisation with the right behaviours.
Establishing those is much harder than signing a cheque for a new website or social media campaign.