Heritage

How small businesses can tap knowledge for growth

LADY

Employee skills, competencies and capabilities should be harnessed. PHOTO | FOTOSEARCH

As small businesses endeavour to distinguish themselves from their competitors, it proves imperative that they both identify ways of capturing knowledge that is distinctive to the firm and also explores ways of being innovative in how they capture and deliver value to their clients.

Entrepreneurs must ascertain how to best develop learning organisations. There exist a number of ways in which entrepreneurs can capture organisational knowledge

In this day and age, entrepreneurs need more than just technical know-how in building up a wealth of knowledge that is unique to them.

Firms that have been in existence for long usually have uncovered the art of developing the capacity to learn and utilise knowledge as a matter of survival.

An organisation’s knowledge architecture comprises shared understanding, internal systems, quality control measures, operating procedures and routines.

Employee skills, competencies and capabilities should be harnessed such that even by the time they leave an organisation their unique contributions will still be useful. It becomes knowledge that is specific and applicable to that organisation.

Through the practice of cross-functional cooperation and sharing of knowledge, crucial firm-specific information can be built up to advance organisational objectives.

Improving the use and re-usability of tacit and explicit knowledge is key to the creation and retention of knowledge unique to a firm. Companies should take copious notes, document learning, create a database and make it accessible across the organisation. According to researcher Chris Argyris, in order to avoid the risk of losing the benefits of experience, a firm must engage in double loop learning as opposed to single loop learning. Single loop learning involves the adoption of a whole new set of structures to improve productivity and quality.

READ: Setting up your small business for success

Double loop learning, however, occurs when those set of structures are continually altered, questioned and updated in line with experience gained and the ever-evolving business environment. This will also foster bottom-up inquiry, not just top-down orders.

An often overlooked point, proper knowledge management involves identifying informative patterns in the data a firm holds and converting that data into useful insights critical for decision making.

Knowledge must be viewed as an asset rather than a burden. Data turns into knowledge as something to be exploited and utilised to generate value.

When an organisation is able to harness knowledge that is imperfectly imitable, non-substitutable, rare and valuable, then it proves possible to

After-action reviews, learning reviews and frequent brainstorming sessions are some of the ways in which an entrepreneur might want to capture new knowledge from the team. Another way is by forming communities of practice which could enhance cohesiveness and team spirit among employees.

One could also ask “what areas of knowledge if well harnessed now, would really propel us forward in the next five years and enable us to achieve our goals?“.

Capturing key data about existing clients and potential ones represents often the most important. This brings in the angle of incorporating customer profiling in the business so as to better understand its clientele.

In summary, the organisational knowledge base plays a critical role in its ability to be innovative and also survive in the long run. It is therefore imperative that firms learn how to generate new knowledge, capture existing knowledge and use it to uniquely position themselves from their competitors.

Steve Muriithi, Director of finance at Humanum Ratings.