We live in a knowledge-based economy where data and information are considered as valuable assets compared to physical assets. Organisations are collecting more data and processing them to turn into actionable insights. These insights act as a powerful tool in business decision making and driving strategic initiatives. These insights need to be captured and disseminated across your organisation that will stimulate and accelerate innovation. Sharing of organisational knowledge across the organisation helps with getting buy-in from stakeholders and change management processes.
Organisations that exhibit a higher level of knowledge management capacity are likely to increase their competitiveness through collecting, organizing, and transforming knowledge into productive activities. Thus, the speed of organisational innovation depends on how organisation organises its information, how it disseminates that information, and how this whole process generates new knowledge. This continual loop is indispensable for organisation to survive in a competitive business landscape.
How is knowledge management important to innovation?
Many traditional organisations have a separate Research and Development (R&D) department that overseas many innovation projects. Focusing organisational efforts on the R&D department does not scale as your organisation grows and expands its portfolio of products/services. Knowledge management is key to decentralise the knowledge which is usually siloed in Research and Development (R&D).
Empowering everyone in an organisation is the mantra now!
Knowledge management stimulates everyone to understand about product/services and enables them to innovate around solving customer-centric business problems. This accelerates faster development of existing products, build a new category of products, offer new services, and streamlines existing services. Thus, an organisation should create a centralised knowledge repository that captures everything about their products, services, internal business processes, data and metrics, product roadmaps, and service delivery. Knowledge base tools provide a platform for knowledge management.
Also Read: Enterprise Knowledge Management: Importance, Methods & Tools
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Three steps you can take to accelerate business innovation
Step 1: Organising existing knowledge
Acquiring and organising existing knowledge is an important function of a knowledge management. Organising existing organisational knowledge is a stepping stone for business model innovation.
Innovation cannot happen without understanding business problems. Information about organisation’s customers is vital to understand problems faced by customers. In addition to understanding customer feedback and problems, knowledge on how customers are deriving product value helps to create innovation mindset. If the organisation staff are empowered with product knowledge, customer-centric problems aids with team collaboration leading to novel solutions. The other sets of information that an organisation needs to catalog and document are in the areas of business risk and financials. Understanding business risks and budgets lay a strong foundation for frugal innovation.
Organising information about topics on stakeholders, product, product’s unique value proposition, business risks, customer feedback, product roadmap, customer support, patents, IP, service delivery into right taxonomies needs a lot of investment and should be taken as part of the strategic organisational initiative.
Step 2: Disseminating knowledge
Disseminating knowledge ensures that the right information is available to the right staff at the right time; Accessing information on patents held by an organisation helps staff to utilise organisation resources to innovate. Sharing of information knowledge helps diverse teams/departments to collaborate to focus on solving a specific business problem. Knowledge sharing from top executives to service delivery personnel to get more strategic insights and operational intelligence.
To help understand the shared knowledge, a good business glossary needs to be established such no business jargon is mixed leading to ambiguity. This helps everyone across the organisation refer to the same thing and enhances shared understanding. In summary, if the organised knowledge is shared using terms in your business glossary, it amplifies the impact of your innovative projects.
Step 3: Generating new knowledge
Once the organisation staff starts to solve any specific customer-centric problem utilising all knowledge across the organisation, they will generate new knowledge. This new knowledge can cover a wide range of organisational scenarios such as
Learnings from failed experiments
Organisation may wish to try new things and might fail. Learnings from failed experiments are essential to ensure mistakes are not repeated. These new learnings promote “build fast, learn fast” innovation mindset
Also, check out our article on Knowledge Management Metrics
Business insights via analytics
New knowledge gets generated based on data analytics projects that span across the organisation. Business analytics unearths new trends and patterns in customer behaviours. These helps businesses to pivot or create new product offerings.
Market trends
Information on market trends helps the organisation to understand the product market size, competitor behaviour, and business drivers. Capturing knowledge on market trends alters how the organisation does business.
Shift in customer behaviour
Customer behaviour also shifts as technology and globalisation impact the society. Newly generated knowledge should flow through organisational nervous system, and it is very important that it reaches all the staff irrespective of their roles. This set the stage for the empowerment of everyone in the organisation to change the existing business model and innovation with all stakeholders.
Conclusion
Effectiveness of knowledge management drives business innovation. Internal employees can use existing knowledge to understand current customer pain points and process bottlenecks. Increased team collaboration helps to enrich the knowledge that is shared among different stakeholders. This fuels organisation to innovate faster and stay competitive in thriving business landscape. Organising existing knowledge, sharing that knowledge, and generating new knowledge based on learnings form the basics for institutional memory. This institutional memory makes an organisation adaptive to emerging business opportunities and risks.
Also Read: What is Tacit Knowledge: Importance, Benefits & Examples
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