Knowledge Management 101

I recently saw a mug with the message, “I drink coffee and I know things.” As business owners, we probably expect a little more than that from our employees. Still, there’s no denying that the knowledge in people’s heads is one of the most valuable assets for any company. It can be devastating to have that knowledge lost when a team member leaves to pursue other opportunities. That’s where knowledge management comes into play.

“Knowledge Management is the process of capturing, distributing, and effectively using knowledge.” – Tom Davenport

Davenport’s definition captures the three fundamental tasks leaders must tackle to prevent the loss of critical corporate knowledge.

  • Identify knowledge resources within your business and record that knowledge in a usable way.
  • Share knowledge with team members to increase their value to the organization.
  • Apply knowledge to promote positive outcomes for current clients and to power future innovation and growth.

It’s important to remember that knowledge management isn’t a one-and-done proposition either. For any industry — but especially for a heavily regulated one like insurance — laws and regulations constantly evolve to address new products and business models. Obsolete information doesn’t help maintain your competitive edge. In fact, it can actually result in costly non-compliance.

Banking Knowledge Resources

Who is your go-to person in each department of your organization? I bet you have one. They take the same facts that everyone has and see the connections between them, turning details into knowledge. Then, by applying past experience, they transform that knowledge into wisdom. Being a knowledge resource isn’t necessarily a result of time with the company. It’s a combination of ability and desire. A new hire with an eagerness to learn can rapidly become more valuable than a long-time employee who’s gotten overly comfortable in their role.

Seek out your most productive and knowledgeable team members. Ask them to document how they do what they do, with special attention to any resources they use. Capture the contacts they reach out to for answers. Be aware, however, that their notes may not be ready-to-share. Very knowledgeable people often skip steps that are “obvious” to them — so familiar that they no longer think about them. Pairing a very experienced employee with a less knowledgeable one is a great way to close these gaps. (It can also be the start of a great mentoring relationship!) And don’t overlook the rest of your team. You never know who might have the nugget of insight that completes your information map.

And Don’t Forget: 

Don’t overlook another precious source of knowledge about your company — your customers! Bill Gates once famously said, Your most unhappy customers are your greatest source of learning. Feedback from happy customers may make us feel good, but talking to unhappy ones provides greater insight into what is and isn’t working.

A strong quality assurance or client management team is worth its weight in gold! Learn what the client wants, when they want it, and decide how you can make it happen for them. Then apply that insight to other clients. After all, there are likely to be other customers with similar concerns who simply aren’t unhappy enough to say so.

Sharing and Applying Knowledge

Unfortunately, the people who know a lot about your business aren’t always equally talented at communicating that knowledge to others. (If you have one of these unicorns, treasure them!) That’s why actually getting information down on paper, so to speak, is essential. This knowledge bank can then form the foundation of your training program.

Start with an assessment. What skills and resources do team members already have? Which do they need? Are there questions that seem to come up again and again? Do employees understand how what they do fits into the bigger picture? What do they know about your organization’s overall goals?

While step-by-step instructions, checklists, and guides are undoubtedly valuable tools, don’t overlook the why of processes. Rote learning may enable employees to perform run-of-the-mill tasks, but it limits their ability to recognize and respond effectively when things don’t go according to plan. Understanding the decision-making process behind procedures and how tasks fit together also fuels future innovation. It’s one of the main benefits of cross-training. Be sure to take external factors such as the regulatory environment and competitors’ offerings into account as well.

As more and more of your employees master your knowledge base, the resilience and value of your company increase greatly. Positive outcomes become more likely. Customers develop confidence in your expertise. This results in greater customer loyalty and a willingness to refer your company to others.

Knowledge Management As an Investment

So what happens to a company that neglects knowledge management? Well, if your other management practices are sound, you probably won’t see a lot of priceless knowledge walking out the door at once. Over time, however, employee turnover eventually reduces the ability to serve clients effectively. Your competitive edge grows dull. Old customers leave, and new clients don’t replace them. Innovation stagnates.

Investing in knowledge management may seem time-consuming, especially if employees are busy dealing with current clients. There may be other costs involved, as well. But compared to seeing your business gradually wither … it’s worth it! After all, you never want to hear someone say, ABC Insurance? Yeah, they used to be awesome.

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