Competitive Performance - Use knowledge & Innovate

Competitive Performance

The term competition refers to a situation where two or more parties fight it out in the market for better share and gain. To get the better of the other, a business has to be proactive, dynamic and nimble. To out think, to act and adapt faster a business must acquire and harness its knowledge resources. When knowledge answers, businesses often innovate. Innovation well supported by knowledge help companies raise the bar and be competitive. Hence it is imperative, for companies that aspire to grow their businesses, to embrace knowledge and innovation.

Let’s dwell a bit on achieving competitiveness in an established market. We all know that a company can gain an edge over its competitors by achieving one or more of the follow viz., superior quality and service, Cost advantage, Ease of use and Aesthetic design. The following mind map captures various requirements for achieving each of these aspects of competitiveness.

Take a closer look at each of the requirements in the above map and try to figure out the role of knowledge in achieving them. A company that is aware of its knowledge repository and makes full use of it would keep delivering on all fronts and continue to grow.

Knowledge

Knowledge has its roots in learning. It is through learning that one builds up and strengthens his or her knowledge base. An encounter with a customer in an airport can open up a new way to serve and expand business. A business should identify all the available channels and points of learning to tap and convert that learning into a knowledge resource. Some can be accidental but many can be by design.

A company accumulates knowledge through its people, who learn and gather knowledge through various sources, in various ways and for various purposes. Knowledge thus gained should help a company to sharpen its competitive edge by improving processes, technology and the overall business performance. However not all willingly share knowledge for the greater benefit of an organisation. Two big challenges of knowledge management are making people share and use knowledge.

People, behind technology, beside machinery, in the cubicles, and those in the field make things happen in this highly competitive world. The knowledge they accumulate is vital for a company to grow. They learn and accumulate knowledge by doing, observing, questioning, reading, listening and brainstorming. The onus is on a company to make the best use of its knowledge assets.

A knowledge focused organization

Knows that knowledge acquired for business does not automatically translate into knowledge used in business. Like a plant, knowledge requires a conducive environment to thrive.

Knows what it knows, tracks & builds its knowledge repository

Puts in place a system that acts as a breeding ground for knowledge

Rewards and more importantly recognizes people for their contribution and making use of knowledge

Knowledge Management System

Any effort towards knowledge management must keep the major stakeholders (employees) of knowledge into consideration. A mere installation of knowledge management software won’t suffice.

Men distinguish themselves from the rest with the knowledge they possess. Asking them to share that knowledge with others to the common benefit requires greater commitment and a genuine system. Even after that it will be a tough task. The following question can stop one on his tracks. Who is responsible for the outcome, if I use other’s knowledge? This is where a comprehensive and well communicated KM system comes in handy for a company.

The following are imperatives for a successful knowledge management system.

• Well articulated knowledge strategy
• Firm commitment by the top and middle management
• Clearly defined roles and responsibilities with regard to KM system
• Strong and committed knowledge management team
• Clear reward and recognition system
• Comprehensive knowledge capture, transfer, storage, channelling and usage system
• Open work culture that encourages knowledge sharing and usage
• Facility for people to track and know the fate of their knowledge contribution
• Last but not the least, absence of blame culture and a clear accountability structure

Innovation

Innovation is an act of starting something for the first time; introducing something new. By innovating we bring something new to the environment. This is how innovation is defined in dictionaries. In business, innovation often is associated with new products and services. However it can also be associated with new processes, practices, methods etc. that improve core operational parameters viz., cost, quality and time.

To innovate one needs to think and capable of thinking differently. It’s a combination of attitude and knowledge that breeds innovation. Innovation needs right climate and support. It cannot happen in a choked environment.

I will post later on supporting innovation in a business environment

Sustaining Business Growth

Businesses grow but not all business grows continuously. In fact continuous growth is elusive even for the ones led by the best of business minds. There may be periods of flatness or even temporary slump due to external environment but as long as a business turns up in quick time and resumes its growth journey, we may deem a business as growing continuously.

To grow, a business has to perform. Continuous performance ensures continuous growth. The word performance has different meanings to different people. To some it may simply mean more money generated. To some it may refer to quality of product or service. And to some it may mean return on investment. None of it are wrong but even all of it do not capture what performance is all about in a business context, especially when we talk about business growth. An all encompassing business performance would mean performance at all the three levels viz.,

• Strategic
• Competitive
• Operational

Strategic performance involves articulating vision and formulating strategy. Competitive performance involves harnessing knowledge and innovating to achieve operational excellence. Operational performance involves delivering quality product / service on time at effective cost. The picture given alongside captures three layers of performance in a pyramid.

Mostly people relate performance to operational performance. As long as the external environment is conducive and friendly to the business then efficient operational performance alone may suffice. However competitive pressures are part and parcel of today’s business environment and add to it the side effects of globalisation, companies can no longer rest on their operational laurels. They have to transcend competitive and strategic performance levels successfully in order to grow and maintain the growth momentum.

Operational Performance vs. Competitive Performance

Operational performance involves successfully delivering on three traditional yardsticks viz., Time, Quality and Cost. The operational mantra is to consume optimal resources and delivering high quality of work in the least possible time.

A company sans operational issues and problems would deliver on operational yardsticks 24x7. In the absence of any changes in the environment this performance would suffice for a company to be competitive. However changes in the environment induced by the market / competition / economy / regulation / society etc. can derail even the best of companies priding in efficient operational performances put up yesterday. It would not be suffice to deliver efficiently (by yesterday’s standards) when the environment is constantly changing. In a changing environment, what is efficient yesterday is not efficient today. A company needs to learn, know, adapt and innovate in order to remain competitive and lead the pack. It has to evolve and dump work practices, policies, systems, products, services, technology etc. that were rendered obsolete by the environment.

Companies that harness knowledge and foster innovation enrich their operations and constantly raise the bar. These companies will remain competitive and often capture the best of the market. The competitive performance factors viz., Knowledge and Innovation become a source of improvement for performance on operational yardsticks viz., Time, Quality and Cost. An operationally efficient company achieves operational excellence by managing and exploiting its competitive performance factors. A strong Operational performance means operational efficiency. A strong competitive performance means operational excellence.