Financial Daily
from THE HINDU group of publications

Saturday, July 21, 2001



Opinion | Next | Prev

New edge in business

L. Jayarangan

THE unique thing about knowledge is that you can have the cake and eat it too. Or, put differently, `the more you mine, the more you shine'. Over the last few years, there has been a perceptible shift in management style and approach, to match the changi ng emphasis from an industrialised society to an information society. In the former, Knowledge was not all that significant. But now, the K-word has assumed strategic importance.

With competition hotting up, product differentiation is reaching dizzying levels. Worldwide, 50,000 brands are launched every year. HLL's mantra until recently was TPM -- two product a month. Some of these could be white elephants, and some cash cows. Th e concept of emotional capital captures the product managers launch experiences and documents the same. This helps the company avoid repeating its mistakes.

With expanding markets, and the removal of mobility constraints, cent per cent employee retention is not possible. Even the software people's mecca, Microsoft, is losing 700 employees every week from a manpower strength of 29,000 people. When they depart , the knowledge resident in them too departs. Again, it is knowledge-intensive business rivals that could dent ones business badly! Good companies capture social capital and document it for company wide dissemination as part of their knowledge management (KM) initiative.

People who call shots in the organisation are the ones who have a good inter-personal skills. In the 1970s, a leading truck company in the South had a very bumpy ride vis-a-vis labour and, to iron out issues, it brought it's own production chief to head the industrial relations function. What stood the company in good stead over the next 10 years were his inter-personal skills! Had he profiled the union leaders and documented it, it's value would have been immense for future managers.

3M Corp of the US has produced well over 3,000 products. It was 3M's R&D that gave birth to such products as `Post-It', `Scotch tape', Scotch Brite, etc. It has filed thousands of patents in the US, and its CEO once rightly observed that 3M was in the bu siness of R&D, and that the products were only incidental! No wonder 3M figures in the Fortune 500 list year after year. Good KM thus not only helps knowledge traverse all corners of the enterprise but also boosts brand recognition and profits.

Knowledge is the new currency in most economies and is fast dividing the world into the `knowledge haves' and the `knowledge have-nots'. Learning organisations make faster progress, and both the firm and its customers benefit from it but others who ignor e this aspect trail the winners, with little chance of making it to the top.

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