Tag Archives: Business

What is Knowledge Management?

20 Apr
happily collaborating, celebrating businesspeople

via ksawa.com

Steven Johnson, author of Where Good Ideas Come From, suggested that the main ingredient behind successful innovation was not a clever way of thinking or brainstorming. Instead, it was a place where people could share ideas, let them bump into each other, and in so doing, evolve into new, more powerful forms. The coffee-shops of Paris served this purpose during the Enlightenment, allowing for fantastic new scientific and philosophical concepts to be born.

The Japanese, during the 70s, applied this concept to businesses. How, they asked, does knowledge flow, and how can managers and business leaders help? Philosopher Ikujiro Nanaka and others developed a model of knowledge creation that captures all the ways knowledge moves and morphs within a network, and the one main technique that managers can use to encourage its development.

The SECI Model Explained

The model suggested by Nanaka’s team details the ways that knowledge changes hands and transforms. To begin, he divides knowledge into two types: Explicit Knowledge, which can be described with numbers, science, or manuals, and Tacit Knowledge, the emotional, difficult-to-describe variety. Both kinds of knowledge are necessary, both for everyday living and for business ventures. These two kinds of knowledge interact with four processes: Socialization, Externalization, Combination, and Internalization (SECI).

SECI Model displayed, socialization, externalization, combination, internalization, tacit and explicit knowledge

The SECI Model

Socialization

Socialization is the process where tacit knowledge it transmitted between people. Because tacit knowledge is rarely successfully expressed, socialization simply involves spending time with coworkers, enjoying their company and conversation until you learn how they think feel. You learn how they look at their tasks, their perspectives. It’s possible – and necessary – to do this with your customers, too. Those who are in a position to interact with the customers directly need to learn the skills needed to see how they think and feel, and through the other processes in the model, transmit that model to other parts of the organization.

Externalization

This process allows tacit knowledge to be morphed into explicit knowledge. Through interaction between an individual and other groups in the organization, the individual’s tacit knowledge is expressed through whatever terms are possible, such as metaphors and stories. Effective communication skills are a necessity; developing these and increasing opportunities for externalization are the main ways managers can encourage this process.

Combination

Through teams, or a creative individual, the explicit knowledge injected into the organization is transmuted through the process of Combination. Knowledge throughout the organization is collected and compiled into a more effective form of explicit knowledge, allowing the more refined forms to be distributed throughout the organization. An example would be a team in a tech firm whose job is to publish reports of successful products made throughout the company.

Internalization

Internalization is where the model comes full circle: as we started with an individual sharing tacit knowledge, it ends with the same individual converting the explicit knowledge supplied either by the firm or outside sources into personally applicable tacit knowledge. An HR official runs through this process when he reads the company’s training manual for conflict resolution, then puts it into practice. Internalization doesn’t just refer to an individual; the collective tacit knowledge of the organization is morphed from its explicit knowledge through internalization.

Ba and Encouraging Knowledge Flow

Now that we understand the main mechanisms whereby knowledge moves throughout an organization, the only piece missing is this: What are we, as managers, supposed to do about it? How can we apply this information? Here, we return with Nanako to the introduction of this article: a space that encourage the flow of ideas, that can allow all the SECI processes to occur. Nanako introduces a concept from Japanese, called Ba, which generally translates as “Place of _______.”

Ba or Tokoro, Kanji, Japanese Character

Ba: “Place of _______”

Ba, when applied to business, refers to the concept of having a place for knowledge processes to occur. This place can be physical, virtual, or mental (such as a shared perspective or set of values). Managers’ main purpose in knowledge management is to provide this Ba, and to tailor the characteristics of each Ba to the processes it’s meant to encourage. For example, if one is trying to encourage Socialization, it would be counterproductive to encourage virtual interaction. Why? Socialization requires face-to-face interaction, as the very act of an individual expressing his/her tacit knowledge transmutes it to explicit knowledge, making it Externalization instead of Socialization. Considerations such as these should become vital to a manager’s strategy.

Ba is a powerful tool, and regulated or not, it’s an integral component in a company’s culture. When underutilized, Ba will develop independent of a manager’s direction, and will likely be counterproductive to the company’s goals. However, when used properly, Ba can encourage the flow of ideas throughout an organization, and as such, allow for greater innovation and creativity. Enjoy, and good luck, Changemakers!

Feel free to Share using the buttons below!

Where in your workplace can you see Ba in action? How can you utilize Ba to help your company’s effectiveness?

Understand Customers, Understand Yourself: Means-End Analysis applied to Habit Substitution

19 Apr

via ebiz.net

Hello, Changemakers! Today, we talk about one of the most valuable theories in marketing research, and look at its implications in our own lives, especially with regard to strengthening our own personal habits.

Gutman’s Means-End Chain

In 1981, Jonathan Gutman proposed a new method for understanding consumer behavior. Called the Means-End Chain, its basic assumption is that when an individual uses a product, it’s not for the product itself. It’s rare that we get a car just to have it. Usually, the product is a means to an end: certain features of the product allow us to achieve something that is important to us. Gutman’s model suggests that the benefits each product feature gives are important to us because they feed a set of personal values we have. If we were to apply the Means-End Chain to our car, then, we would see that the car has a Feature of traveling quickly and easily, giving us a Benefit of getting to far-away places with little effort, feeding into our Value of convenience.

The Means-End Model

The Means-End Model

This model allows for many different applications in the field of marketing. Once a successful Chain has been discovered, usually through extensive market research, it can be stressed in advertisements to influence consumer behavior. Understanding the Chains behind consumers choosing the competition can allow a company to deliberately undermine those Chains, slipping their product in as a suitable substitute to feed those same values. It’s that very idea behind product substitution that allows us to transfer the Means-End Model to personal habits.

Analyzing our Own Motives

Do you remember when we looked at the basic structure of habits? We mentioned that all habits have a basic structure of Cue-Routine-Reward. The Means-End Model allows us to look at the underlying relationship between the Routine and the Reward. Why is the Routine important to us? What, precisely, is the Reward we’re given? There are many ways to find out, but the Means-End Model gives us a chance to see what we really want.

For example, let’s apply this method of analysis to a simple habit we want to stop: say, snacking when we feel hungry. What are the Features, Benefits, and Values affected by this Routine? Our first step would be to ask ourselves some key questions, such

  • What do I like most about snacks?
  • What benefits do I get when I snack?
  • Why are those benefits important to me?

This could be one result, though the answer will be different for each person.

One possible Snacking Means-End Chain

One possible Snacking Means-End Chain

Now that we have the Chain for this particular activity, we’re equipped to substitute another activity in that will feed those same Benefits and Values. Note: The further down the Chain your substitution goes, the easier it will be to switch. That is, a substitution will be easier to implement if it satisfies the same Benefits and has the same Features instead of simply satisfying the Values in question. In our snacking example, it would be easier to switch to healthier snacks than to resting with a book and blanket. While the rest may give you comfort and distraction, the part of your brain used to the full stomach will still be pulling you towards the snacks.

Once you’ve found an effective substitute, make it your personal determination to use it instead of your unhealthy habit. There will be resistance, but depending on how well-chosen your substitute was, the resistance will die in time. Hold fast, and use this to give yourself some good habits along the way! Enjoy, Changemakers!

Feel free to Share using the buttons below!

What habits do you need to change? What habits do you wish you had? How can you use substitution and Means-End Analysis to help?

The Grid: Analysis of Selling Strategies

17 Apr

Well, Changemakers, here’s one of my favorite techniques from the sales books I’ve been reading. Though I’ve forgotten the title and author, one of them concerned a new way to look at the assumptions governing both salesman and customer behavior. This is based on a pair of graphs: two graphs, one representing the salesman and one representing the customer, each using the same scale.

The Sales Grid

Here, we look at a graph of all the different ways a salesman can look at sales. The grid is laid out on two axes: the horizontal, representing the salesman’s concern for making the sale; and the vertical, showing the concern for the customer. Each axis is measured on a scale from one to nine. While there are a near infinite number of combinations here, we will only look at five, residing at the (1,1), (1,9), (9,1), (5,5), and (9,9) points.

The Sales Grid: where are you?

The Sales Grid: where are you?

Take it or Leave it

This salesman is absolutely careless, not in lack of attention, but lack of emotional investment. They care neither for the customer nor the sale, leaving little reason to put much effort in the sale. Regardless of the situation, this salesman is unlikely to provide value for himself, the customer, or the company.

Pushover Salesman

Here, the salesman is consumed with caring for the customer and their feelings. Their sales style is filled with flattery, concessions, and attempts at ensuring the customer thinks well of them. They even view sales less about selling products as selling themselves. While this salesman may possibly make more sales than (1,1) or (9,1), they rarely will actually benefit the customer, and it is even less likely to benefit the company.

Hardball Salesman

This sales style is full of distrust of, and contempt for, the customer. They believe that the customer must always be bullied into a sale, and any compromises are losses. This salesman may make a sale, but their unnecessarily tough tactics make it unlikely, and they will rarely benefit the customer or ensure repeat purchases.

Technique Salesman

Based on equal concern for the customer and the sale, this salesman bases his sales on selling techniques. In an effort to half-help both in a false compromise, they rely on proven techniques and processes to make a sale. In all the strategies mentioned so far, this one is most likely to ensure repeat purchases, and has the best set of sales ethics associated with it.

Solutions Salesman

Just as the Pushover Salesman bases his sales on selling himself, the Solutions Salesman bases his sales on selling Solutions. They believe in their heart that there is a possibility for a supreme Win-Win, where both the customer and company gets everything they need. The Solutions Salesman still uses some well-known techniques, like capitalizing on objections and soft closes, but bases most actions on on-the-moment growths from his Solutions mentality. This mentality succeeds against all customer mentalities, and helps customer and company with equal effectiveness.

The Customer Grid

The Customer Grid: Where is your buyer?

The Customer Grid: Where is your buyer?

Each of these positions roughly corresponds to the same point on the Sales Grid. For example, the Avoidance Customer (1,1) despises salesmen and purchases alike. When confronted with a salesman, they make make a hasty purchase just to get rid of the perceived assailant. The Pushover Customer (1,9) will do anything to make the salesman approve of him, while the Defensive Customer (9,1) distrusts all salesmen, and pushes his own opinions relentlessly (often doing themselves a disservice in the process). A Reputation Customer (5,5) understands that the best compromise is to base purchases on the information about the company gathered from outside sources, but the Solutions Customer (9,9) sees that a Solution exists where both salesman and customer are satisfied.

These grids allow for two keen advantages: one, self-diagnosis as a salesman, which allows us to focus our self-development efforts; and, more importantly, analysis of the customer’s mentality and the choice of appropriate sales style. There is a general rule suggested by the second use of the grids:

Given a customer style on the customer grid, the salesman is most likely to profit with any strategy that is closer to the (9,9) point than the customer.

That is, if the customer is a Pushover, the salesman would do well to value the customer just as much as the customer values him, but emphasize the goals of the company so as to do the employers and salesman justice. A Defensive Customer is put at rest when the salesman cares as much for the purchase as they do, but is willing to listen to their needs. Obviously, the best possible position to take for any customer is the (9,9) Solutions Strategy, but assuming that few salesmen are able to consistently uphold this strategy, this rule allows the salesman to always mount a successful reprisal to each customer style.

Where are you on the Sales Grid? As a customer, where are you on the Customer Grid, and how will you benefit from moving towards being a Solutions Customer?

%d bloggers like this: