Towards A Knowledge Business

They say that companies in the business of providing knowledge for profit will dominate the twenty-first century global marketplace. The underlying cause for this change: with changing

technology business life-cycles are becoming shorter and shorter while knowledge is doubling every seven years. So the best way to succeed is to become a knowledge-based business one that leverages the economic value of knowledge.

The value it offers to customers: knowledge products give more value than its preknow-ledge predecessor. A tennis racket that glows where the ball strikes it helps you correct that stroke. As ki jacket that warms according to the outside temperature is a more convenient product for its wearer.

 

Many smart products have been built from time to time. Goodyear's smart tyre contains a microchip that collects and analyses tyre data, then tells the driver, I am low on air, time for a pit stop, or, I am wearing thin on my right side, time for a realignment. These products do not just provide data, but as the second part of the above statements shows, they tell you what to do. That is the knowledge component.

And this is just as relevant to the hamburger sellers and supermarket chains as a software developer. Any product can become a knowledge product. One possible way to achieve this: create knowledge about the product rather than literally building it into the product. Lets see how a hamburger business can be turned into a knowledge business.

What is the basic hamburger data? One set comprises of its ingredients - protein, fat, carbohydrates. The functions of the burger nutrition, convenience, price, and perhaps, aesthetic pleasure. It is the organisation of this data into a meaningful pattern that leads to useful information about the menu and the market.

But that is only information. It has to be tinkered around a little more for the hamburger company to become a knowledge business. So far customers are getting only tasty and nutritional food. They can also make use of the knowledge about that food. When customers place orders for an entire meal, can the calorie and fat content be calculated and printed alongside the items of the bill, or even at the time of the order, so that they can make informed judgements about their order.

The same can be done in, say, a supermarket. When customers buy halibut steak, they could flip electronically through a dozen recipes for halibut preparation, print one out, and pick up the additional ingredients at the same time.

But the transition into a knowledge business has many implications that must be understood carefully. Computers ushered companies into the data age, and now we are in the information era, made possible by the marriage of telecommunication and computers. At this stage, computers require little training and millions of people use them. The knowledge age will be ushered in by the blending of computers and telecommunications with human actions. In the knowledge phase, computers will require no training at all.

And therein lies the first rule for a knowledge business. People are not interested in how a smart product works, not what it will do for them, and how easy it will be to learn and use it.

The second fallout of this transition: knowledge products and services have relatively short lifecycles It is hard to keep them proprietary. Patent protections on intellectual property are still not as developed as they are on hard technologies.

The half-life of proprietary information is short, unless you can find ways to build barriers around that knowledge. This is where the advantages of scale prove useful. A big company knows more, and given the resources at its disposal, can continue acquiring knowledge at a rapid pace, putting more and more distance between its competitors.

Smart products get smarter, the more you use them. The company in that business should realise that, and put in systems that exploit this characteristic. The Ritz-Carlton chain is putting in a knowledge-based system that tracks customers' particular preferences and needs, and automatically provides them anywhere in their worldwide system.

When business beco-mes educator, consumers become learners. Rap songs have replaced rapped knuckles as means of learning important lessons. The trick is to make education more entertaining, not vice versa. The boom in multimedia is a case in point, where words, sounds, and images are sent, displayed and stored together in an electronic blend.

Businesses that can informationalise and know how to use the knowledge platform will do better than those that cannot. Companies are only beginning to grasp this concept. So any time you find an example of a knowledge-based product or service, ask what it is doing differently from before. Then extract a principle and ask yourself how it could be applied in your business.n

The half-life of

proprietary knowledge is short, unless you can find ways to build barriers around it. This is where the advantages of scale prove useful. A big company knows more, and given the resources at its disposal, can continue acquiring knowledge at a rapid pace, putting more and more distance between its competitors.

Companies in the business of providing knowledge for profit will dominate the twenty-first century global marketplace. The underlying cause for this change: with changing technology business life-cycles are

becoming shorter and shorter while knowledge is doubling every seven years. So the best way to succeed is to become a

knowledge-based business one that leverages the economic

value of knowledge.