The 7 best ways to build your business now: Harness your corporate brain

Written by Kim Shiffman

Remember when your firm was really small? You knew all your employees as well as you know your close friends, and could probably do all their jobs better than they could. But how about now, with employees scattered around different floors, offices or even cities. “Now, you don’t know people intimately anymore and, worse, you don’t know what people know,” says Nick Bontis, director of the Institute of Intellectual Capital Research and a professor of knowledge management at McMaster University in Hamilton, Ont.

That’s a very bad thing. Without effective, systematic ways of filtering, capturing and distributing the knowledge within your walls, you risk unnecessary duplication costs and can’t tap into the full intellectual horsepower of your company. More important, a proper knowledge management (KM) system helps you find the knowledge in your company and eliminate knowledge gaps due to employee turnover.

A 2003 study by KPMG revealed that 83% of organizations with a KM program in place said they had realized synergies among business units; 63% said they had accelerated innovation; and 67% said they had reduced costs.

Among the non-financial benefits, companies experienced increased teamwork (68%), increased speed and responsiveness (64%) and better decision-making by front-line workers (55%). The same study revealed that 6% of companies’ annual revenue isn’t being realized because they fail to exploit knowledge effectively. “The cost of KM is relatively low in comparison to the business opportunities it can exploit,” say the authors of the KPMG report.

Effective KM processes at your company mean no more unnecessary duplication of work. A KM system, says Bontis, would allow you to know that Mike in Toronto shouldn’t start that sales presentation from scratch because Paula in Vancouver created the same presentation six months ago.

Start your KM initiative with an intranet-based document filing cabinet — a program that helps all employees add, navigate, search and retrieve information from disparate sources. Many such programs are now being offered online through the software-as-a-service model.

Bontis also strongly advocates comprehensive exit interviews for departing employees. He recommends hiring a human- resources consultancy to conduct exit interviews that capture the employee’s most useful knowledge — the stuff he knows that nobody else knows. At Mississauga, Ont.-based Pivotal Managed HR Solutions, for example, a 40-minute exit interview costs about $75 — although Bontis recommends even longer, more extensive interviews. The idea is to learn everything, from a client’s quirks to where the departing staffer keeps the keys to his filing cabinets. All the information gleaned would then be stored in the corporate intranet.

But KM isn’t just about capturing knowledge and technology; it’s also about communication and collaboration among employees. “My research shows that for really good collaboration, you must have rapport,” says Bontis. “That’s only done face to face. So, as a leader, you must find institutional slack” — which he defines as the time and space you set apart for the purposes of socialization. Whether it’s Thursday night at the bar, Friday afternoon in the lunchroom or Monday morning at the weekly sales meeting, companies “must come up with a time and place where the only things that happen is people come together to informally socialize. We need to know who people really are in order to truly collaborate.”

Originally appeared on PROFITguide.com