The CRM Textbook: customer relationship training

Terry James© 2006

Knowledge Management (KM)

© 2006 Terry James

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Tacit Knowledge Knowledge management is the capturing

and active management of intellectual assets You can have capital assets, and intellectual

assets An asset is a process or object of value

Tacit knowledge is not written down It is undocumented expertise in your people

For CRM, who knows the client well, what makes the client buy from you, what do they want next?

© 2006 Terry James

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Catalog and directory Product catalog that lists all the products

and information on products Directory that lists all the employees,

name, phone number, perhaps department Extend the directory, to skills, experience,

authority to spend, etc. Extend the directory to contain CRM data:

knowledge of clients, industries, regions,… Extend the directory to relationships and roles

between employees, teams, and clients.

© 2006 Terry James

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Ontology of CRM Thesaurus of CRM terms

Equivalent terms, hierarchical, associative, synonyms, homonyms,..

Deepen your understanding of client ideas, concepts, relationship of ideas and concepts

© 2006 Terry James

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Continuous Improvement This is not just a manufacturing idea Take your client relationships and constantly

improve KM is about finding what you need to know KM is about creating a learning organization In a world that changes quickly, KM is critical. Do you know your knowledge gaps? Do you have an improvement plan?

© 2006 Terry James

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Theory of constraints Do you know your weakest point? An easy way to find the weak link is to speed

up your process and see what breaks first. Can your old shipping system keep up to new

orders from the Internet, or does billing get crash first?

Once you detect a flaw, fix it, then speed up again.

The constraint of time (speed) can equally be applied to constraints of space, cost, quality, or other key components of a business. Can you ship globally, for less than a competitor?

© 2006 Terry James

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Workflow This concept is the process flow for

activities in your business Fill in screen 1, then go to screen 2 for

approval, then fax a form, then send an email, and follow-up with screen 9 to complete the job.

Workflow will guide you through each step, it will monitor steps, tell you where a form is waiting, missing, how long it has been stuck?

Workflow can automate filling in standard items such as current date or department number, and detect bottlenecks or wasted time.

© 2006 Terry James

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KM and workflow What is the knowledge velocity of your

firm? How fast does a new standard or client order

flow across the company? Where is the choking point or constraint? Where is the quality hotspot? Why?

Workflow combined with KM can improve knowledge velocity Where do client orders slowdown? Where in your process are your largest quality

issues on client data? Who, when, why?

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Learning organization We live in a knowledge economy We are mostly knowledge workers, paid for skills

and know-how than manual labor Closed loop marketing is where you take results

of one campaign, learn from it, and use that knowledge in the next campaign.

Single loop learning is finding a problem and fixing it.

Double loop learning is learning how to improve your process of learning from single loop learning.

Single loop – lost client do to late shipping Double loop – we always ship late on quarter end, we

never anticipate or learn from peak order patterns

© 2006 Terry James

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Patterns What are the patterns of behavior?

Positive patterns, destructive patterns Client patterns?

Retired people like product X and Y together, parents buy T and within a month buy product Z.

Business patterns? Configuration, process, learning, …

Solve causes, not symptoms A cure for a spot is helpful, but cure the measles and

you stop getting any more spots What is the new client pattern?

© 2006 Terry James

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Patents Patents are needed to protect your

inventions, but publishing patents makes the information available to competitors

Patents provide some protection against competition (a type of monopoly)

Patents can be licensed, and the license generates fees. Do you know anything unique, invent any

process, that you can patent and license? You can now patent processes

Do you have proprietary knowledge, do you have intellectual capital?

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Competitive Intelligence You must know what your

competitors are doing? It is naïve to not watch your

competitors When they change direction, you may

need to change your plans or die. Are the competitors moving into

new territories, lowering prices, hiring people (your people?), patenting new products?

© 2006 Terry James

13Is your competitor growing?

How can you tell if your competitor is hiring more people at the factory? Drive around the parking lot and count cars

How can you tell if your competitor is making more shipments every month? Measure the wear on the railway line or floor

How can you tell if the competitor is opening a new sales office? Check advertisement postings in the

newspaper How can you tell if the competitor will

launch a new product? Look at what skills are advertised for on

www.monster.ca

© 2006 Terry James

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Portals You can create websites that aggregate

information You may offer connections to bidding systems

or auctions You may offer easy connection to competitors,

knowing the ease of use will attract more clients to your own site.

You can generate transaction fees from any advertising or purchases made from your portal.

Bringing together clients, products, or industries where there is diverse and fractured information is an excellent method to turn intellectual capital into cash.

© 2006 Terry James

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ABC Costing What is the biggest cost you don’t know about? What is your most expensive item of ignorance

today? We all have blind spots, and so are blind to the costs of

that ignorance. One way to uncover the cost of hidden

information is activity based costing (ABC) If you track and internally cost every process

and item, you can start to see the hidden costs. With knowledge comes power -when you see the

issue, you can work on it. What is the cost of your tacit knowledge when it

leaves your firm?

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ABC Example Each department solves security in their

own way. They never account for work on security Each department simply shows the cost

of the project, with items like security hidden in with overall project costs.

So the duplication of this item continues across departments repeatedly.

© 2006 Terry James

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Scripting There are an infinity of potential problems and

an infinity of fixes. If you wish to avoid solving the same problems

over and over, then log the best solutions. Give people the information about what has

been solved before, make it easy to look up an error, and find an answer.

A solution script provides a template to answer a problem well, with consistency, and quality.

Now I see why they did it that strange way! Keep a lessons learned document from any

painful error

© 2006 Terry James

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Drowning in information We have lots of information, but can

never find the one thing we need to know. Lots of data, little information, and less

knowledge Imagine if your search for information

provided you with the steps that the last person used when looking for the same answer?

Imagine if searches spanned departments, and even collaborative organizations, consortium?

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Search We can greatly increase our knowledge

just by staring with search technology? Does your company have a good search

engine for internal documents? Do you use keywords to make finding

documents easier of others? Do you keep important documents on

your portable and C: drive where no-one can find them?

Do you have incentives to promote sharing knowledge?

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Why would employees not share information?

What would you do? Not paid to train other people Too busy to help right now Last time you got too many phone calls

asking how to use the document you provided

No rewards for helping new people Don’t know how to do it yourself I am competing with Joe. If I help him, they

might fire me instead of Joe

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Why would employees share

Best reason is culture I share because everyone shares with

me Nice environment here, everyone helps

each other I can’t say no to Joe because Joe helped

me yesterday This kind of environment is called

teamwork and is very productive

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Summary Tacit knowledge Catalog and directories Ontology of CRM Continuous improvement Theory of constraints Tracking and workflow Learning organization Patents Competitive intelligence Portals ABC Costing Scripting Drowning in information, but lacking in knowledge