Thursday, 23 January 2020

What KM can learn from business start-ups - ensuring there is a market

If we liken KM implementation to a business start-up, there are many lessons we can learn and apply.


Start Up Company
Image by www.inkmedia.eu on Flickr
In many ways, the initial implementation of Knowledge Management within an organisation is like the launch of a new product into a market by a start-up organisation.

You are preparing something which, in theory, is designed for a customer base of users, and which will you hope they will find valuable enough to adopt. Your product is a Knowledge Management Framework, your customer base are the knowledge managers within an organisation, your start-up company is the in-house KM team, and your investors are the senior managers who provide your budget.

The launch of new products by start-ups is fraught with difficulty. 20% of start-ups do not survive their first year, while 50% have failed before the end of their 5th year. Failure rates for Knowledge Management are often quoted as being in a similar range. Obviously both undertakings are far from easy, and arguably there may be much that KM can learn from business start-up.

This short series of 5 blog posts uses this analogy to inform KM implementation by reviewing 5 common reasons for start-up failure and suggesting ways in which KM programs can avoid these failure modes. These common reasons are taken from  a great article by David Skok , and are as follows:

  1. Little or no market for the product; 
  2. The business model fails; 
  3. Poor start-up management team; 
  4. Running out of cash; 
  5. Product problems.

This blog post explores the first of these 5, and the others will be covered over the course of the next week.

Failure mode 1 - Little or no market for the product


How do we ensure there is a market for the KM product we build?

 David Skok describes this failure mode as occurring when there is little or no market for the product the start-up has built. In other words, there is not a compelling enough value proposition to cause the buyer to actually commit to purchasing. This could be because the product does not fulfil a buyers need, or the market is not yet ready, or the customer base is too small. Whatever the reason, you have built a product for which there is no market.

We see this in KM implementation when we roll out our KM Framework and KM solution, and there is little uptake. We have built something nobody wants.

This failure mode can be addressed initially by proper analysis of market needs before KM implementation begins. It will also be further addressed by "Agile" product development, which I cover in a later post.

Any KM implementation program should begin with a thorough analysis of the internal market for KM, the value proposition for all stakeholders, a preliminary view of the “gap in the market” and a clear understanding of the KM USP within the organisation.

The ISO standard 30401:2018 suggests three foundational activities for KM, described below, which help with this market analysis.

 Understanding the organization and its context 

This involves an analysis of the external and internal issues that affect the organisations ability to achieve the intended outcome of its KM Framework; the market constraints if you will.

Understanding the needs and expectations of interested parties (stakeholders) 

This involves identifying the stakeholders for KM, and their requirements. In Siemens they recognised two main classes of stakeholder, “the business” and the user. We can add a third to this, to determine three primary internal stakeholders for Knowledge Management; as follows:

  • Senior management; those who sponsor the KM program. In the analogy with a business start-up, these are the investors. They want to see a return on investment, in whichever way they define it. It may be a financial ROI, or it may be “fewer mistakes”, “less rework”, “better customer satisfaction” or some other metric. 
  • The knowledge workers, who will benefit from use of the KM Framework. In the analogy with a business start-up, these are the end users, or consumers. They want KM do do something for them that is more valuable than the time of effort required to take part. Perhaps KM will make their life easier or less risky in some way. 
  • The middle managers, whose cooperation you need in order to adopt KM within their teams. In the analogy with business start-up, these are the dealers or the retailers. They “buy” KM from you in order to “sell” it to their teams of knowledge workers. They will adopt KM in order to make their teams more efficient or more effective. 

The KM team should not only identify these stakeholders and their needs, they should develop a value proposition for each stakeholder group in order both to understand what KM needs to do to deliver value to the stakeholder, and also to be able to effectively market and sell KM.

To these activities we can add a third:

Identifying the USP for KM

You need to be able to say what KM does that is new and different; it's Unique Selling Point. It could be something like:

This can be the basis for your KM vision, brand, strapline and marketing campaign.

If you can do your market research as described above, then you can be assured that there is a market for KM, and can start to design your product to satisfy that market. 


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