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New theory of knowledge management explains business edge

01 April 2010 Tom Healy, Business Unit Manager, Knowledge Centre, Alexander Forbes

How knowledge is created, accessed, stored, developed and traded has, since time immemorial, been a success differentiator between people, societies and, in today’s world, businesses. Organisations that know more and are able to deliver highly sought-after or useful knowledge in original ways, outperform their competition.

Tom Healy, Business Unit Manager of Alexander Forbes Risk Service’s Knowledge Centre has been working with, and thinking about, knowledge for over 20 years. The upshot is the development of a framework for understanding knowledge which Healy calls ‘knowledge management for advantage’.

In a nutshell, Healy conceives the South African risk market “as a dynamic in which the risk base interacts with market players by giving and receiving advantage through high-value knowledge management.” By risk base Healy means mainly the entire stock of buildings and motor vehicles in South Africa. By market players Healy means; consumers, brokers, agents, insurance companies, re-insurance houses and state players. By high-value knowledge Healy means knowledge that provides both giver and receiver with an advantage.

In this dynamic, “the risk base wants knowledge of the offerings of the insurance market players who, in turn, seek high-value knowledge of the risk base – so as to win a larger slice of the risk bases’ spend” explains Healy.

The organisations that can identify, access and use high-value knowledge the most successfully and the most consistently will win the largest share of the risk base’s spend.

Yet no one player in South Africa owns a monopoly on high-value knowledge. If they did they would secure the entire market spend. Instead, high-value knowledge is unevenly spread amongst market players – often existing in isolated pockets, like specific individuals, teams, research houses or government departments.

To put high-value knowledge into perspective, Healy has divided knowledge into seven categories.

  1. Common knowledge, possessed by all, gives neither the risk base nor the market players any particular advantage, unless used in an original way.
  2. The same applies to Media knowledge, available in newspapers, on the net, in general publications, libraries and all other knowledge in the public domain.
  3. In-house knowledge is possessed by people in a particular company.
  4. Team knowledge is the preserve of teams working at a particular coal face.
  5. Individual knowledge is held by a particular person by virtue of his or her unique role or specialisation, like a CEO, specialist or subject expert.
  6. New knowledge exists but has not yet been uncovered and put to use.
  7. Finally, high-value knowledge imparts an advantage to both the giver and the receiver of knowledge.

High-value knowledge can come from any of the above forms of knowledge but, by virtue of its presentation and timing, imparts an advantage to both the giver and the receiver of this knowledge. For example “sought-after knowledge, often paid for, that provides the receiver with more income, better market share, a higher rating, or added value” explains Healy.

There are no rules as to who is best at finding, growing, using and benefitting from high-value knowledge. That said, there are individuals and teams spread throughout the risk base and amongst all market players that, by virtue of their position or experience, become good at managing high-value knowledge.

As such, no South African insurance industry player has an absolute monopoly in giving and receiving high-value knowledge - or enjoying the advantages of this knowledge. All advertising will tell consumers that every company or product is the best. Insurance is, however, a highly personalized game with high-value knowledge spread unevenly throughout the industry.

That said, there are very knowledgeable and skilled teams and individuals in the South African insurance industry. Their high-value knowledge delivers distinct advantages to recipients whether at the risk base or amongst market players. As such Healy encourages consumers “to get beyond the adverts and make contact with the individuals in the industry. This is the only way to find out who actually does have the kind of high-value knowledge useful to you.”

All players in the South African market are highly competitive and seek advantage through the management of high-value knowledge. As such, South African consumers would do well to shop around for the knowledge most valuable to them.

Similarly, “insurers that really want to score in the South African market place need to regularly and consistently provide high-value knowledge that actually provides consumers with an advantage” concludes Healy.

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