The most precious asset at an organization isn’t money or office space. It’s not products and services. Most organizations rely on people to conduct business daily. But even people aren’t the most valuable asset of a business. Those people generate, use, and wholly rely on one thing: knowledge.
Businesses trade on their knowledge. It influences, affects, and determines everything that occurs in, around, and for the business. At the most granular level, knowledge defines the organization’s very existence: what they do, how they do it, who buys it, and why.
That’s why it’s crucial that business leaders understand the importance of knowledge. It’s the single most vital asset of every business. Here are just three of the many reasons why:
#1: Knowledge Drives All Business Activity
What is actually happening when you are doing business? Knowledge is being transferred between stakeholders, in order for those stakeholders to make buying decisions.
Interacting with people to make business transactions requires a trained workforce. Every person in this workforce needs to know what they need to know to make these interactions with prospects and customers successful, day-in, day-out.
The right knowledge needs to be transferred to the staff so that they know what they need to know prior to interacting with fellow employees, prospects, investors, or customers. If they use their knowledge effectively the staff will, in turn, transfer select knowledge to these external parties, which influences and persuades them to make buying decisions.
Regardless of your industry or the size of your company, there isn’t a single aspect of business activity that doesn’t rely to some degree on knowledge. From sales to marketing, HR to Accounting, customer service to R&D, every person operating within or without the organization is seeking, generating, and leveraging knowledge in order to purchase, refer, hire, etc.
#2: Knowledge Drives Growth
Since knowledge drives all business activity, knowledge also drives growth. Your company’s ability to sell more, do more, hire more, and provide more relies on the right information reaching the right people so that they know what they need to know in order to perform the right action.
When a business is attracting the right people, when its staff are doing the right things, connecting with customers in the right way, when those customers are referring the organization to others; all those actions require knowledge as much as they require good products, services and people.
#3: Knowledge is a Company’s Differentiator
Knowledge has immense value because it is completely and entirely unique to the organization. From corporate culture and values to well-honed processes, what the business knows, how it teaches, and what stakeholders learn will be different than anywhere else. For instance, the unique knowledge of the business determines how accurately, quickly, effectively, and helpfully an employee can respond to and resolve a customer’s issue. That employee relies on knowledge (from training, experience, or observing colleagues) to not only provide answers to the customer, but how to provide the best possible service.
Any business leaders worth their salt understand that this unique knowledge is the company’s differentiator.
Knowledge – though frequently unknown or underestimated – is a business’s most vital and valuable asset. It is the make-or-break factor in every occurrence of the business from routine procedures to major sales to growth and scalability. Understanding the importance of knowledge is crucial for a company’s executive team: only then can it be protected and leveraged.
Why does knowledge need protecting? In the second part of this series, discover how inefficiencies and errors arise from improperly stored company knowledge.
