Building a Customer-focused and Learning Culture with KM
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Transcript of Building a Customer-focused and Learning Culture with KM
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Building a Customer-focused and Learning Culture with KM
Philip FungVice Chairman of KMDC
July 2005
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Agenda
Challenges to managers in the new economy
Building a new work culture KM practices in retail shops
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Challenges to managers in the new economy
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Knowledge Based Economy
An economy in which the production,
distribution and use of knowledge is the
main driver of growth, wealth creation
and employment across all industries
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Knowledge Workers
Knowledge workers will own the tools of production because they own their knowledge and will take it with them where ever they go.
Peter Drucker, Post Capitalist Society
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Challenges
Globalization and competition ICT has changed the way we work Knowledge becomes obsolete quickly Increased demand from customers Low staff loyalty
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Impact on Work Life
Work more with less Stress High staff turnover Low morale
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Building a New Work Culture with KM
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New Work Culture
Customer focus Team work Continuous learning
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Value of Customer Knowledge
An important asset that companies own
Origin of most improvements in products and customer service
Vital for companies to create and sustain their competitive advantage
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Sources of Customer Knowledge
Directly from customers Indirectly through knowledgeable
employees, suppliers and partners Systems that capture and analyze sales
transaction, customer profile, usage pattern and etc.
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Acquisition of Customer Knowledge
Market researchMarket research
Loyalty programLoyalty program
CRM programCRM programFocus groupFocus group
InvolvingInvolvingfrontline stafffrontline staff
Customer user-groupCustomer user-group
Company hotlineCompany hotline
& web site& web site
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Problems with Customer Knowledge
Gather by different business units for their specific objectives
Not properly managed throughout the life cycle
Lack of a “central clearing house” and senior executives to take quick and appropriate actions
Low participation from frontline staff Focus on explicit knowledge and data
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Customer Knowledge in Fashion Retailing
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Nature of Fashion Market
Short selling period- in months or weeks Demand unstable- influenced by weather,
mass media or film stars Low predictability- difficult to do accurate
forecast High impulse buying- most buying
decisions are made in the store
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What Retailers Do?
POS dataPOS data
LoyaltyLoyaltycardcard
programprogram
MarketMarketresearchresearch
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What Retailers May Not Know?
The store traffic Conversion rate- how many shoppers are
“converted” into buyer The amount of time a shopper spends in a shop The interception rate- the percentage of
customers who have some contact with sales staff
The waiting time Why customers don’t buy
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Customer Knowledge Strategy
Identify customer knowledge as the most important knowledge to the business
Apply KM principles and practices to maximize the value of customer knowledge
Build up a customer-focused and learning culture
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Two Examples using KM
Use frontline staff to build a customer-focus culture
Use AAR meeting to build a learning culture
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Shop Customer knowledge Management (CKM)
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Why CKM?
We know that in order to gain competitive
advantages in this constant changing
environment, we will need superior customersuperior customer
knowledgeknowledge, and the ability to applyapply that
knowledge to improve our product and our product and
service deliveredservice delivered.
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What is Shop CKM?
Our front-line staffs generate many insightful
knowledge through their day-by-day
interaction with the customers …
The question is : how do we manage all how do we manage all
these collective tacit knowledge?these collective tacit knowledge?
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Support for the Front-line Staff:Support for the Front-line Staff:
Training on observation skills
Emphasis on their benefits when head
office better understand their difficulties whilst
selling products to the customers.
Implementation Shop CKM
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DiscoveriesDiscoveries
LearningLearning
ActionAction
Through front-line staffs observations and sharing own tacit knowledge with team member.
Codify collective knowledge standard from. Fax to office for storage and analysis.
Relevant parties to develop action plan according to the learning discovered.
The Knowledge-transfer Process:The Knowledge-transfer Process:
Benefits of Shop CKM
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Shop After Action Review (AAR)
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U.S. Army’s After Action Review
A review meeting held after an action, with the purpose to capture lessons and re-use in next battle or mission.
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Ground Rules of AAR Meeting
Discover the “ground truth” Focus on issues, not people No personal attack Don’t blame for mistake or failure Be Open, positive, constructive
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4 Questions in AAR
Q1. What did we set out to do ?
Q2. What actually happened ?
Q3. Why did it happen ?
Q4. What are we going to do next time ?
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AAR as a KM tool
Capture Lessons Learned
ExperienceExperience
KnowledgeKnowledge
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AAR as a KM tool
Knowledge Transfer
IndividualIndividual
TeamTeam
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How to start KM initiatives?
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Three approaches to change
Top down Bottom up Middle-up-down
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Middle-up-down
Middle managers are often attacked as the obstacles to changes
In the knowledge-based economy, middle managers are the key to innovation
Knowledge is created by middle managers who are leaders of task forces
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Stages of Implementation
Stage 1GettingStarted
Stage 2Explore andExperiment
Stage 3Pilots and
KMInitiatives
Stage 4Expand
andsupport
Stage 5Institutionalize
KM
Source: APQC