Matt Weller Founder, Naviga Supply Chain In the age of technology, people, process and knowledge remain the first best ingredients to competitive advantage and innovation. Innovation is a term that gets thrown around a lot these days, but we never really mention where innovation comes from. The reality is you can’t be innovative simply because you aspire to be, nor can simply adopting technology make you innovative. It turns out that Innovation is actually the result of an ongoing cycle that despite having been well researched, is seldom discussed and (consequently) seldom known and executed. This is part of the knowledge gap I have referred to in other posts. Though applicable to any business anywhere, here’s how it works in the context of small and medium manufacturing and becoming innovative in your operations.
Tacit Knowledge: Intuitive, non-verbal. Can be individual experience or learned through imitation like an apprentice. In production, this can include all the tricks and techniques that get work done reliably and safely but aren’t documented. It can also be the key person (front line or executive) who just seems to know how to do everything or who must authorize every decision. In manufacturing, tacit knowledge MUST be converted into Explicit Knowledge (written, documented information) that can be shared, examined and refined. This eliminates “single points of failure” in processes and promotes collaboration, resilience and agility. This is the basis for effective business processes that are repeatable and productive. Explicit knowledge has a hard limit, after which no more productivity or improvement can be attained without New Knowledge. New Knowledge must always come from an EXTERNAL source mostly because any observer within a system will have biases and knowledge gaps that will prevent them from seeing the full picture objectively. New Knowledge can be as simple as an unbiased point of view outside of your business system (consultant, customer, competitors, etc.), or research based on external data. It’s not enough on its own, which is why you need Explicit Knowledge first to anchor it and to integrate with. Technology adoption can’t bring new knowledge in and of itself, but it can augment its integration when applied strategically. Innovation is the final phase and the result, not the starting point. This is when New Knowledge is successfully integrated with Explicit Knowledge to yield previously unknown advantages or opportunities in the business system. It is also a key component of true competitive advantage. Innovation can only happen after everything else, despite what may be claimed or advertised. Since it is the result of the previous knowledge processes, there is no way to skip or fast-track the road to innovation. That being said, those who take the time to extract and retain knowledge within their business are the ones who find the competitive advantages that most others miss.
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