Are you a Beverly Hillbilly?

“…Then one day he was shooting at some food, and up through the ground come a bubbling crude.” Remember Jed Clampett, the hillbilly who struck oil by accident on the 1960’s TV show? It’s not a far stretch to think that successful businesspeople in today’s knowledge economy are like ole’ Jed—just being lucky when they turn an idea into millions or billions of dollars. That’s because most of them, and us, haven’t been trained how to think about managing the knowledge side of our business. More often than we would care to admit, we rely on luck rather than ability to find and leverage knowledge opportunities.

Knowledge is the oil—the fuel of our economy today. Like oil, knowledge can have a stand-alone value and be bought and sold in a finished form, such as a book. But it also has a secondary value as a raw material, and its value becomes embedded in other products.

Stand-alone knowledge products include things like: books, software, training, services, consulting, outsourcing, and innovation. Many times, knowledge is bought and sold directly in these stand-alone forms.

However, there is also an increasing knowledge component in tangible goods as well. This can be harder to see, but it is a very important concept. For example, the costs and/or savings from intangibles such as innovation and process improvement can be embedded in the price of a piece of a physical product.

This is very obvious in an iPod, which is a highly innovative delivery system of an on-line music service. But it’s also true for a car produced by Toyota, a company with world-class processes and employee development. Most consumers choose a brand like Toyota because of the quality that results from these intangible components.

Once you understand the places where knowledge resides, you can go looking for the core knowledge of your business. Read on in Strategic Action for how to do this.   -Mary Adams  2007