The Knowledge Asset - A perspective

Many years ago, when my father was explaining economics to my brother, he used a very interesting analogy, which continues to stick to the mind – “Money is round…so it can roll; money is also flat, so it can be stacked”!  He was explaining the importance of the need for money to flow through the system, while retaining the need to save and keep sufficient reserves.    Looking at it from the perspective of knowledge management, I find that it holds well in the case of knowledge too!  Well, after all it should – Knowledge is wealth!

“Knowledge is sticky.  Without proper processes and enablers, it will not flow” – Carla O’Dell

Research by Kalseth [1] and others have shown that where knowledge management is integrated into the business strategy of the enterprise, and / or is embedded into the core processes of the organization, implementation has been successful, and the organization has been able to realize the benefits of KM.  However, in the absence of this, most efforts have resulted in implementation of huge content management systems with no quantifiable or measurable benefit to the organization.   We see examples of the need to integrate knowledge into the core operational framework everywhere.  In insurance companies for instance, when underwriting a risk, the underwriter applies his prior knowledge about the risk, while determining the type of coverage, and the clauses (or endorsements) to be included.  In order to ensure that the risk is determined correctly, a checklist is essential to capture all the elements of risk.  This checklist is nothing but a list of questions that the underwriter is expected to run through and confirm before deciding to underwrite the risk.  Obviously, this is a list that has been compiled over several years of experience of the organization – knowledge stacked (in a repository).  However, it really begins to work only when, as part of the underwriting process, the underwriter is able to pull out this checklist and verify that all the aspects of the risk have been covered.  Where, the risk is new to the organization (or to the underwriter) he seeks the assistance of experts / colleagues in the organization (knowledge stacked in the heads of people) – which now flows through the organization, as he collaborates with others in the process of discovering the extent of risk.

We clearly see the dual aspects of knowledge too carrying the properties of “being able to be stacked” and “requiring to flow” for organizations to benefit.  Profit from knowledge! Make it part of the core framework of your organization’s processes.  Measure it and manage it, like you do every other process.  Knowledge is everybody’s business.  But, if you intend to treat it like wealth, also make sure you assign a knowledge manager – like you would, a wealth manager.  After all, you do need to make sure, it flows…and it stays!

[1] Kalseth K, Knowledge Management: Development Strategy or Business Strategy. Information Development. 2001, 17:163-172.

Customer Retention - Rationally unpredictable?

Sona, the Customer Service Representative wore an appropriately contrite expression on her face as she helped me fill out the Account Closure form.  Her name was in resonance with my amused reflection of the state of affairs I found myself in - an old Ajit (Hindi villain) joke - "Usko liquid oxygen mein duba dho, taaki liquid usay jeene nahin dega, aur oxygen usay marne nahin dega" (Drown him in liquid oxygen -- the liquid will not let him live, and the oxygen will not let him die)!  The Bank had just sent me their second reminder to pay my credit card dues; but had cleverly blocked me from carrying out any operations on my account! And then charged me interest and late fees for non-payment of credit card dues!!!
Reason for blocking the payment: Err  9999!  (How informative) After calling up a Contact Center and lengthy explanations, I found out that Err 9999 was non-submission of KYC forms!  They can reach me on my mobile, send emails, even letters to my residence...call me at odd hours of the day with cross-sell and up-sell promotions!  Yet, they do not know their customer!!! And the irony of it all -  they have on their records that they did indeed collect that form from me!!!

I was reminded of a recent conversation with a friend about the next big challenge for Financial Services and Telecom companies - how do they predict which customer will stay with them...and who will they lose!  A corollary to this : Do these companies have the intelligence or the knowledge to deal with this.

Would every customer who has gone through the experience that I did, go on to take the extreme action of closing their account with the bank?  Probably not.  At least, not the ones who have a salary account, or someone who has taken a loan.  Nothing in the bank's response to this situation seemed to suggest that they would have acted any differently with any customer.  The responses were pretty standard! A feeble attempt to retain the customer...followed by an attempt to show their concern for customers by making the exit as pleasant as possible.  However, in the present case, even that miserably failed!  Apparently, you cannot close an account even, if the KYC formalities are not completed!  "The case has an identified risk against the account"  - please resolve it the CSR was informed by the teller!  Wow! That's very sensitive - the customer becomes a "case"!  The Bank's got my money...and I become a "Risk" to them!  :-)

I wonder if the bank has any kind of intelligence that alerts them to:
a) Accounts where KYC norms have not been completed
b) Transactions which are likely to fail on account of (a)

Do they have the processes that:
a) Do not permit the transaction to be entered even (why allow it to be entered and then cause it to fail)
b) Allow their systems to generate Error codes that customers can understand

Do they have the knowledge base that:
a) Lets CSRs know that you cannot close an account if it is not KYC compliant
b) Train CSRs identify problem customers and resolve the issue before it escalates.

A customer-oriented bank would have definitely taken the trouble to alert the customer of this situation and quickly stepped in to resolve the situation.  Strangely enough, a PSU bank with which I have an account had the sense to do it...no fancy information systems here...just plain only customer-friendly face-to-face banking!  Rao, the factotum, who has been with the branch for over twenty years, seems to have a mental checklist for all the customers who walk in.  It's not his job, but he seemed to know that there was something pending against my account, and quickly brought me a form, when he saw me walking into the bank.  As he seemed to know that there was a tax form that needed to be given to another customer as she walked in.  I wonder, if this bank will also fall into the same rut, as the more fancy multi-national bank when Rao retires!!! They have already implemented a core banking solution... the first step to losing touch with the customer!

I think it ultimately boils down to a "people" or "process" failure.  If the knowledge systems are wired to identify the information links that can lead them to these "points of failure" early enough, customer satisfaction will go up, revenue generation opportunities will not be lost.  The bank not have had to go with one customer less if their system had not let me schedule a transaction which they would disallow later on; or  kept me informed about it.  They still might have managed to retain a customer, even if this account closure had gone through smoothly! The CSR was not knowledgeable about her own internal processes!  You can be sure I'm going to terminate my credit card account too!

Question: How can you predict customer retention?  Some customers like to be informed of new products.  Others can get pretty upset by these unnecessary interruptions.  Some customers will stay on, if they are just left to themselves, others want to be wooed.  How can marketing intelligence predict what customer needs the kid gloves...and which one needs to be ignored...so as to be able to retain them?