Creating new knowledge

In one of our earlier post we wrote about knowledge management and it includes sharing knowledge and also creating new knowledge. And now we have to ask how to create new knowledge in the enterprise?

In recent years, scientists have challenged the ability to create new knowledge and to use it, which is one of the most important sources of competitive advantage. In a world where markets, products, technologies, competition, regulations, and the whole society changes extremely fast, continuous innovations where knowledge is growing has becoming an important source of competitive advantage.

Between implicit (implicit knowledge of the human unconscious knowledge, which is the result of past experience, and that is difficult to put it into words) and explicit knowledge (explicit knowledge is easily expressed and thus quickly shared between people and organizations, using a variety of options, such as formulas, manuals and records) we have four main steps, which can be considered as phases of knowledge creation in the organisation:

  1. Socialization – one individual shares implicit knowledge with the other . . . socialisation alone is quite limited knowledge creation process. Granted, the student learns from the tutor. Neither the tutor nor student will get systematic review how the knowledge was created, because their knowledge didn’t become open, so this method is not used in a large organization as a whole. Companies use the same principle for on-the-job-training. Thus, the principal method of acquisition of implicit knowledge is experience.
  2. Sharing – in this phase implicit knowledge is put into word, so the knowledge will become explicit. This is the most typical knowledge creation process in firms; the implicit knowledge is converted explicit through metaphors, analogy, concepts, hypothesis or model.
  3. Combining – is the process where knowledge is systematized in knowledge management systems. This phase conversion involves combining different explicit knowledge. Individuals exchange and combine knowledge through documents, meetings, telephone, or computers, social networking sites. Existing explicit knowledge is transferred through sorting, adding, combining and categorizing, this may lead to creating new knowledge.
  4. Internalization – in this phase explicit knowledge is transformed implicit through learning. When the experiences through socialisation, sharing and combining are attached to an individual knowledge base, then the implicit knowledge will become more valuable. Moreover, if the new knowledge revealed to be shared across the organization, other employees will learn it, which means that they use the explicit knowledge to expand, develop, and shape their implicit knowledge . . . Employees use innovation, which will eventually become part of the process for granted.

To stay competitive, companies must efficiently and skilfully create, find, grab and share knowledge inside the organization. Many companies are so complex that their knowledge is fragmented, difficult to find and therefore sharing the knowledge is inconsistent, irrelevant, and ignored in the decision-making processes, that affect the business.

Strategic Management of Customer Relations

Stories by Leaders

are a series of experience exchange of Pärnu Konverentsid, where Estonian top executives will talk for 3 hours with other leaders, share their story in the open discussion with participants.


In modern world customer-centered approach leads to success. “Strategic Management of Customer Relations” was the first of the leader stories in this spring’s conference theme. Ene Raja talked about her experiences.

In businesses where large number of customers do not have regular direct customer service experience the  service is perceived by the customer as an abstract of the fee to be paid.

In this case for an enterprise it is challenging to manage customer communication /loyalty and customer decision can be easily influenced by competition.

Command over customer experience becomes therefore highly important and should now be taken to the enterprise management level.


The customer stays with the company, which provides to him good experience. Good experience management skills are for a service company the key for advantage today. Experience Management should not be random, it should be planned and managed carefully. Offer to your customer additional value, which is unexpected and would create a “wow-effect”!


Do not expose the ignorance to your customer. TIP: customer is more satisfied with immediate response “we solve your problem in five days”, compared when the immediate response delayed and client receives your response and solution in three days. The customer wants to have control over the situation  – to know what and when are things happening with him/his question and when his problem is solved! This is often more important than quick (but not as quick as customer expects!) solution.


Customer shares the positive experience, and even more, he shares the negative. Sharing the experience in social media has given the customer a significant position advantage. Compensate for the negative customer experience – it is cheaper and easier to have the situation resolved in favor of the client, rather than debate over the issue and degrade yourself publicly.


Consumer expects kindness and friendliness, but he/she looks even more customer service expertise and competence to find the best solution and find it quickly. Trust service personnel and provide sufficiently broad mandate for decision-making – the limits within which employees can decide for themselves. Customers love today speed in decisions. This improves customer satisfaction, employee motivation, and company’s financial results.


Distinction of the best pays off. Employees are different – recognize the best by prestigious remuneration. Evaluation principles should be clear and simple. Also, customers are different – sometimes it makes sense to abandon unprofitable customers to contribute more for the good. Create different service model for different customer segments!


Communication with customers is mutual and two-sided – in addition to your telling, the client must be given word and you must hear it and RESPOND!

Customer communication in different media must always follow the basic direct communication rules: say hello, talk in direct speech, always respond to questions and say good-bye. As simple as such!

Ask for customer recommendations and link this result to your managers’ performance fee. This is the quickest way to teach your organization to listen your customers.

When asking customer recommendation (Net Promoter Score), it is really important (and smart) to provide feedback to the client, how your company uses the given recommendation and you get loyal customers without loyalty program! But when our loyal customer still leaves – then your price must be very wrong.


Keep cost under control by smart development of e-solutions. Besides lower cost, e-channel provides in addition consistent service quality and good opportunities for additional sales.

The key for e-service is simplicity – customer expects easy and fast service. But … building a simple e-business solution is difficult task for a service provider.


To each his own. Service design requires a different strategy for different national/ cultural environments. E.g. in Nordics customers can be on hold (queues) for a longer time period, in Baltics waiting in line more than half a minute would raise frustration; in South-Europeans prefer direct communication over e-channels, in Russia customers are satisfied receiving the necessary information from the telephone answering machine.


Tips on how to achieve the best results in e-services

Hereinafter based on experience, offers advice on how to avoid the common mistakes and how to achieve the best possible solution of selfservice for the customer and the service provider.

  • Selfservice has to be found conveniently at company’s website. Selfservice design language fits well into the company’s brand image so that the user gets the impression as Selfservice is seamlessly integrated. The boundaries of different Selfcare solutions are not noticeable and surfing between them is as smooth as possible.
  • Customers are given chance to decide on the most convenient service channel. For making choice client is shared with enough information – e.g. response times in different channels: web, phone, mail, direct contact etc. Nowadays, as a rule, more convenient service channels are at the same time the most cost-efficient for the company. Possibility of making choice helps the service provider to save cost and increase customer satisfaction (in case the company of course fulfills the given promise).
  • It has great importance that navigation solution permits convenient access to Selfservice, being safe at the same time. Customers will not start using the Selfservice, where the entrance is difficult or unsafe. Good accessibility is necessary to achieve Selfservice business objectives  – to get as many users as possible, ensuring a quick return on investment.
  • The logical structure of Selfservice offers as user-centered experiences as possible, through which supports brand loyalty. Focus on specific user sustains the Selfservice structural simplicity – avoiding unnecessary information presentment to a user.
  • Selfservice is easy to use. The customer feels confident because the navigation is logical and fast, the most relevant subjects are well-found, information is clear and understandable. If in doubt, the user finds quickly help or he can ask any question immediately via Selfservice (and gets prompt answer!). The client has a good overview of his activities in Selfcare: he perceives his position in navigation process and the length of a whole process. By ending the transaction (orders, etc.) the client receives confirmation and if necessary the instructions for the next steps.
  • The content of Selfservice is for customer easy to read and to understand. Web environment requires quick and convenient way to find the necessary information and carry out the transaction.
  • Customer rating on Selfservice depends largely on the service provider ability to understand the customer’s needs – find out carefully what are the customer specific needs for your Selfservice solution. This is vital to optimize Selfservice on a regular basis, based on the customer’s real needs and their changes over the time. Client is given an opportunity to make suggestions in Selfservice. Analyse the customer behavior and respond to each customer recommendation – always thank customer.
  • Measure the customer activities fulfillment in Selfcare. Analyse unfinished transactions on a regular basis in order to find the logics errors in design or navigation shortcomings.
  • Take the time to shape the customer behavior in Selfservice environment! Customer should have a good motivator, to start using new channel – to change his habits. The motivator could be both – “the whip or the cookie.” However, the latter is always more pleasant acting through positive emotion. It is clear that opening Selfservice does not necessarily make customers using it just by itself. Human being is naturally lazy to change his current habits without specific reasons. E.g: service fee increase in regular channel could be a whip and promotions in Selfservice could be a carrot.