Our business is knowledge

June 1, 2006 By    

This is the fourth in a series on business topics inspired by the 20th century business management icon Peter Drucker.

While the retail propane industry’s primary activity involves the physical transfer of propane, the product is simply the vehicle for the exchange of the customer’s purchasing power and the company’s business knowledge.

 Carl Hughes
Carl Hughes

The actual value of individual retail companies lies in the knowledge and what it means to customers. This happens through the activity of a propane “knowledge worker.”

Drucker first identified the emergence of knowledge workers and considered this concept one of the great societal shifts of the 20th century. Simply, the propane knowledge worker is any employee whose most valuable asset is the mental skill he or she brings to the table.

Knowledge itself does not reside in your customer lists, data banks, accounting books or financial statements. Knowledge is the ability to apply specific information to work and performance. Because it requires human thought, specific knowledge valuable to your company is therefore imbedded in the minds of your employees.

Today, propane employees seek to add knowledge to their experiences and gain value in the marketplace since retail propane companies seek out and reward those who bring the greatest value through the knowledge they have acquired.

Great blunders disregard the application of worker knowledge. Why address this concept for our industry? Because often we don’t acknowledge this basic concept in our businesses.

For example, this concept explains the challenges and failures in attempts to combine and integrate two non-like retail organizations simply because of their geographical proximity to one another. What looks on paper like a successfully combined new entity seldom materializes because not enough attention was given during the integration process to the specific knowledge of each company – which is lost and not transferred into the new entity.

This concept explains why employees who have remained with a company over time become more valuable – they have acquired additional knowledge through their experiences. It also addresses the risks involved in key employee changes.

Here are some specific examples of the knowledge worker in the retail propane industry:

Technical knowledge – The skills regarding trucks, installations, systems and piping, plus HVAC and service work. These trained skills are easily transferable from company to company.

Management knowledge – The knowledge to effectively use resources to best add value by exploiting opportunities in the marketplace. The knowledge to select, place and motivate employees, plus the knowledge to correctly discern significant customer segment issues and determine how to react appropriately.

Marketing knowledge – I would classify marketing knowledge mostly as customer knowledge. These are the special needs, cares and sensitivities of a particular customer base. They can be interpreted as trust. This phenomenon explains why a key employee with keen customer knowledge can switch to a competitor and inflict serious damage on his or her prior employer.

Financial knowledge – Every successful retail company I know has a key employee whose working knowledge of the financial and operating data is of unmatched value to management and the ownership. They often are irreplaceable.

As we close this concept, consider the structure of successful volunteer organizations. Today, volunteer organizations must attract quality knowledge workers in a competitive marketplace in order to be effective. Volunteers do not work for money, so how do successful volunteer organizations attract and retain this talent?

This is accomplished in three ways:

  • Understanding and offering volunteers a challenge they seek.
  • Getting volunteers to understand and buy into the mission of the organization.
  • Having volunteers see results from their efforts.

Can your company withstand this test of attracting and retaining key employees

Carl Hughes is vice president of business development for Inergy LP. He can be reached at
Chughes@InergyServices.com
or 816-842-8181.

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