Wednesday, October 13, 2010

Knowledge Aware Management

I have had the good fortune to read 'Farmers – Your Store for 100 years' (ISBN 9781869507633) which is Ian Hunters book on the Farmers stores in New Zealand. Ian’s team at The University of Auckland’s Business School were commissioned to write the history of Farmers to celebrate the 100 years of trading since its founding in 1909, and whilst this might sound a little dry it is in fact a terrific read.

What is particularly striking is how the store grew rapidly through its adoption of what was then a very innovative retailing approach, and that is the catalogue based retailing model. It has many parallels with the online retailing phenomenon in that customers are remote, select items from a brochure and it is then despatched directly to them from a central store. The impact was as profound then as it has been in more recent times and Farmers grew to be a major retailer in New Zealand. It has gone through a number of incarnations and suffered through some poor strategic decisions in the late eighties which saw its ownership shift between groups that were often not New Zealand based. I have little doubt that much of the poor decision making would have come about from flawed thinking on the part of professional service firms happily advising that the firm follow management trends without ever thinking through the implications for the social capital and intangible knowledge based assets in the organisation, and basing judgement purely on balance sheet based rationales. Happily the firm is back in New Zealand ownership and under the guidance of David and Anne Norman and with 4000 staff and over 50 stores it is clearly on the up again.

What I found particularly striking and particularly encouraging were the words of these entrepreneurial owners. I quote from the book

“Over the past three or so decades, Anne and I have been fortunate to participate in the recovery of several iconic brands....In almost every situation we have found that the heritage within these organisation has produced a pool of talent that for some reason has been ignored by the previous owners who had tried to fix an organisation that was far from broken! What has been achieved in our short ownership period has not so much been through our own efforts but through empowering existing people within the organisation.”

If anyone wants to know what knowledge aware management is – that is a definition of it in practise.

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