A Search for Knowledge
Warren Buffet is quoted as saying, “Risk comes from not knowing what you are doing.” Mr. Buffet is considered one of the smartest investors in the modern era. One might say that he is a very knowledgeable investor. What makes him a knowledgeable investor? I would suggest that he works hard to become knowledgeable in the companies in which he invests. He learns to know their management, their product/services, their people, their plans, their competitors, their markets, their technologies and their people. He never assumes anything or works on a tip. He is in a constant search for knowledge.
So how does that apply to those of us who spend our day doing the work that is required to keep our businesses prosperous? Once you begin to achieve success in a business, whether it be large or small, don’t we begin to believe that we have figured it all out and accumulated all the knowledge needed to be successful. What happened to General Motors when it began to believe that it knew what customers wanted better than they did? What happened to Kodak when it believed that digital photography was a passing fad? What happened to the music industry when they were convinced that a CD was the only way to deliver content to the market? All these are examples of businesses which were not aggressively pursuing the knowledge necessary to grow and prosper.
After considering these examples, what’s to be learned by managers and owners of small or medium size companies? Every day the world around us changes. Technologies change. Competitors change. Our customers change. Demographics change. As a business leader, your hope is to always be ahead of these changes, but often they come from unexpected sources. Who thought a computer company would change the music business?
At the age of 18, I became a cooperative engineering student at a nearby General Motors plant. On my first day, I was given a tour of the paint department by a general foreman, who was definitely much older than me. The plant was an automotive assembly facility so it wasn’t a very high tech operation such as the Tech Center or any other of the primary design centers. We built the cars, but the process was complex and required much knowledge and experience. During that tour, the general foreman told me that every day he worked at the plant, he learned something new. He also continued to say that the day he could not make that statement, he would retire. If you consider that every year was a model change with new tools and new machines, you can understand that his success within the plant was a product of his continuing search for knowledge and learning.
As the President of a small manufacturing company, with approximately 20 employees, the different search for knowledge occurred. We designed and built a line of very specialized machinery used in the plastics industry. It was our belief that we produced the fastest and most accurate equipment in the market. We had the leading electronics technology and control systems. We believed that we were second to none. I was always interested in learning from others in the machinery business what they were doing. These machine builder, were not necessarily our direct competitors but built equipment for other industries. In my search for knowledge, I will continuously read their literature and visited their trade shows. As a result, we learned that our internal technology could be improved upon by borrowing ideas from others.
Of course, you may obtain knowledge by reading books or attending seminars, but ask yourself some more basic questions about your business.
- Do you know the strengths and limitations of your competitors?
- Do you understand the trends in your marketplace?
- Does your financial statement produce accurate information, which can be used to target areas for Improvement?
- Do you understand the capacities of your staff and how to motivate their efforts?
- Why do customers continuously return to you to do business and why do some never come back?
- Do you understand areas where you can grow in new markets and services?
These are meant to be questions which can be a starting point for a learning point in your business.
We like to say that a business leader’s role needs to be working on their business, not just in their business. Get out of the office or shop and consider your business from across the street. What does your business look like to someone walking up to your front door? How do your clients, customers and potential customers perceive your business? We are often so personally involved in our daily activities that this exercise is difficult to complete.