HOW to Help and Advise Your Business Owner Clients to “Capture Business Knowledge”
Are your business owner clients (and their teams) "capturing their business knowledge”? If they are not they will not be maximizing their business value.
This is an area that CPAs often over-look when they are advising their clients. It’s almost always of massive importance to the business value of your clients – and you have a fiduciary duty of care to help them maximize business potential.
It’s a fact that on average more than 80% of business value is intangible – in other words the client will not find this value on their balance sheet (and business knowledge represents a big element of that value).
“7 Tentacles of Knowledge”
At Elite Resource Team Solutions we advocate a structured brainstorming process that concentrates on 7 key areas of business knowledge.
It is important to understand that these 7 knowledge areas are not mutually exclusive. They will often overlap and represent individual prompts for further (“deeper dive”) brainstorming sessions, ideally properly facilitated by you (as Most Relevant Advisor) with all your client’s key “knowledge workers” actively participating.
Also remember that here will always be an element of “blurring” across the different thought prompt areas (like the “7 tentacles of a fast moving octopus - with a crutch and one tentacle missing” - and that's not a sentence that you write very often J
In the initial brainstorming sessions you are not actually trying to necessarily capture the knowledge but instead you are trying to identify where it would be really valuable if your business client COULD capture that knowledge. Once you have identified the most important knowledge opportunities your next step is to work out HOW to capture them.
We have detailed the 7 key areas below – the first 2 areas in more detail - to help you get a feel for the type of thinking involved by your client team.
1. Technical services - What valuable “intangible services” can your client “put into a box and productize” or make more “solid” (process driven) and less “fluid” (reliant on individual knowledge)?
For example - one of the things we do regularly at Elite Resource Team Solutions is to coach and train CPAs to help their business owner clients to clarify their business direction.
We have been helping CPAs do this for many years - but 20+ years ago we did this in a rather “fluid” way. Our approach many years ago meant that there was no one fixed method to help the CPA - and the way we went about it was typically different each time. We were continually “re-inventing the wheel” with our clients. The end result for the CPA (and their client) was definitely valuable - but it was difficult to describe to them in advance (in the sales process) – which meant that it was also difficult to offer the client at a fixed price - and was often somewhat inefficient (in the delivery process).
Today we call the process of clarifying business direction a “Vision Workshop”. Shown below is the standard icon we use -which helps makes this particular knowledge process feel more “solid” and more “tangible” to the CPA and their client.
Importantly, we have captured exactly what to do to consistently deliver value from a client “Vision Workshop”. The outcome is a very “solid” process - which can easily be described and sold for a fixed price because the outputs are clear and consistent - as well as being more efficient to deliver. Importantly - it is now easy to train CPAs to deliver a “Vision Workshop” for their best clients. The intangible knowledge has been captured and made “solid” and can easily be shared with our CPA partners.
The above is obviously just a simple example (from Elite Resource Team Solutions) – but would be a typical outcome for your business owner clients – and would be particularly important for (particularly service related) business owner clients who plan to sell their business - and who need to be able to “package their technical knowledge” to add value to their business.
2. Sales - How does your client ensure they have a consistently used sales proposition that is totally embedded within their business? How do they ensure that the individual knowledge - “sales hero” style - becomes consistent “solid” knowledge to be used by everybody inside their business?
The methodology here is once again all about brainstorming to capture what knowledge and then eventually using that to drive a consistent process.
Many years ago I was a partner in a UK accountancy business. This meant that most of the “selling” to clients necessarily had to be carried out by technical accounting people. Accountants are usually not good salespeople (in England that’s called an under statement!).
However, once we introduced a standard sales process (we called it a “Client Service Framework”) - suddenly we got dramatically better at identifying sales opportunities and taking them through to a close. We achieved that by brainstorming and capturing best practices (and good ideas) and incorporating them into a consistent process which everybody followed – and gained confidence from using.
The key to making that process really work well was to underpin it with measurable key performance indicators - including measures to ensure that we had “delighted clients”.
Given that this is a blog (and we are aiming for something closer to a short “Gettysburg Address” rather than a lengthy “War and Peace”) - I will try to be more succinct with the remaining 5 knowledge thought prompt areas - but hopefully you will see a pattern emerging (around creating “solid processes”).
3. Relationships - Who knows the people that matter (key customer contacts, work introducers, important external business contacts) at the client business?
How does the client maximize their benefit from individual relationships and ensure that they become a valuable business asset (rather than a personal asset that the business is currently only “renting” – from their employees)?
4. Processes - How will the client capture “the way we do it here”?
What existing processes are outdated? Where does the client need to create new processes to ensure greater consistency (in the use of knowledge)? How can the client best translate individual knowledge into a business owned asset?
5. Support systems - Where does the client keep all their “important business information”? How does their IT work? Can everybody on the client team easily access the business knowledge that the business owner wants to use?
6. Virtual (intangible) assets - What databases, methods, techniques, solutions, brands, values, creative knowledge exist inside the client business that could be better “captured” and used more consistently?
7. “Glue” - What, where or who are the key “go-betweens” in the client business? How does the client team communicate at the moment (and where does it work particularly well - and why does it work well)? How does the client make sure that “important and valuable business stuff” happens consistently?
Which people's knowledge would the client really miss if they left the business?
Once you have identified all the critical knowledge areas to capture (via the brainstorming process) - then you can work out with your client where their knowledge capture priorities are - and how best to go about it. But that's a blog for another day!
So - a key rule of strategy - remember - there are 7 “Tentacles of Knowledge” in a business.
If you are a 21st Century CPA you have a fiduciary duty to help your business owner clients to maximize business potential and you should be encouraging your best clients to “capture intangible business knowledge” – and we can show you HOW.