By KATIE BRENNEMAN
No matter the size, operating a business involves a fair share of risk. Indeed, if the last three years have taught us anything at all, it’s how very vulnerable businesses and entire economies alike can be to unexpected shocks.
The good news, though, is that there are ways for decision-makers and business leaders to reduce the risks their companies are exposed to. In fact, perhaps your greatest asset in protecting your business from both internal and external threats is your approach to knowledge management.
What Is Knowledge Management?
Knowledge management refers simply to the practice of identifying, acquiring, using, and regulating the essential information a company needs for optimal performance. It encompasses a host of processes, from defining what data is needed to make informed business decisions to control who can access this data, when, how, and for what purposes.
Knowledge management also pertains to the storing and dissemination of critical information. As such, it touches on business functions as diverse as IT, network security, and internal communications.
Taken together, effective knowledge management practices are instrumental to supporting business growth, promoting efficiency and productivity, and facilitating risk management.
Unleashing the Power of Data Technology
When it comes to using knowledge management to reduce business risks, the first and perhaps the most important goal is to acquire the critical data needed to facilitate decision-making.
Innovations in data technology are making this process easier, more efficient, and more beneficial than ever before. For instance, consumer behavior analytics can provide decision-makers with key insights into the ever-evolving needs and expectations of the target market.
This includes the capacity to forecast consumer trends through the use of predictive analytics, often powered by artificial intelligence (AI) and machine learning technologies. Equipped with this critical data, business leaders can make evidence-based decisions, including strategic operational changes, to proactively respond to impending market shifts.
This creates an agile and responsive model that cuts risks by preparing for market dynamics rather than reacting to them once they have already occurred and impacted the business.
Collecting comprehensive, accurate, and actionable data is only part of the story when you’re endeavoring to reduce risks through effective knowledge management. It’s also vital that you prioritize strong communication enterprise-wide.
After all, information is only useful if it reaches the right people. Unfortunately, even in small and medium-sized businesses (SMBs), information silos can easily emerge, and the consequences can be devastating for your business. Poor interdepartmental communication can, at best, lead to inefficiencies. At worst, they can contribute to human errors that may end up costing the company clients as well as money.
For this reason, instituting a clear plan for consistent and robust interdepartmental communication is a must. This should include a clear and comprehensive plan for defining the flow of information both within and beyond departmental boundaries.
The goal is to ensure that knowledge is managed in such a way that the entire organization becomes a cohesive, unified entity. Critical business data must circulate efficiently and reliably to every employee, partner, or stakeholder, regardless of what department or division they belong to.
As important as it is for business information to circulate freely, efficiently, and reliably, there are limits. Information must be shared, but such information-sharing must be managed and highly regulated depending on the sensitivity of the materials.
Without strict control over how sensitive data are stored, accessed, and communicated, you put your business at risk for devastating breaches. Such breaches can not only severely, even irreparably, damage your company’s reputation, but they may also subject the company to legal liability and enormous financial losses.
This is why data loss prevention (DLP) should be a cornerstone of your knowledge management practices. Sensitive data, for example, should only be stored in a highly secure area. Digital storage is likely your best solution if you want to ensure both remote access and secure storage.
A secure cloud system can be ideal, provided that only those with the appropriate permissions are provided with the credentials they need to access it. By routinely updating passwords and security software, you can ensure that authorized persons can retrieve and appropriately use and share the data they need when they need it.
This reduces the risk of work stoppages and inefficiencies because critical information will always be accessible to those with the proper permissions. At the same time, the risk of data losses and system breaches will be reduced because networks and the information they hold will always be highly secured.
Knowledge is instrumental to operating a business effectively, and that means that perhaps your greatest weapon against business risk is strong knowledge management. As such, it’s imperative to keep a close eye on your data and business information. The more often you implement knowledge management practices across the business, the more often your business will encounter success rather than risks.
ABOUT THE AUTHOR
Katie Brenneman is a passionate writer specializing in lifestyle, mental health, education, and fitness-related content. When she isn’t writing, you can find her with her nose buried in a book or hiking with her dog, Charlie.