The Knowledge within: Sometimes companies don’t know what they know.

When referring to innovation people often times imagine some advanced technology or very complex math. Truth of the matter is that most innovations are very, very, basic in nature. Most organizations have been able to create new processes, new businesses and new markets simply by modifying very small elements in either their production or their product. My first recollection of such a modification was in freshman year: An airline achieved millions in savings back in the 70’s simply by swapping two olives in a salad, for one. Another airline started cutting limes in 16 pieces instead of 10, and achieved savings of similar proportions. It sounds pretty easy when we talk about it, yet it still took the airline a long time to realize: it didn’t matter to customers. How can we design organizations to detect these opportunities?

Let me start by referring to my first article on cost cutting measures: The argument was not against cost cutting, my thesis is that cost cutting alone will not do the trick. It is important to use all tools available to attain above average results, and resorting mainly on one falls short of managing effectively. It’s in the spirit of this argument that I seek to reveal opportunities to managers, through these notes, on how to activate other tools in the simple pursuit of improvement.

Small nations are plagued with one thing: mismatch in the labor market. Said mismatch finds its roots in many avenues, such as brain drain, educational systems, and an array of other complex social factors that deliver the labor force to the market. This sets the organization at a disadvantage since it deals with below average workforce, unsuitable to deliver value as promised. This is often quite evident when in new markets, where costumers have different expectations, assumptions, and patience. But do not despair, there is a way for organizations to optimize their people, and it’s very simple: Ask, and listen.

You would be surprised that managers are not as much engaged with their team members as their team members are engaged with their tasks. This is because said mismatch is based on unknown expectations and risky assumptions. Case in point: Hospitality is one of the biggest industries in the Caribbean, and its growing comfortably, with new markets receiving access to the region. But how well prepared are the workers for these new markets? How will they communicate? How will they know how to engage? Do they understand why certain tourists tip more than others? Why do they require specific services? These are very basic questions that managers need to address with team mates in order to match the needs of customers.

A simple survey of students in my class working in hospitality revealed surprising results. First off, they were not trained at all as F&B staff, it was assumed to be “well known” what is expected, and consequently there were many interventions that ultimately lead to improvement. Second, they noticed stark differences in the behavior, tastes and preferences of tourists from different markets. US tourists are very chatty and tip on average more because they assume hospitality workers earn in the same way as those back home. European tourists spent less on other meals, except for dinners where they consumed a wine. South American tourist had many questions as they did not understand the English menu, and so forth. 

The most surprising revelation of all was that they felt that it was normal to face these problems and did not feel the need, nor obligation to share this with their organization. Let’s focus on the fact that they did not feel the obligation with the following question: What environment did managers create to allow the feeling of lack of obligation? We quickly concluded that managers had no idea that, a. there was such a disparity and b. staff had trouble operating the business. 

The story ends quite well for the students, over time they learned tips and tricks (they were college students after all) and manage to own a small/basic vocabulary to offer better service. The business owners, however, lost in the long run because these people left the business once they graduated, because in end they were college students. But more importantly, they were slowly replaced with new, younger (college student) staff that were not trained again. This is a very basic but true example of how companies ignore the knowledge they have in house. I’ve experienced similar discussions with peers in industries such as finance, business services, manufacturing, government, health care and tech. Managers are expecting from, assuming about, and overlooking their employees, leading me to the conclusion that they do not know what they know.

Organizations in small countries often rely on hiring underqualified people in many low skilled positions, with the hope that they will catch on in the future and grow. In part, this happens, people need jobs and they will do the required to keep them. At the same time managers and executives need to invest a lot of effort in making sure they can keep their people in check, because you are dealing of course with a situation of mismatch. 

But these people aren’t completely useless, they dispose of unique skills and abilities and often times display these extracurricularly. Either they excel in culinary arts, or are great at sports, or dispose of exceptional event planning skills. Rather than ignoring these people and reviewing their performance as poor, managers need to recognize that there is diversity in intelligence. Howard Gardner proposed this model of multiple intelligences back in 1983, identifying 8 distinct abilities. Our educational system and set of job requirements only focus on two forms of intelligence verbo-linguistic and logic-mathematical. By definition we exclude an entire group of skills and motivate people to leave their gifts unpacked, in the pursuit of jobs in our organizations.

I’m not proposing that organizations complete a full turnaround. The central thesis here is recognizing diversity and activating it in ways that create harmony with tasks at hand. One employee after some time could not keep up with the demands of her work, however she was an exceptional event planner. She took care of all office events and they were really outstanding and never went over budget. We found a workaround by organizing her work as events, all of a sudden, she could apply her skills to the same task she was unable to fulfill before embracing her intelligence.

Imagine how harmonious organizations can run if they knew they had diversity in intelligence and that they could activate it simply by asking questions. Managers tasks include challenging employees with new tasks, but more often than not in new ways of doing things. It is only so that employees might create small, but very impactful changes; like swapping two olives with one.