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Small Business Know-How

In any small business, record keeping is an essential. Good notes ensure consistency of product and/or a process, and help one to keep improving and expanding the business. However, we often tend to write out the steps as we remember them (and only if we have spare time), and overlook the importance of documenting our tacit knowledge.

What is tacit knowledge? There are many different definitions, but what it boils down to is the "know-how", the knowledge that is built up through experience, after the academia has been completed. And for small businesses, identifying and then recording that tacit knowledge is key. It creates a foundation on which a business can expand, and is also a factor in preventing burnout.

One of the shining examples I always look to is Capt. Sully who safely landed a plane on the Hudson. As you may recall, in 2009 after the geese struck the plane there were unequivocal instructions given to Sully to head towards an airport. The FAA manuals had clear procedures on how to handle the situation - and their knowledge management systems were precise and up to date. Nonetheless Sully ignored the instructions being given to him by the tower official, and he made the unthinkable decision to land the plane in the Hudson River. Why? Because he did not believe that the plane would make it back safely to an airport. Again, why? Because years of piloting experience had given him additional knowledge - tacit knowledge that with the time left, he would not be able to make it to any of the suggested airports.

Although he landed the plane safely in the Hudson and was hailed a hero by the passengers and the public, Sully was later sued by the aviation industry for reckless endangerment of lives and failure to comply with instructions.

The FAA produced flight simulations alleging that he did in fact have time to return to an airport. And Sully rebutted, demonstrating successfully that there was a difference between a simulation vs the real life experience. In the event of engine failure, by the time there is some communication between the pilot, co-pilot, the tower etc., a few seconds have already been consumed. And those few seconds are what propelled the choice between an attempt to return to an airport with certain casualty or to attempt a water landing, which we know to be the Miracle on the Hudson.


Those few seconds were Sully's knowledge.

It was tacit knowledge that even an entire aviation industry had failed to capture and codify.


At this point, I'm sure readers are convinced about the importance of tacit knowledge!

But how does it translate into an individual business plan? Quite simply put, this is unique to each entrepreneur - because it is your experience. Each day whether you are creating a new product line, researching suppliers, adding to your inventory, or refining a process, subtle steps creep in to steal your time or modify your product. These seemingly inconspicuous moments often add to frustration because we have an inherent inability to recognize their impact.

Example: when a baker measures batter down to a fraction of a gram, does he / she take into account that you necessarily lose some when you spoon out the mixture into the baking dish? The fractions of wasted batter are co-related to optimal baking time and change the taste of the confection. A slight taste perhaps - but in a competitive world of refined palettes and frequent yelpers, that nuance might be the difference between a likable product vs. a must-have product. But I've yet to come across a cookbook that addresses this tacit point.

You don't need fancy software to develop a portal of knowledge - unless of course you are a large company or a corporation. In my own case, I keep a book of my soap recipes, and I diligently write out not only the steps, but also observations and notes to myself for next time. I also like to do this as soon as possible, after each time I soap, so that it's fresh in my memory and I am documenting as contemporaneously as possible. This creates a little repository of formal knowledge, plus tacit knowledge - and it's good to look at your notes before you start making anything, even if you think you might know it by heart. It's a true way to ensure consistency.

I cannot emphasize enough how crucial it is to capture your tacit knowledge, that know-how which is as unique as a fingerprint. It transforms the act of cataloguing the pro-forma steps into a living experience that you can continue to rely on, as you grow your business.

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