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KSM Blog | Katz, Sapper & Miller CPA

How Large is Your Knowing-Doing Gap?

Posted 7:59 PM by

Is it possible that a trucking company’s performance has less to do with how much the company’s employees know than it does with how they turn that knowledge into action? Jeffrey Pfeffer and Robert Sutton’s book, The Knowing-Doing Gap, How Smart Companies Turn Knowledge into Action, discusses why this might be the case. Although there may be important differences in the knowledge levels of competing trucking companies, the authors argue that the knowledge gap only partially explains the performance gap. They feel it is the ability to turn knowledge into action that has the biggest impact on performance.  

The authors cite two primary reasons why “doing” matters more than “knowing.” First, there are simply too many ways to acquire and share knowledge to blame performance gaps on “performance secrets.” Second, research shows that successful performance improvements depend largely on implementing what is already known, rather than adopting new ways of doing things.

If you know that your company’s revenue per truck per week, fleet miles per gallon, out-of-route miles, idle time and other important benchmarks are not on par with your competitors, what prevents you from taking action to improve those benchmarks? Pfeffer and Sutton identify certain barriers and propose eight guidelines to turn knowledge into action.

  1. Ask Why Not How: Many company managers are fixated on “how” rather than “why” when it comes to analyzing the detailed practices, behaviors and techniques of successful companies. Why not take the opposite approach? Begin with your mission or core values (i.e. the “why”) and make sure every resulting action aligns with them.
     
  2. Knowing Comes from Doing, and from Teaching Others How it is Done: Not enough emphasis is placed on the value of learning by doing. Many trucking companies rely on online courses to impart the latest knowledge to their drivers and dispatchers. They fail to realize that many things about an organization, its operations and its people can only be learned by firsthand experience.
     
  3. Action Matters, Not Just Words: Sounding smart is no substitute for doing something smart. There is a tendency to allow the planning process to overshadow real action. It is important to reward employees for their executions, not just for their ideas. 
     
  4. Expect Mistakes: Action may require taking risks. Does your company treat failure in a way that causes employees to think twice before they act? Employees need to know that making mistakes is part of the learning process, and that failure will never be met with anger.
     
  5. Eliminating Fear Improves Outcomes: Fear is a troublemaker in any organization. If employees worry that a mistake could cost them their career, they will shy away from taking chances. Driving fear from the workplace is key to maintaining employee confidence. It will lead to more risk taking and improved performance.
     
  6. Fight the Competition, Not Each Other: Many companies learn the hard way that establishing practices that promote internal competition is bad for business. It pits employees against each other and undermines performance. Studies show that employees prefer cooperative work arrangements, and that these practices improve morale and task completion. This is becoming more evident with the needs and wants of the growing millennial workforce.
     
  7. Measure What Matters: Many companies believe that the task that gets measured is the task that gets completed. Therefore, if one measures more things, more will get done. Companies should focus instead on fostering a better understanding about what drives the economic engine of the company. Additionally, trucking companies tend to measure outcomes instead of processes. They may measure that they collect receivables in 45 days, but they do not know why that is good or bad.

    Does it make sense to instead measure the processes that lead to the collection of receivables? For example, it would be better to measure how long it takes drivers to turn in their paperwork, the number and cause of re-bills, the number of collection calls made each day, or the number of days from picking up the load to mailing or transmitting an invoice to the customer. Measuring the process will help trucking companies’ focus on improving operations and not just measuring outputs.
     
  8. Leading By Example: Leaders of companies with the smallest knowing-doing gaps understand that they cannot know and do it alone. Their job is to create an environment that enables others to know and to do for themselves. Leading by example is key. What you do, how you spend your time, how you allocate resources – it matters. Show your team the way and they will follow you.

Understanding the causes of the knowing-doing gap is the first step to closing it, and closing it is the first step to improving employee performance and company production. 

About the Author
Tim Almack is the partner-in-charge of Katz, Sapper & Miller's Transportation Services Group. Tim audits and reviews financial statements and advises numerous trucking clients in accounting, reporting, internal controls, analysis of cash flow, and other operational matters. Connect with him on LinkedIn.

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