Customer Knowledge Management

INtrODUctION As companies begin to develop competence in managing internal knowledge and applying it towards achieving organizational goals, they are setting their sights on new sources of knowledge that are not necessarily found within the boundaries of the firm. Customer knowledge management comprises the processes that are concerned with the identification, acquisition, and utilization of knowledge from beyond a firm's external boundary in order to create value for an organization. Companies can utilize this knowledge in many different forms of organizational improvement and change, but it is especially valuable for innovation and the new product development function. The notion of working with partners to share information was first discussed in 1966 where the possibility of transferring information between a company and its suppliers and customers was identified. Kaufman (1966) describes the advantages to a business that include reduced order costs, reduced delivery time, and increased customer " confidence and goodwill " (p. 148). Organizations have since been viewed as interpretation systems that must find ways of knowing their environment (Daft & Weick, 1984). Through this environmental learning, a firm's ability to innovate can improve by going beyond a firm's boundaries to expand the knowledge available for creating new and successful products. Some organizations conduct ongoing, active searches of the environment to seek new and vital information. Such organizations become the key innovators within an industry. Other, more passive organizations accept whatever information the environment presents and avoid the processes of testing new ideas and innovation. Marketing literature refers to this concept as market orientation (Kohli & Jaworski, 1990; Slater & Narver, 1995). More recently, many organizations have realized the value of information about their customers through customer relationship management and data mining strategies, and have used this information to tailor their marketing efforts accurately manage inventory levels within the supply chain (Lin, Huang, & Lin, 2002) also reflects this notion. However, what is missing from these theories and strategies is the realization of the value of knowledge residing within customers, and not information about customers. Iansiti and Levien (2004) describe an orga-nization's environment as an ecosystem, where networked organizations rely on the strength of others for survival. Within this ecology, they identify certain " keystone organizations " that " simplify the complex task of connecting network participants to one another or by making the creation of new products by third parties more efficient " (p. 73). This increase in overall …