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The Insanity Of Protecting Your So-Called Proprietary Knowledge

By April 26, 2010July 15th, 2018Best Practices, Learn!

First a chain of logic, then a case in point… (I’ll assume you possess valuable knowledge.)

  • Fact: The more valuable the knowledge you possess, the more valuable you are to your customers
  • Fact: As more customers and prospects realize you have valuable knowledge, the more they will seek your advice and the more they will buy from you
  • Fact: The more you share your knowledge, the more customers and prospects will recognize the fact that you possess valuable knowledge
  • Therefore: Aggressive sharing of all of your knowledge is an excellent strategy

The #1 objection to the above “therefore” is that by sharing what I know, I’ll be helping my competitors and weakening my ability to differentiate my offerings. Human nature says that’s a dumb objection. Consider NUMMI.

General Motors opened a plant in Fremont, CA in 1962. Twenty years later, when it was shut down, the United Auto Workers union issued a statement saying Fremont employees were “considered the worst workforce in the automobile industry in the United States.” Sabotage and heavy drinking on the job were commonplace.

Toyota at the time was kicking the crap out of GM competitively. The quality of the vehicles it produced was enormously better. They suggested a joint venture, NUMMI (New United Motor Manufacturing, Inc.), based in the idled Fremont plant, with a start-up in 1984 and offered to share ALL of their “secrets.”  And they did.  They shared all of their car manufacturing knowledge.

Fast forward 15 years to 1999. The NUMMI plant had the lowest defect rate and was the most profitable in all of GM. So how many other GM plants had adopted the Fremont plant’s best practices? How many other GM manufacturing locations learned and implemented the processes that produced fewer defects and higher profits? How about zero?


And did things get better since 1999? Sadly, while quality across GM did improve slowly and quite dramatically, it was too little too late. You’ve read the papers, and NUMMI itself shut down last November.

The lessons:

  • Over 15 years, GM used exactly zero of the “secrets” it was given by Toyota
  • 25 years of open access to the Toyota knowledge base was not enough to save GM from corporate humiliation
  • Toyota made money by the bucket-full and lost nothing by sharing its knowledge
  • Toyota, as evidenced by their own recent quality problems, got arrogant, fat, dumb and happy about how “totally awesome” their car knowledge management principles were

The conclusion:

  • Aggressively share everything you know with everybody (Customers will appreciate it and buy more, competitors will probably ignore, at best resist and certainly won’t exploit any of it.)
  • Recognize that you ain’t that smart (Just because you’re on top right now, doesn’t mean you’ll be there forever.)

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