Knowledge Management in Consultancies

Experience is not what happens to you; it’s what you do with what happens to you. – Aldous Huxley

“Knowledge Management” is a relatively new term but the process it refers to is well established; a father teaching his son how to kick a football; a grandmother passing down a family recipe; a consultant cascading acquired knowledge to both internal and eternal customers. All these are part of an essential hand over to perpetuate thriving continuity, and in the case of consultancy, to reinforce the message of value.

The consulting industry is extremely successful (it has a worldwide value of over $300 billion) and has a positive story to tell.

The critical focus for such knowledge transfer is on “tools” – the techniques, frameworks and products that have been developed. These will have been continuously refined over many case studies, capturing and enhancing feedback to meliorate methodology. Knowledge managers in consultancies generally have to be proactive in anticipating problems before they arrive. Subsequently they can remain viable and attractive to potential clients with a problem; the problem will have been previously addressed and conquered elsewhere. A good example would be the “7S” framework established by McKinsey; and established tool that has evolved over many years and experiences. A wider explanation can be found here:

Untitled from Joe O’Mahoney on Vimeo.

The core competencies that should be shared include explanations of final objectives and potential achievements, and pertinent examples of how products have been previously successful. These products should be presented as organic in that they continue to develop, and as a valuable price of intellectual property enhancing the value of consultancy advice .

Typically, managers do not always put enough time into knowledge management, since much of their time may be involved in fire-fighting the “here and now”. However, the regular problems to be encountered, the methods and incentives for innovation and the most efficient ways of cascading this, are issues that should be considered alongside daily operations.

In the seminal article “What’s your strategy for Managing Knowledge?“ in the Harvard Business Review March-April 1999, Hansen, Nohria and Tierney identify two types of management consultants and allied knowledge strategies–

  • The traditional, procedural style as typified by Accenture. These generally have”off-the-shelf” type solutions. These are easier to communicate extensively because the message is established, repetitive and already refined. The knowledge strategy used here is known as CODIFICATION. This can be done by less experienced staff, utilising chiefly IT resources.
  • The more stylised consultancies, for example McKinsey. These offer more bespoke solutions and require experienced staff in more personalised forums to communicate their features and potential. This knowledge strategy is known as personalisation and enables higher fees from smaller teams with lower leverage ratios.

The efficient management and passing of knowledge using either method ensures a continuation of business on a commercial level, and the refinement and development of tools and techniques, adding value and wealth to the wider economy. There are many useful lessons for managers within consultancy and beyond; such a simple sounding process should not be taken for granted and overlooked – time should be set aside to manage the future as well as the present.

Consultancy Perspectives on Knowledge – Handout

A good article on this can be found here