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04 January 2010

Are the consulting firms partly to blame for the fact that only a relatively small minority of companies have adapted their internal culture to the knowledge intensive economy?

Last month (Dec 09) I posted this question on Linkedin:

Are the consulting firms partly to blame for the fact that only a relatively small minority of companies have adapted their internal culture to the knowledge intensive economy?
In so few companies are collaborators incentivize to internally share freely their valuable knowledge (and rewarded for it). I would think that if consultants were to start advising "en masse" their clients about the benefits of such cultural change, "knowledge focused companies" could become the norm, not the exception.  This question concerns only the companies that do call in consultants (however, the others do get to learn of successful cases so could benefit indirectly). I am assuming also that most consultants would be aware and agree about the knowledge sharing benefits but maybe this is being optimistic. As for the competitive advantage of a knowledge focus culture, I believe it is not an assumption but a fact.

This question received 16 answers.  About 5 disagreed with the suggestion that consultants have to share the blame for the lack of organizational knowledge-sharing.  A couple seemed “neutral” on this point.  So, a majority seemed to agree.

I particularly liked how Nerida Hart put it: <<I think that what is happening is that the 'big' consulting companies only tell their clients what they think they want to hear - rather than - guess what guys you have a massive cultural problem and it won't matter what I write in the final 'report' - unless you want to address these issues nothing will change.>>

As the best answer, I chose Nicole Marchand’s:

<<Thanks for raising a subject that I really believe organization should all practice. Here is my take!

There are a few issues here that I believe contribute to the lack of buy-in, to adapt a knowledge focus culture. Are consultants responsible? As mentioned above, I believe it is a partnership between the consultant and the CEO but most importantly success is proportional to the leadership commitment to implement such an initiative. The lack of involvement at the senior level has proven to be a barrier in building a knowledge focus culture. Commitment from Senior Management is not restricted to the allocation of resources but also requires them to champion the initiatives, model the desired behaviour through the enhancement of their own learning, participation in the collaborative process, in essence; the promotion of knowledge sharing through concrete actions and consistency. Knowing that, I am honestly curious to know if senior leaders are willing and capable to commit to that extent. Could this be part of the lack of collaboration to implement such an initiative?

Another factor, because knowledge is an intangible asset, the business requirements to produce a return-on-investments and cost/benefit factor is often a huge challenge and tough sell. KM (knowledge management) practitioners need concrete evidence both qualitative or quantitative including a special place in the organizational financial statement to enhance the value of this intangible asset. (that will be my next question!) Experts report that 80% of organizational knowledge lies in the head of individuals, a fact worthy of attention.

A knowledge focus culture is a newer way of doing business. If leaders and managers keep thinking that water cooler conversations are a waste of productivity and not part of sharing knowledge and building trust and relationship, its implementation will be difficult. It requires a change in mind-set and behaviour and yes trust.

Implementing a knowledge focus culture takes considerable time, effort, energy and resources, it is the consultant’s responsibility to enhance the value of knowledge management, provide an accurate and informed assessment of the present knowledge manipulation situation, present a solid implementation plan and educate leaders on its present status and benefits. The success of the execution though, at the end of the day lies in the hands of the leaders. According to Bossidy & Charan (2002), “no company can deliver on its commitments or adapt well to change unless all leaders practice the discipline of execution at all levels” (p. 19).

There are many other factors affecting a successful implementation but I have hope I have managed to bring a contribution to your question.
>>

My position is also that the responsibility is shared and successful cultural change depends on a partnership between the leader(s) and the consultant(s):  “…it is the consultant’s responsibility to enhance the value of knowledge management, provide an accurate and informed assessment of the present knowledge manipulation situation, present a solid implementation plan and educate leaders on its present status and benefits.”  The leader then makes it happen.  However, I believe that only a minority of consultants initiate this change unsolicited.  The consultant should not wait for the leader to ask them “help initiate a knowledge-focus culture”, as he unlikely knows that this is indeed what the organization needs to gain competitive advantage in a sustainable way.

Could it be that knowledge-focused companies less need to call on consultants? Since these companies make much better use of their human capital by leveraging internal expertise and talents for creativity and innovation, maybe they can do away with consultants for most problem-solving situations.   I do not want to initiate another conspiracy theory but what if many consulting firm partners are aware of this and consciously refrain from spreading too quickly the knowledge word?

3 Comments:

At 6:27 PM, Anonymous Atle Iversen said...

As a former consultant, I don't think the partners are too worried about sharing knowledge.

The simple fact is that proper knowledge management is *hard* !

It won't help trying to share knowledge when the recipient doesn't have a system or a culture for collecting and using shared knowledge.

We tried to share as much knowledge as possible, and our clients (the managegemnt) even encouraged it. However, there was no system or incentives for making this easy for the clients, so they basically just got more "work" without any visible advantages.

The main problem is that you need a *culture* for learning, collecting, sharing and using knowledge first - consultants can help with this process, but the main burden and challenge will always be on the clients themselves (consultants are not the best answer to everything).

My 2 cents on KM:
- http://www.ppcsoft.com/blog/km-3.asp

 
At 6:24 PM, Anonymous Chris Collison said...

Hi Peter,
If you frame the question as “Could it be that knowledge-focused companies less need to call on consultants?”, then I believe that you’re spot-on.

My experience (both as a independent consultant, and a corporate “real person”) is that if you know what you know, and have the means and the will to mobilise that knowledge – then you can be far more focused and deliberate about how you use external consultants to fill the gaps.

Too many organisations are intellectually lazy, and press the McKinsey {or insert your favourite large management consultancy here} button without first understanding the depth and breadth of knowledge already available through their own employees.

Sometimes it’s hard to put your finger on “where that knowledge is”, because different parts of the organisations describe things very differently.

Sometimes there are cultural blockers which make it hard to first identify (e.g. Tall poppy syndrome) and then mobilise knowledge (e.g. Not invented here syndrome).

Sometimes, sadly, there’s a lack of belief at senior levels that good practice lies in house. There’s a biblical parallel to this in Mark 6v4 when Jesus returned to Nazereth and found he was unable to carry out any miracles because of their lack of faith in him – Isn’t that just the carpenter’s son?
Jesus said to them, "Only in his hometown, among his relatives and in his own house is a prophet without honour."

So for these, and other valid ones (like lack of capacity) consultants can find themselves in organisations which don’t really need them; interviewing disenfranchised staff who resent the fact that only external voices seem to listened to...

This is why Geoff and I wrote “No More Consultants. We know more than we think.” – the animation on YouTube explains it better than me...

 
At 11:32 AM, Blogger Nimmy said...

Excellent conversation and comments, Peter. I think Nerida puts it well like you say. Consultants only give you what you want because that's what will keep the relationship alive and smooth.

Most change, is effective, even otherwise, when it is internally initiated...in my experience. Consultants can however be a good bridge between the organization and the rest of the world and pass on practices, examples, experiences and case studies from outside rather than sermonize from a management text book - maybe this will make a difference!

 

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