Why is it that while knowledge is the single most valuable asset of a professional services firm, very few have institutionalized the discipline of knowledge management in their day-to-day activities? The cost of this is high for the firms themselves as well as for their clients. To fully understand the impact of not managing knowledge well in a service organization, let’s take a look at a typical scenario for the launch of a new service offering:
- The Idea
A new service offering usually starts with a desire to take advantage of a new business opportunity for the firm. The firm may in fact have expertise in the new service offering or may have to completely build capability from the ground up. In either case, critical mass and momentum is usually reached when there is at least a core consisting of a few bright people with an idea for a service.
- Business Development
Marketing and sales efforts are often scattered or vague as the organization attempts to sell services that are not clearly defined. This usually results in over or under promising and therefore over or under delivery. Consultative selling approaches result in engagements to address unique needs rather than engagements for specific service offerings.
- Service Delivery
Engagements tend to be an adventure where some go well and some not so well. The successful ones can usually be traced to the heroic efforts of a few very seasoned professionals who can pull almost any engagement out of the fire.
There is no formal methodology for delivering the service so a new delivery process is created for each engagement. The lack of a consistent process makes it difficult to share knowledge and staff across engagements.
If formal attempts are made to create an engagement method, the service offering team usually starts from scratch rather than using certified reusable building blocks from other existing methods. This results in reinvention of method components already in use on other service offerings.
- People
It is difficult to ramp up staff as there is no formal training (or certification) available. Usually staff learns by shadowing experienced team members or by being thrown in unprepared in a “sink or swim” approach. Conflicting approaches develop over time based on consultants own rather than collective experience. Attempts to develop a “best practice” are not possible.
To some this scenario may sound disturbingly familiar. Now let’s take a look at a scenario with knowledge management established as a foundational discipline of the firm.
- The Idea
New service offerings start not only with a desire to take advantage of a new business opportunity for the firm, but with a keen understanding of the firms’ core competencies. A gap analysis can outline the skills, knowledge and tools needed for the new service offering against what currently exists in the firm.
- Business Development
Marketing and sales efforts are targeted as the new service offering can be clearly described alone and as part of the overall set of offerings for the firm. The sales process results in engagements specifically for the new offering. As the firm knows the requirements of the offering as well as its capabilities, engagements are not under or over sold.
- Service Delivery
A new engagement method, is created by assembling certified reusable building blocks from other existing methods (e.g. change management, organization design, system integration, application development, object technology, etc.) This results in quicker time to market with new offerings due to less reinvention of known activities.
The engagement method outlines the work performed, the work products produced and the roles and responsibilities for the client and consulting teams. Engagement status can be monitored against the standard approach. Variations from standard highlight unique engagement issues for resolution or may indicate the need to evolve the standard process.
It is possible to share knowledge and staff across engagements thus providing for increased flexibility in managing staffing conflicts.
- People
Staff may be ramped up quickly via a formal training (or certification) program. Training differentiates between new and existing method building blocks so that consultants know what is “net unique” to the offering.
While mentoring may be appropriate, staff comes prepared with the proper training. Over time the standard approach is evolved into a best practice approach based on the collective experience of consultants across engagements.
So what are the benefits of implementing Knowledge Management for professional services firms?
Time to Market – ability to….
- implement a standard service offering development, launch and management process
- quickly assemble engagement methods and intellectual capital from previous building blocks
- perform gap analysis of service offering requirements to organizational capabilities
Engagement & Practice Management – ability to ….
- develop a standard engagement method covering the work performed, the work products produced and the client and consultant roles and responsibilities
- develop a project (time and cost) estimation model based on the engagement method to more accurately and profitably prices engagements
- establish consistent quality assurance processes to continually monitor, measure and enhance delivery methods
- facilitate risk management through enhanced governance processes
Organizational Learning & Collaboration – ability to ….
- harvest, harden and reuse intellectual capital within and across engagements
- identify and capture ideas for new services
- increase efficiency and effectiveness of delivery methods
facilitate teamwork and collaboration through the use of common language and methods
- defining (work performed, work products produced and roles and responsibilities) within and across engagements
The result is a more collaborative and challenging environment for consultants where they are well trained and focused on developing new thought leadership rather than reinvention. The value to the client is obviously that the firm is at their very best and not stumbling through the engagement. Clients will tend to return and give follow on work to firms that provide good value for their money.
Lisa Florence Wickersham, with over 16 years working for and with Fortune 500 organizations offers the following thoughts on KM for professional service firms. She has worked with Business systems development including IT strategy as well as acting as a transformation and management consultant. While Lisa’s experience goes beyond financial services, having worked with government, manufacturing and high tech, this article is drawn from her direct experience with service firms. She is currently principal for Knowledge Consultant, LLC (www.knowledgeconsultant.com) which provides KM information and consulting. In her free time, she volunteers as a consultant for the Executive Service Corps of New England, teaches job skills to women in need at the Women’s Center in Cambridge, Massachusetts and provides foster care for the Rhodesian Ridgeback Rescue organization of Massachusetts. Lisa has enjoyed an extensive consulting background as a Principal with IBM Global Services and a Director with KPMG Consulting.