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My name is Andreas Werr
and I'm a Professor
in Management
at the Stockholm School
of Economics in Sweden.
My research
has focused extensively
on management consulting,
but also more broadly
on professional services,
study both the production
of consulting services
as well as their consumption,
how they are bought
and used in client companies.
But the focus of today
will be the production arts
and especially
this key resource in consulting,
which is knowledge.
As we'll see,
knowledge is kind of
at the heart of management.
Consulting,
it's really what clients buy.
And if managed well,
it is a key asset
for the success of consulting.
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In this talk, I'll address
two main questions, really.
The first one, we'll look at
the nature of knowledge
in management consulting,
what it is
and what the role of this
kind of key resource is
in the consulting firm.
And second,
we will turn to the question
of how to manage
this knowledge.
Given that it is so important,
how do consulting firms go
about managing this key asset.
So let's start
with the first theme,
the asset part of consulting.
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Few would argue
against the claim
that management consulting is
a knowledge intensive business.
But let's explore
in some more detail,
what we actually
mean by that.
The first aspect is, of course,
that when clients buy
consultants,
they do that with expectations
of buying individuals
with certain knowledge
and expertise.
These expectations have changed
with the development
of management consulting
from expectations regarding
rather general problem
solving methodologies
and skills to expectations
regarding much more
detailed knowledge
about industries,
best practices,
and process benchmarks.
This thus possess high demands
on today's consultancies
to both generate this knowledge
but also to make it available
to the entire body
of consultants,
which is what
knowledge management
to a large extent is about.
Second,
against this background,
knowledge has increasingly
become a wave
of competing
for consulting firms.
As clients are becoming
increasingly
sophisticated buyers,
they are moving
from buying consultants
they have a relation with
whom they've worked with before
to more systematically
looking for consultants
that are experts
in the specific problems
they need to tackle.
They're looking less for general
analytical ability
and more for experience
and documented expertise
in specific areas.
Knowledge also becomes
a way of proactively
marketing consulting services
where the development
of specific management concepts
tools or insights
provides a basis
for approaching
potential clients.
Third and important,
particularity of knowledge
in consulting is
that is closely intertwined
with the ongoing work
with clients.
Learning and consulting
takes place
in client assignments,
new concepts
and ideas are developed
in the work with clients.
So a typical way of developing
a new consulting approach
is in response
to a client request.
In that specific project,
a new approach may be created,
which may then be formalized
into a marketable concept.
As we will see later,
projects also serve
as an important way
of continuously
developing methods
and concepts in consultancies.
Now this is in contrast with
more traditional organizations
where knowledge development
and production
are typically separated.
Knowledge development
takes place
in a separate part
of the organization,
typically in R&D department.
And first, when they're done,
production gets involved
in consulting,
production
or product development
for simultaneous
and interacting processes.
Now this peculiarity creates
the condition
that knowledge
and management consulting
has increasing returns,
which means that
the more knowledge you have,
the easier it will be to gain
further knowledge.
The logic behind this
goes as follows.
As clients will hire those
with the most expertise
in a specific area,
those already
knowledgeable firms
will gain further opportunities
for learning
and knowledge development
in their specific area
of expertise.
And thus become
even more attractive,
earn clients,
creating further projects
from which to learn and so on.
But this of course presupposes
that the firm is able
to leverage the knowledge
created in a single project,
which in essence is what
knowledge management is about.
This will be the focus of
the second part of this talk.
Now given that knowledge
is a strategic asset
in consulting firms,
let's dig a little deeper
into how we could understand
what we mean
by consulting firms knowledge.
Obviously,
people can know things,
but how can we say
that organizations know things?
