Internal Knowledge Management Techniques in Large Consultancies - Coursework Example

Internal Knowledge Management Techniques in Large Consultancies The extant literature presents consultancies as important knowledge suppliers, which pursue different knowledge management strategies. The planning of how to manage internal knowledge is bolstered by prior consideration that knowledge is pivoted by two major scales: explicit and tacit. According to Davenport (2005), explicit knowledge is largely external and codifiable, which implies that it can be written down and disseminated without impairing the quality of the information. Tacit knowledge is non-codifiable, and its establishment and dissemination revolves around hands-on experience. The power of the two knowledge scales is evinced by the large multinationals, which have to export their knowledge wealth to franchises and maintain standards of management and growth. In this context, large and international consulting firms give subsidiaries manuals of their internal knowledge, which cannot be mastered implicitly without the strategic devolvement of tacit knowledge. This implies that internal knowledge of an organization is fundamentally anchored on the tacit form (Rooney, Hearn & Ninan 2005). Hansen, Nohria and Tierney (1999) primarily established the techniques of personalization and codification. Personalization technique is synonymous with the personal invention in that the knowledge is individual dependent and can only be utilized or disseminated through that person. Additionally, Hansen’s codified knowledge revolves around inscription of knowledge into written or audio media, which amplify the potential of spreading the knowledge (Hansen et al.1999). It is imperative that personalization is mainly aligned towards creation of tacit knowledge, and focuses on the storage of knowledge in human minds and its transferring through person-to-person interface. This is common in Innovation consultancies such as Bain & Co, Mc Kinsey. According to Schulz and Jobe (2001) the codification technique that is primarily the conduit for creation of explicit knowledge, allows knowledge to be carefully codified and stored in databases where it can be made easily available to use. This is common in implementation types of consultancies such as Ernst & Young, Anderson Consulting now known as Accenture, IBM, PwC. In the exploration of the personalization technique, the review will detail techniques such as mentoring and training, networking and Use of IT Systems. Furthermore, discussion of the codification technique will explore the use of the IT and databases as the main technique. Tacit Knowledge As aforementioned, the conceptual tacit knowledge is the cornerstone of organizational internal knowledge base. Large consulting firms use different strategies in the creation and management of internally crucial information. The Mentorship Technique Mentorship is commonly applied in internal knowledge management to facilitate the implicit transfer of work experience from an individual to another party within the organization. Among the varied internal knowledge creation and management concepts, the mentorship technique emerges as a crucial tenet by which experienced experts transmit their art to the young and less experienced practitioners (Schulz & Jobe 2001). The technique is crucial in the sharing of the firm’s guarded knowledge directly within the consultancies’ functions. Some firms ensure that in addition to sharing tacit knowledge through familiarization and mentoring, they facilitate face-to-face skills sharing in everyday work practice and between shifts (Remenyi 2008). The knowledge is also shared through effective and regular departmental meetings to ensure that every employee understands workmate’s experiences and how to respond to similar situations. (Hansen et al.1999) Team leaders also plug vital voids by establishing conduits via which knowledge is shared within the consulting firm. Team leaders communicate various standard practices and experiences that underlie the value in the delivery of quality consultation services to the clients. The organizations thus encourage open conversations and coherence between the employees and the management team. People in lower ranks in the firms like supervisors are empowered to make decisions in order to encourage continuous utilization of the internal knowledge (Manyika et al. 2011). Large consultancies like McKinsey further empower their employees giving them capacity to create new solutions as well as actualizing various lessons learned from their previous areas of employment as part of their internal knowledge management and enlargement of the organization’s stock of skills (Manyika et al. 2011). The discussion herein exemplifies the management techniques of internal tacit knowledge used by McKinsey. Recognition of the Experiential Knowledge Although knowledge has perennially been presented as a formerly acquired and harnessed asset, experience from routine duty stabilizes individual’s art of perfection. Large consultancies bank on experiential knowledge particularly because it helps in building strong internal knowledge that translates to a better competitive advantage in the market (Sarvary 1999). Recognition of experientially developed skills is one of the strategies applied in the management of knowledge internally in large consultancies achieved through rewarding of the employees (Magarisons 2005). The organizations recognize individual based efforts as well as group effort in resolving client and internal problems. Fair rewarding is particularly observed when motivational collaborative problem solving is enthused to encourage addition of new ideas and solutions to problems, which can form reference stake for future issues. This technique not only gives the firms an opportunity to attract the best knowledge in the consultancy market but also the sustainability a powerful internal skills repertoire capable of contributing to significant competitive advantage in the market (Sarvary 1999). Recognition of the experiential knowledge value plays an important role in empowering and motivating the employees to provide consultancy services to the clients. The firms also encourage continuous utilization of internal knowledge to found solutions to new situations as part of sustaining the existing intrinsic mechanisms that provide the firms with a competitive advantage in the market (Khosrowpour 2001). Networking It cannot be overemphasized that the management of tacit knowledge is anchored on the networking technique. This is evinced by Bain and McKinsey (Manyika et al. 2011), which have established extensive web of networks of people that had common experience of solving problems. The networking strategy works by facilitating for such people to work together to create realistic solutions existing and emerging work related issues. The strategic connection of experienced people through networks enabled the continual sharing of tacit knowledge through person-to-person, via the telephone, by e-mail and through video conferences. Information Technology Systems The doctrine of tacit knowledge acquisition, development, and dissemination is bolstered by tenets of continuing information systems. The search and purchase of informational and skill facets are some of the techniques applied in transferring external knowledge to internal (Armbruster 2006). The large consulting firms greatly rely on information technology (IT) systems to achieve effective management of its crucial knowledge intrinsically. The construction of information database is a capstone technique that has been adopted by large consultancies in the management of both types of internal knowledge. Many large consultancies have implemented different IT tools identified as crucial in supporting effective knowledge management. Additionally, artificial intelligence, internet, laptops, mobile phones and voice recognition devices are increasingly being deployed as instruments of knowledge creation and management (Schwartz 2006). Databases for best practices and intranets have emerged as the most common and influential IT tools developed by large consultancies to facilitate management of the valued tacit knowledge. The intranet is an effective instrument of internally disseminating tacit knowledge stored in the firm’s databases to the individuals working within the company. Transfer of tacit knowledge via the intranet ensures that important knowledge at the center of the firms’ competitive advantage is not unprecedentedly leaked or strayed in the way of rivals (Davenport 2005). Explicit Knowledge In the increasingly globalized realm of consulting services, large organizations expand through acquisitions or franchises to extend their international reach. This requires many of them to feed their new business partners with their core information in pursuit of standardized service delivery. The explicit knowledge is usually transferred in codified forms. Database and Codification of Knowledge Generally, large consultancies are buttressed on functions like data collection and information analysis that bolster informed decision-making. All the processes in large consultancies culminate in a repertoire of experiences informing the firm about what actually works and what does not. In this context, creation of databases has been exploited by large consultancies in their internal knowledge management to ensure that vital information is readily available for internal advantages via the firms’ knowledge databases (Hansen et al. 1999). Codification of knowledge is important to the organizations because important information can easily be forgotten or lost through transfer or departure of workers. Storage of knowledge emphasizes on ensuring that information is stored to the extent that is useful and necessary to sustain a firm’s strategy. One of the commonly applied knowledge storage and exchange techniques developed by large consultancies includes the Lotus Notes databases, which contain both internal and external information in document constellations. Development of the Lotus Notes databases technology has been deployed successfully in large consultancies such as PriceWaterhouseCoopers and Arthur Andersen in which it is adopted as an electronic resource planning (ERP) knowledge explication strategy (Khosrowpour 2001). The large firms have developed knowledge database from which clients cannot only access explicated rich information, but also pay to access implicit skills resources inherent in the firms. Consulting firms particularly attract competent people with important knowledge away from clients by offering more money and highly diverse or challenging experiences that enhance their competitiveness in the market. Through proper management and safeguarding of internal knowledge, consulting firms are able to offer important consulting services including technical product skills and system implementation procedural information. Development and utilization of codified knowledge stock emerges as a key element in selling and delivering consultancy products (Magarisons 2005). Large consultancies enhance their reputation as innovative knowledge hubs through demonstration that they can collectively generate experiences and convert the experiences into useful services that meet changing clients’ demands or offer solutions to their problems (Anand, Gardner & Morris 2007). The consultant’s information base is not only important for interaction and problem solving but also contribute to the consultancy’s marketing and promotion. In the process of knowledge management, managers focus on ensuring that experiential knowledge of seasoned employees is codified into databases and manuals to ensure that earlier solutions can be referred to in problem situations. A Knowledge Database A creation of knowledge database is facilitated in consulting firms through the establishment of information instruments that actualize the re-use of knowledge to improve work and safe time. Additionally, as evinced by Accenture, knowledge database reduces communication costs that allow the firm to contract on more projects. Knowledge Centre This component of internal knowledge management has been utilized at the Ernst & Young, which has a centre that is anchored on high-tech IT method for management of explicit knowledge. The works in three tires according to Awad (2004): The Centre for Business Innovation that primarily harnesses new knowledge The Centre for Business Transformation that converts available knowledge into methods and automated tools The Centre for Business Knowledge tasked with the collection, storage, and critical analysis of knowledge from internal of external sources Knowledge Web Through the firm’s web of knowledge, internal knowledge centers co-function for facilitation of the consulting purpose. Particularly, honed consultants that have substantial experience in specified areas such as strategic business management are sorted in groups (knowledge networks), which are charged with the planning and management of databases in their area of expertise (Awad 2004). An Intranet Internal networks that interconnect firm’s intrinsic knowledge are referred to as intranets. For example, the KPMG Peat Marwick US has developed an intranet (Knowledge Web (KWeb)) for effective management of internal knowledge. The internet facilitates the firm’s knowledge collection and versatile reach on different databases for instance those hosting client and engagement information.  HR Strategies Primarily, the human resource (HR) techniques are pivotal in the sense of attracting and retaining talent that actualize the firm’s efficacy in the management of tacit and explicit knowledge. Strategic HR techniques ensure that experienced talent not only serves optimally but also forms a bank of tacit knowledge for inheritance by incoming folks. This is however bolstered by the nature of talent and the creation of a viable knowledge sharing organizational culture. The sustainable management of internal tacit knowledge requires the organization to: Hire highly educated talent of people that like problem solving and can tolerate ambiguity. Train people through one-on-one mentoring. Encourage direct sharing through rewarding facilitators Culture of continual mentoring and acquisition of knew knowledge Ingrain the mission and vision of the firm into tacit knowledge to grow with the enterprise To integrate viable explicit knowledge the company must: Attract and recruit graduate trainees that can effectively facilitated re-use of knowledge and provide solutions to issues Train people in groups and through computer-based distance learning. Reward participants well for utilizing and enhancing continual development of databases Constantly evaluate and update all knowledge Codified Knowledge is Challenging for Consulting Firms Despite the various benefits associated with codified knowledge such as proactive dissemination to people, several disadvantages have been identified with the form of knowledge. Codified knowledge is time intensive and requires zealous effort to help users articulate the useful skills thereby limiting its effectiveness in problem solutions. Codified knowledge has also been associated with limitations on the articulation of tacit knowledge (Dunford 2000). The limited accessibility has been voted one of the primary characters of codified knowledge, which delimits some of the parties within the firm from accessing important internal collection of informational assets. This limits the collaborative approach to problem solving as some people are disabled by internally codified knowledge thus reducing their ability to contribute to consultative services and problems arising within the consultation firms. In many consulting firms, it is the implicit component of experienced people in the consulting firm that command the highest levels of respect and consequent high price thereby limiting the value of codified knowledge. Another, contradiction of codified knowledge is that it is usually highly summarized thus defacing its usability particularly by people not familiar with knowledge (Dunford 2000). Another contradiction to the use of codified knowledge is the extent to which the recipient is able to decode such knowledge and apply it effectively in prevailing situations or decision-making. The limitation in the ability to decode codified information not only limits its usability within the organizations and by clients but also impairs sharing of such knowledge effectively (Magarisons 2005). The rising cost of accessing codified knowledge poses a great challenge to not only the clients but also the marketability of the consultants’ services. Despite the importance of restricting the accessibility of knowledge in the consulting firms, such accessibility barriers may interfere with the efficiency and effectiveness of the services delivered by the firms. Patent database may become a limiting factor in the application of codified knowledge in that only the patent-holder can use the information or allow access. This may be inconveniencing or lead to delays in the delivery of services especially when the codified information stored in such database is pivotal for the delivery of the service. Another major concern faced by consulting firms in the management of codified knowledge is the extent to which a certain piece of data can be codified to ensure that it remains reliably useful to consumers. Large consulting firms continue to struggle to resolve the dilemma on the degree to which knowledge can be codified, entered on ICT and offered in the markets as attractive informational goods (Magarisons 2005). Codification of knowledge often faces challenges related to differences in competences, skills and understanding between the original source or sender and the recipient. Conclusion Large consultancies have developed various techniques for the management of knowledge. The primarily service institutions deploy intensive and extensive implementation of various information technology systems. Conventional techniques include the mentorship and familiarization techniques applied in the sharing of internal knowledge between the experienced and the less experienced workers. Recognition of the experiential tactics through rewards has emerged influential in the management of internal knowledge within the large consultancies. Despite the benefits associated with codified knowledge, various contractions arise include restrictions in access, extent of codification and usability of such knowledge. Although some researchers have indicated that successful firms have excelled through adoption of one internal knowledge management technique (either codification or tacit), it is worth noting that no type of knowledge can serve effectively without support of the other. It has emerged that although McKinsey primarily uses personalization techniques, the firm has demonstrated that internal knowledge management is a function if strategic integration of explicit and tacit knowledge. References Anand, N, Gardner, H & Morris, T 2007. 'Knowledge-based innovation: emergence and embedding of new practice areas in management consulting firms'. Academy of Management Journal, Vol. 50, no.2, pp. 406-428. Armbruster, T 2006, The economics and sociology of management consulting. Cambridge University Press, Cambridge. Awad, M 2004, Knowledge management, Pearson Education India, New Delhi. Davenport, T 2005, ‘knowledge management in consulting’, in Greiner, L. and F. Poulfelt (eds.) the contemporary consultant: insights from world experts, Mason, OH, Thomson/South-Western. Dunford, R 2000, 'Key challenges in the search for the effective management of knowledge in management consulting firms'. Journal of Knowledge Management, Vol.4 no. 4, pp. 295-302. 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