Leveraging Knowledge

Tom Peters

“We can no longer compete on the cost of labor with countries like China,” says Olivetti chief Carlo De Benedetti. “What we have to leverage is our know-how.” Right on. Unfortunately, we don’t know how to do it.

Seventeen thousand PriceWaterhouse consultants and accountants are using Notes, Lotus Development’s new work-group technology system, CIO magazine reports. But most applications of the software have been mundane. Why? “Fostering the shared workgroup vision that lies behind Notes has proved elusive,” reporter Thomas Kiely concludes.

Devising the right sticks and carrots is the issue, says Sheldon Laube, the $3.8 billion firm’s national director of information and technology. The following question must be answered affirmatively by a cast of thousands: “Was it worth their time to enter information—for someone else’s benefit—on the gamble that somewhere down the road information would appear in Notes that is useful to them?”

Laube has sidestepped this issue so far and settled for practical uses of the system. Case in point, per CIO: “A banking consultant in Washington picks up regulatory gossip, and sensing an opportunity, broadcasts a message to the 200 or more PriceWaterhouse banking consultants throughout the nation, who immediately broach the subject with their clients.” That boils down to an email use of Notes, according to MIT Professor Wanda Orlikowski, who’s studied PriceWaterhouse. “It isn’t the same thing as collaboratively working together on a joint project,” she adds.

Brook Manville, co-director of information and technology at consultants McKinsey & Co., understands the distinction Orlikowski makes. He’s also overseeing a major implementation of Notes—but McKinsey’s avowed emphasis is fundamental transformation of the company’s professional practice.

McKinsey has typically thrown very bright, energetic folks at a client project. Manville calls it the “we’re smarter than everyone else and that’s enough to maintain our advantage” strategy. But competitors are catching up. McKinsey’s next step, according to Manville, is to leverage its collective experience by systematically developing and sharing institutional knowledge.

Knowledge development at McKinsey orbits around 30-odd “practice centers”—voluntary, virtual communities of consultant-specialists who offer their expertise to colleagues. Getting these centers to view knowledge development in marketing terms is the first step. “They should think about growing their ‘mind share’ with consultants throughout the firm,” says McKinsey exec Bill Matassoni.

McKinsey summarizes what it’s learned from some 1,500 projects completed each year in computer databases. But these records aren’t viewed as dusty electronic archives. Manville, a statistics nut, urges practice center leaders to measure usage of the databases—and even publish “best-seller lists” of the most valued documents.

However, such tactics still fall well short of the mark. The Organization Performance Practice, the firm’s largest, has gone much further. The centerpiece of its activities is the Rapid Response Network, manned by four people better characterized as consulting psychologists than technical support staff.

The RRN team instantly responds to internal customers’ questions with referrals to McKinsey experts and customized material culled from numerous internal and external databases. (The human touch counts: Send too many documents, and the already besieged consultant is overwhelmed; send too few and she or he is disappointed. Ducking such nuts-and-bolts issues is the Achilles heel of most knowledge-management schemes.)

All 60 consultant-specialists in the Organization Performance Practice have also agreed to act as “on-call consultants” a couple of weeks a year. They guarantee a response, within 24 hours, to queries from consultants in any of 58 offices in 28 countries.

Finally, the RRN staffers perform extensive follow-up interviews and religiously track “customer satisfaction.” They even publish an annual report on their activities!

The bottom line is trying to get harried consultants to routinely use the firm’s reservoir of knowledge in their client work and to take the time to replenish that reservoir. Beyond the practice-center activities, McKinsey is slowly developing the “cultural” value that measurable contributions to the firm’s knowledge base are a must for satisfactory performance evaluation.

Manville has barely gotten started, as he readily admits. But he’s asking all the right questions. Fitting together the pieces of the knowledge-development puzzle may be the foremost challenge for corporate America in the coming decade.