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Ebook: The Knowledge Creation Potential of Management Consulting
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The Knowledge Creation Potential of Management Consulting interprets management consulting from a knowledge perspective, and proposes a general conceptual framework for investigating and interpreting that potential. To begin with, the main dynamics of change that characterize today’s demand for management consulting is outlined, and is it suggested that firms are becoming increasingly aware of the real cognitive (rather than only the economic) value generation potential that can be activated through the consulting relationship. Also, the possible pathways for evolutionary transformation of consulting practices, models and roles that consulting firms could follow if they want to take advantage of the important changes that are taking place, are looked at. Next, a definition of management consulting is proposed, which aims to identify the distinctive ontological (real, essential and relatively stable) features of this particular service and emphasizes the mainly cognitive nature of its value-creation potential. Furthermore, two approaches to interpreting management consulting are discussed: the diachronic approach, and the synchronic approach. To conclude, the theories interpreting knowledge creation processes as knowledge conversion processes are explained, and applied to the specific context of management consulting relationships.
The literature offers a wide selection of studies into enterprise knowledge management (Abrahamson, 1996) and management consulting (Whittle, 2006). Management consulting firms are often discussed as being the archetypes of knowledge-intensive firms (e.g., Alvesson, 1995; Crucini, 2002; Heller, 2002; Werr, 2002), or as the firms whose core product is knowledge itself (Sarvary, 1999). Consulting firms are generally aware of the value of knowledge for their own organizations and for their clients
The increasing awareness among consultancies of the knowledge creation potential of management consulting is confirmed, for example, by the progressive and empirically detectable change in the range of management consulting services offered and their modes of delivery: creating and sharing knowledge (in terms of exploration, development and exploitation) have now become key-channels for transferring value to clients (Davenport & Prusak, 2005). Moreover, many of the top consultancies now “offer knowledge management services for their clients, focusing on how they can develop their internal knowledge management practices” (Buono and Poulfelt, 2005, p. IX).
In Chapter One, I outline the main dynamics of change that characterize today's demand for management consulting, and suggest that firms are becoming increasingly aware of the real cognitive (rather than only the economic) value generation potential that can be activated through the consulting relationship. I also look at the possible pathways for evolutionary transformation of consulting practices, models and roles that consulting firms could follow if they want to take advantage of the important changes that are taking place.
In Chapter Three, I propose a definition of management consulting which aims to identify the distinctive ontological (real, essential and relatively stable) features of this particular service and emphasizes the mainly cognitive nature of its value-creation potential. I go on to discuss two approaches to interpreting management consulting: the diachronic approach (the consulting process), and the synchronic approach (the consulting models). I use these approaches to outline the essential variables of the consulting relational dynamics.
In Chapter Six, I make use of the theories interpreting knowledge creation processes as knowledge conversion processes (Nonaka & Takeuchi, 1995), and apply them to the specific context of management consulting relationships. This allows me to propose a possible framework of the cognitive pathways along which knowledge can be created through management consulting. It highlights the fact that in “meta-” (i.e., advanced) consultancy contexts the knowledge creation potential of consulting lies in the possibility that it can generate not only explicit knowledge but also (even,mainly) new tacit entrepreneurial knowledge, such as new interpretative abilities (vision of the firm's structure and of the competitive environment), new experience-based diagnostic skills, and new capabilities to gain insights into solving entrepreneurial problems. The value of this knowledge for both the client and consultant goes far beyond the solution of the specific problem for which the consultant was engaged.
The aim is not to demonstrate the absolute validity of this model, but more simply to highlight its internal theoretical consistency and to discuss the supporting evidence of a number of anecdotal cases
The brief empirical evidences provided in this book are based on interviews by a group of researchers who are exploring (under my guidance) the emerging issues in knowledge management within the context of the European management consulting industry. This research project is being conducted with two samples of firms; one comprising fifty management consultancies of various sizes, and the other with over one hundred large and medium-sized corporations. The interviews are still in progress and will be completed by the end of 2008. This approach is frequent in management literature. See, for example, Normann (2001).
Testing the validity of the proposed framework through a systematic quantitative analysis is the next challenge I intend to undertake. Another challenge is to develop management control tools which can translate the conceptual model into practice, into systems that can support management consulting firms and their clients in the consulting relationship knowledge management.
Perhaps a better understanding of the knowledge creation paths that can be activated by management consulting projects following the meta-consulting approach will allow both clients and consulting firms to increase their awareness of the entrepreneurial knowledge generation potential engrained in the dynamics of the consulting relationship. Clients and consultants might be better placed to consciously define knowledge creation goals for their consulting projects, to effectively design and manage the related cooperative learning dynamics, and to evaluate the cognitive value (rather than only the economic value) of the consulting intervention results. Client firms might come to regard the management consultant's work not simply as “seeking a solution to a specific problem” but also as “facilitating the endogenous development of their cognitive capacities” (and hence of their distinctive capabilities). They could then select the consultant and, above all, plan their active cooperation in the consulting process on this basis. Similarly, consultants may be encouraged to interpret the consulting relationship as an opportunity for cooperative learning. This may not only increase the client's cognitive resources, but also enable consulting firms to develop new and unique knowledge (which only the specific consulting context can induce), and, consequently, new distinctive consulting capabilities that may be fundamental for their competitive success.
The proposed conceptual model may have two major limitations. First, it may be subject to the limitations that some authors (e.g., Gourlay & Nurse, 2005) attribute to Nonaka and Takeuchi's theory of organizational knowledge
To my mind, however, Nonaka and Takeuchi's organizational knowledge creation theory does still remain a very powerful tool for interpreting knowledge creation entrepreneurial processes.
