Do Not Straddle
As we’ve said, companies that use knowledge effectively pursue one strategy predominantly and use the second strategy to support the first. We think of this as an 80–20 split: 80% of their knowledge sharing follows one strategy, 20% the other. Executives who try to excel at both strategies risk failing at both. Management consulting firms have run into serious trouble when they failed to stick with one approach.
The strategy consulting firms we studied all came to grief with document-driven systems. Consultants were tempted to use the systems to deliver standardized solutions, but their customers were paying for highly customized services. When the systems were misused, customers became dissatisfied.
The strategy consulting firms we studied all came to grief with document-driven systems.
As the CEO of a major U.S. company told us, “I have been using a particular consulting company for over a decade now. One of the main reasons I have used them so regularly is because they have intimate knowledge of my company and our industry. The firm’s partners who have worked with me also know my style and my strengths and weaknesses. The advice I have gotten from them has been sensitive to our unique needs. Recently, though, I have found that they are trying to push cookie-cutter solutions. It’s almost as if they are simply changing the names on the same set of presentations. While some of their advice is useful, I am not sure if that’s enough. Frankly I expect more—and they sure as hell have not reduced their rates.”
Another consulting firm, Bain, learned a hard lesson about relying on documents. In the 1980s, before electronic document systems became fashionable, managers at Bain developed a large paper-based document center at its Boston headquarters; it stored slide books containing disguised presentations, analyses, and information on various industries. The library’s purpose was to help consultants learn from work done in the past without having to contact the teams that did the work. But as one partner commented, “The center offered a picture of a cake without giving out the recipe.” The documents could not convey the richness of the knowledge or the logic that had been applied to reach solutions—that understanding had to be communicated from one person to another. Bain’s management eventually developed an entirely new system, but the failed approach wasted time and money.