77 Knowledge Management for a Small Consulting Firm

Overview. A senior professor who has done part-time consulting for many years is very pleased when his latest book becomes a best-seller and he is inundated with new consulting opportunities. He decides to take a two-year leave of absence from his university to start a small consulting firm with several of his current and former graduate students as his junior consulting partners.

An organizing system for knowledge management is required, but what gets designed will depend on the scoping decision. Is the goal of the system to support the consulting business, or also to support ongoing and future research projects that sooner or later will generate the consulting opportunities?

What is being organized? The professor concludes that since his consulting is based on his research, he needs to include in the new knowledge management system his research articles and the raw and analyzed data that is discussed in the articles. These resources are already organized to a great extent according to the research project that led to their creation. These have been kept in the professor’s university office.

The professor also has a separate collection of consulting proposals, client reports, and presentations that he has made at client firms. Because of restrictive university rules about faculty consulting, the professor has always kept these resources in his home office rather than on campus.[1]

In addition to these existing resource types, it will be necessary to create new ones that make systematic and explicit information that the professor has managed in an informal and largely tacit manner. This includes consulting inquiries, information about prospects, and information about specific people in client firms.

Why is it being organized? The professor has usually just done one consulting project at a time, very opportunistically. He has often turned down projects that involved more work than he could do himself. He now sees the opportunity to do much more consulting and to take on more significant projects if he can leverage his expertise in a more efficient way.

The professor can take on the “rainmaker” role to secure new consulting engagements and make the important decisions, and he is confident that he can train and support his new staff of current and former students to do much of the actual consulting work.

The knowledge management system must enable everyone in the firm to access and contribute to project repositories that contain proposals, plans, work in progress, and project deliverables. Much of this work can be reused from one project to another, increasing the productivity of the firm and the quality of its deliverables.[2]

Just as it is essential that the professor’s knowledge is systematized and made available via a knowledge management system, so must the knowledge created by the new staff of consultants. The professor cannot expect that all of the students will work for him forever, so any knowledge that they acquire and create in the course of their work will be lost to the firm unless it is captured along with the professor’s.

The consulting firm probably will not have an indefinite lifetime. After his leave of absence, the professor might return to his university duties, perhaps on a part-time basis. The knowledge management system will enable him to leave the firm in someone else’s hands while enabling him to keep tabs on and possibly contribute to ongoing projects. Alternatively, if the firm is doing very well, perhaps the professor will resign his university position and take on the role of growing the firm. A larger consultancy might want to acquire the professor’s firm, and the firm’s valuation will in part be determined be the extent to which the firm’s capabilities and resources are documented in the knowledge management system.

How much is it being organized? A small firm has neither the money nor the people to invest in complex technology and a rigorous process for knowledge management, but appropriate technology is readily available and affordable. Decisions about organizing principles must be made that reflect the mix of consulting projects; resources might be organized in a shared file system by customer type, project type, the lead consultant, or all of these ways using a faceted classification approach.

Standard document templates and style sheets for the resource types created by consultants can be integrated into word processors and spreadsheets. Contact and customer management functionality can be licensed as a hosted application.

Many small teams make good use of wikis for knowledge management because they are very flexible in the amount of structure they impose.[3]

When is it being organized? The professor’s decision to take a leave of absence reflects his belief that getting the firm started quickly is essential if he is to capitalize on his recent bestselling book to generate consulting business. This makes managing the prospect pipeline and the proposal-writing process the highest priority targets for knowledge management.

Much of the other organizing work can emerge as adjuncts to consulting projects if some effort is made to coordinate the organizing across projects.

How or by whom is it being organized? Because many of the early organizing decisions have implications for the types of customers and projects that the firm can take on, only the professor is capable of making most of them. The principal goal of the knowledge management system is to enable the professor to delegate work to his consulting staff, so he needs to enlist them in the design of the organizing system to ensure it is effective.

Other considerations. As the consulting firm grows, it is inevitable that some consultants will be better than others at creating and using knowledge to create customer value, and they will expect to be compensated accordingly. It is essential for the ongoing success of the firm not to let this create disincentives for knowledge capture and sharing between consultants. The solution is to develop a company culture that promotes and rewards them.[4]

  1. http://www.spo.berkeley.edu/guide/consultquick.html is an example of such a policy. Indeed, it is because of rules like these that the professor determined he needed to take a leave of absence from the university.

  2. For a high-level theoretical framework about capturing value from knowledge assets see (Teece 1998); for a detailed case study see (Goodwin et al. 2012).

  3. (Poole and Grudin 2010).

  4. (Hansen 2009).


Icon for the Creative Commons Attribution-NonCommercial 4.0 International License

The Discipline of Organizing: 4th Professional Edition Copyright © 2020 by Robert J. Glushko is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License, except where otherwise noted.

Share This Book