Eight to Late

Introduction

Since the 1980s, intangible assets, such as knowledge, have come to represent an ever-increasing proportion of an organisation’s net worth.  One of the problems associated with treating knowledge as an asset is that it is difficult to codify in its entirety. This is largely because knowledge is context and skill dependent, and these are hard to convey by any means other than experience. This is the well-known tacit versus explicit knowledge problem that I have written about at length elsewhere (see this post and this one, for example).  Although a recent development in knowledge management technology goes some way towards addressing the problem of context, it still looms large and is likely to for a while.

Although the problem mentioned above is well-known, it hasn’t stopped legions of consultants and professional organisations from attempting to codify and sell expertise: management consultancies and enterprise IT vendors being prime examples. This has given rise to the notion of a knowledge-intensive firm, an organization in which most work is said to be of an intellectual nature and where well-educated, qualified employees form the major part of the work force.   However, the slipperiness of knowledge mentioned in the previous paragraph suggests that the notion of a knowledge intensive firm (and, by implication, expertise) is problematic. Basically, if it is true that knowledge itself is elusive, and hard-to-codify, it raises the question as to what exactly such firms (and their employees) sell.

In this post, I shed some light on this question by drawing on an interesting paper by Mats Alvesson entitled, Knowledge Work: Ambiguity, Image and Identity (abstract only), as well as my experiences in dealing with IT services and consulting firms.

Background: the notion of a knowledge-intensive firm

The first point to note is that the notion of a knowledge-intensive firm is not particularly precise. Based on the definition offered above, it is clear that a wide variety of organisations may be classified as knowledge intensive firms. For example, management consultancies and enterprise software companies would fall into this category, as would law, accounting and research & development firms.  The same is true of the term knowledge work(er).

One of the implications of the vagueness of the term is that any claim to being a knowledge-intensive firm or knowledge worker can be contested. As Alvesson states:

It is difficult to substantiate knowledge-intensive companies and knowledge workers as distinct, uniform categories. The distinction between these and non- (or less) knowledge-intensive organization/non-knowledge   workers is not self-evident, as all organizations and work  involve “knowledge” and any evaluation of “intensiveness” is likely to be contestable. Nevertheless,  there are, in many crucial respects, differences  between many professional service and high-tech companies on the one hand, and more routinized service and industry companies on the other, e.g. in terms of broadly socially shared ideas about the significance of a long theoretical education and intellectual capacities for the work. It makes sense to refer to knowledge-intensive companies as a vague but meaningful category, with sufficient heuristic value to be useful. The category does not lend itself to precise definition or delimitation and it includes organizations which are neither unitary nor unique. Perhaps the claim to knowledge-intensiveness is one of the most distinguishing features…

The last line in the excerpt is particularly interesting to me because it resonates with my experience: having been through countless IT vendor and management consulting briefings on assorted products and services, it is clear that a large part of their pitch is aimed at establishing their credibility as experts in the field, even though they may not actually be so.

The ambiguity of knowledge work

Expertise in skill-based professions is generally unambiguous – an incompetent pilot will be exposed soon enough. In knowledge work, however, genuine expertise is often not so easily discernable. Alvesson highlights a number of factors that make this so.

Firstly, much of the day-to-day work of knowledge workers such as management consultants and IT experts involves routine matters – meetings, documentation etc. – that do not make great demands on their skills. Moreover, even when involved in one-off tasks such as projects, these workers are generally assigned tasks that they are familiar with. In general, therefore, the nature of their work requires them to follow already instituted processes and procedures.  A somewhat unexpected consequence of this is that incompetence can remain hidden for a long time.

A second issue is that the quality of so-called knowledge work is often hard to evaluate – indeed evaluations may require the engagement of independent experts! This is true even of relatively mundane expertise-based work. As Alvesson states:

Comparisons of the decisions of expert and novice auditors indicate no relationship  between the degree of expertise  (as indicated by experience)  and consensus; in high-risk and less standard situations, the experts’ consensus level was lower than that of novices. [An expert remarked that] “judging the quality of an audit is an extremely problematic exercise” and says that consumers of the audit service “have only a very limited insight into the quality of work undertaken by an audit firm”.

This is true of many different kinds of knowledge work.  As Alvesson tells us:

How can anyone tell whether a headhunting firm has found and recruited the best possible candidates or not…or if an audit has been carried out in a high-quality way?  Or  if  the  proposal by  strategic management consultants is optimal or even helpful, or not. Of course, sometimes one may observe whether something works or not (e.g. after the intervention of a plumber), but normally the issues concerned are not that simple in the context in which the concept of knowledge-intensiveness is frequently used. Here we are mainly dealing with complex and intangible phenomena.  Even if something seems to work, it might have worked even better or the cost of the intervention been much lower if another professional or organization had carried out the task.

In view of the above, it is unlikely that market mechanisms would be effective in sorting out the competent from the incompetent.  Indeed, my experience of dealing with major consulting firms (in IT) leads me believe that market mechanisms tend to make them clones of each other, at least in terms of their offerings and approach. This may be part of the reason why client firms tend to base their contracting decisions on the basis of cost or existing relationships – it makes sense to stick with the known, particularly when the alternatives offer choices akin to Pepsi vs Coke.

But that is not the whole story, experts are often hired for ulterior motives. On the one hand, they  might be hired because they confer legitimacy – “no one ever got fired for hiring McKinsey” is a quote I’ve heard more than a few times in many workplaces. On the other hand, they also make convenient scapegoats when the proverbial stuff hits the fan.

Image cultivation

One of the consequences of the ambiguity of knowledge-intensive work is that employees in such firms are forced to cultivate and maintain the image of being experts, and hence the stereotype of the suited, impeccably-groomed Big 4 consultant. As Alvesson points out, though, image cultivation goes beyond the individual employee:

This image must be  managed on different levels: professional-industrial, corporate and individual. Image may be targeted in specific acts and arrangements,  in visible symbols for public consumption but also in everyday behavior, within the organization and in interaction  with others. Thus image is not just of importance in marketing  and for attracting personnel but also in and after production.  Size and a big name  are  therefore important for  many knowledge-intensive companies – and here we perhaps have a major explanation  for all the mergers and acquisitions  in accounting, management consultancy and  other  professional service companies. A large size is reassuring. A well-known brand name substitutes for difficulties in establishing quality.

Another aspect of image cultivation is the use of rhetoric. Here are some examples taken from the websites of Big 4 consulting firms:

“No matter the challenge, we focus on delivering practical and enduring results, and equipping our clients to grow and lead.” —McKinsey

“We continue to redefine ourselves and set the bar higher to continually deliver quality for clients, our people, and the society in which we operate.” – Deloitte

“Cutting through complexity” – KPMG

“Creating value for our clients, people and communities in a changing world” – PWC

Some clients are savvy enough not to be taken in by the platitudinous statements listed above.  However, the fact that knowledge-intensive firms continue to use second-rate rhetoric to attract custom suggests that there are many customers who are easily taken in by marketing slogans.  These slogans are sometimes given an aura of plausibility via case-studies intended to back the claims made. However, more often than not the case studies are based on a selective presentation of facts that depict the firm in the best possible light.

A related point is that such firms often flaunt their current client list in order to attract new clientele. Lines like, “our client list includes 8 of top ten auto manufacturers in the world,” are not uncommon, the unstated implication being that if you are an auto manufacturer, you cannot afford not to engage us. The image cultivation process continues well after the consulting engagement is underway. Indeed, much of a consultant’s effort is directed at ensuring that the engagement will be extended.

Finally, it is important to point out the need to maintain an aura of specialness. Consultants and knowledge workers are valued for what they know. It is therefore in their interest to maintain a certain degree of exclusivity of knowledge. Guilds (such as the Project Management Institute) act as gatekeepers by endorsing the capabilities of knowledge workers through membership criteria based on experience and / or professional certification programs.

Maintaining the façade

Because knowledge workers deal with intangibles, they have to work harder to maintain their identities than those who have more practical skills. They are therefore more susceptible to the vagaries and arbitrariness of organisational life.  As Alvesson notes,

Given the high level of ambiguity and the fluidity of organizational  life and interactions with external actors, involving a strong dependence on somewhat arbitrary evaluations  and opinions of others, many knowledge-intensive workers must struggle more for the accomplishment,  maintenance and gradual change of self-identity, compared to workers whose competence and results are more materially grounded…Compared with people who invest less self- esteem in their work and who have lower expectations,  people in knowledge-intensive  companies are thus vulnerable to frustrations  contingent upon ambiguity of performance  and confirmation.

Knowledge workers are also more dependent on managerial confirmation of their competence and value. Indeed, unlike the case of the machinist or designer, a knowledge worker’s product rarely speaks for itself. It has to be “sold”, first  to management and then (possibly) to the client and the wider world.

The previous paragraphs of this section dealt with individual identity. However, this is not the whole story because organisations also play a key role in regulating the identities of their employees. Indeed, this is how they develop their brand. Alvesson notes four ways in which organisations do this:

1. Corporate identity – large consulting firms are good examples of this. They regulate the identities of their employees through comprehensive training and acculturation programs. As a board member remarked to me recently, “I like working with McKinsey people, because I was once one myself and I know their approach and thinking processes.”
2. Cultural programs – these are the near-mandatory organisational culture initiatives in large organisations. Such programs are usually based on a set of “guiding principles” which are intended to inform employees on how they should conduct themselves as employees and representatives of the organisation. As Alvesson notes, these are often more effective than formal structures.
3. Normalisation – these are the disciplinary mechanisms that are triggered when an employee violates an organisational norm. Examples of this include formal performance management or official reprimands. Typically, though, the underlying issue is rarely addressed. For example, a failed project might result in a reprimand or poor performance review for the project manager, but the underlying systemic causes of failure are unlikely to be addressed…or even acknowledged.
4. Subjectification – This is where employees mould themselves to fit their roles or job descriptions. A good example of this is when job applicants project themselves as having certain skills and qualities in their resumes and in interviews. If selected, they may spend the first few months in learning and internalizing what is acceptable and what is not. In time, the new behaviours are internalized and become a part of their personalities.

It is clear from the above that maintaining the façade of expertise in knowledge work involves considerable effort and manipulation, and has little to do with genuine knowledge. Indeed, it is perhaps because genuine expertise is so hard to identify that people and organisations strive to maintain appearances.

Conclusion

The ambiguous nature of knowledge requires (and enables!) consultants and technology vendors to maintain a façade of expertise. This is done through a careful cultivation of image via the rhetoric of marketing, branding and impression management.The onus is therefore on buyers to figure out if there’s anything of substance behind words and appearances. The volume of business enjoyed by big consulting firms suggests that this does not happen as often as it should, leading us to the inescapable conclusion that decision-makers in organisations are all too easily deceived by the facade of expertise.