Book review: Developing knowledge-based client relationships

Regular

posted 1 May 2000 in Volume 3 Issue 8

Book review: Developing knowledge-based client relationships

TITLE: Developing Knowledge-Based Client Relationships – The Future of Professional Services
AUTHOR: Ross Dawson
PUBLISHER: Butterworth-Heineman, 1999
ISBN: 0750671858

Dawson’s exhaustive text is organised into ten chapters, plus an appendix on mental models, and is divided into 3 sections. After an Introduction, Part I explores knowledge-sharing and professional services; Part II addresses adding value to clients with knowledge, and Part III looks at implementation (including leading practices, managing communication with clients, co-creating knowledge with clients and pricing models). Before the book even begins, the reader is faced with four pages of nominated endorsement of the text; in the face of promotion from such alumni, is a review worth writing or reading at all?

While the vague term ‘professional services’ is used in the title, the author is a consultant talking about the changing nature of consultancy in the face of the emerging global knowledge economy. Much of the text is delivered in forms of academic consultant-speak based on neurolinguistic training.

The essential message of this book includes the following:

The difference between products and services is becoming blurred. This is because,

the only way to sell a commodity is to create a form of knowledge around that commodity, differentiating it from its competitors.

Over time, this form of differentiation degrades into commodity, and new forms of knowledge have to be added to maintain differentiation.

This commoditisation process is accelerating.

The nature of the relationship between client and consultant can only be sustained by the continuous creation, and sometimes co-creation, of new forms of knowledge.

It is better to keep yourself creative by giving your knowledge away and filling a new vacuum, than to conceal your differentiating knowledge from your client. Someone else will have your idea anyway and do it instead, so it might as well be you.

Throughout this painstakingly careful book, an artificial sense of virtue is maintained by suggesting that a useful distinction can be made between adding value to clients and sharing knowledge with them. In effect, adding value is clearly a good thing, but sharing knowledge that differentiates the commodity you offer is much better. Dawson differentiates client-offerings as being either ‘black box’ or knowledge-transfer. Black box consulting involves cheaper, outsourced services that are not core to the client; where knowledge transfer relates to the core client functions dedicated to delivering competitive advantage in the form of new market values, and allows a higher charging rate.

Dawson shares Sveiby’s view of knowledge, defining it as “the capacity to act effectively”. This avoids any differentiation between data, structured data and information, and tends toward defining knowledge as a kind of competence and not as something usefully differentiated from information as, say, a visible pattern whose relocation within a new context creates new value. Like many authors, Dawson has not explored the context within which Sveiby developed Intellectual Capital, nor its painful limitations. Then again, for a consultant, it makes sense to sell a generalised competence to act effectively since they are usually only as good as their projects allow them to be. And if they were that good, they would create a form of knowledge that might mean that they no longer have to be consultants.

There are several items missing from this book. Firstly, awareness of the lifecycle nature of consulting relationships. In other words, these relationships have their climaxes, they have their symbolic marriages, their equivalent of features in Hello magazine and also their secret divorces; when what became a public partnership that bloomed from an accidental one-night-stand becomes a bitter and public silence.

Secondly, although the Porter basis of competition is acknowledged through price and value differentiation, I had hoped for some acknowledgement toward the Japanese hoshin kanri model, whereby a client relationship is sustained by continuously working to identify and anticipate the next customer need before they themselves have thought of it.

Finally, although GBN (the Global Business Network) is explicitly mentioned along with the use of scenario planning as a strategic co-creation process that appears to have worked at Shell for a period of time, there is no explicit development of the nature of creativity and its relationship to knowledge-creation in the consulting process. What Dawson does spend useful time on, is the nature of mental models and their representation (in the Appendix and in part of Chapter 10).

This text is full of useful, boxed case studies that develop ideas and themes with specific examples. Chapter 10, though useful, covers the creation of value in the knowledge economy in a highly generic way without getting down to the basics. Chapters 8 and 9, in exploring co-creation and knowledge pricing demonstrate how far the knowledge economy is developing a potential to displace conventional models of value and work itself. Similarly, Chapter 7 on ‘Firm-Wide Relationship Management’ offers a wide variety of practical models for structuring client contact, reflecting the type of client and the nature of the engagement that an academic studying consulting practice would find interesting.

Victor Newman is the director of the Knowledge Development Centre at Cranfield University. He can be contacted at:v.newman@cranfield.ac.uk