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The Business of Selling Knowledge: Part 1

Architects must find better ways to grow what they sell: outstanding know-how, know-who and know-what.

February 1, 2005
by Sharon VanderKaay

Architecture is a knowledge-intensive business. When clients retain the services of an architect, they seek knowledge ranging from aesthetics to technical know-how to effective relationship-building skills. Firms compete on the basis of how clearly they understand stakeholder priorities as well as their insight into the client’s business. As the project unfolds, teams must apply their insight in ways that far exceed standard “we listen to you” marketing promises.

“The ability to learn faster than your competitors may be the only sustainable competitive advantage today.”1 This popular management phrase pinpoints the need to take an active role in leveraging what we know and can learn. In other words, we must find better ways to grow what we sell. This article is the first in a two-part series that will (Part 1) examine invisible barriers to expanding and selling knowledge, and (Part 2) identify some cost-effective ways to nurture the firm’s vital knowledge resources.

Information is not knowledge

“Knowledge Management” (KM) became a fad in the business world ten years ago. KM can be defined as making the best use of what the firm knows and can learn in order to support its business goals. Initially, many managers believed that information technology would answer their corporate KM needs. Over the years, much time and energy has been expended in attempts to capture and store the firm’s “knowledge assets” in a digital format. These efforts yielded disappointing results whenever knowledge was confused with information. A closer look at these terms reveals that knowledge (of such topics such as a better approach to assessing client needs) depends on imprecise human interpretation that resists digitization. By contrast, information (such as a waterproofing specification) can be precisely written down for storage and retrieval with no loss of meaning.

Unique advantage

A current rule of thumb is that up to 80% of the firm’s value-creating and competitive capabilities come from know-how, know-who and know-what. The reason that knowledge is widely considered to be the only sustainable competitive advantage is that it’s nearly impossible to replicate a highly motivated, knowledge-sharing, active-learning firm that offers clients collaborative leadership and great ideas. Information in a database, although highly valuable, provides an advantage only until it is either copied and adapted by another firm, or until it loses relevance. Design can provide a temporary edge, for example, when a competition is won, but it is difficult to sustain competitive advantage solely through design if clients view all firms on their shortlist as possessing credible design talent.

Perhaps the most daunting KM-related realization is that firms thrive or stagnate on the basis of messy, invisible human judgment and motivation. The task of understanding what it means to depend so heavily on these hidden forces could be our greatest future challenge. During the industrial era, firms counted on busy-looking people and billable hours to achieve profitability. Today we must recognize that “hard-working” staff might be repeatedly solving problems that could have been prevented. And outwardly “dedicated” employees might be silently withholding suggestions for saving hundreds of hours worth of potential profits. The inescapable reality is that degrees of judgment and levels of commitment can’t be seen with the naked eye.

The dawn of an era

Architects–similar to many professionals today–have barely scratched the surface of possibilities for identifying and nurturing their most valuable sources of competitive knowledge. Management sage Peter Drucker says that our current understanding of knowledge-worker productivity is as primitive as the early 20th-century manager’s (pre-assembly line) grasp of manual-worker productivity. As a result, we leave money on the table by blindly (usually due to ignorance, rather than malice) discouraging people from doing their best work. Visible expenses are routinely micromanaged, while the really big costs that stem from low motivation (for instance, encouraging staff to contribute money-saving suggestions) are overlooked.

During the industrial era, firms that worked around their knowledge blind spots could still make good money. The following diagnostic questions focus on some of today’s biggest knowledge killers and unseen costs:

Knowledge Withholding

* Do team members make an extra effort to prevent errors that could cost the firm twice their salary–or do people allow predictable train wrecks to happen?

* Are staff members encouraged to suggest a better, faster way to do something that might save the firm the equivalent of their annual salary–or do such minor initiatives require too much effort?

* Is it worth the risk to voice concerns and make management-related suggestions–or is it better to keep quiet?

Knowledge Gaps

* Do principals find themselves doing work that should be done by knowledgeable senior and intermediate staff? If so, does this situation persist because key individuals haven’t learned appropriate coaching, knowledge-sharing and delegation techniques?

* Does the firm lack leadership bench-strength? Do competitors hire and develop the best potential leaders, while you fill positions with competent “hard workers?”

Knowledge Development

* Are you open to learning from clients, other professionals, and your own mistakes? Do you convey these lessons learned widely in order to save time and money in the future?

* Do staff members know more, and learn faster, than staff with the same number of years’ experience at other firms?

In Part 2 of this series, we will look at practical ways to make the best use of your existing knowledge as well as how to convert serial knowledge killers into knowledge activists.

1 Peter Senge, The Fifth Discipline

Sharon VanderKaay, Associate AIA, is Director of Communications at Murphy Hilgers Architects Inc. in Toronto. For the past ten years, her research has focused on the shift to a knowledge-based economy.

Sources of Additional Wisdom

* “The Knowledge Management Resource Center” is a website that offers links to diverse aspects of KM: www.kmresource.com/exp.htm

* Thomas H. Davenport and Laurence Prusak, Working Knowledge

* Liam Fahey and Laurence Prusak, “The Eleven Deadliest Sins of Knowledge Management,” California Management Review, Spring 1998



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