Bridging The Consulting Gap: Strategic Knowledge Management

By Mostafa Sayyadi and Michael J. Provitera 

Executives across the globe have found that knowledge is critical to business success. However, knowledge, in itself, is not enough to satisfy the vast array of changes in today’s organization. Executives today are more focused on strategic management decision-making due to the hypercompetitive global environment. An inter-knowledge approach is a necessary precursor to more strategically managing knowledge within the organization. This article is to help executives have a better understanding of this new approach. An inter-knowledge approach, effectively integrating all organizational components, can increase the chance to overcome competitive challenges. This approach is also needed by organizations to reach their highest possible potential with a competitive advantage. Much of what we share comes from our interviews with 49 executives and also our experience as senior management consultants in the Sydney branch of a Japanese multinational automotive manufacturer.

Introduction

Analyzing big data and converting this analysis into practical knowledge in organizations is very difficult and requires an inter-knowledge approach. Inter-knowledge is the process of developing a safe and secure location of data in a real-time process. Digital transformation and making decisions based on data analysis coupled with intuitive decisions are both tempting and exciting. [1] [2] [3] The most vital attribute is design which draws upon identifying, storing, and disseminating data to all strategic areas of the organization. [4] [5] Companies such as Toyota tell us that organizations should have a deep understanding of their business model to identify the strategic areas of organizational knowledge in technical fields, and the relationships with suppliers, customers, and vendors. For example, one furniture manufacturing plant in Milan, Italy shows us that this organization alone determined more than 21 strategic areas for its organizational knowledge. Disseminating data on a real-time basis helps not only with decision-making but also adds revenue as resources are moved to vital locations of the organization to meet customer needs. [6] [7] This article comes from our interviews with 49 executives in the Sydney branch of a Japanese multinational automotive manufacturer, and summarizes our experience of working with a team of top-level management consultants in this company. 

The Proposed Model 

A clear understanding of the strategic areas of organizational knowledge is tantamount to the data analysis that will be necessary to lead to the growth and prosperity of organizations. [8] Strategic areas of organizational knowledge, from culture to technical knowledge, require identification. The process of identification addresses areas that are needed at certain times throughout the day. [9] [10] Just as traders on Wall Street get hour-to-hour profit and loss summaries to see how successful they are throughout the day and what pivots need to be made to lessen losses. This practical application has not been developed. 

Once the categorization takes place, we place them on a horizontal diagram of X to Y. One end of which is tacit knowledge, and the other is explicit knowledge. Tacit knowledge refers to the intuitive understanding that an experienced professional endears over time and cannot be manifested in unseasoned recent graduates from MBA programs. There must be experience built into the process for it to be successful. For example, consider a doctor who, after years of working in a camp, identifies the cause of the disease with just one look at the patient, there is a stage of diagnosis that comes natural to them. In contrast, explicit knowledge, which is codified, is based on a step-by-step methodology for learning. Could be quantitative or qualitative but it has a basis of origin that transpires from a system type of operation. An example of this would be past sales corresponding with the inflation rate increase or decrease. 

Along a vertical diagram X to W, the strategic areas of organizational knowledge are grouped into two dimensions of private and public knowledge. Private knowledge refers to knowledge that is specific to a company and should not be identified and imitated by other companies and competitors. Leaking this knowledge would be catastrophic to the organization. We see this with Tesla talent fleeing to the competition, taking secrets that are beyond due diligence and unethical. Due to the strategic nature of private knowledge, a lot of attention and care must be taken in maintaining this type of knowledge, and any leakage of private knowledge to the outside world greatly increases the operational risk for organizations. Internet professionals are paid a great deal of money to prevent hacking while people walk around as expert systems taking knowledge directly to competitors with very little consequence. 

In contrast, public knowledge, which is not specific to a company and refers to the best practice of the industry, is worth noting and celebrating. [11] For example, Tesla sales beat all competition in Germany in the month of September, 2022. This type of knowledge depicts itself in the form of concepts such as six sigma, innovation, ingenuity, inventions, and some aspects of TQM (total quality management).

Our interviews with 49 executives and also management consulting experience in the Sydney branch of a Japanese multinational automotive manufacturer show us that simply designing and mapping the strategic areas of organizational knowledge provides many practical ideas and useful insights for senior managers. The top managers of this company in Sydney, Australia, realized that the emergence of tough competitors such as Tesla was capturing market share. Therefore, they started designing and drawing the strategic areas of their organizational knowledge and found that the knowledge related to the goods supply chain was not sufficiently codified. Moreover, its supply chain knowledge was also not sufficiently protected in both public and private dimensions, as private knowledge, and the leakage of this type of knowledge to the competitors had increased the operational risk of this company. The great resignation, quiet quitting, and quiet firing left workers with the knowledge to share at this company’s expense. We found that this company had a strong corporate culture that was effective in protecting its supply chain knowledge. Our suggestion of designing and mapping the strategic areas of organizational knowledge created an important initiative in the development of tacit knowledge in different areas that impacted customer purchasing power. 

Designing and mapping the strategic areas of organizational knowledge brings practical ideas and important initiatives to organizations. The knowledge that is defined as tacit and private knowledge is a competitive advantage of companies. [12] The key is to codify explicit and tacit knowledge and specify the private security of knowledge to prevent it from leaking out and ultimately causing a sharp increase in operational risk for the organization. Lawyer up documents to prevent spoilers from exiting the organization with vital information. Prevent the increase in the possible leakage of private knowledge. On the other hand, tacit knowledge that is decided to be made explicit can be made explicit in a more effective way by disseminating information through codification and creating corporate ambassadors and customer advocates. Train people to learn this knowledge and solve possible problems before they escalate and create negative exposure or lower profits. 

Today, organizations must innovate and create new products and services. Just as private and tacit knowledge is a critical area to protect, innovations and ideas (tacit knowledge), can be also transformed into explicit knowledge and this can eventually increase the organization’s ecosystem value. In addition, the combination of tacit and explicit knowledge in McKinsey has led to the development of tacit knowledge through the publication of the McKinsey Quarterly and the sharing of articles by its consultants with its consultants. This integration has provided an extensive platform for social media and consumer awareness. 

In Conclusion 

Companies invest millions of dollars to acquire new knowledge. The adage “Knowledge is Power,” has developed into a household word, but businesses neglect the strategic management of their knowledge. Preventing them from growing, flourishing, and gaining a competitive advantage. This article attempts to provide a road map for companies to better manage their organizational knowledge. By drawing, diagnosing, and designing the strategic areas of organizational knowledge as part of the corporate strategy, companies can integrate, codify, and develop a competitive advantage. Done correctly, companies will gain a distinct competitive advantage compared to their competitors and expand their market share.

About The Authors 

Mostafa Sayyadi works with senior business leaders to effectively develop innovation in companies and helps companies—from start-ups to the Fortune 100—succeed by improving the effectiveness of their leaders. 

Michael J. Provitera is a senior faculty professor of Management and Leadership, in the Andreas School of Business at Barry University, Miami, Florida, USA . He is an author of Level Up Leadership: Engaging Leaders for Success, published by Business Expert Press.

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