Innovation in management consulting firms through informal knowledge sharing

Innovation can be a problem in consultancy organizations. Simply enough, consultants have too little time to innovate, since they are principally engaged in customer-related activities. To be able to innovate, consultants have to share their knowledge with clients, colleagues and managers. The methods that the consultant can use for this are formal knowledge sharing (through meetings, intranet) and informal knowledge sharing (via lunches, carpooling). This article states that informal knowledge sharing is the most successful way.

Aims
The aim of this article  is to describe the obstacles that exist in the field of innovations in Dutch consultancy firms. The focus is on informal knowledge transfer as the way to more innovation.

Approach
This article discusses the findings of a study on the barriers to innovation in the Dutch consultancy industry. With 29 consultants there have been done in-depth interviews.
The interviews were conducted in two rounds. The first round (2002-2003) focused on the extent to which knowledge obtained from clients, is actually used to innovate. The second round of  interviews (2006-2007) concerned the knowledge sharing between consultants within the boundaries of the organization. In addition, interviews were held with specialists in the field of consultancy and innovation and one of the authors has done an internship within a consulting organization for four month.

Results
The complexity of innovation within the consulting industry lies in the fact that the consultant must develop its own competencies and at the same time needs to provide his knowledge to the company he serves.  Lack of time to share knowledge and to elaborate new ideas during working hours, makes it necessary for the consultant to work on innovation in his or her own time.
Consultants spend a lot of time talking, presenting and persuading others. The best way to encourage innovation is to expand the number of opportunities for informal knowledge sharing and creativity, such as drinks and lunches. Innovative ideas especially come up in an informal setting since  these are more accessible and relaxed. In the long term this will increase the knowledge and the ability to innovate and will provide the organization with a significant competitive advantage.
However, there is a stumbling block within consulting organizations for a full development of innovative ideas, namely support of management; this is deficient in many organizations. The authors argue that too little knowledge is not so much the problem behind a lack of innovation, but the problem is a combination of too few opportunities for knowledge sharing and too little support and time for developing new plans. It is important for consulting firms to encourage a culture where new ideas,  coming from knowledge sharing, may flourish with full support of the management.

Reference
See the annex for the article: Yvette Taminiau, Wouter Smit, Annick de Lange, (2009) “Innovation in management consulting firms through informal knowledge sharing", Journal of Knowledge Management, Vol. 13 Iss: 1, pp.42 – 55

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