Knowledge Creation Through Management Consulting

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Knowledge Creation Through Management Consulting

Prof
.

Francesco Ciampi,
Florence
University,
Florence,
Italy

Mobile Phone Number: (0039) 3355893497


ABSTRACT

The paper proposes a conceptual framework that enables to identify and draw the map
of the c
ognitive paths through which the potential of entrepreneurial knowledge creation
of

management consulting intervention can express itself.

The proposed model represents an original application of Nonaka and Takeuchi’s
theory of organizational knowledge cre
ation to the specific context of consulting
relationships. It is
mainly
grounded on the author’s reasoning, consulting experience and
speculations,
but it is also
supported
by

significant
albeit concise
anecdotal evidences.

The model proposed here highligh
ts that in advanced
(i.e.
,

“meta
-
”)
consultancy
contexts this potential lies
i
n the possibility of generating not only explicit, but also (and
mainly) tacit, new entrepreneurial knowledge

(such as new experience
-
based diagnostic
capabilities

and new abilit
ies to gain insights into solving entrepreneurial problems).

In t
he first section the paper proposes and thoroughly discusses
two
ways of
interpreting
the activity of
management consulting: the defini
ng
(conceptual delimitation) and
the synchronic (consult
ing models
)
interpretations
. The adoption of the
consulting approach

-

which is referred to as
"meta
-
consulting"

model

-

is essential
for the entrepreneurial
knowledge
-
creation
to be fully expressed
through management consulting
in all of its facets
.

The p
roposed conceptual framework may enable both consultants and their clients to
more clearly and consciously define the knowledge creation goals of consulting projects, and
hence
to
more effectively design and manage the ensuing consultant
-
client relationshi
p
. The
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intuition of the meta
-
consulting paths for new entrepreneurial knowledge generation
(socialization, externalization, combination and internalization) may also stimulate further
theoretical development of the conceptual framework as well as its empir
ical validation as a
way to
further

investigate the entrepreneurial
-
consulting cognitive dynamics
.

INTRODUCTION

Over the past twenty years m
anagement consulting
has been
one of
the most
dynamic
segments

of the advanced tertiary
sector
in terms of
turnover,

new business start
-
ups,
number
of employees
, range of services offered
,

etc
.

According to Kennedy's most recent annual
survey
on

the global consulting market (Kennedy Information
,

2007)
,

the
aggregate turnover
in this sector was about 285 billion dollars

in 2006
and
is
expected to reach
about
375 billion
dollars
by 2010.

This paper adopts a knowledge
-
perspective for interpreting management consulting.
The model developed here is an original application to consultancy relationship of the theories
that consi
der
knowledge
-
creation processes as knowledge
-
conversion processes (Nonaka and
Takeuchi, 1995).
Aside from
criticisms (e.g.
,

Gourlay and Nurse, 2005),
Nonaka and
Takeuchi's theory
remains,
in the author's opinion,
a
n

effective

tool
in interpreting knowledg
e
-
creation entrepreneurial processes
.

More specifically, this paper proposes a conceptual framework designed to
draw the
potential cognitive pathways of
entrepreneurial knowledge
-
creation
through
management
consulting, and the consultant
-
client relational
dynamics
it triggers
. The proposed
model
highlights
that in advanced consultancy contexts
the entrepreneurial knowledge creation
potential lies
i
n the possibility
of generating not only explicit, but also (
and mainly
) tacit, new
entrepreneurial knowledge,
including
new diagnostic (problem finding), therapeutic (problem
solving) and interpretative (
understanding of the company structure and competitive
environment)
capabilities
,
whose value
for both
the
client and consultant

goes
far
beyond
the
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3

solution of
t
he specific entrepreneurial problem
for which
the consultancy relationship

was
originally activated
.

The
design of the
conceptual framework proposed here is
based on
the author's
reasoning, consulting experience and speculations, although it is corroborate
d by a number of
concise, but significant, anecdotal evidence.
In this regard
, the paper provides
concise
empirical evidences based on interviews
by
a group of researchers currently
exploring under
the author’s coordination
emerging issues in
knowledge man
agement within
the context of the
management consulting industry
.
Th
is
research
project
is being
conducted
on two
samples

of
companies, one comprising 50 European management consulting firms of var
ious
dimensions,
and the other with over 100 European mediu
m and large industrial corporations. The
interviews, which are still in progress, will be completed
by
the end of 2007
,

and
the gathered
data
will
form the basis for
a detailed
statistical analys
is
. We
expect to
publish
the results
by
the first half of 200
8.

The first part of this paper proposes and
discusses
two keys for interpreting
management consulting:
the defining
(conceptual delimitation) and
the
synchronic (consulting
models)

approache
s,
emphasiz
ing

that, when compared to
the
diachronic (consulting
process)

approach,
the
synchronic interpretation
can
better identify the explanatory variables of the
cognitive dynamics
which
characteriz
e

the consulting relationship.

LITERATURE REVIEW

Knowledge is considered the main resource for underpinning the develo
pment
processes
of entrepreneurial
organizations

(e.g.
,

Drucker, 1995; Grant, 1996). Knowledge
management
has consequently become
a key

theme
both
in corporate practice (Abrahamson,
1996) and
in management
literature. Traditional knowledge management liter
ature interprets
knowledge as something
that
people own (the

knowledge as possession


view)
,

which has an
essentially explicit nature and
that is relatively easy to
transfer (e.g.
,

McElroy, 2000
;

Ruggles,
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1998).
Hence
,

t
he

knowledge as possession


view
m
ainly
focuses on
practical
techniques for
gathering, disseminating, imitating and
exploiting
knowledge (in essence, transferring best
practices). Conversely, the most recent literature (the

knowing
-
in
-
action


view) interprets
knowledge as being mainly tac
it, socially constructed,
embedded

in practice
,

context
-
dependent (
Johnson

et al
.
, 2000),
and
difficult to transfer (Szulansky, 1996).
According to this
stream of literature
, therefore,

knowledge is actually valuable
only
whe
n it is
generated in
a
specific

context (
from which
the

knowing
-
in
-
action


metaphor),
thus
shifting the focus of
analysis
from transferring best practices to creating and maintaining ideal conditions
to
fully
realize
the know
ledge
-
generation

process
potential

(Blacker, 1995
;

Buono and
Kerber, 2005
).

Currently, n
ot only
does
knowledge
play
a
critical role
in the competitive strategies of
companies in
all

industries
,

it has
also
more specifically
demonstrated
its strategically central
role

in knowledge
-
intensive sectors. This is confirmed
, for example,
by
the
progressive
,
radical and empirically detectable change in the range of services offered by management
consulting firms and their m
odes
of delivery: creating and sharing knowledge (in terms of
exploration, development and exploitation)

have now explicitly become key
-
channels for
transferring value to client
s

(Davenport and Prusak, 2004)
;

nowadays
many top consultancies
offer their clients knowledge management services, focusing on how the
ir
internal knowledge
management practices
can be

can develop
(Buono and Poulfelt, 2005).

D
espite the vast amount of literature on company Knowledge Management and the
fact that management consulting firms are commonly discussed as the archetype of
knowledge
-
intensive firms
(e.g.
,

Alvesson, 1995; Crucin
i, 2002; Heller, 2002; Werr, 2002)
,

and
notwithstanding
the
common
awareness among consultancy firms of the value
of
knowledge for
both
their
organizations

and their clients

(
as well as
the fact th
at knowledge
itself
is the
core product of management consu
ltancies
;
Sarvary, 1999)
, the
subject
of
knowledge
-
creation through management consulting intervention (and more specifically
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through the consultant
-
client relational dynamics
it
triggers) is a

research
area still largely
unexplored
and consequently
“our u
nderstanding of what actually happens with consultant
knowledge (in essence their main product) and the knowledge of the client organization is
murky at best” (Todorova, 2004).

The literature on management consulting is extremely wide
-
ranging

and
heterogen
eous (Whittle, 2006)
,

but
only
occasionally

and partially,
it
covers
the
subject
of
the
potential of
knowledge creation of

management consulting
intervention “in action”
.
On the
one hand
,

t
here is a
great deal of literature
on
management
consulting
practic
al
techniques
(
Kass and Weidner
, 2002)
,

offer
ing

recipes on how to consult (e.g.
,

Armst
r
ong, 1993;
Bellman, 1990; Block, 2000; Freedman, 2000; Schaffer, 1997), start (e.g.
,

Biech, 1998; Biech
and Swindling, 2000), manage (e.g.
,

Maister, 1993), protect (e.g
.
,

Shenson, 1990) and develop
(e.g.
,

Bly, 1998; Lambert, 1997; Shenson, 1994; Shenson and Wilson, 1993; Weiss, 1992) a
consulting practice.
On the other hand,

if we turn our attention to the
main
literature dealing
with the scientific interpretation of the

management consulting process
,

two main
interpretative paradigms
with
totally distinct visions

can be identified
.

The
first group of studies interprets the role of the consultant as a problem
-
solver
and/or a supplier of expert knowledge (the

expert consu
ltant


approach). According to th
is
interpretative model, the company engages
the services of
a

consultant because it
is
facing
some
difficulties and/or
is sensing
symptoms of dysfunction, and
entrusts
him

with
the
responsibility of
conducting
a diagnosis
(problem finding) and, subsequently, identify
ing

and
suggest
ing

the solution (problem solving). The expert consultant must
have

adequate skills
(both diagnostic and therapeutic), including those needed to tailor possible solutions to the
client's particula
r context (Bessant and Rush, 1995; Greiner and Metzger,
1
9
8
3).
Under
the

expert consultan
t” a
pproach, the
potential of
knowledge
-
creation of consulting relationship is
limited (almost ignored as far as the
client’s
role is concerned)
,

and the knowledge
wh
ich is
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generated/transferred travels
primarily

in the consultant

client direction, taking on a
mainly
codified character.

Under a second (

process
-
consulting

)
approach

the client retains full ownership of
the problem in every phase of the consulting proce
ss,
while
the consultant
acts as a facilitator
of

the diagnosis, solution
,

discovery
,

and application phases,
which nevertheless
remain the
client’s responsibility
(Schein, 1987; Stjernberg and Werr, 2001)
.

Starting from
the initial
phases, the interventio
n
aims
to fuel and develop the client's sel
f
-
diagnosis and problem
-
solving capabilities, by setting in motion bidirectional (consultant

client)
transfer of
"process" (and hence tacit) knowledge.
The

process
-
consulting


approach

has a far greater
cognitive

potential
then the “expert
-
consulting” approach,
and
both parties
to
the
relationship
play
a critical role
in it
, even though the potential
for knowledge
-
creation
connected with the
use and the conversion of the consultant's explicit knowledge appears to
be underestimated
(
Linnarsson and Werr
, 2002). Furthermore,
even in
the studies
that adopt this
approach
there
are no
significant

contributions regarding the cognitive path
s through which
new
entrepreneurial knowledge creation is (or
can
be) induced throug
h
the
consulting relationship

in
action”
.

Th
e

same limitation can also be found in the recent literature which has adopted a
knowledge perspective in investigating management consult
ing

(
Buono, 2002; Clark and
Fincham, 2002;
Engwall and Kipping,

2002; Eng
wall

and Sahlin
-
Andersson
, 2002)
.
Among
the issues
examined
in this literature are
:

-

the internal
Knowledge Management

(KM)
procedures and
systems of management
consulting firms
(e.g.
,

Anand

et al., 2007;
Bou and Sauque
t, 2005;
Bukh and
Mouritsen, 2005;
Haas and Hansen, 2005;
Henriksen, 2005;

Stjernberg and Werr
,
2003
)
;

-


limitations
to
and risks connected with
,

the use of
codified
Information and
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Communication Technologies

knowledge management systems
,

due to their in
ability
to
manag
e
the non
-
codified (implicit) part of the knowledge that is created and used
(Dunford
,

2000; Kim and Trimi, 2007);

-


the problems of integrating KM systems in consulting firm mergers and acquisitions
(Ejenäs and Werr, 2005;
Gammelgaard

et
al
.
, 2005);

-


management consulting firms’
knowledge strategies:
explor
ing

new consulting
practices
versus
exploiting

already known consulting practices (
Baaij

et al.
,

2005);

-

the mechanisms through which professional institutions
affect
knowledge
-
crea
tion in
professional service firms (Robertson
et al.
, 2003).

A

few recent
studies

have shed a little
light on the concrete dynamics of knowledge
creation within the management consulting process "in action". Some
authors
, for example,
have
focused on the
k
nowledge
-
creation
processes
involved in the adaptation of
the
consultant’s codified knowle
dge to the client’s setting
and the
building
among them of
“communities of practices”

(Todorova, 2004),

the
importan
ce

of
client
-
consultant face
-
to
-
face
interaction
t
o
professional service firms’
knowledge
-
development processes (Fosstenløkken
et
al.
, 2003)
,

the mainly tacit and socially constructed nature of knowledge created and used
in
consulting intervention (Newell, 2005; Visscher
,

2006),

the factors
which enhance,

or impinge
upon

the effectiveness
of
consultant
-
to
-
client
knowledge transfer processes (
Kirsch

et al.
,
2005; Lahti and Beyerlein, 2000), the role of "epistemic communities" (Cowan
et al.
, 2000)
and "communities of practices" (Lave and Wenger, 1991)
in
int
erpreting and evaluating the
impact of
the
intervention
of management consultants
on the knowledge structure of the
organization they intervene in (Creplet
et al.
, 2001). Others have highlighted the dynamic and
(tacit and explicit)
composite
nature of the
knowledge
that is
used/generated in consultancy
activities
as a
consequence of the fact that in order to discover the solution to
the

problem,
consultant
s

must have the
ability
to apply pre
-
existing explicit knowledge to the specific
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consultancy context

on

case
-
by
-
case
basis
(
thus converting
explicit knowledge into new tacit
knowledge)
as well as (
and above all
)

“the ability to relate to the specific situation without
having a…normological model”. T
hen
“the consultant, through processes of reflection and
an
alysis, tends to become [also] a researcher” (Jensen, 2005),

that is to say, someone who is
able to produce knowledge through insight
as well as through externalization (i.e.
,

conversion
into new explicit knowledge) of
experience
-
based
tacit knowledge.
E
ve
n
though
these recent
contributions

are
original,
they
do not
delve deeply into
the cognitive paths through which the
potential of entrepreneurial knowledge creation by management consulting intervention can
be expressed.

MANAGEMENT CONSULTING: A CONCEPTUA
L DELIMITATION

A

vast amount of literature
deal
s

with the conceptual delimitation of management
consulting

in a
rather heterogeneous

way
. The definition of management consulting proposed
in this paper is an attempt to provide a synthesis

of
, and at the sam
e time supersede the
heterogeneous
aspects of the numerous definitions proposed in the literature
(e.g.
,

EIU, 1993;
Greiner and Metzger, 1983; Kubr, 2002; Salvemini, 1987; Steele, 1975)
,
by underlying
the
ontological aspects
which define
the inner nature o
f
this

particular and fascinating service
activity.

We define management consulting as a
service activity

performed by
persons

external
to
,

and

independent of
,

the
client
company
,

which
posse
s
s appropriate scientific/professional
skills

and capabilities
,
a
nd
consisting

of
supporting

the client company
’s

top
management to
identify and solve strategic,
organizational

and/or
specific
functional area
s

related
problems,
using a rectifying, progressive and/or creative approach,
thereby contribut
ing

to
the
creati
o
n
of
new entrepreneurial knowledge

(
see
Figure 1).



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1.
The independence of the consultant
. In order to be able to express
its
assessments
and opinions objectively and impartially, consultant must be independent (in financial,
decision
-
making an
d emotive terms)
, so that he can
adopt cognitive and behavioural
approaches
respectful

of the
fiduciary remit given to
him
by the client.

2.
The scientific/professional
skills

required of the consultant
. To provide management
consulting services,
the
consu
ltant must possess (and be able to use) appropriate
scientific/professional skills

and
capabilities
, acquired through specific training and/or
entrepreneurial experiences and/or previous consultancy work.
The m
anagement consultant

is
able to guarantee an i
ndependent approach precisely by virtue of
his

possession of appropriate
scientific and professional
background
. This
feature is
emphasized

by
the "definit
ional

approach", which interprets management consulting as a "profession", whose essen
ce

is
precisely

in the
particular
professional skill
s

and expertise
of the consultant

(G
r
einer and
Metzger, 1983). This
aspect
of
the
consulting
activity
is important in every phase of the
consulting process, even though it sometimes appears not to be adequately taken in
to account
by consultancy firms. In this connection, here are the comments of the
chief executive officer
Figure
1
: Management
consulting:
synoptic conceptual framework
.

DISTINCTIVE ONTOLOGICAL
(REAL, ESSENTIAL AND
RELATIVELY STABLE) FEATURES
OF MANAGEMENT CONSULTING
THE CONSULTANT'S INDEPENDENCE
THE CONSULTANT'S SCIENTIFIC
-
PROFESSIONAL SKILLS AND
CAPABILITIES
THE CONSULTATIVE NATURE
THE "PROBLEM ORIENTED" NATURE
THE "PRIMARY CLIENT" BELONGS TO
THE
TOP MANAGEMENT OF THE
CLIENT COMPANY
THE ENTREPRENEURIAL NATURE OF
THE PROBLEMS ADDRESSED
THE CONTRACTUAL AND FIDUCIARY
NATURE
THE MAINLY COGNITIVE NATURE OF
THE VALUE
-
CREATION POTENTIAL
DISTINCTIVE ONTOLOGICAL
(REAL, ESSENTIAL AND
RELATIVELY STABLE) FEATURES
OF MANAGEMENT CONSULTING
THE CONSULTANT'S INDEPENDENCE
THE CONSULTANT'S SCIENTIFIC
-
PROFESSIONAL SKILLS AND
CAPABILITIES
THE CONSULTATIVE NATURE
THE "PROBLEM ORIENTED" NATURE
THE "PRIMARY CLIENT" BELONGS TO
THE
TOP MANAGEMENT OF THE
CLIENT COMPANY
THE ENTREPRENEURIAL NATURE OF
THE PROBLEMS ADDRESSED
THE CONTRACTUAL AND FIDUCIARY
NATURE
THE MAINLY COGNITIVE NATURE OF
THE VALUE
-
CREATION POTENTIAL
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of
Studio Roscini
S.p.a.

(a garment design company whose clients include numerous
leading
companies in the Italian fashion industry, such as Gucci, Fe
ndi, Valentino and Tod's)
regarding the work of a consultancy f
i
rm
it had
commissioned to design and implement a new
enterprise resource planning

system
.


"A partner and two senior managers of the consultancy firm attended the first two meetings. The
meeti
ngs were very productive, and even before form
all
y retain
ing

their services, we had already defined the
project
goals

and the timing.
But a
fter
engaging that firm
we only met junior managers and trainees

and all
these people never gave us the impression th
at they had mastered their
task
. The project was a failure, and we
were forced to go back to the old
ERP

system. I am certain that if the project had been followed up by the two
senior managers we
had
met the first time, things would have worked out differ
ently."


3.
The
consultative

nature
.
M
anagement consultant provides opinions (not advice,
which is a deviation from the requirements of objectivity and independence, including
emotional independence, which should always
characterize

the consultant's work),

which set
into motion
a process of collaborative information and knowledge
exchange
between the
consultant


whose

responsibility concerns the quality and objectivity of the opinions
provided


and

the client, who is ultimately responsible for applying or

rejecting the opinions
received. These are the comments of the chairman of a major Italian bank regarding
the work
of
a consulting firm
engaged

in the
develop
ment

of
a new internal credit rating system.


"The consulting firm demonstrated that the new rati
ng model worked better than the one we had
previously used (
as

it enabled us to predict the insolvency of our customers with a far narrower margin of error
that with our old model), and this model is
now
effectively underpinning our decisions
to
grant cred
it facilities.
However, none of us was involved in all the phases of designing the model, and as a result, none of us fully
understood the mathematical and statistical rationale underlying the way it operates and the complex weighting
criteria used for the

several
variables
it
use
s
: the model is simply like a "black box" as far as we are concerned.
How shall we be able to improve that model in future? And above all, how can we change it if it eventually turns
out not to be so reliable (under changed conditi
ons and in a different economic situation, or
with

different
composition of customers, etc
.
)?"


The
consultative

nature is
emphasized

by the definit
ional

approaches which interpret
consulting as a

method

,
and
find
its
essence
in
its advisoring function
t
o the
client when
taking decisions and/or performing certain tasks (e.g.
,

Cohen, 1989).

4.
The "problem
-
oriented" nature
.

Management consulting consists of
identifying
/
defining problems (
diagnosis
),
working out
solutions (
therapy
) and subsequently
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applying

those solutions (
cure
). The
problem
-
oriented
nature

of management consulting
makes it all the more necessary to establish an appropriate level of co
-
operation between the
consultant and the client (Lippi
t
t and Lippi
t
t, 1986) in every single phase
of
the c
onsulting
process.
Here is
what we were told by the managing director of the Italian division of a
pharmaceutical multinational
.



We are accustomed to dealing with (and seeking to solve) problems all the time (often
very many
problems at
once

and the same

time). We often have to take
rapid
decisions regarding the priority to be given to
the different
problems. We can decide to set aside some of them, to resolve the most urgent ones, but we cannot
evade the problems

or

pretend not to see them. I can immedia
tely
recognize

people who are accustomed to
,

and
skilled in
, problem
-
solving, and when I ha
ve

to choose a consultant (whatever the
task

might be) these are the
decisive qualities I look for
."


5.
The contractual and fiduciary nature of the management consu
lting relationship
.
The remit is given by the client company and accepted by the consultant in the form of a
contract
,

in which both parties
agree
to
confer full legal and psychological legitimacy
to the
consultancy
services
.
Among the k
ey
-
elements of the
consultancy relationship are a clear
definition of the rights, duties and roles of each part
y
involved (
legal

contract
) and the
ir

commitment to co
-
operate in a climate of mutual trust (
Galford

et al.
, 2000
; Green, 2006
) and
respect (
psychological covenant
)
,
which
ought to be constructed already during the
negotiations in the initial phase of the consultancy relationship.


"The most difficult thing during the initial phases of contact with a new potential client is understanding
whether I can trust th
e

clien
t (whether he is sincere, whether he is really interested in the expertise that I can
offer,
etc.
) and above all
,

convincing him that he can trust me.
E
xperience has taught me that being totally
transparent can
create
a sense of insecurity in the other par
ty (I have "lost" many
potential clients
for this very
reason), but in the long term it certainly pays off: in the remits I have been given in the past 10 years I have
always received
the
maximum co
-
operation from
my
clients, and only in one case have I be
en accused of not
fully
attaining
the
goals

of the consultancy project (and in our profession
attaining
100% of the objectives within
the given timescale is
the

exception, rather than the rule)."


These
are
the words of
a
founding partner of
Integrale

S.r.
l.
,

a
n

Italian
medium
-
sized
strategic consulting firm.

6.
The entrepreneurial nature of the problems addressed.

Management consultants
address
entrepreneurial

problems

(strategic, organizational and/or related to one or more
specific
functional areas)

whos
e
solution
can
significantly
affect the
structure of the client
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company
(whether small or large, in manufacturing or in services, etc.),

generate changes
in

its
state
,

set in motion strategic development, stability or recovery processes (Ciampi, 2004;
Fazz
i 1982; 1984)
,

and ultimately
have
innovation effects (Greiner and Metzger
,

198
3;
Vallini, 1991
)
,

supported by evolutionary changes in knowledge (
rationalizing

motivations for
change), attitudes (acceptance and
internalization

of
motivations for change
)
,

i
ndividual and
group behaviour (
concrete

actions to bring about change)
; in one word:

changes in the
corporate culture (Kubr, 2002). Over the
last decades
,

the scope of the entrepreneurial
problems addressed by management consultants has gradually expanded
to cover the whole
gamut of firm management activities. Some
authors

have held
that identifying
the
management consultant’s
"
specialized

areas of expertise" lies at the heart of defining the
concept of management consulting: given a particular list of
spec
ialized

areas of expertise, it
is assumed that whoever supplies services in those
specific
fields
may
be
called
a
management consultant. We do not share this view
,

since not
only does it fail to bring out the
essential features of management consulting,
bu
t
it also generates definitions that are
physiologically obsolete because of the changes to which the spheres of consulting
intervention are constantly subjected

(Aiello, 1996; Clark and Fincham, 2002)
.

7.
The persons primarily in
terested
in solving the pr
oblem
for which the consultancy
services are retained

belong to
the top management of the client company
. Given the nature of
the management consultant's work, the

primary client


must be at least one person belonging
to the
client company

top management,

for
it is at this level that the
“not delegable”

entrepreneurial

top
management functions
related to the problems
to be
addressed by the
consultant
are performed (Ciampi, 2004; Fazzi, 1982).


"I immediately decided to take up the KPMG
offer,
even though t
he starting salary they
proposed
was
20% lower than what I was paid by ITN Consulting [a company offering Information and Communication
Technologies services to manufacturing firms]. Even though I had become a senior manager, our consultancy
projects almos
t invariably dealt with the technical aspects of the client's technological infrastructure and my
interlocutor was always an EDP employee and/or an employee of an external company to which our client had
outsourced the maintenance of his technological faci
lities. I was not working for an IT management consulting
firm, but for a company offering IT infrastructure maintenance services."

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This statement was made by one of the
candidates recently
recruited,
after
a l
engthy
selection process, by the IT managemen
t consulting sector of KPMG Italia.

8.
The
mainly

cognitive nature of
management consulting

value
-
creation
potential
.
The creation of new knowledge and the development of new entrepreneurial
capabilities

(diagnostic, therapeutic and/or interpretative)
,

whi
ch both the client and the consultant can
exploit
once the consultant
’s work

is completed
,

are potentially
the
most significant results of
management consulting intervention. However
,

empirical evidence shows that
it
is extremely
rare for th
is
potential to

be consciously perceived and fully exploited. For in very few cases
do
the client and the consultant consciously set knowledge
-
creation
goals

for the consultancy
project (
Linnarsson and Werr
, 2002). Furthermore, their
efforts
are
very often
taken up
entir
ely by
merely
replacing the client's existing practices with best practices (
mainly
explicit
knowledge) which the consultant proposes to "transfer


to the client (e.g.
,

Ernst
and

Keiser,
2002
; Newell, 2005
). By so doing, both parties to the consultancy rel
ationship
eschew
embarking on social reconstruction
pathways
(Lave and Wenger, 1991)
through which
new
practices and knowledge (not only explicit but mainly tacit)
can be generated (
by
contextualiz
ing

the "best practices" proposed by the consultant and/or
by
socializ
ing

the
pre
-
existing implicit knowledge possessed by the two parties
)
. Yet
not only implicit knowledge
very often constitutes the most important
cognitive baggage

of both parties, but it
also
represents
the main potential outcome of the consulti
ng intervention. From this it follows that
even in cases where the consultancy intervention is deemed successful (because it has made it
possible to solve the problem the consultant had been commissioned to solve)
,

the most
important part of the potential
cognitive value of the relationship is often lost and/or not
adequately exploited. We will address this specific feature of the consultancy activity
in
greater depth
in the final
part
of this paper.

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Figure 2 provides a synoptic
over
view of the concepts, di
stinctive ontological (real,
essential and relatively stable) features
,

and logical relations which, according to the
proposed
definition, best
identify the essence of
management consulting activity.

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Figure 2
:
The ontology
of the management consulting activity: concepts, features and logical relationships
.

STRATEGIC AREA
ORGANIZATIONAL AREA
PRODUCTION AREA
FINANCIAL AREA
ADMINISTRATION AREA
HUMAN RESOURCES AREA
INFORMATION AREA
(MANAGEMENT INFORMATION
SYSTEM)
RESEARCH AND
DEVELOPMENT AREA
MARKETING AREA
SPECIALISED AREAS OF
MANAGEMENT
CONSULTING PRACTICES
(TECHNIQUES, TOOLS
AND METHODS)
STRATEGIC AREA
ORGANIZATIONAL AREA
PRODUCTION AREA
FINANCIAL AREA
ADMINISTRATION AREA
HUMAN RESOURCES AREA
INFORMATION AREA
(MANAGEMENT INFORMATION
SYSTEM)
RESEARCH AND
DEVELOPMENT AREA
MARKETING AREA
SPECIALISED AREAS OF
MANAGEMENT
CONSULTING PRACTICES
(TECHNIQUES, TOOLS
AND METHODS)
Features of the service
CONSULTATIVE NATURE

PROBLEM ORIENTED

NATURE
RELEVANCE TO ENTREPRENEURIAL
PROBLEMS
TRIGGERS/FACILITATES STRATEGIC DEVELOPMENT
PROCESSES AND (TACIT AND EXPLICIT) KNOWLEDGE
-
CREATION PROCESSES
TRIGGERS
-
FACILITATES
CHANGE ABOUT
APTITUDES
ATTITUDES
CONDUCT
QUALITY
OBJECTIVITY
SCIENTIFIC
-
PROFESSIONAL SKILLS
Definitional approaches
CONSULTANCY AS METHOD
CONSULTANCY AS
PROFESSION
HIGH
-
LEVEL OF INTERACTION AND
COLLABORATION
Features of the consulting relationship
CONTRACTUAL NATURE
LEGAL
PSYCHOLOGICAL
Features of the primary client
MEMBERSHIP OF TOP
MANAGEMENT
PROBLEM OWNERSHIP
DIAGNOSIS
CURE
THERAPY
Features of management consultant
INDEPENDENCE
RESPONSIBILITIES
FINANCIAL
EMOTIONAL
DECISION
-
MAKING
CURRENT
SKILLS
CONSULTING AND
ENTREPRENEURIAL
EXPERIENCE
POTENTIAL
SKILLS
ANALYTICAL
CAPABILITIES
CREATIVE
CAPABILITIES
SYNTHETIC
CAPABILITIES
CONTENTS
EMPATHETIC
CAPABILITIES
MAIEUTIC
CAPABILITIES
SKILLS AND
CAPABILITIES
Features of the service
CONSULTATIVE NATURE

PROBLEM ORIENTED

NATURE
RELEVANCE TO ENTREPRENEURIAL
PROBLEMS
TRIGGERS/FACILITATES STRATEGIC DEVELOPMENT
PROCESSES AND (TACIT AND EXPLICIT) KNOWLEDGE
-
CREATION PROCESSES
TRIGGERS
-
FACILITATES
CHANGE ABOUT
APTITUDES
ATTITUDES
CONDUCT
QUALITY
OBJECTIVITY
SCIENTIFIC
-
PROFESSIONAL SKILLS
Definitional approaches
CONSULTANCY AS METHOD
CONSULTANCY AS
PROFESSION
HIGH
-
LEVEL OF INTERACTION AND
COLLABORATION
Features of the consulting relationship
CONTRACTUAL NATURE
LEGAL
PSYCHOLOGICAL
Features of the primary client
MEMBERSHIP OF TOP
MANAGEMENT
PROBLEM OWNERSHIP
DIAGNOSIS
CURE
THERAPY
Features of management consultant
INDEPENDENCE
RESPONSIBILITIES
FINANCIAL
EMOTIONAL
DECISION
-
MAKING
CURRENT
SKILLS
CONSULTING AND
ENTREPRENEURIAL
EXPERIENCE
POTENTIAL
SKILLS
ANALYTICAL
CAPABILITIES
CREATIVE
CAPABILITIES
SYNTHETIC
CAPABILITIES
CONTENTS
EMPATHETIC
CAPABILITIES
MAIEUTIC
CAPABILITIES
SKILLS AND
CAPABILITIES
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FROM THE DIACHRONIC INTERPRETATION TO THE SYNCHRONIC
INTERPRETATION: CONSULTING MODELS

In the literature,
management
consulting is often interpreted as a process
(Figure 3)

comprising several sequential phases (initial contact

entrepreneurial problem
diagnosis

therapeutic planning

solution
implement
ation

output evaluation

conclusion
of the relationship), each one
characterized

by different activities to be performed, specific
risk and critical elements
,

and consequently, partic
ular skills that the consultant must possess
in order to successfully complete each phase (e.g.
,

Greiner and Metzger, 198
3
; Kubr, 2002
).











By focusing on the specific features of each phase in the process t
his interpretative
approach (

diachronic

interpretation


of management consulting)

does not, however,

reveal
the overall picture of the essential variables in the relational dynamics on which the
results

of
the consultancy intervention depend in terms of new entrepreneurial cognitive value

creat
ion
.
For the consultancy process tends to take
concretely
place with variable degrees of
looping/reiteration, completeness, and intensity
of
co
-
operation, depending upon the
service
Figure 3
:
The diachronic interpretation of management consulting: consulting process.

INITIAL CONTACT AND CONTRACT STIPULATION
SOLUTION DISCOVERY: THERAPEUTIC PLANNING
ENTREPRENEURIAL PROBLEM DIAGNOSIS
SOLUTION IMPLEMENTATION
OUTPUT EVALUATION AND CONCLUSION
INITIAL CONTACT AND CONTRACT STIPULATION
SOLUTION DISCOVERY: THERAPEUTIC PLANNING
ENTREPRENEURIAL PROBLEM DIAGNOSIS
SOLUTION IMPLEMENTATION
OUTPUT EVALUATION AND CONCLUSION
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configuration sought, the problem to be solved, the ways of delivering the

service and
,

above
all
,

the
consulting model
adopted (

synchronic interpretation of management consulting

).

Key to the
synchronic interpretation of management consulting is the

nature of the
relationship


established and developed between the consultant

and the client (Bell and
Nadler, 1985). In this regard, factors such as the structure (
i.e.,
the system of qualitative and
quantitative features) of the entrepreneurial problem to be solved, the
volume
of specific
investments required
from

both parties, t
he intensity of the knowledge generation/transfer
dynamics, the
mainly
codified

or
tacit nature of the
both parties’ starting
knowledge and
of
the knowledge
generated/transferred through the relationship, become particularly relevant.

Particularly c
ritical

features of consultant
-
c
lient
interaction
are the qualit
y
and quantit
y

of the client's
starting
knowledge
,

and the degree to which the consultant is inclined/able to
activate and
manage

the knowledge creation/transfer processes.
M
any different possible
co
mbinations have been identified
in literature
regarding the forms that these features
may
assume

(
Maister, 1993;
S
c
hein, 19
87;

19
8
8
;

1999): here, we shall merely examine three
alternatives which, we believe, can be seen as
theoretical configurations

(model
s) while
bearing in mind that each one is a conceptual abstraction that, as such, tends to
take a different
form
in
each

specific consulting context (
F
igure
4
). Each model identifies a different "mode
of reasoning" and "
way to relate
to the client"
by
the
management consultant.

Under

the

quasi
-
management consultancy

model

,

the client company needs specific
information and/or cognitive support
to
implement solutions to
already diagnosed
problems.
The client company has
already
identified and defined the pr
oblem to be solved a
s well as
the
type of
intervention

required
,

and the party to which
it should relate
.
After having established
the need for a specific input of
information

or expertise
in a given
firm

area, t
he client reaches
the conclusion

that it doe
s
not have the ability to
implement
the
solution
on its own, or it
concludes that it is more economically or politically convenient
to outsource it.

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outset, the
client
-
consultant
interaction is highly structured with regard to the
mutual

role
expe
ctations.
This model assigns a critical role to the client as he must have the ability to:

-

diagnose the problem autonomously;

-

identify the solution (therapy) autonomously;

-

identify the
specific
information
and/or expertise
needed
;

-

select the consul
tant
which
possess
es
th
e above mentioned information
and
expertise
;

-

correctly
explain
the problem to the consultant.












The consultant, who
se

role
is
merely
that of
a "knowledge provider", is required to
possess
specialized

expertise within the
specific area
with which the consultancy
intervention

has to deal.
T
he generated/transferred knowledge mainly travels in the
consultant

client

direction
, and
takes on
an almost exclusively codified
character
. The consultant
’s intervention

has a
slight
impa
ct on the
client company
structure and therefore remains on the borderlines of
management consult
ing work
.

Figure 4
:
The consultant
-
client relationship: consulting models
.


THE CLIENT IDENTIFIES THE
PROBLEM AND ITS POSSIBLE
SOLUTION. IMPLEMENTING THE
SOLUTION REQUIRES SPECIFIC
INFORMATION OR EXPERTISE
"QUASI CONSULTING"
MODEL

CLASSICAL

MODEL
THE CLIENT PERCEIVES THE
SYMPTOMS OF CERTAIN
DYSFUNCTIONS BUT IS UNABLE
TO DIAGNOSE IT AND TO
IDENTIFY A THERAPY
"META
-
CONSULTING"
MODEL
THE CLIENT PERCEIVES THE
SYMPTOMS OF CERTAIN
DYSFUNCTIONS, DOES NOT
HAVE SELF
-
DIAGNOSIS SKILLS,
BUT WISHES TO DEVELOP
THEM
THE CONSULTANT IMPLEMENTS
THE SOLUTION
THE CONSULTANT DIAGNOSES
THE PROBLEM, DISCOVERS THE
THERAPY AND IMPLEMENTS
THE SOLUTION
THE CONSULTANT "HELPS THE
CLIENT TO HELP HIMSELF"
(DEVELOPING
THE CLIENT'S
SELF
-
DIAGNOSIS SKILLS
)
THE CLIENT IDENTIFIES THE
PROBLEM AND ITS POSSIBLE
SOLUTION. IMPLEMENTING THE
SOLUTION REQUIRES SPECIFIC
INFORMATION OR EXPERTISE
"QUASI CONSULTING"
MODEL

CLASSICAL

MODEL
THE CLIENT PERCEIVES THE
SYMPTOMS OF CERTAIN
DYSFUNCTIONS BUT IS UNABLE
TO DIAGNOSE IT AND TO
IDENTIFY A THERAPY
"META
-
CONSULTING"
MODEL
THE CLIENT PERCEIVES THE
SYMPTOMS OF CERTAIN
DYSFUNCTIONS, DOES NOT
HAVE SELF
-
DIAGNOSIS SKILLS,
BUT WISHES TO DEVELOP
THEM
THE CONSULTANT IMPLEMENTS
THE SOLUTION
THE CONSULTANT DIAGNOSES
THE PROBLEM, DISCOVERS THE
THERAPY AND IMPLEMENTS
THE SOLUTION
THE CONSULTANT "HELPS THE
CLIENT TO HELP HIMSELF"
(DEVELOPING
THE CLIENT'S
SELF
-
DIAGNOSIS SKILLS
)
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Under the

classical model


the company
feels
symptoms of a certain dysfunction, but
is unable
neither
to clearly spell out the scope of the problem

nor to
identify the most
appropriate measures to solve it. The responsibility for conducting
the

diagnosis (problem
finding) and subsequently identifying and suggesting
the

solution (problem solving) therefore
falls to the consultant.
The c
onsultant

is
giv
en
broad
margins of
action
freedom by
a
client
,

who entrust
s

himself
total
ly to the consultant,

vest
ing

him

with the remit
not only
to find a
remedy but above all to define the "borderlines of the
disease
". The diagnos
tic

ph
ase can
sometimes

lead "far

away
" from the starting point
,

thus
identify
ing

problems
that are very far
from the generic expectations that had originally
led
the client to
engage the consultant. The
relationship

is much less structured
,

and
its
effectiveness is
heavily
influenced by the
c
lient’s
will and the capability to become involved in the various phases of the consulting process.
While the client should be involved as
intensely

as possible in principle, the more complex the
problem, the more necessary it is for
the
consultant to rece
ive
the client

cooperation

from the
very first phases of the interaction, in which,
by
diagnosi
ng

the situation, the problem is
reconfigured in its
proper
dimension
s
. The knowledge generated/transferred is mainly
codified even though, unlike what happens u
nder the "quasi
-
management consulting" model,
its transfer is
bidirectional (consultant

client). For the classical model to function
effectively:

-

the client must provide the consultant with all the information needed to conduct a
reliable diagnosis, and mu
st above all be ready to accept and manage the changes
resulting from an in
-
depth diagnos
tic intervention
performed "from the outside";

-

the consultant
’s

analytical, synthetic
,
and
intuitive/
creative
capabilities

must be
adequate for
the
complexity of the e
ntrepreneurial problem to be solved
. The
consultant
must
also
be able to correctly
communicate the diagnosis
to the client

(not
infrequently, consultant deliberately use
s

"obscure"
or
"sophisticated" language,
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assuming

he
will win over the unconditional
tr
ust of the client
)
. The consultant

s

analytical
capabilities

are

indispensable for dividing up
the
entrepreneurial problem
and reconstructing the
system of
cause
-
effect
relations between the
principal
variables.
The consultant'
s

synthe
tic
,

intuitive and cr
eative
capabilities

are decisive
to
identify
the primary causes of the problem

and
to discover
the
possible solutions;

-

the client must understand and properly interpret the diagnosis
made
by the consultant
,

and must
effectively

be
able to adopt the solutio
n (

cure

) proposed (even
theoretically
right
the solution
might
be unviable
because

of
conflict

with the value system and/or
with
the deep
-
seated strategic identity of the client company).

In conclusion, the classical model is appropriate provided that th
e client ("patient") is
willing to rely wholly on the consultant ("physician") with regard both to the diagnosis and
the therapy
,

and
to implement the
advised
measures ("
to
take the medicine") and
to
give up
the idea of developing autonomous auto
-
diagnosti
c and problem solving capabilities.

The

meta
-
consultancy


model is the most ambitious one
. T
he client retains full
ownership of the problem in every phase of the consultancy process
because no one knows
better than him

the company's strategic, managerial
and cultural context
,

and can therefore
determine
real scale of the problem and
the
true
feasibility and effectiveness of any possible
solutions

to
it
.
T
he starting point is similar to the one in the classical model (the client
perceives certain shortcomin
gs and dysfunctions but does not know their origin, or how to
deal with

them
,

and finds it difficult to choose the most appropriate consultant)
,

but the degree
of client involvement is far
higher
, particularly from the cognitive point of view. The
consulta
nt
plays
a “
leading role


in the diagnosis (
which nevertheless remain within the
client’s competence
) and
acts
as
a


facilitator


for
the
therapeutic planning
and
implementation phases, also suggest
ing

recourse to
further
specialist resources (external
and
/or

internal) if these are deemed necessary to solve specific problems. The problem
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remains the client's, and the work of the consultant consists of "helping the client to help
himself". From the initial phases the intervention is
oriented to fuel and deve
lop
the client's
self
-
diagnosis and problem
-
solving capa
bilities
,

by implementing bidirectional
(consultant

client)
transfers of “
process


(i.e., tacit)
knowledge
.

In conclusion, the
meta
-
consultancy

model
not only aims to
maximiz
e

the possibilities of sol
ving the immediate
problem
but
its main purpose is to enable
the top manage
ment
of the client company to
enhance
its
own level of autonomy
when
deal
ing

with

future entrepreneurial problems
(Schein, 1987). The necessary conditions for effective meta
-
consult
ancy are:

-

from the outset,
the client must be aware of
his
responsibilities connected with
retaining full ownership of the problem;

-

the consultant must resist the temptation to exclude the client from the problem
(Scha
f
fer, 1997) and, at least in the initi
al phases,
avoid
offering personal
diagnostic interpretations
,

to
avoid hampering

the
development potential of
client's self
-
diagnosis capa
bility
;

-

the consultant must be endowed with
not only
analytical, synthetic

and creative
but also
maieutic and empathe
tic

capabilities

that can stimulate a

high

(and early)
involvement of the client, thereby triggering cooperative processes for auto
-
diagnostic and
problem solving learning
.

The consultant's capacity to stimulate a
collaborative relational environment is es
sential
for
overcom
ing

the difficulties
connected with the presence of "evasive"
and/or "antagonist"
(sometimes even
"rejection")
attitudes
which are
physiologically
present
,

particularly
in people
who
work in functional areas and/or roles where the root c
ause of the problem lies,
and
in
compan
ies whose
culture
is one with a strong "resistance to change". Hence the
need for the consultant to avoid aggressive diagnostic attitudes which might create
the sensation of "hunting for mistakes to punish" ("inspecti
ve attitude

) or which
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22

lead to expressing premature value
judgments

(
thus
preventing client from calmly
offering
his
own evaluations). In addition to facilitating the process (client know
s

the problem better than consultant, although
his over
-
involv
ement

m
ay prevent
him
from "seeing the wood for the trees"; the agreement on the outcomes of
a
commonly agreed diagnosis emerges in a wholly natural way
,

without the need for
the consultant to convince the client about its soundness), jointly conducting a
commonl
y agreed diagnostics exercise
,

also
acquires
an "
intervention’s
ontological value"
for

it triggers a change in the cognitive system of the
client
company
which, by reacting to the stimuli, sets in motion
process
es

for

gradually

bringing to the surface


an
d

re
-
appropriating


(
and hence "regaining control

of
")
the problem
, and

for

learning
the diagnostic techniques proposed by the
consultant.
In addition to
facilitat
ing

the client's involvement in the subsequent
phases
,

these cognitive processes
enable the
client to acquire skills
and
capabilities
that can be used in future to solve problems autonomously
,

even if
they are not necessarily similar to those addressed in the consulting intervention;

-

client must be strongly motivated to develop autonomous problem
-
solving
capabilities

and effectively be able to implement
the related
learning processes:
the client'
s

cognitive flexibility

(i.e.
,

his
degree of receptiveness to change and
his
ability to challenge
his
own ideas, convictions and working methods
)

is essen
tial
to ensure the effectiveness o
f the knowledge
-
generation process set in motion
using the meta
-
consultancy model.


“Over

the past ten years we have commissioned
more than twenty different consulting firms to
carry out
more than forty strategic consultin
g projects. In the last five years, despite the fact that we have almost doubled
our turnover and the managerial complexity of our business has certainly grown, we have only implemented
two
strategic consulting projects (one on the "redefinition of our con
cept of customer loyalty"

and
another on the
"redefinition of
our businesses
chains of value") using only one consultancy firm,
Alfa

S
.
p
.a
. The fact is that after
the first consulting project carried through by
Alfa

S.p.
a
. our manag
ers
began to consider it

possible to develop
their own capacities to define, diagnose and solve problems, even when the problems
belonged to
completely
new strategic
contexts

from
those experienced in the past. The risk of failure became for us
a desired opportunity
for developin
g these skills, an
occasion
that all the managers in our group were anxious to address, and no
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longer something from which to defend themselves, avoiding the problem as far as possible or offloading it on to
external "specialists". The consultancy projects

implemented by
Alfa

S.p.
a
. are much more demanding than those
implemented previously and cost almost twice as much. But the value that these projects enable us to create in
terms of new
strategic and managerial
skills and abilities

is immeasurably

higher.
"


These words were spoken by the Chairman of a multinational corporation working in
the garments industry, which
owns

three world
-
famous high
-
fashion labels and w
ere

reported
to us by two partners of
Maretex

S.
r
.
l
.
, a
n Italian
strategic consultancy firm t
hat
adopts
consulting intervention techniques consistent with the model we have defined as meta
-
consultancy.

Figure
5

offers a synoptic picture of the essential features
characterizing
each of the
three
consultancy models described above.

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Essential
feat
ures

ENTREPRENEURIAL PROBLEM

CLIENT

CONSULTANT

CONSULTING RELATIONSHIP

INDUCED/SOUGHT EFFECTS

Breadth/

complexity


Diagnosis

Therapy

Cure

Initial
knowledge
of the
problem

Critical capabilities

Critical features
and propensities

Primary role

Critical

capabilities

Primary role

Degree of
structur
-
ing

Nature of
generated
and
transferred

knowledge

Knowledge
transfer
flows

Degree of
client
involvement

Primary goal

Primary risk

CONSULTING MODELS

QUASI
-
CONSULTING

Limited


Client
responsible

Client
responsib
le

Consultant
responsible

High

Diagnostic capability


Problem
-
solving
capability


Capability to specify
necessary
information/knowledge


Capability to select
consultant


Capability to
communicate the
problem

Propensity to
"shift the problem"

Acquirer of
co
dified
information
(delegating
solution
implementation)

Specialized
expertise regarding
the specific
problem

Supplier of
codified
knowledge
(implementing
the solution)

High

Essentially
codified
(content
related)

One
-
way
(consultant to
client)

Limited

Mainl
y
operational

(implementing
the problem
solution
)

High level of
client
dependency on
consultant

CLASSICAL

High

Consultant
mainly
responsible

Consultant
mainly
responsible

Client
mainly
responsible

Limited

Capability to understand
the diagnosis


Capabilit
y to implement
the therapy

Information
transparency


Propensity to
change


Willingness to
comply with
consultant's
"prescription"

Implementer of
the prescribed
treatment
("patient")

Analytical
capability


Synthetic
capability


Creative
capability


Capabili
ty to
communicate the
diagnosis

Diagnostic and
therapeutic
role (entering
into the
problem)

Limited

Mainly
codified
(mainly
content
related)

Two
-
way
(consultant

client)

High

Entrepreneurial
-
technical
(solving the
problem)

Inconsistency
between
"prescriptio
n"
and strategic
identity of the
client

META
-
CONSULTING

Very high

Client
mainly
responsible

Client
mainly
responsible

Client
mainly
responsible

Very
limited


Cooperative learning
capability

Realization of the
problem "full
ownership"


Cognitive
flexibil
ity


Motivation to
learn


Desire to change

Cooperative
learning
protagonist

Analytical
capability


Synthetic
capability


Creative
capability


Empathetic
capability


Maieutic capability

Cooperative
learning
facilitator
(remaining
outside the
problem)

Very
l
imited

Mainly tacit
(mainly
process
related)

Two
-
way
(consultant

client)

Very high

Entrepreneurial
-
cognitive
(developing the
client’s self
-
diagnosis and
problem
solving
capabilities
)

Inconsistency
between
cognitive
potential and
client's
capacity/will to
l
earn






Figure
5:

Consul
ting models: essential features of intervention object (entrepreneurial problem), parties to
the relationship
(client and consultant),
consulting relationship, and
outcomes (induced/sought effects)
.

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COGNITIVE INTERPRETATION:
THE
KNOWLEDGE
-
CONVERSION META
-
CONSULTING PATHWAYS

C
ompany knowledge
-
Creation Processes
: the Nonaka and Takeuchi
’s

Model

The dimensions of knowledge

Nonaka and Takeuchi (1995) define company knowledge
creative capacity

as the
capacity of an
organization

as a whole to generate new knowledge, to disseminate it internally
and translate it into products, services and systems.

The
organizational

knowledge
-
creation theory developed by the Authors is based on
the
possibility

t
o
categorize

cognitive resources in terms of the
two
following essential
dimensions:

-


epistemological
, which makes it possible to distinguish between explicit and tacit
knowledge
(
Arrow, 1962;
Gelwick, 1977;
Polanyi, 196
6
; 1985
).
Explicit knowledge
is
kn
owledge that can be expressed, codified and easily transferred between different
people through formal and systematic languages.
Tacit
(or implicit)
knowledge
, on the
other hand, comes from personal events, is difficult to
formalize
, and resides
exclusivel
y in the minds of individuals (insight, personal experiential skills,
etc.
),
often at levels
different
from the level of "full awareness". Since explicit knowledge
(which can be effectively expressed in numbers and in words) is only the "tip of the
iceberg
" (
F
igure
6
), whose foundations are essentially "tacit events" (which are
difficult to express and share), the fulcrum of the entrepreneurial process of
knowledge creation lies in the capacity to
mobilize
, convert and disseminate the tacit
knowledge of ind
ividuals throughout the
organization
;

-


ontological
, which makes it possible to
categorize

knowledge in
relation to
the
entities

involved in
its creation (individual knowledge, group knowledge,
organizational

knowledge, inter
-
organizational

knowledge). Th
e
firm

knowledge
-
creation
process
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can be described as
an “
interactive
/
loop
ing

spiral"

mov
ing

away
from the individual
level and gradually spread
ing

through
ever
higher ontological levels, involving
increasingly broader interacting communities.











C
ompany knowledge
-
creation processes

T
he interactions between individuals (social interactions)
, by

set
ting

into motion
processes
of

knowledge
epistemological and ontological
evolutionary metamorphosis,
trigger
/activate

a spiral of
knowledge
conversion proc
esses (Nonaka and Takeuchi, 1995).
The
socialization

pathway
consists of
processes of
shar
ing

of tacit knowledge among
individuals,
and
generat
e
new tacit knowledge through the social interaction

arising
therefrom
. Since tacit knowledge cannot be codified
,

this cognitive path
requires the
sharing
of experiences

which, in turn
activat
e
"
fields of
interaction
"

(between those who possess
the
experience

and those who wish to acquire it), through, for example, recourse to on
-
the
-
job
training practices reproduc
in
g

the apprentice
-
master craftsman relationship, in which the
former learns from the latter through observation, imitation and practice.
By resorting to

dialogue and group reflection”
and methods of inductive and deductive reasoning, t
he
Figure 6
:
Polyani's
knowledge

iceberg
.

TACIT
knowledge
EXPLICIT
knowledge
TACIT
knowledge
EXPLICIT
knowledge
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externalization

pr
ocess makes it possible

to convert tacit knowledge into new explicit
knowledge

in the
form of metaphor, analogy, concept, hypothesis and/or model. The
complexity of the process is due to the fact that
,

in addition to being non
-
codified, implicit
knowledge
is
characterized

by a close linkage with the mental models of the individuals
who

possess it. The
combination
process makes it possible to produce new explicit knowledge by
sorting, adding, combining and
categorizing

externalized and pre
-
existing
explicit
knowledge
.
Information and Communications
T
echnologies facilitate this process
by
networking
, and
hence

systematizing


distinct corpuses of explicit knowledge.
Internalization
makes it
possible to convert explicit knowledge into new tacit knowledge: apply
ing explicit knowledge
(codified in documents
,

manuals,
etc.
) to specific operational environments
enables
individual
s

to
contextualize

th
at

knowledge (

learning by doing

),

to
take possession of

it

,
and to transform it into new implicit knowledge.










The
nature

of
the new
created
knowledge depends on the
w
ay it is converted (
F
igure
7
):
socialization

produces
sympath
etic
knowledge, that is to say
,

shared

technical
abilities

and
mental models;
externalization

creates
conceptual
knowledge (for exampl
e
,

the
concept

of
a
new product

structure
); combination produces
systemic
knowledge (for example, the
F
igure 7
:
Knowle
dge conversion processes

(Nonaka and Takeuchi, 1995)
.


(Socialization):
Sympathetic
knowledge
From
tacit
knowledge
From
explicit
knowledge
To tacit
knowledge
To explicit
knowledge
(Externalization):
Conceptual
knowledge
(Internalization):
Operational
knowledge
(Combination):
Systemic
knowledge
(Socialization):
Sympathetic
knowledge
From
tacit
knowledge
From
explicit
knowledge
To tacit
knowledge
To explicit
knowledge
(Externalization):
Conceptual
knowledge
(Internalization):
Operational
knowledge
(Combination):
Systemic
knowledge
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conceptual architecture of a new technology); and
internalization

produces
operational
knowledge, that is to say, new
and mainly process
knowledge (for ex
ample, project
management innovative know how).

Creating new knowledge can be viewed as a continuous and dynamic meta
-
process
consisting of
parallel iteration
s

of
the four knowledge conversion process
es

(
socialization
,
externalization
, combination and
int
ernalization
),
the
spiral shape
of which shows
the

expansion
of knowledge
towards increasingly higher
both epistemological (knowledge quality
development) and
ontological levels

(from the individual to the organizational level, and to
the inter
-
organizatio
nal level)
.

Knowledge
-
Conversion Meta
-
Consulting Pathways

The basic
aim
of meta
-
consulting intervention is
induction
of
new
diagnostic
,
therapeutic
and
interpretative

(
vision of
firm structure and competitive environment
)
entrepreneurial knowledge
,

which t
he client and the consultant can
also
exploit
once the
consultant has completed
his
intervention. We speak

here of "induction", and not
of
“transfer

of
" new knowledge because the client and the consultant learn
by
reprocessing
new and
pre
-
existing

knowledg
e

and
connecting
it to their
starting

own
cognitive structure

rather t
han
by
only
acquiring that knowledge (codified to a greater or lesser degree)
. This reprocessing is

subjective
, by definition, and cannot be "taught"; it can
however
be stimulated (induc
ed) by
the specific
capabilities,
attitudes and
conduct

of the parties (discussion, explanation, recovery
of previous experiences, active participation
, etc
.).

Assuming
a

knowledge
-
perspective for interpreting management consulting
intervention,
making use

of
the conceptual categories developed by Nonaka and Takeuchi and
seeking to
externalize

the implicit knowledge acquired through our personal consulting
experiences, in
F
igures
8

and
9

we propose
a possible conceptual mapping of the essential
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pathways
thr
ough which the potential of entrepreneurial knowledge creation by management
"meta
-
consulting"
intervention can express itself
.

Through
socialization

pathways
,

new tacit knowledge is induced by the face
-
to
-
face
interaction and
by the subsequent
informal sh
aring (
and
integration) of the
tacit knowledge
owned by the two parties to the consulting
relationship
. Through active participation in the
consulting experience, the client and the consultant develop
new implicit knowledge
by
submitting
their own initial
baggage of
tacit

knowledge, through direct
shared use and
comparison
,
to
a critical

justification


process

which leads
, in the event of "no
n
-
confirmation", to
its

unfreezing


and re
novation
, thereby contributing to
new implicit
knowledge

learning
. Mutual

direct observation, comparing different viewpoints, sharing and
synchronizing

experiences, emotions, sentiments, feelings and mental models
,

makes it
possible
for both the client and
the
consultant
, in particular
:

a)

to renew their
own implicit mental mo
dels
(patterns, cognitive maps, paradigms,
points of view, perspectives, visions, beliefs,
etc.
)
and
visions

about
the
company's
structure

(or functional portions of it)
and/or the
competitive environment
.
For
example, b
y sharing

and

comparing

their own di
ffering mental patterns, the client and
the consultant can co
-
operatively develop new ways of intuitively interpreting (and
"seeing") the essential (qualitative and quantitative) features of the company structure,
and
new ways of interpreting (and "seeing"
) the relationship between
the
company and
its
clients, between
the
company and
its
competitors,
etc.
;
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Figure
8
:
Cognitive interpretation of the meta
-
consulting process: synthetic mapping of the tacit knowledge creation processes (socialization and
internalization)
.

CLIENT'S INITIAL KNOWLEDGE
AREA
TACIT
KNOWLEDGE
EXPLICIT
KNOWLEDGE
CONSULTANT'S INITIAL
KNOWLEDGE AREA
TACIT
KNOWLEDGE
EXPLICIT
KNOWLEDGE
NEW KNOWLEDGE INDUCED BY THE META
-
CONSULTING RELATIONSHIP AREA
TACIT
KNOWLEDGE
EXPLICIT
KNOWLEDGE
NEW IMPLICIT VISION OF FIRM
STRUCTURE
NEW IMPLICIT DIAGNOSTIC
ANALYSIS KNOW
-
HOW
NEW IMPLICIT PROBLEM
-
SOLVING KNOW
-
HOW
NEW IMPLICIT VISION OF
COMPETITIVE ENVIRONMENT
NEW IMPLICIT CHANGE
IMPLEMENTATION KNOW
-
HOW
IMPLICIT VISION OF FIRM
STRUCTURE
IMPLICIT DIAGNOSTIC
CAPABILITIES
IMPLICIT PROBLEM
-
SOLVING
CAPABILITIES
IMPLICIT CHANGE
IMPLEMENTATION CAPABILITIES
EXPLICIT DIAGNOSTIC
TECHNIQUES
IMPLICIT VISION OF
COMPETITIVE ENVIRONMENT
EXPLICIT CHANGE
IMPLEMENTATION TECHNIQUES
EXPLICIT
PROBLEM
-
SOLVING
TECHNIQUES
EXPLICIT CONCEPTUAL MODEL
OF FIRM STRUCTURE
SOCIALIZATION
INTERNALIZATION
EXPLICIT CONCEPTUAL MODEL
OF COMPETITIVE ENVIRONMENT
SOCIALIZATION
INTERNALIZATION
SOCIALIZATION
INTERNALIZATION
SOCIALIZATION
INTERNALIZATION
SOCIALIZATION
INTERNALIZATION
IMPLICIT VISION OF FIRM
STRUCTURE
IMPLICIT DIAGNOSTIC
CAPABILITIES
IMPLICIT PROBLEM
-
SOLVING
CAPABILITIES
IMPLICIT CHANGE
IMPLEMENTATION CAPABILITIES
EXPLICIT DIAGNOSTIC
TECHNIQUES
IMPLICIT VISION OF
COMPETITIVE ENVIRONMENT
EXPLICIT CHANGE
IMPLEMENTATION TECHNIQUES
EXPLICIT
PROBLEM
-
SOLVING
TECHNIQUES
EXPLICIT CONCEPTUAL MODEL
OF FIRM STRUCTURE
SOCIALIZATION
INTERNALIZATION
EXPLICIT CONCEPTUAL MODEL
OF COMPETITIVE ENVIRONMENT
SOCIALIZATION
SOCIALIZATION
SOCIALIZATION
SOCIALIZATION
INTERNALIZATION
INTERNALIZATION
INTERNALIZATION
INTERNALIZATION
CLIENT'S INITIAL KNOWLEDGE
AREA
TACIT
KNOWLEDGE
EXPLICIT
KNOWLEDGE
CONSULTANT'S INITIAL
KNOWLEDGE AREA
TACIT
KNOWLEDGE
EXPLICIT
KNOWLEDGE
NEW KNOWLEDGE INDUCED BY THE META
-
CONSULTING RELATIONSHIP AREA
TACIT
KNOWLEDGE
EXPLICIT
KNOWLEDGE
NEW IMPLICIT VISION OF FIRM
STRUCTURE
NEW IMPLICIT DIAGNOSTIC
ANALYSIS KNOW
-
HOW
NEW IMPLICIT PROBLEM
-
SOLVING KNOW
-
HOW
NEW IMPLICIT VISION OF
COMPETITIVE ENVIRONMENT
NEW IMPLICIT CHANGE
IMPLEMENTATION KNOW
-
HOW
IMPLICIT VISION OF FIRM
STRUCTURE
IMPLICIT DIAGNOSTIC
CAPABILITIES
IMPLICIT PROBLEM
-
SOLVING
CAPABILITIES
IMPLICIT CHANGE
IMPLEMENTATION CAPABILITIES
EXPLICIT DIAGNOSTIC
TECHNIQUES
IMPLICIT VISION OF
COMPETITIVE ENVIRONMENT
EXPLICIT CHANGE
IMPLEMENTATION TECHNIQUES
EXPLICIT
PROBLEM
-
SOLVING
TECHNIQUES
EXPLICIT CONCEPTUAL MODEL
OF FIRM STRUCTURE
SOCIALIZATION
INTERNALIZATION
EXPLICIT CONCEPTUAL MODEL
OF COMPETITIVE ENVIRONMENT
SOCIALIZATION
INTERNALIZATION
SOCIALIZATION
INTERNALIZATION
SOCIALIZATION
INTERNALIZATION
SOCIALIZATION
INTERNALIZATION
IMPLICIT VISION OF FIRM
STRUCTURE
IMPLICIT DIAGNOSTIC
CAPABILITIES
IMPLICIT PROBLEM
-
SOLVING
CAPABILITIES
IMPLICIT CHANGE
IMPLEMENTATION CAPABILITIES
EXPLICIT DIAGNOSTIC
TECHNIQUES
IMPLICIT VISION OF
COMPETITIVE ENVIRONMENT
EXPLICIT CHANGE
IMPLEMENTATION TECHNIQUES
EXPLICIT
PROBLEM
-
SOLVING
TECHNIQUES
EXPLICIT CONCEPTUAL MODEL
OF FIRM STRUCTURE
SOCIALIZATION
INTERNALIZATION
EXPLICIT CONCEPTUAL MODEL
OF COMPETITIVE ENVIRONMENT
SOCIALIZATION
SOCIALIZATION
SOCIALIZATION
SOCIALIZATION
INTERNALIZATION
INTERNALIZATION
INTERNALIZATION
INTERNALIZATION
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b)

to renew their own implicit

diagnostic analysis, problem solving, and change
implementation
capabilities
.
By socializing their own
earlier
diagnos
tic
-
type implicit
capabilities
,

the client and the consultant c
an
, for example, learn new
abilities
and
to
gain insights into the cause
-
effect relationship
among
the explanatory variables of
entrepreneurial problems referring to a certain
functional
area (
for example, the
marketing
area) and
detect
distinction
,

in
the
full
set of
involved
variables,
between
the "relatively primary"
and
the "relatively secondary" ones.

The entrepreneurial knowledge creation potential of
socialization

pathways can be
activate
d through consulting intervention has been very clearly perceived by a young partner
of a medium
-
sized consultancy firm
,

which is
a

European leader in the Business Process
Reengineering segment, who
had the following to say
:


"Classroom training
w
as banish
ed from our company over 10 years

ago
. Anyone wishing to work with
us must have learnt the

basics of
general management at business school. But that knowledge is not sufficient.
For we attribute considerable weight to the mental agility and flexibility of
our
collaborators
, their humility,
their
determination
and
capability

to learn from experience. Working "shoulder to shoulder" with more expert
colleagues, and above all with clients on

concrete

consulting projects, makes it possible to learn, fine
-
tune,
i
mprove and develop consulting skills, and above all
it
enables to develop the
most important
capability

required
of management consultants: the capacity to challenge their own mental patterns every time or, to put it another
way, it teaches to learn from e
xperience. Our clients often do not
realize

it, but the value created by every
consulting project averages
for as
at least three times more than we charge them in fees. Entrepreneur know
s

its
business better than anyone else, and
his
company differs from e
very other. Becoming totally immersed in this
knowledge and in this diversity enables us to build up unique cognitive value, which none of our competitors will
be able to imitate."


By applying their own

explicit knowledge
(
diagnostic analysis, problem sol
ving

and

change implementation methods

and techniques
;

conceptual models for interpreting the
company structure and the competitive environment
) to the specific
context

in which the
consulting intervention takes place,
both
client
s

and consultant
s

convert
that knowledge into
new tacit knowledge
(
internalization

pathways) specific to the company context.
This is a
very arduous cognitive path which requires both parties to
shun
any temptation to merely
replace the client's "existing practices" with "best prac
tices" (mainly explicit knowledge)
forming part of the consultant's cognitive
background
,
and
engage
themselves
in
an intense
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32

activity of contextualiz
ation of
that knowledge
(by adapting it, changing it, redefining it, etc.)
in relation to
the specific
cli
ent company
environment.
For example, the consulting
relationship makes it possible to convert the consultant's explicit
entrepreneurial problem
diagnosis
techniques

into new implicit know
-
how
,

specific to the client's company context: by
experimenting wit
h the application of his

own codified knowledge to the specific
consulting
context, the consultant develops new non
-
codified
skills and capabilities

which are
appropriate for defining the specific entrepreneurial problem
, for discovering
its causes, and
fo
r identifying the client's
ab
ilities

that can be used to solve it; the direct experiential sharing
of this knowledge conversion process also makes it possible for the client to assimilate this
new tacit knowledge,
while
at the same time subjecting his

own
initial

explicit diagnostic
capabilities

to critical
justification
,
unfreezing
, and renewing
.

Through
externalization

pathways
,
the
client and
the
consultant co
-
operatively express
their own tacit knowledge (
both
the
pre
-
existing

and
the
new one
generated
in the course of
the consulting intervention)

by translating perceptions, mental models, beliefs and
experiences into explicit forms
. Th
rough these
pathways
,

new conceptual patterns
and models
are created

which, being explicit
, are easily transmissible
thr
ough codified languages
(
to

different levels of the
organization’s

structure)
, as well as
reusable
in
the
future
should
the
need arise. As new
process
(i.e., implicit)
knowledge emerges
that
proves to work better than
pre
-
existing
one

(new tacit knowledge
"which is shown to be true"), client
-
consultant social
interaction shifts to the plane of a shared reflection, which, through the integrated use of
inductive, deductive and
adductive

reasoning methods (metaphors and analogies; on the role
of metaphors in t
he consultancy process see, for example, Atkin

and Perren
, 2000)
,

is
oriented

to translate implicit knowledge into words, phrases and in the ultimate analysis
,

into
explicit
(
formalized

and codified) conceptual models.
For example,
from the initial phases
of the
consulting intervention, client and consultant share the activity of codifying the
client's
initial


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33




































Figure
9
:
Cognitive interpretation of the meta
-
consulting process: synthetic mapping of the explicit knowledge creation processes (externalization and
combination
)
.

CLIENT'S INITIAL KNOWLEDGE
AREA
TACIT
KNOWLEDGE
EXPLICIT
KNOWLEDGE
CONSULTANT'S INITIAL
KNOWLEDGE AREA
TACIT
KNOWLEDGE
EXPLICIT
KNOWLEDGE
NEW KNOWLEDGE INDUCED BY THE META
-
CONSULTING RELATIONSHIP AREA
TACIT
KNOWLEDGE
EXPLICIT
KNOWLEDGE
NEW IMPLICIT VISION OF FIRM
STRUCTURE
NEW IMPLICIT DIAGNOSTIC
ANALYSIS KNOW
-
HOW
NEW IMPLICIT PROBLEM
-
SOLVING KNOW
-
HOW
NEW IMPLICIT VISION OF
COMPETITIVE ENVIRONMENT
NEW IMPLICIT CHANGE
IMPLEMENTATION KNOW
-
HOW
IMPLICIT VISION OF FIRM
STRUCTURE
IMPLICIT DIAGNOSTIC
CAPABILITIES
IMPLICIT PROBLEM
-
SOLVING
CAPABILITIES
IMPLICIT CHANGE
IMPLEMENTATION CAPABILITIES
EXPLICIT DIAGNOSTIC
TECHNIQUES
IMPLICIT VISION OF
COMPETITIVE ENVIRONMENT
EXPLICIT CHANGE
IMPLEMENTATION TECHNIQUES
EXPLICIT
PROBLEM
-
SOLVING
TECHNIQUES
EXPLICIT CONCEPTUAL MODEL
OF FIRM STRUCTURE
EXPLICIT CONCEPTUAL MODEL
OF COMPETITIVE ENVIRONMENT
IMPLICIT VISION OF FIRM
STRUCTURE
IMPLICIT DIAGNOSTIC
CAPABILITIES
IMPLICIT PROBLEM
-
SOLVING
CAPABILITIES
IMPLICIT CHANGE
IMPLEMENTATION CAPABILITIES
EXPLICIT DIAGNOSTIC
TECHNIQUES
IMPLICIT VISION OF
COMPETITIVE ENVIRONMENT
EXPLICIT CHANGE
IMPLEMENTATION TECHNIQUES
EXPLICIT
PROBLEM
-
SOLVING
TECHNIQUES
EXPLICIT CONCEPTUAL MODEL
OF FIRM STRUCTURE
EXPLICIT CONCEPTUAL MODEL
OF COMPETITIVE ENVIRONMENT
COMBINATION
NEW EXPLICIT CONCEPTUAL
MODEL OF FIRM STRUCTURE
NEW EXPLICIT DIAGNOSTIC
METHODS
NEW EXPLICIT PROBLEM
-
SOLVING METHODS
NEW EXPLICIT CONCEPTUAL
MODEL OF COMPETITIVE
ENVIRONMENT
NEW EXPLICIT CHANGE
IMPLEMENTATION METHODS
EXTERNALIZATION
EXTERNALIZATION
COMBINATION
COMBINATION
COMBINATION
COMBINATION
COMBINATION
COMBINATION
COMBINATION
COMBINATION
COMBINATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
CLIENT'S INITIAL KNOWLEDGE
AREA
TACIT
KNOWLEDGE
EXPLICIT
KNOWLEDGE
CONSULTANT'S INITIAL
KNOWLEDGE AREA
TACIT
KNOWLEDGE
EXPLICIT
KNOWLEDGE
NEW KNOWLEDGE INDUCED BY THE META
-
CONSULTING RELATIONSHIP AREA
TACIT
KNOWLEDGE
EXPLICIT
KNOWLEDGE
NEW IMPLICIT VISION OF FIRM
STRUCTURE
NEW IMPLICIT DIAGNOSTIC
ANALYSIS KNOW
-
HOW
NEW IMPLICIT PROBLEM
-
SOLVING KNOW
-
HOW
NEW IMPLICIT VISION OF
COMPETITIVE ENVIRONMENT
NEW IMPLICIT CHANGE
IMPLEMENTATION KNOW
-
HOW
IMPLICIT VISION OF FIRM
STRUCTURE
IMPLICIT DIAGNOSTIC
CAPABILITIES
IMPLICIT PROBLEM
-
SOLVING
CAPABILITIES
IMPLICIT CHANGE
IMPLEMENTATION CAPABILITIES
EXPLICIT DIAGNOSTIC
TECHNIQUES
IMPLICIT VISION OF
COMPETITIVE ENVIRONMENT
EXPLICIT CHANGE
IMPLEMENTATION TECHNIQUES
EXPLICIT
PROBLEM
-
SOLVING
TECHNIQUES
EXPLICIT CONCEPTUAL MODEL
OF FIRM STRUCTURE
EXPLICIT CONCEPTUAL MODEL
OF COMPETITIVE ENVIRONMENT
IMPLICIT VISION OF FIRM
STRUCTURE
IMPLICIT DIAGNOSTIC
CAPABILITIES
IMPLICIT PROBLEM
-
SOLVING
CAPABILITIES
IMPLICIT CHANGE
IMPLEMENTATION CAPABILITIES
EXPLICIT DIAGNOSTIC
TECHNIQUES
IMPLICIT VISION OF
COMPETITIVE ENVIRONMENT
EXPLICIT CHANGE
IMPLEMENTATION TECHNIQUES
EXPLICIT
PROBLEM
-
SOLVING
TECHNIQUES
EXPLICIT CONCEPTUAL MODEL
OF FIRM STRUCTURE
EXPLICIT CONCEPTUAL MODEL
OF COMPETITIVE ENVIRONMENT
COMBINATION
NEW EXPLICIT CONCEPTUAL
MODEL OF FIRM STRUCTURE
NEW EXPLICIT DIAGNOSTIC
METHODS
NEW EXPLICIT PROBLEM
-
SOLVING METHODS
NEW EXPLICIT CONCEPTUAL
MODEL OF COMPETITIVE
ENVIRONMENT
NEW EXPLICIT CHANGE
IMPLEMENTATION METHODS
EXTERNALIZATION
EXTERNALIZATION
COMBINATION
COMBINATION
COMBINATION
COMBINATION
COMBINATION
COMBINATION
COMBINATION
COMBINATION
COMBINATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
EXTERNALIZATION
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implicit knowledge
regarding his
mental model
for

perceiving the qualitative and quantitative
features of the

company structure (
the
client’s
implicit "starting" vision of the company
structure
)
, thus
making it possible
to
subject that knowledge to critical
justification
and
unfreezing processes
(which
will be
fully implemented through successive
internalization

and
socialization

dynamics).
Furthermore, d
uring the whole consulting process, client and
consultant joint
ly endeavour
to
make
explicit
and codify
the new tacit knowledge
which
emerg
es
in the diagnostic phase (
implicit diagnostic analysis

capabilities
), th
e therapeutic
planning phase (
implicit problem
-
solving
capabilities
)
,

and the
solution

implementation phase
(
implicit change implementation
capabilities
). This
enabl
es
both parties to codify

and learn
new explicit knowledge
(models, techniques, instruments

and methods) which can be
exploited in future
,

once the consulting process is
concluded
.

Finally, t
he

combination
pathways

make it possible to
integrate the new explicit
knowledge
(
generated through the consulting process
)

into
the pre
-
existing explicit
c
onceptual systems
. There
is
also
a high level of
knowledge
-
creation potential in the
combination pathway
,

when the consulting intervention deals with partial areas of the client's
company structure (for example, a given business segment, or a given functio
nal area). For in
these cases
in
the combination of new explicit "medium
-
range" knowledge with more general
pre
-
existing concepts (for example, the
explicit
corporate vision)
,

the latter
is enriched
with
new meanings. The creative use of IC
T

networks and h
ypertext information databases
facilitates the combination pathway and helps both the client and the consultant to
refreeze

the
new conceptual models, the new techniques and the new cognitive capabilities

that
are
developed.


"Our best practices in terms o
f designing and implementing management control systems have reached
levels of excellence, particularly the
ones
that can be used by companies in the manufacturing and banking
industries
. I think that they are the best in Europe. This has helped us to
earn

an excellent reputation, but our
work remains extremely difficult.
For e
very new commission we receive entails immersing our logical,
mathematical and statistical models into a specific corporate context and making them work in the best way
possible, in r
elation to
each client company's
specific [present and future]
needs

of. To do this, we need the
active co
-
operation of the management of the client company. It is precisely thanks to this collaboration that we
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realize

that our systems
are
fail
ing

to take
account of
important
business

interpretation keys
, or that they possess
potential
ities

which we had never previously
realized
. We offer our system to our clients as the best available on
the market (and we believe this to be true), but we have learnt that
in the course of every consulting intervention
the main focus of
our
attention must be on
seeking

both the shortcomings and the latent potential of our systems
and of their several component modules
[consequently generating new implicit knowledge through
i
nternalization
]. The result is that
almost
all
our
consulting interventions lead us to modify

(sometimes also to
add)
one or more modules [
thus
externalizing

the new implicit knowledge acquired during the consulting
intervention], and some of the relations
hips
which
enable the various modules to function as a system [hence
recombining the new explicit knowledge generated through the consulting process]."


These are the words of a senior consultant working for a medium
-
sized consulting
firm, a leader in Ital
y in the management control systems segment. They provide an excellent
example of how new (implicit and explicit) knowledge can be created by activating
knowledge
internaliz
ation
,
externaliz
ation

and
combination meta
-
consulting processes
.

CONCLUSIONS, PAPE
R LIMITATIONS AND ENTREPRENEURIAL
IMPLICATIONS

This paper pursues the challenging goal of presenting a general conceptual framework
for
interpreting

meta
-
consulting
knowledge
-
creation processes
. The purpose is not to
demonstrate the absolute
validity
of th
is model, but more simply to highlight its internal
theoretical consistency and
to discuss the supporting evidence of a number of
empirical
observations.
In particular, a
few
anecdotal
cases have been used to illustrate and better
clarify the conceptual fr
amework, rather than as empirical evidence of the validity of the
model (this is an approach that is typically adopted in the management literature. See, for
example, Normann, 2001). Testing the validity of the proposed framework through a
systematic and r
eliable quantitative analysis is the first next challenge for the author. The
second challenge is to develop management control tools
which can
represent the translation
of the conceptual model into practice, into systems that can support both management
c
onsulting companies and their clients in the consulting relationship

knowledge management
.

The paper may have three
limitations
.

First,
it
pursues the challenging goal of
presenting a general conceptual framework which is in itself non
-
compatible with a co
ncise
discussion compressed
into the strict borders
of a few pages. Second (and more important) the
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individual knowledge creation pathways and the whole conceptual framework from which
they stem
still
need to be

more thoroughly analyzed

and
carefully sifte
d
for
validat
ion
. Third,
the paper
may be subjected to the
limitations
a few authors recently
attributed (e.g.
,

Gourlay
and Nurse, 2005) to Nonaka and Takeuchi's theory of
organizational

knowledge.

The paper has significant implications both for the consul
ting firms and for their
clients.

A
ccepting the proposed framework, both the client companies and the consulting
firms
can increase their awareness of the
entrepreneurial knowledge

generation potential
ingrained in
their relational dynamics. They
may

there
fore be able to more clearly
and with
more awareness define the knowledge creation goals for their consulting projects
, to
more
effectively
design (and
manage
) the related cooperative learning
dynamics
, and to evaluate
also
the cognitive value (new diagnos
tic, therapeutic and change
-
implementation capabilities),
rather then only the

economic value

of the consulting intervention results
. The client
may then
intend
and appreciate the management consultant's work not merely as "seeking a solution to
a specific

problem" but as "facilitating the endogenous development of
its
cognitive
capacities" (and hence of
its

distinctive
abilities
).
It
is on these base that
he

could select the
consultant
and
, above all, plan
its
expectations and active co
-
operation

in the co
nsulting
process
. Moreover, the consultant
may
be encouraged to interpret consulting relationship as
an opportunity for
cooperative learning
,

which will not only increase the client's
competences
base
,

but also enable
himself

to develop new and "unique" kn
owledge (which only the
specific consulting context
can
induce)
,

and
consequently
new distinctive consulting
capabilities
that
can be

fundamental to
its
competitive success.

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