Knowledge Strategy & McKinsey
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Value Propositions and Accenture
 Common KM Value Propositions
• Effectiveness/Responsiveness.
• Efficiency.
• Innovation.
 Accenture
• KXchange – representative approach and mindset of many!
• Technology: D-Base, Discussion Forums, Collaborative Tools
and Expertise Locators.
• Massive investment in technology and organization infrastructure.
• Works well with repeatable work (when you can drive re-use) and
where information is really what needs to be transferred.
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Information Versus Knowledge in
Retail Banking
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Types of Knowledge
EXPLICIT
Documents
Databases
Reports
Manuals
Engineering
Methods
TACIT
Know
What
• Facts
• Ideas
• Theories
• Intuition
• Beliefs
• Values
Know
How
• Routines
• Procedures
• Instructions
• Expertise
• Instincts
• Informal
Practices
Dialogue
Conversation
Mentoring
Experience
Apprenticeships
Coaching
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1. Knowledge & Strategy.
2. KM at McKinsey.
3. Remembering 9/11.
5
Cluster in groups of 2-3…
 My left side of the room focus on codification. Be prepared to
discuss:
•
•
•
•
Randall Love’s search
The overall strategy and economics
Primary investments in technology and infrastructure to support it.
Incentive schemes (and focus)
 My right side of the room focus on personalization. Be prepared
to discuss:
•
•
•
•
Marcia Blenko’s search
The overall strategy and economics
Primary investments in technology and infrastructure to support it.
Incentive schemes (and focus)
Where Would You Characterize Accenture? McKinsey?
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Choose between Two Strategies
 Codification
• Link is person-to-document
• Extract, store and share through computers
• Reuse codified knowledge across similar tasks
 Personalization
• Link is person-to-person
• Share and apply through people networks
• Channel expert advice to unique problems
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Codification: Access Health
 Call-in medical center with 500 nurses
 Nurses assess and direct patients
 Use 500 pre-developed software algorithms
 “We’re not inventing new ways to cure decease. We’re taking
available knowledge and inventing processes to put it to better
use.”
 CEO Joe Tallman
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AH relies on “Reuse Economics”
4500
Costs:
1 algorithm=$40,000
variable costs=$20.
Avg. cost per diagnosis (dollar)
4000
3500
3000
2500
Usage:
For first 300
algorithms; reused
8,000 times on
average last year
2000
1500
1000
500
0
0
100
200
300
400
500
600
700
800
no. times reuse of software algorithm
Reuse of knowledge assets drives profits, not economies
of scale based on volume
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Personalization: Memorial Sloan
Kettering Cancer Center
 No. 1 rated cancer center in the U.S.
 Most innovative and customized cancer treatment in
the country
 Heavily based on personal communication between
doctors, scientists, etc.
 Co-located in 17 disease teams; meetings
 Investing heavily in re-use misses the point here
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Different strategies, different drivers
Codification
 Fast, efficient delivery of
products
 “reuse economics”
 People: “implementers”
Personalization
 unique solutions to unique
problems
 “expert economics”
 People: “inventors”
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Incentives and IT systems differ
IT for Codified:
 heavy investments
 “library” + search engines
IT for Personalized:
 minor investments
 “people-finders” + search for
people
Incentives for codified:
- to write up documents,
- to use documents
Incentives for personalized:
- to help others directly
- to ask for help
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1. Knowledge & Strategy.
2. KM at McKinsey.
3. Remembering 9/11.
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McKINSEY
3 minutes to come up with THE answer
• What strategically differentiates McKinsey? How does KM (repositories,
collaborative technologies and employee development) play into this?
• What were the key elements of the knowledge management project
launched in 1987?
• Be prepared to discuss the Jeff Peters vignette. Specifically, how did he
solve his problem?
• What challenges does McKinsey face as evidenced in the case and
vignettes?
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General Case Questions: McKINSEY
• What strategically differentiates McKinsey? How does KM in terms of
repositories, collaborative technologies and employee development play into
this?
• Solve tough, high-end and big-dollar problems that require a high degree of
expertise and creativity.
• People are inventors, not implementers.
• Most problems are unique and solutions customized.
• KM investments for them are heavily oriented to connecting people.
• Technically (expertise locators and even repositories)
• Organizationally (staffing and culture).
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General Case Questions: McKINSEY
• What were the key elements of the knowledge management project
launched in 1987?
• A common database of client work (e.g., sales presentations,
deliverables, analytic techniques, etc.).
• Client Sectors and Competence Centers hired a full time practice
coordinator to monitor quality and direct consultants to content.
• Established both I shaped and T shaped career paths.
• Knowledge Resource Directory (paper-based) of firm experts and
documents.
How important was it that the 2,000 documents that Matasonni and
Manville collected be high quality?
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Jeff Peters in Sydney
• Be prepared to discuss the Jeff Peters vignette. Specifically, how did he
solve his problem?
• Issue: Bid for growth strategy of respected financial services
organization. But local industry expertise “conflicted out.”
• Resolution: Immediately began using his personal network. Via this
found Jeff Peters in Boston (though unavailable for 6 weeks).
• His help: 1) John Peacocke (New Zealand – 2 years in McKinsey – mostly
oil and gas); 2) Patty Akopiantz (1 Year Associate with prior I-Bank
experience) and 3) Jonathon Liew (first McKinsey assignment).
• Forged group of experts from all over the world.
• Found 179 relevant PD documents and followed up with 60 more people.
• Won the project and client bought in.
• Jeff not happy though (no breakthrough too much reliance inside firm).
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Video Points of Importance
• For you aspiring consultants, note the opening comment about the pressure to come
up with a unique solution (with little experience).
• First stop is PD Net. They do re-use documents. But note that they also use these
documents to determine who to turn to for help.
• Key is finding the 3-4 teams somewhere around the globe that can coach you
through the process.
• Culture in McKinsey where you both add to the knowledge base and when you
respond when asked.
• In part a product of the “One Firm” culture and hiring.
• Performance evals. from day one also emphasize both knowledge contribution
(PD output) and help to others.
• Personal development and feedback built in at all stages.
• Learning during an engagement via feedback sessions.
• Development key to assignments during engagement.
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General Case Questions: McKINSEY
• What challenges does McKinsey face as evidenced
in the case and vignettes?
• Managing growth: Difficult to scale the way
Accenture does.
• Leveraging external expertise:
• Reaching outside the firm.
• Integrating experienced hires.
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A Web of “Effective” Information Flow…
Hierarchy
= Associate
= Manager
= Associate Principal
= Principal & Director
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A low proportion of people regularly
reach outside McKinsey for knowledge
55
Under 1 year
Over 1 year
55
Experienced
hires are the
main exception
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27
8
McKinsey
Boston
McKinsey
other
Client
11
4
8
Other
* Percentage of top 7 information contacts from each source type
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We are three times less likely to go outside
our pod for regular information
Information 9
sharing*
8
7
6
vs.
5
4
3
2
1
0
Within
same pod
Neighboring 2 pods
pod
away
More than
2 pods away
(or different
floor)
Distance
* Weekly information sharing out of a possible 100% of interactions
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1. Knowledge & Strategy.
2. KM at McKinsey.
3. Remembering 9/11.
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What does this have
to do with knowledge
management??
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Give Me Five Minutes of Thought
 How can KM be applied to national security?
• Within Agencies?
• Between Agencies?
• Targeting Initiatives.
• Educating.
• Us
• Them
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KM and National Security
 Within Agencies Bureaucracy Can Stifle “Knowing What We Know.”
• CIA developing an ability to surge.
• NSA is creating new leadership networks and data mining algorithms.
 Turf Wars Between Agencies (CIA and FBI) Preclude Action.
• Homeland Security Office (22 agencies, 200,000 employees and $37.5B)
• Bio-Terrorism Response Capability.
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9/11: A Data (Dis)Integration Case Study
January 2000: Mohamed Atta obtains U.S. visa
Who knew? State Department
June 2000: Atta meets with Iraqi
intelligence in Prague
Who knew? Central Intelligence Agency
June 2000: Atta enters the U.S.
Who knew? Immigration and
Naturalization Service
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9/11: Case Study, Continued
July 2000: $100K wired to Mawan al-Shehhi,
pilot of one of two planes that struck WTC
Who knew? Treasury Department
December 2000: Atta and al-Shehhi leave
stalled airplane on Miami runway
Who knew? Federal Aviation Administration
July 2001: Agent warns of potential
terrorists in training at U.S. flight
schools
Who knew? Federal Bureau of
Investigation
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KM and National Security
 Within Agencies Bureaucracy Can Stifle “Knowing What We Know.”
• CIA developing an ability to surge.
• NSA is creating new leadership networks and data mining algorithms.
 Turf Wars Between Agencies (CIA and FBI) Preclude Action.
• Homeland Security Office (22 agencies, 200,000 employees and $37.5B)
• Bio-Terrorism Response Capability.
 Targeting Interventions.
• Combat almost exclusively about information.
• A key target is finding and disrupting networks.
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Prior Contacts
Small World Metrics
• CC = 0.41
• CPL = 4.75
• Shortcuts = 0.19
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http://www.orgnet.com/MappingTerroristNetworks.pdf
KM and National Security
 Within Agencies Bureaucracy Can Stifle “Knowing What We Know.”
• CIA developing an ability to surge.
• NSA is creating new leadership networks and data mining algorithms.
 Turf Wars Between Agencies (CIA and FBI) Preclude Action.
• Homeland Security Office (22 agencies, 200,000 employees and $37.5B)
• Bio-Terrorism Response Capability.
 Targeting Interventions.
• Combat almost exclusively about information.
• A key target is finding and disrupting networks.
 Educating Different Parties.
• How do you help create understanding amongst disparate groups?
• Religious and socio-economic differences.
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Discussion Questions For Class On
Knowledge Generation
 Be prepared to tell me about the knowledge
brokering steps (and provide examples at
each point).
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