Consultancy firms more interested in billable hours than developing expertise

Knowledge is an increasingly important factor in competition. Companies must keep up to date and ensure their staff have the necessary knowledge to keep their customers happy.

In her doctoral dissertation for BI Norwegian School of Management, Siw Marita Fosstenløkken focused on finding out what long term strategic methods were used by professional service providers improve their employees’ expertise.

Fosstenløkken interviewed a total of 51 managers and personnel from four different professional service providers: two consulting engineering companies and two communication agencies. These are knowledge companies which can be expected to represent the “state-of-the-art” where development of expertise is concerned.

“Professional service providers are seen as role models for effective learning. They are knowledge intensive, their personnel possess high expertise, and they earn their living from selling their knowledge,” explains Fosstenløkken.

Siw Marita Fosstenløkken shows in her study that the consultancy companies she investigated are far from being particularly sophisticated when it comes to prioritising, organising and developing measures for systematically developing their expertise.

“In practice the companies’ attitude towards improving their expertise is almost one of indifference. Its management and organisation are almost completely lacking, and when it comes to professional training and keeping up to date, individual personnel are left entirely to themselves,” she says.

According to Fosstenløkken, the companies studied are more interested in billable hours, customer requirements and short term profit than strategic investment in developing expertise.

“I was very surprised by the results,” she declares, going on to say that there is a big difference between what the companies say and what they actually do in this area.

“Short deadlines and the need for earnings mean that good intentions are not borne out by practice.”

Learning on the job

Although the companies fail to give priority to developing expertise, they are nevertheless successful in the marketplace. The study shows that working on customers’ projects on a daily basis is indisputably the best source of learning. This is crucial for the companies’ competitiveness.

Fosstenløkken continues, “However the companies are little aware of the informal learning that is taking place. They are also very poor at formulating the benefits of this informal on the job learning so that experiences can be shared and used throughout the organisation”.

Development of expertise takes place just as much outside the company through dealings with customers as internally through discussions with colleagues.

According to Fosstenløkken, the clue to the companies’ success is in their ability to learn while carrying out projects for customers with different problems. This is combined with good rhetoric.

“This compensates to a certain extent for the low priority they give to systematically improving their expertise.”

Siw Marita Fosstenløkken carried out her doctoral studies at BI Norwegian School of Management’s Institute of Strategy and Logistics. She defended her doctoral thesis on Friday 14 September 2007 on the topic of “Enhancing Intangible Resources in Professional Service Firms. A Comparative Study of How Competence Development Takes Place in Four Firms”.