Knowledge Management in Professional Service Firms

knowledge is a capacity to act. Knowledge can be used to take action and to serve the client. As market pressures increase, so does the demand for securing and exploiting knowledge for the firm. In addition, a shortage of high-potential professional service providers has increased the 'war for talent' in which firms compete in employing the most talented professionals. These situations are exacerbated by the decrease in lifelong loyalty, a traditional value within professional groups, and the departure and retirement of professionals, often the most experienced ones. For professional service firms, the main assets are intellectual, not physical, and they have to seek new ways to leverage their professional intellect. It is therefore not surprising that the emergence of technology-enabled knowledge management (KM) has attracted much attention from those firms. The special relevancy of KM to professional service firms is clear: " …in professional services, we are selling the expertise of our If knowledge is the 'product' or the dominant ingredient, it is worth it to manage that asset, and to establish and manage systematically the acquisition, synthesis, and sharing of insights and experiences. Indeed consultants are seen as the earliest and most successful adopters of KM The core business of these firms is to provide highly developed knowledge-based services grounded on the existence of intellectual assets. " Thus, it makes sense that managing those assets effectively is now looked at as a vital aspect of maintaining competitiveness " (Davis, 1998, p. 11). Intellectual assets exist in various forms, and their 1842 Knowledge Management in Professional Service Firms exploitation is only restricted by the capacity and readiness of humans to do so. Quinn, Anderson, and Finkelstein (1996) observed: The capacity to manage human intellect—and to convert it into useful products and services—is fast becoming the critical executive skill of the age. As a result, there has been a flurry of interest in intellectual capital, creativity, innovation, and the learning organization, but surprisingly little attention has been given to managing professional intellect. (p. 71)