Tuesday 1 September 2020

Should KM seek to change the culture? Or work within the culture?

If the culture of your organisation makes Knowledge Management difficult, what do you do? Seek to change the culture first?  Or work your way around the different cultural elements?

Introducing KM not only involves introducing new roles, processes and technologies, it also involves changing people's priorities and attitudes; in other words, changing the culture.  These attitudes and priorities can be set by many things, such as societal norms, industry norms, and the personalities of the corporate leadership.

Take for example the billing norms in the legal industry, where historically legal fees have been based on billable hours, and the pressure on staff is to maximise billable hours to specific clients, and minimise "overhead activities", with KM often being seen as an overhead activity. Billing time to clients is seen as "good". Spending time on non-billable activity such as KM is seen as "bad". This sets up a conflict between the long term aims of KM and the attitudes and culture of the staff and leadership.

It can be tempting to say "the billing culture must change to make KM possible", but there is a risk here.

The risk is that we may see culture change as a way to support Knowledge Management, rather than a way to support the business.  This is the wrong way round. KM must put the business first, and changing an entrenched culture to support KM may be the wrong thing to do; at least in the short term.

In the case of the legal billing model, this has evolved over time and is still a common cultural component in the legal market (although this may be changing). It is reasonably logical, it can be reasonably transparent, and it allows legal firms to derive revenue in conditions of great uncertainty, such as litigation. Sure it incentivises the individual, but it ensures the revenue for the firm while reducing risk.  Anything that challenges the hourly billing model will probably not survive very long in many law firms.

Let's assume this model will be here to stay for a while yet. The question then becomes, not how to change the billing culture in order to make KM easier, but how KM can work within the billing culture for the benefit of the firm?

Traditionally, legal KM has done just this, by using non-fee-earning lawyers to act as a supply chain of legal knowledge for the front-line fee earners, thus freeing up fee-earning time for the top lawyers. However there may be other ways to work within the model, for example by reducing the time spent on non-fee-earning activities.

Take Business Development, for example. This non-billable activity is crucial to the future of the firm, and requires lawyers to do non-legal activities, such as client development, pitching and billing. When Ernst and Young (who also billed by the hour) were investigating KM in the 90s, they focused their pilot efforts on the time it took to create and close a bid, and through reusing knowledge were able to cut this time by a huge percentage.  Other law firms could use KM to learn about customers, clients, business segments and key individuals as a way to increase business development success rates and reduce business develoment costs.

Take Marketing, as another example. In a 2013  article, “I Didn't Go to Law School to Become a Sales Person—the Development of Marketing in Law Firms,” consultant Sylvia Hodges writes, “Traditionally, lawyers believed that their knowledge and expertise spoke for itself, and it would be a sign of defeat to start marketing.” That attitude is changing, and law firms need to develop their knowledge of effective marketing; an area which KM already addresses in many consumer goods companies. KM could focus on Marketing support, without needing to come into conflict with the legal billing culture.

These are just two examples where Knowledge Management can show its worth in the legal sector, above and beyond the traditional model of PSLs creating precedent libraries, without attacking the hourly billing model. Once KM has shown its value in improved marketing and business development, it can be time to address the more core elements of the legal business.

So the key here is not to tackle the cultural barriers head-on, but to find areas and activities within the organisation where the barriers are lower, or fewer, and use these to demonstrate the value of KM. Let these be the trojan horse by which KM enters the building.

If you, too, face an entrenched culture which is unfriendly to Knowledge Management, perhaps you should think not how to change the culture, but how to work within it for long enough that you can prove the value of KM, and show the way to a culture which supports the business better.

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