Competing in the Knowledge Economy : The Knowledge Value Chain (KVC)

I’ve been doing research for business clients for forty years.  That’s a lot of research.  (It also means I’ve made just about every mistake possible—at least once!)  When I started, each project looked very different-the details seemed to loom large.  I struggled with how to develop a unique approach for each one.

Several hundreds of projects later, my perspective had evolved.  The similarities among projects, not their differences, became most prominent.  I found that common themes ran among many of the projects, whatever their scope, methodology, or specific client benefit.  I became fascinated by the possibility that a few simple building blocks, moved around in different ways to fit the particular situation, could become the foundation of a whole way of looking at-and improving-the process of intellectual work.

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The age of modern management began with Frederick Winslow Taylor. He worked in the early years of the 20th century studying production processes in a steel factory. Taylor argued that by understanding a process “scientifically”, we could make significant improvements upon it. These improvements could be used to increase productivity, pay better wages, and generally provide a better work environment. His experiments worked, and his insights created a new level of industrial productivity that lasted through the 20^th century. As a by-product, he paved the way for a whole new profession—management consulting.

Management consultants (the best ones) are expert in analyzing a company’s or product’s value chain—the process that leads from raw materials to finished products. Using the value chain model, they find opportunities for cost reduction, revenue enhancement, strategic differentiation, and quality improvement.

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It was a weekday morning in the early 1990s. I stepped out of my office at FIND/SVP onto what the floor of what at that time was arguably the largest independent business information center in the world (and probably still is, though now it’s called Guideline). It covered the better part of a large city block. Shelves filled with books and magazines rose partway to the very high “downtown New York” ceilings. People scurried here and there, making copies, tapping on computers, speaking on phones to some of our 2,000-plus clients. Bees would have been envious of this intense buzz of activity!

Then, it dawned on me. This place was a factory—a knowledge factory! We started with some kind of raw data—numbers, words, databases, ideas—and passed it along to our clients. They in turn used the information to create value—competitive advantage, profits, revenues, opportunities, solutions, etc.

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