Professional service firms and the problem of tacit knowledge

Tacit knowledge is the informal knowledge that people within an organization have about how the place 'really' runs. It's knowledge of the right way to complain about your supervisor, when a relationship with a client becomes inappropriate, or the best (and worst) ways to leave the Firm. Typically this type of information is either not written down or is hidden in turgid prose on page 1132A subsection b of a policy manual. People pick up this critical organizational knowledge or what is sometimes called 'the ropes' from their more experienced peers or managers.

Professional services firms find transmitting tacit knowledge particularly daunting because they hire so many staff each year and so many of them are relatively young and inexperienced. The large numbers, client focus and often transient nature of professional careers make it hard for these firms to informally communicate 'how things are done around here'.

The Dos and Don'ts

An intriguing new approach has been taken by our portfolio company EJ4 on behalf of some of their global clients. What if a series of very short - less than two minute - videos were prepared talking about key Firm cultural norms. The videos would be designed to be sent via email and viewed on smart phones and PCs at the staff member's leisure. They would be designed to be entertaining, even funny or quirky so that staff members would be attracted to them. Topics could include:

• '3 questions to ask and 2 people to talk to before you bail'
• 'Is that P-Diddy below hip pant style appropriate for my client site?'
• '3 expense items that will defo get you fired'
• 'what to do with that cute client who won't leave you alone'
• help! my job is boring! what do I do!

By using an approach like this for critical tacit knowledge, a firm can significantly raise the firm culture IQ of new staff and reinforce key concepts to the old hands. It's also a way to introduce desired changes to behavioral norms.

An added benefit of this type of communication is that it can be shared with recruits, business partners and clients - where appropriate - to educate them on how to best work with and navigate the complexities of a firm's norms and culture. And the better outsiders know you, the more comfortable they are going to be working with you.

Improving performance by eliminating cultural confusion. Another thing to think about while you're sitting out on the Openwater.