New Book Review: "Developing Knowledge-Based Client Relationships"

Recently posted book review for Developing Knowledge-Based Client Relationships: Leadership in Professional Services, by Ross Dawson, Elsevier Butterworth-Heinemann, 2005, reposted here:

Well written and organized text on client relationships and the issues of dealing effectively with knowledge sharing and transfer in business. This book is a practitioner's manual that discusses key foundations of this topic, and then later examines some of the primary approaches used, with a majority of the book covering implementation of these ideas. Dawson begins the text by indicating that "even if you are brilliant at engaging in knowledge-based relationships with your clients, that does not help you if your clients do not recognize the value you can create for them through this deeper level of engagement. Professionals must lead their clients into knowledge-based relationships by demonstrating the value of collaboration. On every front, the future success of professional services firms will depend absolutely on the leadership capabilities within the firm." The author furthers this line of thought by discussing recent growth of the U.S. economy, which was driven by information, ideas, services, and knowledge. But while value is in knowledge, the most powerful trend in business right now is commoditization: "Without a relationship you become a commodity. With a relationship, everything is possible. You can create far greater value for your clients than your competitors can, and as a result lock your clients into longstanding, mutually profitable, collaboration."

Dawson discusses the guilds of yesteryear, the predecessors of today's professions, the purpose of which in part was to protect the commercial privileges of those who held valuable skills and knowledge. But this philosophy cannot continue in a world where vast amounts of information flow freely. The author contrasts delivering professional services in such a manner, by which a client receives an outcome, but does not see the process involved, and is not wiser as a result of the engagement, as the "black box" approach. Continued pursuit of such an approach is detrimental to the professional services firm. "These black box services are opaque to the client. Since the only reference point the client has is the result, it is relatively easy for other firms to replicate that result and then compete primarily on price. In other words, they are commoditizing the service." With a knowledge based approach, however, "the outcome is that clients are more knowledgeable, are able to make better decisions, and have enhanced capabilities. In short, the client is different as a result of the engagement. Professional firms and clients are pooling their capabilities to create results they could not achieve individually. This makes it impossible for competitors to replicate these outcomes. The entire engagement is based on rich interaction, meaning there are many opportunities to develop a valuable and lasting relationship."

One of the best segments in this text is entitled "Why should I teach my clients to do what I do?", where the author notes that "the great fear of professionals is that if they make their clients more knowledgeable they are giving away their key productive asset from which they make money. In many cases this is a misunderstanding of the nature of knowledge-based relationships. This is often not about teaching your clients to do what you do but making them better at what they do, which is very far from doing yourself out of a job. In other cases, it is true that knowledge-based relationships result in clients becoming more self-sufficient. In some cases, it is true that knowledge-based relationships result in clients becoming more self-sufficient. In some situations it is possible that this means they will rely less on you in the future. More often their increased self-sufficiency will allow you to move to higher value and more profitable types of engagements. Either way, refusing to engage in knowledge-based relationships with clients is an unsustainable position. In professional services, the far greater risk is that competitors will offer more value to your clients than you do, so that you will lose all their business."

Another favorite of this reviewer is the 10-page segment "Models of relationship management", where Dawson explains that different models can be created by using diverse approaches to how the four primary knowledge relationship roles (senior representative, relationship coordinator, knowledge specialist, and knowledge customizer) combine and relate. With the guru model, most of the high-level client contact is concentrated on an individual or small number of individuals. Contact begins to expand beyond this key contact at the professional services firm with the expansion model. The mirror model is a bit different, because people communicate directly with their peers as opposed to through a formal relationship manager. And the integration model is the stage at which the boundaries between the firm and the client blur beyond recognition. As the author notes, these four models coincide with each of the stages of relationship development: the engaging, aligning, deepening, and partnering stages. Quite simply, this 350-page text is well thought out throughout, and is well recommended for independent consultants, consultants in professional services firms, and clients who are engaged or are considering engagement with such entities.