Are You Clinging to the Wrong Business?

Are you ready to walk away from your major line of business?  If not, you may be turning away a new, more profitable line of business.  Or, you may find you’re soon out of business altogether.  Not convinced?  Well then, spend a little while with Xerox.  When you hear the word Xerox, you tend to think of office machinery. And, for a time, you would have been right. But that’s no longer the primary business of Xerox.  In fact, lately Xerox has started to tell its customers not to waste their money on unnecessary machinery purchases and is now selling consulting services to help those customers better manage the equipment they have in order to make their end-to-end printing processes as efficient and cost-effective as possible.  Scott Anthony‘s reaction to this change in strategy was overwhelmingly positive:

That’s a strong sales proposition in today’s tough economy. While Xerox might miss short-term printer and copier sales, it is building long-term, potentially lucrative relationships — and a base to move into additional productivity-related services.

Xerox had the courage to stop clinging to its traditional line of business and, by branching out, has opened up huge new opportunities for itself.  How do law firm knowledge management departments achieve that nifty trick? According to Scott Anthony, you need to do three things:

  1. Start with a deep understanding of how the customer frames the problems they are facing. It’s easy for companies to fall into the trap of thinking that customers care primarily about the products they purchase. Often they don’t. Those products are means to an end. In Xerox’s case, it doesn’t sell copiers. It sells workplace productivity. Understanding how the customer frames the problem helps to highlight different ways to address that problem.
  2. Build a solution that solves the customer’s — not your company’s — problem. Xerox could easily have designed a service offering that really was a veiled way for it to sell and support Xerox equipment. But that’s not what the customer wants. More than half of the 1.5 million devices under Xerox management are made by other companies. Ask how a startup company with no base business to defend would approach the challenge.
  3. Give the new business ample freedom. Corporate antibodies can often squash new offerings that look like competitive threats. Sufficient organizational autonomy can be critical for long-term success.

Now, what would happen if we were to apply these principles to the way we deliver KM services to lawyers within our firms?

  1. Understand how lawyers frame the problems they are facing. KM 1.0 has told us for years that lawyers want comprehensive,  carefully-organized collections of practice resources.  This has led us to track down content, attempt to convert the tacit into the explicit, and then build and maintain large databases.  In reality, lawyers don’t care about those collections and KM can never do enough to make them truly effective.  Lawyers just want easy access to information at the point of need.  It doesn’t really matter how you deliver those practice resources (e.g., through enterprise search,  Enterprise 2.0 technology, etc.) as long as it works when they need it.  As Scott Anthony says:  “Understanding how the customer frames the problem helps to highlight different ways to address that problem.”
  2. Build a solution that solves the lawyer’s — not your KM department’s — problem. Don’t think administratively about your staff and their job descriptions.  Focus instead on the nature of the support the lawyers actually need to do their jobs well.  Rather than deploying another database coder, would it be better to set up a Wiki or discussion board to facilitate lawyer-to-lawyer knowledge sharing?  In other words, how would you configure your services if you had no department (or, in the case of Xerox, no base business of machinery sales) to defend?
  3. Give the new way of working ample freedom. As you turn from KM 1.0 to KM 2.0 ways of doing things, you’ll need to resist the temptation to control the new means and methods of collaboration and knowledge sharing.   It doesn’t matter whether you’re motivated by honest concerns about risk or the short-term welfare of your department.  When you place unnecessary restrictions on collaboration and knowledge sharing, you impede the free flow of information. Then you are part of the problem rather than part of the solution. Giving lawyers the freedom to shape the way they share information is critical for long-term success.

As you think harder about this, you’ll realize that you need to move away from the KM 1.0 way of doing things.  That’s the old way of doing business.  The future lies in returning to first principles (or rather, the key 7 Principles of KM) and embracing KM 2.0.  Are you as brave as Xerox?

[Photo Credit:  treevis, Creative Commons license]

5 thoughts on “Are You Clinging to the Wrong Business?

  1. Great post Mary. You highlight a way of thinking strategically that can-as it should-lead to discarding slow and inefficient ways of practicing KM.I have to ask though, exactly what are you implying by highlighting a picture of Boston's Custom House?? ( Stuffy Bostonians are stuck in a KM 1.0 backwater along with the Lowells and Cabots?? More charitably, perhaps you were unconsciously referring to the way that the large early 20th c. tower grew out of the mid-19th century base Custom House, just as KM 2.0 will emerge from KM 1.0.

    1. David –

      The picture was an homage to the creativity and foresight of the good folk of Boston, of course. In fact, when I first saw the custom house I was very taken by how something so modern was springing out from the weathered old facade. There may be a wonderful metaphor there for us.

      In addition, I chose the picture because of the wonderful contrast between the frame and the vista. Hopefully we’ll all be able to achieve something similar by following the example of Xerox.

      – Mary

  2. Another thought-provoking post. It’s very tempting to say “Well, I can’t provoke change, I have to do what my clients want”, but that feels a little like a cop-out. We may have to learn to deal with frightening our customers a little, in order to give them service that they didn’t know they wanted.

    1. Wendy –

      One thing that the Xerox experience teaches us is that if we can think beyond our traditional ways of doing things, we may discover a new line of business that is of much more interest to our clients than the service they previously requested. It’s about truly putting ourselves in our clients’ shoes and having that experience inform our thinking rather than trying to drag them down a path that doesn’t interest them.

      – Mary

  3. Another thought-provoking post. It's very tempting to say “Well, I can't provoke change, I have to do what my clients want”, but that feels a little like a cop-out. We may have to learn to deal with frightening our customers a little, in order to give them service that they didn't know they wanted.

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