Knowledge transfer—the idea of having an external vendor or consultant teach your team how to perform a specialized skill or task—is generally regarded as a universally positive activity. Tech vendors and consulting companies have capitalized on this sentiment and will tout their past successes in knowledge transfer and highlight the activity in their presentations and project plans. After all, how could additional knowledge for your staff ever be a bad thing, mainly when it occurs as if by magic, without impact to the program cost or timeline?
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However, if you pause and consider what knowledge transfer entails, an analysis that’s performed all too rarely, you’ll find that it’s an extremely costly activity that often has little or no benefit.
The teaching problem
Consider for a moment that knowledge transfer is essentially a fancy term for on-the-job training in a new or unfamiliar skill. When considering knowledge transfer, people often assume that it’s essentially a zero-cost bonus, and consulting firms will even present it as a no-cost feature of working with them.
This seems so reasonable on the surface that few take the momentary pause to delve deeper into the actual costs of knowledge transfer, which is fundamentally a teaching problem. You’re asking one of your team members to spend a portion of his or her day as a student, and you’re also asking an expensive, specialized resource in the guise of your external provider to act as a teacher for a portion of his or her day. That external vendor might be brilliant at implementing a technical solution but a completely lackluster teacher, just as your team member might not be the world’s most diligent student, especially when their classroom is filled with the demands of their day job.
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Combine the fact that you’re throwing a mix of teachers and students of unknown quality with the fact that you’re placing them in a completely sub-optimal learning environment. Both teacher and student have day jobs of executing the tasks you hired them to complete and performing their regular job duties respectively, both of which are likely subject to time constraints that don’t factor in extensive, high-quality instruction. You’ve now put the wrong resources into the wrong environment and layered on the stress of completing their jobs in addition to learning. At best, you’ll take focus away from two individuals’ day jobs and put those activities at risk in exchange for a sub-optimal learning experience.
Furthermore, assuming your external vendor is a high-cost resource, you’re now paying high rates for what might be better substituted by commodity training.
Handicapping your vendor
Generally, you’re paying an external vendor or consultant for skills or expertise that are either too difficult or expensive to build internally or a one-off skill that’s not worth acquiring in the long-term. In the first scenario, adding knowledge transfer to the vendor’s work order has the double whammy of slowing down an expensive resource by making them add “ineffective teacher” to their daily duties, and also buying into the proposition that a few hours of shoulder surfing each week can transfer skills that are so complex and expensive that you’re willing to pay another party a high multiple for those skills. In the second scenario, you’re again slowing down a costly resource in order to transfer skills that you’ve already determined are not competencies your organization needs to have in-house.
There are often skills that you want to build internally, and using an outside firm to jumpstart your capabilities creates a learn-by-doing environment. Building momentum through some quick wins is a legitimate strategy to achieve those goals. I’ve assisted several companies with these types of engagements, and it is generally 2-4X more expensive than just having my team execute the project unencumbered. This might seem crass coming from a consultant, but if you’ve ever tried completing a complex task with a child, you’ve experienced the time cost of trying to teach and explain while doing.
Occasionally, clients will find this shocking, having assumed that providing bodies will naturally speed execution progress. However, once they make the connection that unskilled hands actually slow the work on the first couple of cycles until they become skilled hands, that explains the need for more time or more skilled resources as a prerequisite for successful knowledge transfer.
Once again, there’s no free lunch
With knowledge transfer, like just about everything else in the known universe, there’s no free lunch. To do it effectively and meaningfully will require more time and dedication from your expert resources as well as the students on your team.
Rather than blindly assuming knowledge transfer is always a good idea and a laudable goal worth investing in, ask if the skills for which you’re paying an outside party are ones that you wish to pay significantly more to acquire for your staff. Often, the reason you went to the external market is that the skills aren’t worth building internally. If these are worthwhile skills, consider whether dedicated training or other development options might be more effective than the high costs of on-the-job learning.
Next time your vendor or consulting firm touts its knowledge transfer feature, ask them how much you’ll save eliminating that from the program rather than nodding and assuming it’s valuable and a wise investment.