It goes without saying that the professionals are the most important resource of all. The exploitation of their knowhow is the company's only source of revenue.
Inevitably the professionals have the highest status. One might even say - though it is advisable not to say it too often or too loudly - that the sole function of the rest of the personnel is to act as a dedicated support staff for the professionals.
This is in the natural order of things and it shows in the way the professionals behave towards lesser mortals. One only has to think of the omnipotence of the doctor in the hospital or the easy, patrician self-confidence that radiates from successful lawyers, actors and consultants. The professionals know their status, are proud of it and quite naturally they often try to exploit it for their own ends.
But typical professionals are both unable and unwilling to manage other people. They are interested only in the freedom to develop their professional skills. And neither are they in need of much management themselves. They know what is expected of them and because of their often intimate relationships with their clients they act as self-salespeople. A high degree of
Figure 9 There are at least four categories of personnel in knowhow companies.
The PROFESSIONAL is the production 'machine' and only revenue source and is supported by the CLERICAL STAFF. The MANAGER lacks professional knowhow but is strong in managing the business. The LEADER is the prime mover and combines both skills.
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MANGING KNOWHOWprofessional self-management is an important feature of the knowhow company.
Above all, good professionals are rare. They are hard to find, hard to keep and difficult to replace. The constant lamentations of chief executives about the lack of skilled people shows clearly that in this part of the labour market the professionals - the 'sellers' - hold the whip hand.
They are also difficult to integrate into an organisation. The good ones will have developed styles of their own and may be unwilling to accept new rules. If a knowhow company is to develop into a professional organisation it must find ways and means to accommodate and adapt to the 'difficult' professionals. The old industrial stereotype of 'hard' managers who upbraid their staff for failing to adapt are liabilities in knowhow companies. Hard managers destroy knowhow capital by demoralising people and thus hastening their departure. A knowhow company must persuade professionals to commit because it cannot force them to submit.
· The Knot - a cautionary tale
The true story of a talented professional we shall call Knot will serve to illustrate the kind of problems that knowhow companies have to deal with.
He was called 'the knot' from his cradle. His father (who later disappeared with another woman) thought him a knotty and wrinkled baby. It was an appro- priate nickname for other reasons because sometimes he would get knotted up inside and would rage in a fury, kicking and lashing out at anyone or anything within reach. In his teens Knot was a lonely boy.
He was a problem for his teachers at school. His maths master described him in his term reports as 'extremely clever' because Knot never made a mistake in tests - if he showed up for them. 'A monster' was his English teacher's verdict when instead of writing the English essay he had been assigned he scribbled a computer program on toilet-paper.
Knot won a place at university to read maths and information processing. At the beginning of his first year he pocketed his grant and as much extra money as he could beg and borrow and disappeared to France for a year. He returned penniless and 100,000 francs in debt, took all the courses, passed all the exams and was awarded his degree in just over 18 months.
He and a group of university colleagues decided to go into computer consul- tancy together. In 1981 they bought a used computer with three terminals and won an assignment from another computer consultancy to write a database pro- cessing package. Knot had to join later because he was recovering from con- cussion sustained when he slid down the bannisters from a second floor party.
He crashed into the stone floor in the hall and they had to take him away in an ambulance.
His colleagues took care of all the practical details of the start-up but the new consultancy only really came alive when Knot appeared, bursting with energy and ideas. He infected everyone with such enthusiasm that together they produced a revolutionary new kind of database structure which put the young
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company on the computer consultancy map and began to generate substantial royalty revenues.
Knot had laboured night and day, doing the work of three men according to his colleagues. He was the one who solved most of the bugs in the programs and maintained the momentum when others began to tire or become dispirited.
When the work was finished and the revenues began pouting in Knot and a few other amateur speculators bought a futures contract on 30 tonnes of Nigerian peanuts. On the cargo's arrival in London it was impounded by the customs because of serious contamination. Knot ended up with losses of £50,000 which he covered by borrowing from a loan shark. To meet the heavy interest payments he began to write computer programs which he invoiced from his own private company. His absences from the company became frequent and prolonged and after a few years of quarrelling he left. With no Knot the spark deserted his erstwhile colleagues. They broke up soon afterwards and took jobs in large companies.
Knot was a 'superpro' when he functioned but became a distracting and sub- versive influence when his bad judgement took over. He was both the young company's greatest asset and its greatest liability. He made it and he broke it.
How does an ordinary organisation handle such extraordinary people?
One could say that to accommodate extraordinary people - in fact they crop up quite often in knowhow companies - the organisation needs to be extraordi- nary too but that is not much help. There are no simple solutions. All that can be said is that if leaders wish to take advantage of such gifted mavericks they must adapt the organisation to them and be very flexible. Standard labour market rules do not apply.
· 'The manager'
The traditional manager has a high level of organisational knowhow but a low level of professional knowhow. They are typically to be found in the conven- tional industrial company as head of a division or department at middle manage- ment level. They, are rare birds in knowhow companies because their skills are more suited to large organisations.
They find it hard to make headway in small, unstructured knowhow companies because it is more or less impossible for them even to aspire to, let alone achieve, the status of the professionals. Without that status - or something equivalent to it - the top positions are out of reach.
The manager is normally to be found in knowhow companies leading small support teams in such areas as accounting and marketing. For young knowhow companies managers are luxuries they cannot afford. They only need 'ordinary' managers when they reach a certain size, say 30-50 employees.
And though managers as a breed are more plentiful in the marketplace than professionals some are more suitable than others. Of the few who have had experience of knowhow companies a large proportion will say with some feeling 'never again!'. And yet if they are not used to knowhow companies it is hard for them to win the acceptance of the professionals.
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MANGING KNOWHOW· 'The clerical staff'
The clerical staff (mainly women) handle the support services, the secretarial tasks, the accounting and other office work. Their prime task is to support the professionals so they, the breadwinners, can function efficiently.
Office work in the knowhow company differs little from that in other companies. Accounting, administration and secretarial work is fairly standard throughout the industrial spectrum. Those who can do it competently are rela- tively easy to find and can be paid relatively standard salaries - there is usually a 'going rate' for the job.
But clerical staff can be a dangerous source of discontent. They are often very conscious of their lowly positions in the pecking order. They resent being at the bottom of the heap or the back of the office. They feel like 'skivvies' whose interests are constantly ignored. There is at least something that can be done about this sense of inferiority. It must be handled with care. One cosmetic convention we use, adapting a stockbroking term, is to call the clerical staff collectively the 'front office' rather than the more usual and unnecessarily pejor- ative 'back office'.
· 'The leader'
The 'leader' is the driving force of the knowhow company and is more or less irreplaceable. He or she has often founded the company and the organisation is usually run along the lines the leader lays down. In small organisations the leader's role is very much that of the team coach - the chief motivator. In larger operations it is that of the chief organiser and the one responsible for growth and development.
The leader is almost always an ex-professional who has developed an ability to organise. It is very rare to find an accountancy firm, advertising agency or theatre company not led by an ex-professional.
Leaders seldom need to be appointed formally. In contrast to managers who receive their status from a board of directors, leaders receive their mandate from their colleagues. A striking feature of the leaders of professional organisations is their lack of titles or overt accoutrements of power. They have no need of them.
Their position is accepted by the rest of the personnel because they have 'conquered' it themselves. Managers need status symbols because their internal position remains equivocal while it is seen as merely the result of a dispensation by a higher authority such as the board.
A knowhow company can manage without a leader but can never be more than either an agency or 'factory'. If it is to develop into a professional organis- ation it must have more than one leader. But it is not a question of the more the merrier - having too many leaders and potential leaders is asking for trouble.
The challenge for the knowhow company is to develop new leaders, capable of carrying the business idea into the future. A company cannot be described as a true 'professional organisation' until it has survived the emergence of a new generation of leaders.
The balance between professionalism and leadership is crucial. Since
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PUTTING KNOWHOW COMPANIES TO WORK. 63
the professionals are the core of the company, leaders need their full support to be effective. They must earn it in the first place and retain it subsequently by ensuring the professionals continue to find their work challenging. The leader must, at the same time, be able to carry the business idea forward. We shall look more closely at the role of the leader in Chapter Seven (pages 88-97).