History of the company

Booz Allen & Hamilton is one of the world's largest management and technology-consulting firm, founded in 1914. They provide strategy, systems, operations, technology and consulting services to major companies globally. These clients include most of the largest industrial and service corporations in the world, the departments and agencies of the US federal government, and major institutions and government bodies across the globe. The Worldwide Commercial Business sector (WCB) headquartered in New York, accounted for over $600 million in client billings and employed almost 2,000 consultants working out of 30 offices worldwide. In Year 1998, their sales exceeded $1.4 billion, and their staff grew to more than 8,500 members located in over 90 offices around the world.
Booz Allen culture prized the ability to develop new and innovative solutions to client problems, as a result, “wheels were being reinvented” time and again.
2. Key management of the company
During the case study, Brain Dickie was the president, and Frank Varasano was the managing partner of the New York office and also the head of the firm’s Special Interest Group on Innovation. Chuck Lucier was one of the first Chief knowledge officer designed the industrial practices – strategic leadership, operations and functional practices. Steve Wheeler, the leader of the firm’s marketing practice made idea and knowledge much more visible and accessible. The team used their prior experience in new project teams do their work more efficiently, which involved identifying and deploying best practices within clients’ engineering projects, with the goal of radically shortening product development time.
3. Competitive situation in the case
Knowledge management is fast becoming the terminology of many companies’ efforts to gain competitive advantage from the efficient and effective management of their knowledge assets. Booz Allen & Hamilton have been in the forefront of thinking about how to manage knowledge because their own success depends heavily on developing, selling, and applying ideas. It is well accepted that the need to manage knowledge increases proportionately with the service intensity of companies. Service-oriented knowledge intensive companies share some common characteristics: their “products” are intangible, i.e. they do not consist of goods, but of complex non-standardized problem-solving services; their “production process” is non-standardized and highly-dependent on team-work; the majority of their employees are educated and creative people; their customers are treated individually and the “products” are rather adapted to them, than vice versa;
Booz Allen are considered typical examples of highly knowledge intensive companies since: they depend heavily on the expertise of their people; focus on customer relations; employ network architectures, i.e. confederations of professionals engaged in value-added/creativity-added work; the nature of their assignments is team-based and mainly project-focused; and they put considerable emphasis on applied creativity for solving the problems of their clients.
4. External environment of the company
Because companies need to operate in an environment where cost, efficiency, and constant technological change “leads” the market, I believe that in order to survive consultancies to be ambidextrous. Managers need to be able to compete in a mature market and to develop new product and services (radical innovation). The rapid changes in the technology also forces companies to operate across industries. This fast growing, aggressive technological and economic business environment makes knowledgeable, fast decision-making, and leadership skills key components for success. This kind of environment, every manger have a clear view and understanding of “its” operation “own” environment, and how its complements the competencies of the entire organization. Some of my recommendations are that changes to feed organizational and customers goal needs to be align with each employee’s personal and professional goals in order to gain full support and momentum.
Understanding the industry/technology cycle, recognizing the organization position on technological cycle, and the dynamic/pace of the technology/industry could helps Booz Allen mangers to create better business forecast build and initiate more efficient and effective product/service design, processes innovations, and changing strategies. An ambidextrous organization takes this further. Possibly sensitized by Absorptive Capacity, new technologies are needs to be considered and developed. The core business does not stop. Revenue continues from the established customer base. Beyond R&D, the company is building a new line of business while at the same time it is conducting business as usual with ongoing incremental improvements to both product/service and process. A firm’s ability to identify, nurture, and exploit its basic strengths as “ core products” is both directly related to competitiveness and provides a new perspective on organizational form and process.
5. Problem facing the company
In a management consulting firm the dilemmas of managing innovation is so intense. Partners in Booz, Allen had a deeply held ethic to be responsive to clients’ requests for problem-solving projects, and prided themselves on their abilities to draw ideas for solutions from anywhere - the experiences of other case teams in the firm, from other consulting firms. Booz, Allen ‘s senior management instituted a host of mechanisms to surface and disseminate knowledge about the best of the innovations in intellectual capital and problem-solving processes that had emerged from client work, so that future case teams would be able to build upon, rather than re-invent, these innovations.
While this system worked remarkably well, it meant that the company’s strategic direction, in terms of the types of products and services that it introduced, was completely in the hands of its customers: only they could “pull” innovations from this reservoir. The case describes attempts by senior partners in the firm who had identified new service offerings that had already proven successful in several client situations and had the potential to generate substantial additional business, to “roll out” these service offerings across the firm - to entice other partners to sell similar projects to their clients. Because the established selling process at Booz, Allen was to respond to customer problems, however, these efforts were largely unsuccessful.
6. Case study Questions:
What strategic issues does BAH face? Justify and explain your assessment.
The failure to communicate and coordinate among functions, particularly between marketing and operations, significantly raises the costs and difficulty of executing customization strategies. The structural and cultural reasons that make it tough for marketing and operations to work together. The senior executives can encourage better communication and information sharing between these functions to ensure that new varieties of products actually add value for customers and earn profits for companies.
Unfortunately, most companies struggle with the rising costs to serve customers who are demanding more and more variety, customization, and personalization. Indeed, companies frequently find themselves introducing the wrong variations at the wrong prices - giving customers value that they don’t really want at a price that the company can’t really afford to pay. Customers want more customized, personalized products and services, but companies struggle to cost-effectively deliver them. Improving communication and coordination between operations and sales and marketing is one critical path to profitable customization.
How has the Knowledge Strategy been implemented at BAH? Explain your answer.
Booz Allen embarked a new strategy, called “Vision 2000” in 1994, and a “view points” publications to leverage suppliers and they created a knowledge program called “Knowledge-On-Line” that enabled the consultants to access information electronically. The company wanted to extend value to existing customers, generate new sources of revenue and attract new customers. A portal was designed that would host a range of business services aimed at improving efficiency, reducing costs and helping customers be more competitive. The company knew the potential customers well and understood their needs; it has financial relationships with a healthy percentage of the country's businesses. It also knew that these companies have core relationships with providers of other services such as communications and accounting, and it had good reason to believe that customers would be interested in a knowledge base that combined such offerings. As a company isn't simply a set of on-going projects with deliverables but rather an ongoing business meeting standard metrics such as sales, revenue, expense, head count and capital budgeting. The Booz Allen’s strategy for making client teams more efficient involved three dimensions:
1. Acquiring information about the structure and economics of the industry or market
2. Applying the frameworks or models developed in previous engagements to the present client’s situation and
3. Benefiting from lessons learned about the process of managing previous projects of a similar character, to avid repeating the mistakes of the past, and utilize all that could be known about best practices across all of Booz-Allen.
What is your assessment of this Knowledge Strategy? Explain and justify your answer.
Booz Allen’s organizational structures and the business processes are mapped explicitly to the knowledge management processes. At the core of knowledge management of Booz Allen lie four processes: generating, organizing, developing and distribution.
· Generating. Generating knowledge involves the proactive identification of the desired content, often before it is in finished form, and the involvement of people to contribute ideas, either through on-line discussions or by submitting deliverables that have emerged from other work, such as client engagements.
· Organizing. Once information has been collected, it must be organized so that it can be represented and retrieved electronically. Knowledge sharing systems or tools, including knowledge repositories, navigational devices, user interfaces, and taxonomies, must be designed to facilitate this process. Here, a critical task is continually refreshing the material, deleting and adding information to retain its currency. Avoiding obsolesce is a primary concern.
· Developing. Knowledge development activities involved the selection and further refinement of material to increase its value for users. In many cases, the line between organizing and developing material is difficult to draw; often the two occur simultaneously.
· Distributing. Knowledge distribution refers to how people gain access to material.
There are two primary objectives: making it easy for people to find what they are looking for, and encouraging the use and reuse of knowledge.
What is your assessment of the Campaign Selling implementation at BAH? Explain your answer.
Senior partners of the company took the role of champions, they travel throughout Booz Allen’s worldwide network, teaching the staffs at each office what the new service offerings were. This process of drumming up internal enthusiasm for new service offerings had been dubbed campaign selling. Viewpoints publication was another strategy to develop campaign selling. Defining the customer-segment strategy is an exercise in creating clarity, which is critical because both the organization and customers must understand what is changing. Customers will want to know how they will benefit, and those in the organization will want to know how expectations for their behavior will change. It is clear from our experience that tremendous value can be gained from understanding each customer segment better and formulating the appropriate strategies to optimize those relationships. If focused on the correct value levers, any company can achieve the benefits of better customer-segment alignment. Booz Allen should develop a new good expression of strategy must articulate, at a minimum:
■ A clear and precise description of what the strategy is and is not
■ How the new strategy differs from the organization’s current strategy
■ The customer segments the strategy will address
■ The path to capturing increased value from the strategy and the business case for the change
■ The capabilities needed to execute the strategy and make it competitive, defensible, and sustainable
■ A reasonable time frame for realizing benefits
■ How the strategy will change the expectations being placed on the organization
What is your assessment of BA & H as a new product leader? Explain your answer.
§ The learning takes place at the individual level or the project team level and it is very conceivable that different teams could be addressing the same issues in complete isolation from one another.
§ The biggest benefit of basing Knowledge On-Line on Web technology is that it helped bridge the islands of knowledge that reside within Booz-Allen. In addition, the intranet provided an overarching framework where it is possible to marry people, process, content, and knowledge.
§ Creating a medium for knowledge transfer was arguably the easiest challenge for Booz-Allen. The greatest barrier to change is rooted in human factors. In conjunction with the technology, Booz-Allen strived to create an organization and culture that would support the sharing of knowledge on a regular basis.
§ Involvement at all levels of the firm is critical. The deployment of KOL significantly changed the work process within Booz-Allen. Senior officer support underscored the firm’s commitment to this change. In addition, buy-in and early
involvement by different practices within the commercial business provided a
level of ownership that helped sustain the project.
§ Integration of best-of-breed technology is a complex venture that can pay off over the long term with greater flexibility, reduced costs, and vendor independence.
§ The Web spreads fast and Booz-Allen needed to move quickly to gain control over grassroots projects that were developing.
§ The consultants themselves, rather than the Knowledge Managers, are most often the creators of knowledge. Therefore, making content submission easy was critical to the long-term success of a dynamic knowledge store.
7. Possible resolution of the problems
Corporate Venturing provides an alternative to traditional methods of growing Booz Allen in terms of corporate growth and diversification. A company invests in new products or technologies by funding businesses that have a reasonably autonomous management team and separate human resource policies. The goals can be to develop products to expand the core business, to enter new industries or markets, or to develop “breakthrough technologies” that could substantially change the industry. Corporate Venturing can be done in one of four ways: by taking a passive, minority position in outside businesses (corporate venture capital), by taking an active interest in an outside company, by building a new business as a stand-alone unit, or by building a new business inside the existing firm with a structure allowing for management independence. The following concrete actions are proposed in order to promote and improve the functionality of the venture base: take responsibility, secure access, acquire network capabilities, gain competencies in how to influence the vision and agendas in knowledge-creating networks, and invite to discussion at an early stage. These actions are important elements in influencing the quantity and quality of venture ideas.
A venture base may be a new opportunity-creating activity for Booz Allen and its environment, which can serve as major resources for starting radical innovations. I believe the venture base is capable of shaping the innovative conditions that will result subsequently in further idea generation. In terms of attracting, the venture base functions as a tool for gaining access to the right resources and capabilities, which will ensure a steady flow of high quality ideas. The development of high technology innovations from the venture base demands a combination of scientific skills and intellectual capacity that exceeds the capabilities of an individual corporation. Eventually Booz Allen needs to stimulate the flow of ideas by participating actively in the process of developing and shaping new ideas. In particular, when learning and knowledge for innovation is dispersed, learning about new opportunities depends on participation in a network of knowledge-generating relations.

Through evaluating and cooperating with small ventures with another understanding and perspective on technology, the parent company creates a “window on technology.” This window may be accelerated product development, the ability to recognize new market developments, and the development of new technologies. The venturing processes may helps to transform the organizations through a process of strategic renewal based on the acquisition of new capabilities.
8. Recommend the solution
· Establish strategic objectives. Venturing requires companies to create and screen new ideas identified in-house. It is best used for long-term projects that develop knowledge key to the core business. Booz Allen’s managers should evaluate ventures based on strategic needs and ensure that they fit with overall strategy.
· Develop the correct approach. Managers must then decide which method to use to pursue the new idea. Corporate venture capital, which provides access (through investments) to breakthrough technologies being investigated by startups, can be an effective prelude to a decision to acquire or build a stand-alone business. In some instances, however, firms will want to build the new business themselves to either lock in the value created or leverage close linkages with an existing part of the business;
· Establish a team. Once the approach is selected, a team can be created with the capabilities, resources, and sufficient independence to manage the program;
· Create processes to monitor progress and incorporate knowledge. Develop strict metrics and timetables to monitor the development process. In some instances, employ staged funding to ensure progress is on schedule. In all cases, look for means to transfer knowledge from the venture into the broader organization.





Reference:
1. Burgleman, Maidique and Wheelright, Strategic Management of Technology and Innovation, (3rd Edition).
2. Utterback, James M., Mastering the Dynamics of Innovation, Harvard Business School Press, Boston, MA, 1996.

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