Imagine the following situation: You are a consultant who has just been assigned to a new project at your firm, and your first major presentation is in a week. Unfortunately, your client's problem isn't something you have any expertise in. You know for sure that others at your firm have dealt with this kind of situation before -- in the same industry, even -- but it would take hours to sift through the worldwide knowledge database to find those cases. Besides, you would emerge from that research with only a brief, names-and-numbers-expunged summary of the cases, not the real lowdown you need. What do you do?
Chances are, according to research by Sheen S. Levine, a Singapore Management University professor who recently received his PhD from Wharton, you would pick up the phone and make a call. In a recent study, Levine has found that often, what gives firms competitive advantage isn't just their repository of sheer knowledge, but their use and encouragement of so-called "performative ties" -- those impromptu communications made by colleagues who are strangers in which critical knowledge is transferred with no expectation of a quid pro quo. "Not many managers even understand that this happens, much less why," says Levine. "They think it's just friends helping friends. But it's not. Usually, people will reach out and connect with colleagues whom they have never met or talked to before. It's not dependent on prior or future favors."
While many companies have the potential to realize competitive advantage by creating and transferring knowledge more efficiently across employees, few know how to do it successfully, Levine notes. "The idea of knowledge as a source for competitive advantage is relatively young, and there's not much research that looks at how knowledge flows within firms. So professional services firms seemed a good place to start. They have no retail locations. They rent generic office space and have computers. In other words, there are no assets other than knowledge to explain their success.
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