Strategies for Capturing Lost Knowledge for Employee Exits: Processes and Practices from Fortune 500 Organizations by BPI Research Staff

Home , Chief knowledge officer

Strategies for Capturing Lost Knowledge for Employee Exits: Processes and Practices from Fortune 500 Organizations By BPI Research Staff

Table of Contents Overview and Background Pages 1-4

● The Cost of Knowledge Lost Pages 1-2 ● Knowledge Management Defined- Pages 2-3 ● The Role of the Chief Knowledge Officer Pages 3-4

Process of HR in Knowledge Management Pages 4-5

Initiatives of Fortune 500 Companies Pages 5-6

● Strategic Mentoring Options Pages 7-9

Conclusion Page 9

Appendix !: Annotated Checklist Pages 11-13

References Pages 14-16

Overview and Background

Knowledge held closely is an asset. Knowledge shared is a treasure. With all the investment in corporate knowledge management systems, so much still depends on human nature. And, that presents a real risk to organizational performance and futures.

In an economic ecosystem that tolerates and promotes employee movement among organizations over a life’s career, the cost of lost knowledge can be enormous for employers. It’s reasonable that an employee would “own” knowledge and experience in which s/he were

Creating a culture that values shared knowledge and an infrastructure that enables it may be the first risk management tool to protect the knowledge, direct its use, and prevent its abuse.

The cost of knowledge lost

In 2004, Pamela Babcock of SHRM warned, that the failure to share knowledge can create huge financial loss; “Fortune 500 companies lose at least $31.5 billion a year by failing to share knowledge.” That number was originally determined by International Data Corp. has been repeated in print since 2001.

Christopher G. Myers references that same $31,5 billion in a 2017 Harvard Business Review article warning, “By trying to recreate the wheel, repeating others’ mistakes, or wasting time searching for specialized information or expertise, employees incur productivity costs and opportunity costs for the organization. Because, while formal systems might help communicate established best practices (the what), they often don’t explain how an individual should apply them to their own work.”

Knowledge management defined

“Knowledge management” once referred to the organizational manipulation and control of knowledge on hand. It assigned, allocated, and distributed data and information of company data and proprietary intelligence. And, it worried unsuccessfully against cyber-crime.

Ganesh D. Bhat explained, “the knowledge management process can be categorized into knowledge creation, knowledge validation, knowledge presentation, knowledge distribution, and knowledge application activities.”.

Knowledge management has, in short, been the application of systems to execute business processes. But, global drives add a value of strategic quality to the knowledge managed. Strategic knowledge is about more than quantitative and operational systems. It recognizes that each employee has explicit and tacit knowledge.

● Explicit knowledge it the information the employee was given in training and development. ● Tacit knowledge is the learning employees pick up, capture, and process in their experience with the employer.

Copyright © Best Practice Institute Page 2 Both are lost to the employer when the employee leaves. But, while the explicit knowledge can be rescued and transferred, the tacit knowledge is a quantitative and qualitative loss to the organization.

APQC (American Productivity & Quality Center) has reframed that definition as follows: “APQC defines knowledge management (KM) as a collection of systematic approaches to help information and knowledge flow to and between the right people at the right time (in the right format at the right cost) so they can act more efficiently and effectively to create value for the organization.”

With the extraordinary volume of data, accelerated competition, and light-speed growth, global enterprise is upgrading knowledge management because:

● Demographics: Aging experts retire and take their intelligence with them. Millennials often have a confused sense of rights to intellectual property. ● Training: Without shared knowledge, the cost and time in bringing new hires on board and performing to need s significant, ● Infrastructure: Reorganization, acquisition, and merger tax corporations with reinventing too many wheels. ● Discovery: Leveraging technology and innovation often grinds the experienced out of systems without respect for their experience. ● Recycling: Age does not invalidate knowledge or the holder. Organizations must learn from the past and the processing present.

In The Economic Impact of Knowledge (1998), Ikujiro Nonaka wrote, “Knowledge today is a necessary and sustainable source of competitive advantage. In an era characterized by rapid change and uncertainty, it is claimed that successful companies are those that consistently create new knowledge, disseminate it through the organization, and embody it in technologies, products, and services.”

The role of Chief Knowledge Officer

In 2002, Nick Bontis reported on the rise of the Chief Knowledge Officer (CKO):

● 25 percent of Fortune 500 companies currently have CKOs; ● 80 percent of Fortune 500 companies currently have KM staff; ● 95 percent of CEOs polled at the 2001 World Economic Forum in Davos, Switzerland, said that KM was critical to organizational success; and ● 91 percent of Canadian business leaders polled by Ipsos-Reid in 2001 believed that KM practices have a direct impact on organizational effectiveness, and one-third of Canadian organizations that have not undertaken a KM initiative expect to do so in the next 12 months.

Copyright © Best Practice Institute Page 3 But, in 2015, Jim Lee is writing “Why Death of Chief Knowledge Officer is a Good Thing.” He opines, “First and foremost, organizational knowledge management shouldn’t be a function—it should be a capability. The difference in those words makes them worlds apart. A function implies constraint, clear delineation of roles, and perhaps even silos of responsibilities! Conversely, the creation of new knowledge, sharing of expertise, and taking advantage of organizational expertise can, and should, be done by everyone in an organization, from the newest employee to the most senior, from the least paid to the highest.”

These different views really mark a maturing that parallels the advances in technology over those same years.

That is, “knowledge management” once described functions preoccupied with accuracy, accessibility, distribution, and security. It now refers to a cultural and strategic shift to discern, share, and retain knowledge crucial to business success. There is overlap, to be sure, but this demands a new understanding of knowledge.

There are, for example, core, stable, knowledge systems. Financials and payroll are bound functions that vary only when better technology comes along or regulations and practices change. Trainers can fill the gaps in these generally accepted practices.

Then, there are dynamic knowledge bases in marketing, R&D, engineering, quality control, and more. Such knowledge is better shared for several reasons:

● It grows and improves with collaboration. ● It is not owned by any individual because it is group involved. ● It expands so rapidly it needs community input.

With or without a designated CKO, leadership needs infrastructure that, in Nick Bontis’s words:

● Promote stability in a turbulent business environment; ● Enable the speedy delivery of productions or services; ● Create high efficiency in the knowledge value chain by the sharing of resources and realization of synergies; ● Enable the separation of work so that specialization is feasible.

Such changes often fall to Human Resources to author or implement.

Process: The Role of HR

Because employee turnover, voluntary or involuntary, risks the loss of strategic knowledge, there is some logic in assigning the accountability to Human Resources.In “HRM and knowledge management” (2008), Ingi Runar Edvardsson differentiated to strategic approaches Copyright © Best Practice Institute Page 4 to knowledge management: exploitative and explorative. The approach simplifies and structures an approach HR can deliver and describes the assignable tasks.

Recruitment and Selection: HR must rethink traditional job description, strategic assessment,

and recruitment. The change asks HR to move away from recruiting to match function in favor of a match of personality with a knowledge sharing culture.

1. Training and Development: Knowledge workers must commit to continuing education, and HR must provide the opportunity, structure, and inventive. Knowledge management once focused on abilities, manipulators, and implementers. But, contemporary competitors must personalize knowledge through inventors and innovators. 2. Performance Management: If performance assessment remains a checklist or scaled score, it restricts and discourages strategic knowledge sharing. An archaic sense of individual merit, self-reliance, and responsibility inhibits lateral accountability. It is a short-term emphasis on application, volume, and metrics. When the strategy is exploratory, it rates quality, relationships, and interpersonal skills. 3. Compensation and Recognition: Standard approaches to compensation must change to acknowledge the personal value in knowledge management. Compensation statistics do not easily measure or price collaboration, sharing, and community. It is HR’s task to pioneer flexible and innovative reward and recognition infrastructure that values autonomy, self-direction, and formal and informal knowledge sharing,

Human Resources must move from its commitment to codification and prophylaxis towards the strategic development of talent.

The initiatives at Fortune 500 companies

● Duke Energy has been named to Fortune magazine's 2018 list of the “World's Most Admired Companies.” Melissa Moran, the nuclear group’s manager of strategic workforce planning estimates, that 46 percent of employees in the nuclear division will be eligible to retire within five years taking unique experience and tacit knowledge with them.

Writing for BizJournal, Dana Manciagli notes, “Duke has launched multiple initiatives to help transfer what seasoned workers just know to what younger workers must know.”

○ New hires play Megawatt Fever, a board game, designed “to help young engineers better understand an energy industry that has not seen a new nuclear facility come on line in nearly 20 years but where experience in maintenance is critical.” ○ All managers have been tasked with developing knowledge-transfer plans including videos to supplement written records. ○ Longtime employees mentor newcomers who shadow their seniors to observe and record the nuances of performance.

● General Motors, with its 225,000 employees, ranked #8 among the Fortune 500 for 2017 has launched an online mentoring portal. Mimi Brent, GM’s global career development strategy leader, envisions the portal as a center to match mentors and mentees.

Urging employers to create mentors not minion, Bravetta Hassell quotes Brent in CLO, “It works like a dating website… Based on an employee-generated profile, the system kicks back a list of recommended mentors whom they can learn more about and ultimately connect with using the portal.”

● Northwestern Mutual: A report on Knowledge Retention and Transfer in the World of Work, quoted Greg Jones, Director of Diversity and Inclusion and Corporate Staffing as saying, “We counsel our leaders about workforce planning because no matter how great a place a company is to work, employees will eventually leave or retire. We share data with leaders to help them identify trends, and point out what portion of their team may retire and when they will be eligible to retire. This really prompts leaders to think about where there may be gaps in knowledge and skills. It gives them lead time to think about how they’re going to backfill certain roles with other employees.”

● Other prominent employers are using variations on mentoring programs to retain and transfer strategic knowledge. Claire Schooley, reporting in Drive Employee Talent

Strategic Mentoring Options

Organizations worried about talent drain and strategic knowledge transfer are reinvesting in Mentoring: ● Distance Mentoring: Sizeable and complex organizations, especially those in global competition from several locations, find value in Distance Monitoring. It strategically matches mentors and mentees regardless of location. Technology makes it possible through email, tech-assisted conferencing, and meeting software. ■ Situational Mentoring: Temporary but immediate situations benefit from short-term Situational Mentoring arrangements. It has a targeted purpose and project calendar. It has metrics that measure its quality and effectiveness. Mentees can pick up segmented experiences and knowledge without a larger infrastructure. ■ Mentoring Circles: Some organizations form conversational and collaborative circles of senior and junior members. The circle focuses on specific projects, problem/solution tasks, or innovation/implementation issues. The commonality of task encourages exchange and development. ■ Group or Team Mentoring: One mentor leads a group of mentees, or a group of mentors leads mentees in Group or Team Mentoring. Such arrangements facilitate exchange, strategic knowledge capture, and talent retention. Success assumes a pro-team culture that will reduce over-structuring the event. ■ Peer Mentoring: This creates a mentor-mentee approach for Peer Mentoring between co-workers on the same job level. It parlays the expertise of one peer to influence the growth and development of a peer. It removes the hierarchical stress of a senior-to-junior relationship for the trust and cooperation in a reciprocal effort. ■ Reverse Mentoring: This turns the usual mentoring relationship upside down. Reverse Mentoring creates a respectful relationship between a junior member who works with someone older.

Copyright © Best Practice Institute Page 7 It creates a reciprocal partnership where the senior mentee benefits from the junior mentor’s more contemporary talents and skills. With the right mix of personalities and needs, Reverse Mentoring strengthens community and shares strategic knowledge.

Coach Mentor

Helps develop skills for daily work. Develops skills needed for future work.

Manager coaches employee. Manager, mentor, and mentee cooperate.

Coach is line manager. Mentor is third-party.

Managed by coach with little structure. Driven by organizational strategy within formal framework.

Coaching is manager duty. Mentor is appointed or volunteers.

Goals and objectives are part of assessment. Goals and objectives align with organizational strategy.

Matching Mentor Personality with Mentee Personality Matching Mentee Needs with Mentor Provider

Pairing Mentors and Mentees is key to success and return on investment. Businesses that use personality assessment profiling already have the tools to make matches easier and more secure.

Analytic Supporting

● Logical, factual, and detail-oriented ● Seeks relationships ● Cold, resistant, and unenthusiastic ● Unassertive ● Cautious and emotionally cool ● Shows feelings and empathy ● Trusts fact-based decisions ● People-oriented ● Orderly, grounded, and formal ● Team player ● Avoids confrontation ● Tolerant and accommodating

Expressive Driving

● Amiable, communicative, and ● Task-focused and results-driven approachable ● Self-directed and acts purposefully ● Assertive and competitive ● Nose to the grindstone

Copyright © Best Practice Institute Page 9 ● Invites collaboration ● Blunt and impatient style\ ● Seeks friends and followers ● Controlling ● Makes generalizations ● Makes friends on own terms ● Outgoing, energetic, and dynamic style

Materials are from Mavuso, M. (2017, March). Mentoring as a Knowledge Management Tool in Organization. Stellenbosch University. Retrieved from http://scholar.google.com/scholar_url?url=http://scholar.sun.ac.za/bitstream/handle/10019.1/3330/Mavuso ,%2520M%2520A.pdf%3Fsequence%3D1%26origin%3Dpublication_detail&hl=en&sa=X&scisig=AAGBf m1FsxkqP-WyuFgbZVhKTSZs79c7MQ&nossl=1&oi=scholarr

Conclusion

Global competitors must capture the explicit and tacit knowledge held by departing experts. They must create a culture and infrastructure that drives the appreciation for and retention of strategic knowledge. And, they must do this at all organizational levels.

Strategic Knowledge Loss Risk Management Checklist™ By BPI Research Staff1

Strategic Knowledge includes, but is not limited to, the information, databases, operational processes, and intellectual property that are unique to the organization’s purpose and goals.

Prepare and conduct knowledge audit.

Identify and train knowledge holders to categorize and report on quantity and quality of strategic knowledge under management.

Develop a strategy for knowledge accumulation, distribution, and retention.

Work with information systems providers, functional silos, and executive leadership to create infrastructure, tools, and metrics for accumulation, distribution, and retention of strategic knowledge.

Identify steps in knowledge process: create, capture, share, and revise.

Formalize the process to manage risk in the loss of strategic knowledge. Differentiate between tacit and explicit knowledge in cultural commitment to knowledge-sharing.

Name employees accountable for each step.

Identify people as Strategic Knowledge Leaders accountable for continuation and protection of strategic knowledge is strategic knowledge areas.

1 Based on Strategies for Capturing Lost Knowledge for Employee Exits: Processes and Practices from Fortune 500 Organizations, by BPI Research Staff

Locate functional areas where strategic knowledge affects performance and outcomes, such as R&D, engineering, IT, and more.

Prioritize the SKAs.

Estimate the cost impact of lost strategic knowledge and prioritize attention by cost and cultural expense.

Define the properties of the knowledge: written, digital, archived, etc.

List knowledge forms according to form. Then, identify the knowledge as tacitly-held (memory and experience) and explicitly-held in written, digital, and recorded forms.

Estimate cost of replacing knowledge.

Price the cost of loss of strategic knowledge as a function of replacing it. For example, replacing the person retired does not replace strategic knowledge lost.

Identify those who have access to the SKAs.

Access presents risk to SKAs. Access creates the possibility of theft, abuse, and transfer with departure. Access requires strategic assessment, qualification, and monitoring.

Identify those with need-to-know SKAs.

Prioritize access to the SKAs on a need-to-know basis vertically and horizontally through the organization.

Define the organizational skills and infrastructure to recover loss.

Revise job descriptions to focus on functional connection with and accountability for strategic knowledge accumulation, storage, and distribution.

Create and promote a culture that engages management and employees in common interests in developing and sharing strategic knowledge as the key to organizational goals.

(2016, December 02). Retrieved from https://www.apqc.org/what-knowledge-management

(2014, January 19). Retrieved from

https://www.apqc.org/blog/why-death-chief-knowledge-officers-good-thing

(n.d.). How Companies Survive the Baby Boomer Brain Drain. Biz Journals. Retrieved from https://www.bizjournals.com/bizjournals/how-to/human-resources/2017/01/how-companie

s-survive-the-baby-boomer-brain-drain.html

(n.d.) Knowledge Assessment & Prioritization System (KAPS). Retrieved from

http://pamholloway.com/wp-content/uploads/2013/02/Knowledge-Assessment-and-Prioriti

zation-System.pdf

As baby boomers exit workforce, employers don't want knowledge to go with them. (2015,

August 10). Retrieved from

http://www.crainsdetroit.com/article/20150703/NEWS/307059997/as-baby-boomers-exit-

workforce-employers-dont-want-knowledge-to-go

Babcock, P. (2004, May 1). Shedding Light on Knowledge Management. SHRM. Retrieved

from https://www.shrm.org/hr-today/news/hr-magazine/pages/0504covstory.aspx

Baxter, H. C. (2015). Specialized Knowledge Transfer: Accelerating the Expertise Development

Cycle. Procedia Manufacturing, 3, 1465-1472. doi:10.1016/j.promfg.2015.07.323 Bhatt, G. D. (2001, 03). Knowledge management in organizations: Examining the interaction

between technologies, techniques, and people. Journal of Knowledge Management, 5(1), 68-75. doi:10.1108/13673270110384419

Bontis, N. (2002, Mar/Apr). Rising Star of the Chief Knowledge Officer. Ivey Business Journal.

Retrieved from

https://iveybusinessjournal.com/publication/rising-star-of-the-chief-knowledge-officer/

http://www.clomedia.com/2016/04/22/create-mentorships-not-minions/

Earl, M. J., & Scott, I. A. (n.d.). What Is a Chief Knowledge Officer? Retrieved from

https://sloanreview.mit.edu/article/what-is-a-chief-knowledge-officer/

Edvardson, I. (2008). HRM and knowledge management Employee Relations. Employee Relations. (30: 5, pp. 553-561). Retrieved from https://www.researchgate.net/profile/Ingi_Edvardsson/publication/234016184_HRM_and_

knowledge_management/links/0912f50ef0e3939929000000.pdf

Jasimuddin, S. M., Connell, N., & Klein, J. H. (2011, September 15). Knowledge transfer

frameworks: An extension incorporating knowledge repositories and knowledge

administration. Retrieved from

https://onlinelibrary.wiley.com/doi/pdf/10.1111/j.1365-2575.2011.00382.x

Jennex, M. (2014, May 21). Assessing Knowledge Loss Risk. Americas Conference on

Information Systems. Retrieved from

https://www.researchgate.net/publication/220890413_Assessing_Knowledge_Loss_Ris

Knowledge management 10-point checklist. (n.d.). Retrieved from

https://www.hci.com.au/km-checklist/

Knowledge Retention and Transfer in the World of Work. (2010). Manpower Group. Retrieved

from

https://www.manpowergroupsolutions.com/wps/wcm/connect/74daefd6-7443-4598-843f-1

0f569c38da4/Knowledge_Retention_and-Transfer_in_World_of_Work.pdf?MOD=AJPER

ES&CACHEID=74daefd6-7443-4598-843f-10f569c38da4

Lee, J. (2015, June 25). Why Death of Chief Knowledge Officers is a Good Thing. Retrieved

from https://www.apqc.org/blog/why-death-chief-knowledge-officers-good-thing

http://www.emeraldgrouppublishing.com/learning/management_thinking/

Myers, C. G. (2017, April 19). Is Your Company Encouraging Employees to Share What They

Know? Harvard Business Review. Retrieved from https://hbr.org/2015/11/is-your-company-encouraging-employees-to-share-what-they-kno

Nonaka, I. (1998). The Knowledge-Creating Company. The Economic Impact of Knowledge, 175-187. doi:10.1016/b978-0-7506-7009-8.50016-1

Prusak, A. J. (2014, August 01). The Cost of Knowledge. Harvard Business Review. Retrieved from https://hbr.org/2006/11/the-cost-of-knowledge

Quest, L. (2013, August 13). Why Knowledge Management Is Important To The Success Of

Your Company. Forbes. Retrieved from

https://www.forbes.com/sites/lisaquast/2012/08/20/why-knowledge-management-is-impor t

ant-to-the-success-of-your-company/#429536c13681

Schooley, C. (2010, August). Drive Employee Talent Development Through Business

Mentoring Programs. Forester Research. Retrieved from

https://www.manpowergroupsolutions.com/wps/wcm/connect/74daefd6-7443-4598-843f-1

0f569c38da4/Knowledge_Retention_and-Transfer_in_World_of_Work.pdf?MOD=AJPER

ES&CACHEID=74daefd6-7443-4598-843f-10f569c38da4