By: William J. Rothwell, President, Rothwell & Associates, Inc. and Professor, Penn State University
As Baby Boomers prepare for retirement in most Western countries and as turnover rates rise due to explosive business growth in Eastern countries, it is apparent that there is more to succession planning and human capital planning than simply attracting, developing and retaining top talent.
In a knowledge economy, it is what people know -- and what they have learned from experience -- that can become the essence of competitive advantage. And yet research indicates that fewer than 40 percent of US companies make any effort at all to capture what people have learned from experience and pass it on before those people sail off into the sunset of retirement or resignation.
Why is knowledge transfer so difficult? What practical steps can facilitate knowledge management? This article addresses these important questions as part of your workforce planning strategy.
Why Knowledge Transfer Can Be Difficult
Experts in knowledge management distinguish between two types of knowledge -- that is, explicit and tacit. Explicit knowledge is consciously-known. It can be easily vocalized. But tacit knowledge is gained from experience, and it is often difficult to put into words. However, tacit knowledge is the most valuable in guiding performance.
There are several kinds of knowledge that is worth transferring. One kind is gained from work experience. Another is institutional memory, what people have learned by being in an organization when important decisions were made. If institutional memory is forgotten because all the key decision-makers have resigned or retired, successors may fall into traps that were avoided by their predecessors.
Capturing tacit knowledge and institutional memory is not always easy. For one thing, decision-makers do not always think about capturing these kinds of knowledge. When they do, they may throw up their hands and admit that it is tough to pin down knowledge gained from experience and from participating in decision-making.
Additionally, those who possess tacit knowledge and institutional memory may not be eager to share it. If they are asked to provide it, they may worry that they will simply be replaced by lower-priced talent as soon as their brains are drained.
Put simply, organizational leaders who wish to foster such knowledge sharing must find financial or nonfinancial incentives to encourage those who possess that knowledge to share it. They may also need to find convincing ways to allay the very real fears of those who have that knowledge.
Steps in Knowledge Transfer
It is wise to use a model to guide the knowledge transfer process. A model makes the process easier to explain to others, to justify, and to guide action.
Perhaps the most important decision to make is how to narrow down what knowledge to transfer. Many well-meaning efforts to encourage knowledge transfer collapse under their own weight because nobody sets priority on what kind of knowledge is really worth passing on. It is neither practical nor worthwhile to try to pass on everything learned from experience by everyone in the organization.
Strategic planning theorists often indicate that each organization has a core competency, a special competitive strength that sets that organization apart from all others. It is the essence of what makes the organization better, and different, from others in the industry. Without a core competency, an organization will cease to exist -- it will go bankrupt, be acquired by other organizations, or be liquidated.
The core competencies of some organization are well known. Wal-Mart’s core competency is inventory control. FedEx is especially good at reliable delivery. Nokia is known as especially strong at marketing.
It simply makes sense to conclude that any knowledge associated with the organization’s core competency should thus take priority for transfer. Here are six steps to do so:
1) Determine what makes the organization especially good at what it does.
2) Decide which people possess the most knowledge, gained from experience or from participation in decision-making, about that key competitive strength.
3) Find out who is most at risk of loss to the organization through retirement eligibility or through possible resignation.
4) Take steps to capture the tacit knowledge from those people by finding practical ways to do it and by providing incentives for those who possess that knowledge.
5) Take steps to implement the plan to capture and transfer the knowledge.
6) Finally, evaluate the success of the effort.
Next: Knowledge Transfer: Whose Knowledge Matters Most?
William J. Rothwell, Ph.D., SPHR is President of Rothwell & Associates, Inc. and is also Professor of Workforce Education and Development on the University Park campus of The Pennsylvania State University. He has authored, coauthored, edited or co-edited 300 books, book chapters and articles including 70 books. His most recent books are Invaluable Knowledge: Securing Your Company’s Technical Expertise (Amacom, 2011), Effective Succession Planning, 4th ed. (Amacom, 2010), and Competency-Based Training Basics: A Complete How-To Guide (ASTD, 2010). He can be reached at email@example.com.