Minding the company lore
Firms find that moving forward is easier when employees know where the company has been.
The goal seemed simple enough.Skip to next paragraph
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A mining firm in northern Canada decided in March 2001 to replace a metal housing on an iron-ore smelter with one made of a lightweight, plastic composite.
It bought the materials. Then, an in-house team formed to create the custom part began searching through company records for the specifications it needed for the job.
But when the specs were found, a critical piece of data was missing.
The mining firm figured it would make a quick call to the company that had designed the smelter. Engineers there, however, came up with the same incomplete set of plans.
Frantic, bosses at the design firm launched what one executive now calls "a forensic investigation" into the whereabouts of "Bob," the individual who had drafted the original specifications. Retired, he was golfing in Florida when finally reached months later. His personal records held the needed numbers.
"They were able to track him down, but that's an exception to the rule," says Kimiz Dalkir, of Fujitsu Consulting in Edison, N.J., who was already developing a knowledge-management system for the mining firm - which she declined to identify more precisely - at the time. Ms. Dalkir says this long and costly exercise brought home to all involved the need to capture knowledge from an employee before she or he leaves.
The mining firm's case is not uncommon. In his autobiography, "Business @ the speed of thought," Bill Gates relates how the retired head of real estate and facilities at Microsoft's Redmond, Wash., campus had to be called at home when blueprints for some buildings couldn't be found.
"Here we were, the largest developer of office space in the Seattle area ... and our entire 'knowledge base' of crucial information was being carried round in the heads of just a few people and in a few stacks of blueprints we didn't even have on file," Mr. Gates wrote.
The issue will be compounded in the years to come as baby boomers exit the workforce. "We're going to lose a critical mass of knowledge," warns Dalkir.
By 2005, baby boomers will be reaching age 60 at the rate of one every seven seconds, according to the Bureau of Labor Statistics. About 19 percent of the baby boomers holding executive, administrative, and managerial positions in the private sector are expected to leave by 2008.
The situation looks grim in the public sector, too. By 2005, more than half of the 1.8 million federal employees will be eligible to retire. That includes 71 percent of the senior executive service - the highest-ranking career professionals in the government.
"This will have a profound effect on every facet of economic life," says Hamilton Beazley, organizational-change guru and chairman of the consulting firm Strategic Leadership Group, in Washington, D.C.
While the downturn in the stock market may actually offer some respite, with many baby boomers planning to delay retirement, Mr. Beazley says many of those with flagging portfolios will be more likely to switch jobs than continue in their current positions.
In fact, a recent AARP survey of workers ages 45 to 74 found that 69 percent of those interviewed plan to work in some capacity in their retirement years. But 34 percent said they would work only part time, and in fields that fed some new interest.
"From a company's standpoint it doesn't matter if they've retired or switched to another job, you still lose the knowledge," he says. Beazley, like Dalkir, says it's critical for companies to put in place a system for capturing knowledge so that it doesn't walk out the door when an employee does.
One of the most effective ways to do that is in story form, says Anne Wylie, founder of Wylie Communications in Kansas City.
"We should be developing, telling, and archiving stories every day," says Ms. Wylie, who advises creating a story archive or company chronicle. In light of the pending baby-boomer retirements, a logical starting point would be to interview retirees as they leave.
"That can be a very effective way to make sure you're not losing those stories, that they're not walking out the door," says Wylie.
The key to building a useful archive is to go beyond checklist-type responses to problems, says Carl Frappaolo, co-founder and executive vice president of Delphi Group, a business-and-technology consultancy in Boston. A company must also learn from its senior employees the thought processes that went into their policies and approaches.