We gathered as the A-Team to take on the specialized task of designing the knowledge continuity assessment. Roger was take-away-ready, and Cap'n Carlos sailed in just before the meeting began with the announcement of another retirement.
"What's our objective with the knowledge continuity assessment?" Cheryl asked as she opened the meeting.
"To determine how serious the knowledge discontinuity problem is," Roger quickly answered.
"Which means?"
"What's our annual job turnover rate?" Cap'n Carlos suggested. "Who at WedgeMark has unique knowledge? How big a knowledge hit do we take every time somebody leaves? What procedures do we have in place to prevent knowledge from leaving when people jump ship or walk the plank? Things like that."
"This is beginning to sound complex," Roger said, possibly with delight.
"No, it isn't," Cheryl reassured him. "It's a straightforward assessment with known criteria. We'll break into groups and brainstorm a knowledge continuity assessment. What is it? What does it require? How do we accomplish it?
As we explored developing the knowledge continuity assessment, we found that it was less complicated than we had thought, but just as critical. In fact, it is the assessment that sets up and guides the continuity management initiative, serving 10 important functions:
Develops the business case for continuity management by providing evidence of organizational knowledge discontinuities and their associated costs.
Identifies operational knowledge that is critical to the organization, including knowledge that relates to core competencies, and assesses the negative impact of the loss of that knowledge on operations when knowledge discontinuities occur.
Provides an assessment of the extent to which employees analyze their knowledge base in relation to their job functions and performance. Do they, for example, understand the knowledge leverage points in their jobs? Have they evaluated their knowledge needs, including skills enhancement, and have they analyzed how they spend their time in relation to job priorities? Have they analyzed their knowledge strengths and weaknesses? Such analyses are all part of continuity management.
Identifies specific job classifications where the most serious knowledge discontinuities exist and therefore defines the breadth of the continuity management implementation (that is, how many job classifications should participate in continuity management).
Determines the extent to which knowledge is critical in each job classification and therefore defines the depth of continuity management implementation (that is, how much knowledge should be harvested for each job classification).
Analyzes the process of operational knowledge transfer between incumbent employees and their successors, pinpointing strengths and weaknesses in each phase of that process. This analysis examines everything from the means by which operational knowledge is identified and preserved to how new hires are oriented and mentored to how much job-specific operational knowledge new hires actually receive.
Identifies those areas where continuity management can build on or supplement knowledge management efforts or where continuity management can be productively integrated with knowledge management initiatives.
Surveys existing information technology capabilities to determine which systems can be adapted to continuity management. If a pilot program were to be launched, for example, what kind of technology would be required, and what would it cost to develop that technology through purchase, creation, or modification?
Generates statistical and anecdotal data on knowledge discontinuities and their costs that can be compared with similar data after continuity management implementation as one measurement of continuity management's effectiveness.
Provides an assessment of the extent to which the organizational culture values knowledge and knowledge sharing and so previews changes in the organizational culture and reward systems that may have to be made to develop support for continuity management implementation.
The knowledge continuity assessment requires the collection of two types of data: statistical data and anecdotal data. Anecdotal data is necessary because statistical data is not always available and because statistical data alone will not capture the full extent of the knowledge discontinuity problem. The data-gathering methodologies we employed were questionnaires, structured interviews, and focus groups. Because we were starting on a small scale, we used the entire organization for some data (such as annual job turnover statistics), but concentrated on three job classifications for our in-depth analysis and pilot implementation. We surveyed every employee in those classifications, using structured interviews and focus groups to determine the extent of their knowledge discontinuities. In large organizations, random sampling may suffice, but regardless of the scale of implementation, the fundamentals of the assessment remain the same.
The knowledge continuity assessment process consists of seven steps:
Step 1. Calculate annual turnover statistics by job classification.
Annual turnover statistics show the number of "knowledge hits" the organization takes each year through resignations, layoffs, downsizing, terminations, transfers, and retirements. A breakdown by job classification is especially revealing. Virtually every employee who leaves the organization represents lost knowledge, but we didn't know the size of the turnover among our knowledge workers—or where that turnover was concentrated—and therefore how pervasive the knowledge discontinuities were. We also examined our use of the contingent workforce and outsourced knowledge suppliers to determine how well the company was managing knowledge continuity with these employees.
Step 2. Calculate retirement eligibility statistics by job classification.
Retirement eligibility statistics indicate how many people will be eligible for retirement over the next 3- to 10-year period. Baby boomers are such a high percentage of our experienced workforce, and so many of them could leave within the next five years, that their departure will create a potential knowledge crisis unless we act soon. Job turnover usually involves relatively short-term employees who take significant operational knowledge with them, but relatively short-term knowledge built up over a few years. Retirements, on the other hand, can steal years of operational knowledge and corporate wisdom. The accumulated organizational experience of these employees is our institutional memory, on which we constantly depend to maintain our competitive edge. It is of inestimable value to us, and we have made no effort to capture it except in a very few cases. Because organizational knowledge loss through baby-boomer retirements is concentrated, it can threaten the fundamental knowledge base of the company. However, with these impending retirements, we have both warning and the potential for a physical overlap between incumbents and successors that we could mine to great effect. Both of these characteristics are advantages that can be seized with continuity management.
Step 3. Determine which job classifications warrant participation in continuity management and to what degree.
After we had completed our knowledge continuity assessment, we reached a surprising conclusion: the majority of WedgeMark employees possess operational knowledge that is critical to high performance in their jobs. This discovery was something of a revelation to us. We began to look at continuity management as a process with broader application than we had originally conceived, but with more complex criteria for determining individual participation than we had anticipated. The question of whom to include was not as clear-cut as we had imagined it would be. The issue was complicated by such factors as how much operational knowledge the job required, how often that knowledge changed, whether the knowledge was tacit or explicit, and how much variation existed in the job's activities. Some employees, for example, held relatively routine jobs that, once mastered, required little additional knowledge for high productivity, whereas other employees faced many unique situations requiring extensive new knowledge.
Where to draw the line? Should every employee at WedgeMark participate in continuity management to some degree? How extensive and how unique did the operational knowledge have to be to warrant its transfer to a successor employee? For example, should successor employees requiring primarily explicit knowledge receive simple knowledge transfers as opposed to the complex knowledge transfers for employees using primarily tacit knowledge? Questions such as these led us to develop a set of criteria for determining which job classifications should participate in continuity management. All the criteria are derived from two basic questions: How critical is operational knowledge to the job, and how critical is the job to the organization? The more critical the knowledge or the job, the more likely that the job classification will be included in continuity management.
How strategic and essential to ongoing operations is the job? In other words, does the job, for example, support the organization's core competencies? How seriously would poor productivity affect coworkers or the organization?
To what extent is knowledge rather than skill or information essential to the job? That is, to what extent would missing knowledge have a negative impact on a successor's performance? Is the job largely intellectual rather than physical?
How complex is the knowledge base needed for an employee to perform well in the job? In other words, is the job relatively routine, or does it involve many unique events requiring complex decisions based on complicated factors? A correlated question is: How stable is the knowledge base required for the job? That is, how quickly does the operational knowledge have to be supplemented or replaced if the employee in that job classification is to perform well in the job?
How much of the operational knowledge is tacit (in the employee's head) and how much of it is explicit (in corporate documents or databases)? Tacit knowledge is often unique and is more difficult to capture and transfer than explicit knowledge. The greater the tacit knowledge involved in a position, the more critical the operational knowledge for that position is likely to be.
How unique is the knowledge base required for the job? In other words, how many other employees are performing approximately the same job, how long have they been with the organization, how specialized is their training, and so forth? The more unique the knowledge base is, the more likely the job classification will be included in continuity management.
On the basis of this analysis, we could determine the number of people at WedgeMark whose operational knowledge should be preserved and transferred and so calculate the number of job classifications and employees who should participate in continuity management. But the analysis accomplished something else as well. It pointed out that the depth of continuity management (that is, how much operational knowledge should be harvested) could vary significantly among job classifications. Because not every position would require the same degree of knowledge harvesting and transfer, we needed to develop a template that could be widely applied. Some positions simply required less operational knowledge or less complex operational knowledge than others.
Another big lesson came out of the knowledge continuity assessment. We realized that continuity management would lead us through a process of analysis that, in the end, would transform the way we thought about and managed knowledge. When continuity management was fully implemented, WedgeMark employees would be more knowledge-savvy than they had ever been before. In the process, WedgeMark would be transformed into a knowledge-driven organization with powerful competitive advantages.
Step 4. Determine the extent of knowledge continuity or discontinuity between incumbent and successor employees by job classification.
This process, which we called knowledge gap analysis, examines the difference between the operational knowledge a successor needs for peak performance and the operational knowledge made available to that successor at the time of employment. We looked at two aspects of the operational knowledge transfer: the content (how much knowledge was transferred and what the nature of that knowledge was) and the process (the mechanisms by which the transfer was accomplished).
Regarding the transfer process, we were interested in how the circumstances of the incumbent employee's departure affected the knowledge transfer. For example, we wanted to determine the content and mechanism of the knowledge transfer when:
The successor is not known at the time of the incumbent's departure.
The successor is known prior to the incumbent's departure.
The incumbent knows nothing of his or her impending departure.
To obtain this data, we used focus groups and conducted structured interviews with representative employees. We raised four core questions and required specific examples:
How much operational knowledge was available from your predecessor or from the company to help you ramp up when you were hired?
If, in your opinion, you were not provided with adequate operational knowledge, to what extent was your productivity adversely affected?
To what extent has your productivity been negatively affected by the departure of peers or subordinates who did not provide their successors with adequate operational knowledge?
To what extent have you provided for a systematic transfer of critical operational knowledge to your successor?
A long list of adverse effects surfaced, along with many examples of insufficient operational knowledge transfer that had proved costly to WedgeMark. We discovered, for example, that in many cases there was nothing left for the successor but the incumbent's files and the contents of the computer. Even in those instances, there was often no way to make sense of the records other than through trial and error or through whatever assistance colleagues of the departed might provide (usually not much). When there was no formal successor to the lost employee, the problem was even greater. Why? Because, except in unusual circumstances, there is always a successor. When no formal successor is hired, one is conscripted—yanked from the ranks of the still-employed, saddled with additional work about which the hapless conscript may know little or nothing, and provided with no organized way to access the knowledge that has been left behind somewhere in somebody else's files.
When we faced head-on what we all had known intuitively, we were appalled at how carelessly we had treated operational knowledge at WedgeMark. The stories we collected were tales of knowledge-loss horrors. Henry, for example, was a new hire and a highly competent manager. He started on the first day of February and had to make a rapid series of important decisions by the end of the second week—all without sufficient operational knowledge. His predecessor had left him with disorganized, incomplete information that hobbled decision making and caused him to make several serious errors. The truth is that nobody could have done better, given the facts that Henry had to work with, but his superiors weren't interested in the facts, only in Henry's results. And the results were not good. Henry told us the story with regret, but also with bitterness, because the company had failed to give him the basic operating knowledge he needed to do his job. "It wasn't a job I came to," he said. "It was a knowledge hole. And it was ridiculous."
The results of the survey and the structured interviews showed us how deeply immersed we were in the past-century perspective that had ignored the importance of knowledge continuity. The survey results also revealed how hard it might be for us to dig ourselves out of that mind-set and confront the new realities of the Information Age.
"We are living in an old paradigm," Andre pointed out, "when manual skills or formulaic mental processes were the keys to career success. We're acting as if we can still go from job to job like traveling journeymen. All that mattered in those days was carrying the tools of the trade with you. The problem is that the tools of the trade are no longer static abilities, but ever-changing knowledge."
In a recent downsizing at the company where a buddy of mine works, two vice presidents and a managing director vanished.[2] Or at least they seemed to vanish. The three execs were called out of their upper-floor offices and sent to the basement for a meeting with Human Resources. No one knows for sure what happened there on the Floor of Regret, but the assumption is that the three were terminated and ordered to leave the building immediately. Because they never came back. Only their screen savers remained. It's as if they were vaporized, beamed up to the starship Enterprise, or sucked into a hole in the space-time continuum. No one ever saw them again, at least not in the hallways of the firm. So what do you suppose happened to all the operational knowledge the two vice presidents and the managing director possessed about the clients and the projects they were working on? Well, I can tell you, because my buddy knows. It vanished right along with them.
Step 5. Generate a knowledge-loss damage assessment.
A knowledge-loss damage assessment uses turnover and retirement statistics to estimate the damage to productivity, quality, and innovation that knowledge discontinuity inflicts on an organization. Because quantification is difficult, a qualitative appraisal may have to suffice, although it is possible to quantify the knowledge loss in some cases. When it is, the results can be dramatic. For example, we could directly link the loss of two big customers to sales reps who had quit and taken their customer knowledge with them. The successors' insufficient operational knowledge impeded their ability to ramp up quickly enough to accommodate the clients' unique product and service demands within the timeframe the clients required. In one case, the client had gone through two reps in three years and was tired of starting over. The client declined the opportunity to try it a third time.
In another example, we had hired a hot-shot guy in his early thirties and handed him a $6.5 million start-up project we were running for one of our clients.[3] It sounds like a lot of money, but it isn't for us. He did a brilliant job of planning the project and overseeing its design. He was about to launch the development phase when—he left. A competitor, you see, had observed the same capabilities in this fast-track manager that we had. The project was quickly handed off to a successor, who was unprepared because he had virtually no operational knowledge about the project. Oh, some of the explicit details where there—in hundreds of pages of dispersed documents. But there was no organized way of accessing the knowledge, of understanding it, or of putting it to use. All the tacit operational knowledge in the head of our star performer was gone. Suddenly, after $3.0 million in expenditures, it was start-over time. The client, shall we say, was not amused. Neither was the accountant who recorded the lost contract.
Step 6. Identify areas where continuity management can be linked to knowledge management systems.
Continuity management is a set of processes that harvests an incumbent employee's critical operational knowledge and transfers it to a successor. Because the focus of continuity management is on knowledge capture and transfer, it shares many principles with knowledge management and can often be integrated with it. Such integration is highly desirable, because it maintains a free knowledge flow throughout the organization. As an example, continuity management harvests critical operational knowledge from each employee and validates that knowledge through a knowledge-sharing process that includes the other employees in that job classification. As a result, the continuity management function of harvesting critical operational knowledge for future transfer to successor employees has merged with the knowledge management function of transferring best practices. The logical knowledge management extension of this continuity management knowledge process is to make those best practices available throughout the organization.
In pilot and small-scale implementations, the cost of developing technology to harvest, store, and transfer the operational knowledge between incumbent and successor employees may pose a problem. For this and other reasons, it is worthwhile to seek creative modifications to existing knowledge management technology that will convert that technology to continuity management use.
Step 7. Assess the extent to which the organizational culture values knowledge and knowledge sharing.
During the structured interviews and focus groups we conducted for the knowledge continuity assessment, we also examined how well WedgeMark's organizational culture and reward systems supported knowledge sharing, knowledge management, and knowledge continuity. We looked at all three issues because they are interrelated. The more an organization is open to knowledge sharing, the more likely it is to engage successfully in knowledge management activities, and the more likely it is to embrace continuity management activities, as well.
Therefore, we explored why WedgeMark employees might or might not be willing to analyze their critical operational knowledge and to make it available to their successors. By the end of our work and the launch of continuity management in our business unit at WedgeMark, we had the answers. We didn't have them in the beginning, but the results of our investigation into organizational rewards and cultural support for knowledge continuity laid the groundwork. (Organizational culture and rewards are discussed in more detail in Chapter 12, "Operational Knowledge Transfer and Acquisition.")
These seven means of assessing knowledge continuity at WedgeMark are shown here in the earnest efforts of our favorite detailmeister.
As we looked at our knowledge continuity assessment plan, it was clear that the assessment could be as comprehensive as we wanted to make it. In a small-scale or pilot implementation of continuity management, the research task is not onerous because the number of people sampled is small. Even in a large-scale implementation, random or convenience samples of various job classifications can be used to develop an overall picture of knowledge discontinuities. Our own experience was that the assessment appeared more complicated and time-intensive than it was. When we had finished, we prepared a report of our findings that included these elements:
An assessment of the extent of knowledge discontinuity between employee generations that exists in the organization.
The estimated damage that knowledge discontinuity inflicts or is projected to inflict on productivity, quality, and innovation. In part, this assessment is based on retirement eligibility data, annual turnover by job classification, and anecdotal evidence gathered from structured interviews and focus groups.
A proposed scope for continuity management implementation (that is, how many job classifications should participate in continuity management and how much knowledge should be harvested for each classification).
A report on those areas where continuity management can be linked to, or integrated with, knowledge management initiatives.
Proposed technology for harvesting and transferring critical operational knowledge, including potential modification of existing information technology.
An assessment of the extent to which the organizational culture values knowledge and knowledge sharing and of any realignment in the organizational reward system that might have to be made to support continuity management.
The results of the knowledge continuity assessment confirmed statistically and anecdotally that we had serious knowledge discontinuity problems at WedgeMark. The piecemeal efforts we were making individually and sometimes collectively to repair the damage of lost knowledge were often creative, but they were largely ineffective—Band-Aids on a sliced artery. We were awash in knowledge loss, and that loss was driving more of what we did every day than any of us had imagined when we began. The truth was that our daily activities were directed to a disproportionate extent by the problems created by knowledge loss. We consumed immense amounts of time and energy trying to recover knowledge. And, tragically, it was largely unnecessary.
This stark report on the state of knowledge continuity at WedgeMark was eye-opening. Confirmatory statistics were supported by poignant stories of recurring knowledge discontinuities, the lost productivity they spawned, and the frustration they bred. Enduring was one of the words used in the report to describe the knowledge loss. With these findings, our team moved quickly to the next step: figuring out how to preserve, through harvest and transfer, the critical operational knowledge we were hemorrhaging.