My first project in management consulting was providing capital project advisory services on a multi-billion dollar project portfolio.
Large projects like these have extensive time horizons from conception to commissioning. Oftentimes, these projects can take upwards of 8-10 years. An industry veteran often oversees the lifecycle of projects a handful of times over their career. With each cycle, they further develop valuable relationships with internal and external resources, incurring great amounts of knowledge on processes and procedures across development and management activities. Seasoned workers like these are highly valuable assets to an organization, effective at ensuring work gets done to keep projects on track. But what kind of impact occurs when company veterans move to a new role or retire?
The loss of seasoned workforce is a recurring issue on many major capital projects: Promotions, retirements, and layoffs all have similar impact. Meetings with client staff become filled with phrases like “I don’t know,” “I’ll have to get back to you on that,” “Let me send a quick note over to X,” “[Promoted employee] was our go-to source for this, I’ll have to do some digging.” No one walks away from these meetings with much sense of accomplishment, everyone has follow-ups to complete that they now must allocate additional time to out of their day. The knowledge of industry veterans is often not proactively passed down to younger talent - especially new hires - before retirements or promotions take effect. This results in productivity loss as employees scramble to find answers to questions well-prepared employees would know.
According to CIO Dive, 56% agreed that knowledge loss made onboarding more difficult and less effective.
Knowledge loss is one of the greatest risks an organization faces in the modern business environment. The loss of technical and operational knowledge can be detrimental to a business’ operations, driving massive costs. These costs include low morale and gaps in team capabilities leading to decreased productivity including poor work quality and quantity. Organizations with high levels of technical knowledge are especially prone to diminishing operations capabilities due to staff loss. Why does employee attrition often lead to these results? Most likely, a lack of preparation by the company to mitigate against the inevitable.
A study by International Data Corp. states $31.5 billion is lost to failures in knowledge sharing every year.
We can prevent cascading losses of attrition through further developing internal information systems. Important data and information are often housed in spreadsheets that easily get misplaced once their owner leaves an organization – an issue solved by developing good data systems. Additionally, companies frequently lack proactive efforts in encouraging learning and development opportunities.
Starting the conversation is the first step in bridging the gap. These conversations can take the form of seminars led by internal or external subject matter experts (or SMEs), “lunch and learns” with leadership, or online discussion boards to resolve one-off info requests. Opportunities for learning and development also exist on an ongoing basis through mentorship programs, job shadowing or transition, and recurring touch-bases with team leadership and management. These activities are critical to ensuring staff have the proper knowledge and understanding to proficiently perform their roles.
LinkedIn found that 49% of employees surveyed say executives at their company are concerned that employees do not have the right skills to execute business strategy.
By fostering a culture of knowledge empowerment, leadership can prepare the next generation of leaders to take on the roles of SMEs within their team, division, and the organization at large. It is important to remember that developing new skills, understanding internal/external resources, and fostering symbiotic relationships take time. It is up to the leaders to continue to invest in efforts to prepare employees to become knowledge champions for the organization - and to prepare the employees after them to pick up the torch.
A few small efforts today will pay dividends for years to come when your company commits to the following:
At Pioneer, we can help mitigate the effects of knowledge loss.
We accomplish this through partnering with clients to develop internal training and mentorship programs to scale up employee knowledge and performance to be prepared when promotions and retirements are immanent through our Organizational Effectiveness practice. Our Data & Analytics practice specializes in developing data management solutions where critical data, information, and processes are stored and analyzed. And our Strategy & Execution team implements operating models to ensure symmetry in project development and execution companywide.
If your company could benefit from a little investment in mitigating knowledge loss, reach out to a Pioneer today!