Tag Archives: Odgers Berndtson

Keeping Institutional Knowledge

The world of work is facing a perfect storm when it comes to retaining talent and knowledge. As the baby boomer generation – those born between 1946 and 1964 – reaches retirement age, younger workers are changing jobs more frequently than ever before. Youth unemployment is at record levels in many countries, meaning the next generation is failing to pick up suitable work experience.

Aon’s 2015 Global Risk Management Survey, which surveyed senior decision-makers across 60 countries, found the failure to attract or retain top talent was the fifth-most significant risk facing businesses worldwide. This has been confirmed by other studies — more than 38% of hiring managers are struggling to find or retain the talent they need, according to a recent survey of 41,700 managers in 42 countries, with 22% citing lack of experience as a key challenge. Aon’s 2015 Trends in Global Employee Engagement report confirmed this — the average employee’s work experience has dropped by 28% since 2013.

Skills, knowledge and experience are vital to a successful business, but also necessary to innovate and evolve with the needs of the marketplace. So retaining existing institutional knowledge is an increasing priority. If finding people with the knowledge you need is getting harder, a good starting point is focusing on keeping and developing the knowledge and people you’ve already got.

In Depth

Although the loss of data is an increasing concern in the age of cyber threats, the primary way organizations lose institutional knowledge is by losing valued employees with that knowledge.

Every year, four million baby boomers leave the workforce in the U.S. alone, with 10,000 people a day hitting retirement age. In the U.K. and many other developed countries, more than 30% of the workforce is older than 50.

Many baby boomer workers are in leadership positions, and when they leave the workforce almost all are taking with them decades of accumulated skills, experience, networks and personal business relationships, as well as first-hand knowledge of the reasons why their businesses have evolved the way they have.

To make sure this valuable experience isn’t lost, organizations need to take a strategic approach, starting with a thorough analysis of their workforce, including:

  • How many employees are coming up to retirement in the next five years?
  • How many have key skills, knowledge or experience?
  • How many have a succession plan in place?

Next, identify key soon-to-be retirees whose knowledge you most want to retain and begin to develop or expand your retiree-specific knowledge retention strategies. Just be aware that one size does not fit all — to get the best results, you may need to tailor your approach to the individual.

There are three primary methods businesses are using to pass older workers’ expertise on to the next generation: knowledge hubs, mentoring programs and staggered retirement.

Knowledge hubs are familiar to most organizations — a form of corporate intranet that pull together important knowledge in an easy-to-access central digital repository. The challenge is twofold: getting the right information into the hub and making it useable. Older employees, in particular, may struggle with digital technology, meaning you will likely need to provide training or assistance to help them enter the information you require. Equally, identifying what that information is can be difficult, which is why the most successful knowledge hubs are backed up with dedicated teams to manage and maintain them, as well as to measure their effectiveness and use. Apple takes this to an extreme, with dedicated university-style courses organized via an employees-only site backed up with in-person training.

Mentoring programs have become increasingly popular over the last couple decades and have been proven to have a positive impact when implemented effectively. However, not every experienced employee will make an effective mentor — clear desired outcomes need to be communicated, expectations need to be set, training may be necessary to maximize benefits and you may need to introduce an incentive program to encourage participation. Both mentors and mentees will also benefit from third-party support. While it’s worth noting that the most successful mentoring programs tend to run over an extended period, there are no immediate, overnight benefits.

Staggered retirement is a relatively new concept and one with much to recommend it. There are multiple variations in execution, but the basic concept is simple: Rather than retiring completely, employees are retained by the company in some capacity, perhaps shifting to part-time, perhaps to a contingent or contract basis. There is often a renewed focus on training or advising colleagues over their previous work. This enables the organization to continue to have access to valuable expertise and the retiree to top-up their pension with some additional earnings. However, there are some potential pitfalls, as Bankrate explains; depending on the nature of your retirement and health care plans, the retiree extending their working period may end up losing out, so seeking expert advice is vital.

The broader benefits of active knowledge retention

An added advantage of encouraging older employees to share knowledge is a boost in engagement — and with that retention levels — of younger employees. Career opportunities were the number one employee engagement driver in every region in Aon’s 2015 Trends in Global Employee Engagement survey, and opportunities to learn and develop new skills are a vital part of career development.

Mentoring programs can also act as successor training schemes, giving more junior employees a clearer sense of their career path. Strong training programs are in demand among today’s increasingly mobile workforce, and well-constructed knowledge hubs can be a valuable pull-factor for jobseekers when supported with the right mix of internal communication and encouragement.

Finally, while the very act of trying to systematically collate the knowledge and experience of your staff can help to increase their sense of value, it can also increase your organization’s capacity to make the most of its employees’ skills.

While conducting an initial workforce analysis to identify key employees whose knowledge you want to retain, it may also be possible to start developing an internal skills database to maximize the potential impact of staff who may not be utilizing all of their expertise in their current roles.

With failure to innovate or meet customer needs the sixth biggest concern for businesses in Aon’s 2015 Global Risk Management Survey, knowing what your organization knows is a crucial first step in ensuring that you’re able to adapt. The best way to retain your knowledge is to be aware of what knowledge you have in the first place.

Talking Points

“Organizations need to get to grips with the aging workforce challenge today or face skills shortages that will affect their ability to grow or deliver key services in the very near future… Too many employers are sleep-walking toward a significant skills problem that risks derailing their business strategy if not addressed. Not enough organizations are thinking strategically about workforce planning or even know enough about the make-up of their workforce.” – Ben Willmott, head of public policy, CIPD

“The retirement of the current generation of corporate leaders will lead to cultural changes that most organizations are unprepared for. In order to thrive in the post-baby boomer landscape, companies need to put serious thought and effort into smoothing the intergenerational transition for leaders from generations X and Y.” – Richard Boggis-Rolfe, chairman, Odgers Berndtson

“Retirement is currently seen as ‘all or nothing,’ where you are falling off a cliff. This problem comes from the way our public and private pension policies are framed. People would like to be able to work, but not as much, or work part of the year only. Instead of retiring all at once, they could enter phased retirement — that is perfectly feasible from a workplace policy perspective, but goes against some national policies.” – Ruth Finkelstein, associate director, Robert N Butler Columbia Aging Center, Columbia University

“This article originally appeared on TheOneBrief.com, Aon’s weekly guide to the most important issues affecting business, the economy and people’s lives in the world today.”

Further Reading

What Is Your 2016 Playbook for Growth?

CEOs entering 2016 convinced they can succeed by doubling down on what worked in the past may be reading from the wrong playbook.

According to a recently released Forrester/Odgers Berndtson study, “The State of Digital Business 2015,” most companies remain unprepared for digital transformation” — an absolute must for growth. Yet executives representing the diverse sectors examined in the study expect the majority of their sales to be digital by 2020. How will they get there?

If your transformation plan to capture at least a fair share of an expanding digital sales pie is not well underway, and you feel behind the eight ball, that may be for good reason – digital transformation leading to adopting a meaningful new business model or new technology can take years. And it demands operating along a different set of practices that used to work.

Growth is within reach of any CEO…

  • Moving at least as fast as the pace of technological change,
  • Delivering on clients’ growing expectations for real outcomes, and
  • Adapting to the shifts of economic and workplace controls to the millennial generation.

The CEO must be the Chief Growth Officer. Hiring a chief digital officer or chief innovation officer or someone else carrying a fashionable CXO title assigns daily responsibility for actions to close the digital gap. This can be a good move. The CEO cannot be everyplace at all times, and, besides, micromanagement from the top of the C-suite is deadly. When it works, this added role introduces skills, fosters enterprise-wide external partnerships, signals commitment inside and outside the organization and creates the digital blueprint for buy-in by colleagues. But the CEO alone has and must use his or her authority to coordinate growth levers and make the tough calls.

The CEO is also the Chief Culture Officer. Culture is not the job of HR or any other designee. Culture is the sum of the hundreds of choices everyone makes every day. People respond to the behaviors of their leaders. What do growth behaviors look like? Think about orchids in a greenhouse. Like orchids, new and different ideas are fragile and require special care. They may need protection from the outdoors – the conditions through which a mature business can operate, but that will kill a still-emerging concept. The CEO must advance a culture of a greenhouse, using governance to support both the work wherever growth businesses are being incubated, and a smooth transfer to the mainstream at the right time.

A lot has changed, but strategy is still the starting point for execution that gets results. Good strategy means having a clear view of where you are, an intended destination and a map of the terrain with a logical path to get there. Good strategy allows for good prioritization of short- and long-term moves, including the digital agenda. Strategy is still what gives all members of an organization a common view of goals. Strategy must evolve from what it has become in too many companies — a financial extrapolation supported by a sales-y PowerPoint presentation and ungrounded assumptions.

You must govern to engage and create accountability. Bring the whole C-suite into the act – no bystanders or anonymous choristers allowed. It’s a great idea to ask your CMO or CIO (or both) to lead the digital acceleration effort, but what about the rest of the C-suite? Put a governance process in place that fosters a constructive dialog with all of the CEO’s direct reports, including the P&L leaders and functional heads. Governance must reinforce that every member of this team has “skin in the game” to achieve growth results. No one is exempt from being part of the solution.

You have to update the risk/reward equation. Face it – the traditional American corporation was built to be predictable – to control risk. But nowadays, avoiding deviation from the status quo may be the riskiest path of all. I’ll paraphrase how Joi Ito, director of the MIT Media Lab, described the issue at a recent talk: To the corporate leader, downside risk is determined by aggregating variables that are stress-tested through complex analyses in an attempt to account for unknowns. And the potential of digital is full of unknowns, so it can easily be discounted down to where it is assumed to just have incremental impact.

But here’s a whole different view: To a venture capitalist, the maximum downside is the loss of 100% of his or her investment. That investment is meted out in small chunks as milestones are passed, so exposure is clear, measurable and contained. And the upside is viewed as exponential (though low-odds).

Food for thought: Reframing the risk/reward inputs and calculation can be a liberating and responsible course of action.

Digital transformation is a non-starter without the right talent. Seek evidence beyond the skills that seem urgent now but come with an expiration date — what matters is hybrid thinking, continuous learning and a record of delivering meaningful results. Is “fit” simply a euphemism for “people like me”? Go after your complements, and even some people who don’t fit your mold, but for whom you are committed to make room. The continued homogeneity of the faces on the “Team” section of most corporate and start-up websites in this day and age reinforces the untapped opportunity to invite others in and reap the rewards.

You must measure client outcomes. What gets measured gets done. And the wrong metrics stifle innovation. Applying yesterday’s metrics with blunt force is a death sentence for new ideas. The CEO must take a stand on how to gauge digital progress. Implement metrics that: 1. Align to the strategy. 2. Reveal how well you are delivering outcomes to the client (i.e., fulfilling the benefits that brought them to you in the first place). 3. Focus on how well the team is delivering results to clients. 4. Relate to drivers of the P&L and overall franchise health now and in three to five years.

You need to generate speed and momentum through constant progress in small chunks. It beats all-at-once precision that misses the market. Iterate, iterate, iterate, as fast as you can. Make live prototypes and show them to clients. Test and learn. Be flexible to new data and insight. The word “failure” does not appear in this playbook. “Failure” is something you bring upon your team when you don’t take the learning from a study, a test, a prototype, a client conversation and have it fuel the next improvement, however large or small, to allow you to move closer to success. “Failure” is what happens when the water cooler talk echoes with, “That doesn’t work, so we killed it.” A culture of “failure” has gum in its gears.

You must pursue three stages to finding your digital leverage: Step one: Identify the sources of revenue from new clients or relationship expansion (see above point on speed) and the drivers to win this business. Step two: Define the profit model. Step three: Go for scale. I worked under a CEO who set up this one-sentence approach during our early days of digital transformation: “Find the unit profit model and then see if you can scale it.”

You need to collaborate. Some people are wired to collaborate. Others are expert at advancing their own goals through silos. Evidence of growth effectiveness: an environment where colleagues build on each other’s ideas with the goal of shared success. Make collaboration a hiring competency that is taken seriously. Make it an expectation and demonstrate through your own behavior what that means.

Finally, you must get out there and get your hands dirty. We all learn by doing. Fast and valuable knowledge exchange takes place when corporates and start-ups interact. Corporates will find the speed, iteration and absence of failure as a concept inspiring. Start-ups are always looking for mentors and advisers with financial, marketing and operating experience. This quid pro quo can be the basis for a mutually beneficial and mind-expanding relationship. Make the meeting ground any space that is not a corporate conference room.

This post is also published in Amy’s regular column on Huffington Post.