MIT Sloan Management Review

Human Resource Management and Industrial Relations, Leadership and Organizational Studies

Strategies for Preventing a Knowledge-Loss Crisis

By Salvatore Parise, Rob Cross and Thomas H. Davenport

July 1, 2006

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Departing employees leave with more than what they know; they also take with them critical knowledge about who they know. That information needs to be a part of any knowledge-retention strategy.

An organization needs to do more than just develop the individual skills of its potential central connectors. It must also develop their collaborative behavior (which often does not come naturally to them) and position them at the inner workings of a network so that other members can become aware of and develop trust in their abilities. One effective means of doing this is to make network assessments a part of a person’s performance review to encourage that individual to focus on specific relationships that he or she needs to develop.

Of course, the natural unit of work — whether a financial transaction, consulting task or new-product development — is an efficient way to develop budding central connectors. Through such projects, people learn when and how to rely on others. Because veteran central connectors typically have high social capital, energy and trust, they ususally make ideal candidates to lead such ventures so that they can then impart some of their knowledge to others.

Another effective approach for transferring knowledge is to have central connectors lead communities of practice around their areas of expertise. Companies can also use after-action reviews — detailed, illustrative and analytical conversations that can help call attention to and codify the tacit knowledge of what went right (and wrong) on a project. Such reviews can be designed not only to capture actionable guidelines but also to facilitate connections between experienced team members and those who might be new to a task. These and other approaches can serve to reduce the burden on central connectors by helping develop other, less-connected employees in ways that enmesh them more firmly into the social networks of an organization.

Loss of Capacity to Get Newcomers up to Speed Quickly

Most new employees get connected in a network through serendipitous processes that, in a large organization, typically take two or three years. Some savvy fast movers, however, establish ties early with central connectors and thereby bootstrap their own efforts to get embedded in a network. Such a tactic helps to avoid a number of relational challenges faced by newcomers. First, the newcomer’s expertise is rarely known to the rest of the network, so he or she is rarely sought out. The central connector can help by directing people to these peripheral members and telling others about their expertise. Second, the newcomers are often not trusted or deemed credible. Here, a central person can help by vouching for a newcomer, essentially allowing the latter to use the reputation of the former to help get established. Third, although newcomers might have a number of great ideas, they rarely have insight into the norms, politics or work practices in the organization. Central connectors are the best possible advisers in that regard.

Central connectors maintain continuity over time by helping the organization avoid repeat mistakes, and they can pass this knowledge to newcomers. At one research organization, a newcomer was given an assignment to create a diagnostic that had actually been tried 10 years earlier. After three months, the newcomer, who was totally unaware of the initial project, presented his progress at a management meeting. Fortunately, a knowledgeable central person was present at the meeting and put the newcomer in touch with employees who had worked on the first project.

In some organizations, central employees are formally assigned the role of acclimating newcomers to the organization’s network. At one pharmaceutical organization, for example, centrally connected scientists are often teamed with junior researchers on projects so that they can collaboratively perform the data analysis. The process helps build the junior scientists’ relationships throughout the organization. A similar approach is used at a consulting firm in which partners are responsible for helping to bring some of the junior consultants on board. The junior person basically becomes a “shadow,” following the partner on projects or client engagements and observing how that individual makes decisions — all while making important contacts throughout the organization.

Other, more structured approaches can help establish important links between peripheral and central employees. At some companies, first work assignments are crafted such that newcomers must connect with coworkers, especially central people.11 Other knowledge-management initiatives, such as the documenting of lessons learned on a project (including contact info for the team members), can be effective ways to maintain organizational memory. One company is piloting the use of both audio and video segments to capture an employee’s experience at a customer site, including what to expect and how to behave in certain situations. The goal is to help new employees get acclimated and integrated into the network as quickly as possible.

When Brokers Leave

Brokers are people who have links across subgroups in a network. They may not have the greatest number of connections, but they possess a disproportionate ability to help an organization capitalize on opportunities requiring the integration of disparate expertise. With their knowledge of the expertise and terminology of different groups, brokers often play the key role of technical translator. That role also applies on a cultural level because brokers typically understand and appreciate the differences in values and norms across different groups, such as between manufacturing and research and development. Having such a perspective is why brokers are so effective in spotting and exploiting opportunities that require integration.

The departure of brokers might not directly affect as many people as when a central connector leaves, but their absence can still fragment a network at key junctures. Consider the network of a professional services firm. (See “The Importance of Brokers,” p. 36.) If the top five brokers are removed from an organization, the information network would suffer significant disruptions. Two of the research clusters would become nearly isolated, and the connections between the research side of the organization and the business unit and development groups become tenuous. Interestingly, when shown these network diagrams, one manager at the firm was surprised at the identities of some of the top brokers because they weren’t as central or as visible as some of the other employees.

For a qualitative example of the importance of brokers, consider a recently departed strategy executive from an automobile manufacturer. The executive was on the decision review board for the company’s vehicle programs, through which he was effective in translating and transferring relevant processes and data from one vehicle program to another. This individual also acted as a liaison between two teams with vastly different work cultures: an analytic group that was very “process-rich and data-poor” and another unit responsible for collecting customer and market data. According to the executive, “I’ve been sufficiently accepted by each group, but I haven’t been technically or functionally drawn so strongly into one of them that I couldn’t connect to another.” Since his departure, the effectiveness of the market research organization has declined as each functional division now conducts research in its own way. The company has also lost important bridges to many outside consultants and academics — a third group for which the executive served as a broker. Even though the executive made his Rolodex available to his successor, the relational capital he had accumulated over the years was not so easily transferred.

Brokers are especially important in organizations struggling with silos driven by formal structure, deep technical expertise or occupational subcultures. Unfortunately, though, the type of relational knowledge and organizational perspective they possess is rarely captured in retention programs. The irony is that when brokers leave, many organizations don’t even know what’s been lost. To avoid getting caught off-guard, companies need to make concerted efforts to develop, identify and position brokers. Three practices can help.

First, companies can encourage and reward lateral movement for employees across projects, divisions and geographic areas. Such job rotations can help people acquire the work experiences that provide a deep understanding of different expertise, subcultures and work processes. Traditionally, job rotations have been used mainly in manufacturing, but they could also be deployed in knowledge work environments. Some professional services firms, for instance, staff projects in ways that help connect people across various networks.

Second, organizations should identify and groom employees with broker potential. Such individuals can be found by using ONA or by considering employee profiles — brokers tend to be well-tenured (with work in different groups), highly credible, effective translators and skilled negotiators. To train brokers, companies should communicate an understanding of key strategic imperatives, such as new-product development, which demand better connectivity across units. Here, the organization should help brokers see how their role contributes to each imperative, for example, by creating formal expectations with respect to those initiatives. Next, the company can help brokers map or document their vast personal networks, both internal and external, as well as the knowledge obtained and provided through each of those relationships. By connecting specific relationships to strategic objectives, the broker can find opportunities for integrating knowledge that others in the organization might miss.

Third, organizations need to position brokers strategically where their skills can best be deployed. It makes no sense to place brokers in noncritical areas or where collaboration is unimportant. Ideally, brokers should be located wherever tighter integration between groups would benefit the organization and wherever new ideas need to move from the concept stage to actionable results, such as between R&D groups and business units.

(Reprint #:47409)

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Salvatore Parise is an assistant professor of information technology and knowledge management at Babson College in Wellesley, Massachusetts.Rob Cross is an assistant professor of commerce at the University of Virginia’s McIntire School of Commerce in Charlottesville, Virginia.Thomas H. Davenport is the President’s Distinguished Professor of Information Technology and Management at Babson College.They can be reached at sparise@babson.edu, robcross@virginia.edu and tdavenport@babson.edu.

REFERENCES

1. D.W. DeLong and T.O. Mann, “Knowledge Management: Stemming the Brain Drain,” Outlook Journal, no. 1 (January 2003): 39–43.

2. D.W. DeLong, “Lost Knowledge: Confronting the Threat of an Aging Workforce” (Oxford: Oxford University Press, 2004).

3. H. Beazley, J. Boenisch and D. Harden, “Continuity Management: Preserving Corporate Knowledge and Productivity When Employees Leave” (Hoboken, New Jersey: John Wiley & Sons, 2002).

4. S. Poruban and J. Clark, “Managing Data & Knowledge: Oil, Gas Industry Makes Advances in Managing Data, Knowledge,” Oil & Gas Journal 99, no. 50 (Dec. 10, 2001): 74–82.

5. Beazley, “Continuity Management.”

6. Ibid.

7. Deloitte & Touche, “Retiring Workforce, Widening Skills Gap, Exodus of ‘Critical Talent’ Threatens Companies: Deloitte Consulting Survey,” Feb. 15, 2005.

8. L.C. Lancaster and D. Stillman, “When Generations Collide: Who They Are. Why They Clash. How to Solve the Generational Problem of Work” (New York: Harper Business, 2002).

9. An overview of the importance of social networks is provided in R. Cross and A. Parker, “The Hidden Power of Social Networks: Understanding How Work Really Gets Done in Organizations” (Boston: Harvard Business School Press, 2004).

10. D. Leonard and W. Swap, “Deep Smarts: How to Cultivate and Transfer Enduring Business Wisdom” (Boston: Harvard Business School Press, 2005).

11. K. Rollag, S. Parise and R. Cross, “Getting New Hires up to Speed Quickly,” MIT Sloan Management Review 46, no. 2 (winter 2005): 35–41.

12. Pfizer information obtained from interviews and from C. Vollhardt, “Pfizer’s Prescription for the Risky Business of Executive Transitions,” Journal of Organizational Excellence 25, no.1 (2005): 3–15.

13. R. Smith, “Learning and Development’s Critical Role in Successful Mergers and Acquisitions” (presentation at American Society of Training and Development [ASTD] Southern Connecticut Chapter, Oct. 24, 2005).

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