Knowledge management Departing employees: preserving experiential knowledge

How do we ensure that the (experiential) knowledge of our employees is not lost? Many companies are currently asking themselves this question, also because numerous employees will retire from their organizations in the coming years.

"How do we ensure that valuable knowledge in our organization is preserved, and how can we store it in a way that it can be passed on to others?" Entrepreneurs were asking themselves this question even before the term knowledge management existed. For example, traders and farmers thought about how to pass on the knowledge accumulated in their minds over the years to their descendants. Specialists such as craftsmen wondered how to convey their expert and experiential knowledge to their employees.

Knowledge transfer is a management process

Since the dawn of humanity, this transfer of knowledge has occurred in a more or less structured form. However, for a long time, this knowledge transfer was not understood as a management process that should be purposefully designed. This awareness only developed during the course of industrialization, when

• ever larger companies emerged, producing and selling increasingly complex products, and

• the work organization within them became increasingly specialized, resulting in more knowledge islands with specialized knowledge.

In this context, the question also gained relevance: How do we ensure that our organization's knowledge base is not only preserved but also renews itself in such a way that the company remains successful in the medium and long term?

Challenge: Transfer of experiential knowledge

In this process, a distinction is made between "explicit" and "implicit knowledge" — two terms coined by the chemist and philosopher Michael Polanyi, among others, in his 1958 book "Personal Knowledge".

The term "explicit knowledge" generally encompasses knowledge that can be clearly codified and documented using language, writing, drawings, and images, among other means. This largely includes the rules and factual knowledge that can be passed on to others in the form of reports, textbooks, manuals, work instructions, and drawings. Due to its codified form, this explicit knowledge can be stored, processed, and transmitted across numerous media—even online.

The term "implicit knowledge" refers to knowledge that is often called experiential knowledge. The holders of this knowledge, which is drawn from experiences, memories, and beliefs, can be individuals or organizations. It may or may not be consciously recognized by the holder. In any case, this knowledge is difficult to codify and document, making it hard to pass on to others.

Typical examples of implicit knowledge in the corporate context are,

• when an experienced salesperson intuitively senses how to tactically behave with certain customers to secure an order, or

• when an experienced technician's "intuition" indicates that if we don't soon perform certain maintenance on machine x, we'll have problems with it, or

• when a manager or entrepreneur's gut feeling says, we should seize this opportunity to be successful in the long run, even though all the apparent facts argue against it.

Knowledge management

Securing success-critical knowledge with AI

Implicit knowledge is linked to attitudes

Both forms of knowledge are important for the success of companies, but the rule applies: conveying explicit knowledge is easier for them—not only because it can be documented, but also because companies have already gained a lot of experience with it in their training and development areas.

It is different with implicit knowledge. Its transfer often requires that it first be converted into explicit knowledge through a targeted process of externalization—for example, by systematically questioning the knowledge holders or analyzing their actions—so that it can be documented. However, this externalization is often only partially possible with implicit knowledge, which is why it is often passed on to others only through dialogical methods such as coaching and mentoring programs.

Additionally, implicit knowledge is often linked not only to experiences but also to the attitudes and beliefs partially shaped by them. Therefore, individuals who wish or need to internalize this knowledge often require a change in attitude and behavior. Otherwise, it has no effect. For this reason, its transfer is often possible only through dialogical methods.

Changed conditions require changed knowledge management

The rule of thumb is: the more complex a task is, the more implicit knowledge must be transferred to solve it. This is relevant because, in recent years, due to globalization and digitalization among other factors, work and its demands have—at least in the perception of employees—become increasingly complex. Therefore, companies must place greater emphasis on the transfer of implicit knowledge if they want to avoid the creation of more and more knowledge silos within their organization, which ultimately

• often make the desired cross-hierarchy and cross-departmental, or even cross-company, team and project work difficult, and

• hinder the creation of the necessary structures to quickly and flexibly or agilely respond to new challenges.

Knowledge becomes obsolete faster than before

In addition to this challenge, companies face another: explicit knowledge, i.e., technical or factual knowledge, becomes obsolete more quickly in the VUCA world characterized by rapid change and decreasing predictability. The same applies to externalized implicit knowledge: old success recipes often no longer work due to changed conditions or need to be regularly reevaluated. Although explicit knowledge can be updated and disseminated throughout the organization more easily today, since it is often stored electronically, companies must nevertheless update it continuously. Therefore, more than ever, knowledge management is an ongoing project (or continuous process).

Knowledge management becomes a continuous project

Many companies have now recognized this. Therefore, they are rethinking their traditional knowledge management and trying to adapt it to the changed conditions and requirements of the digital age. This process generally proceeds as follows: In the first step, as with most projects, the current or initial situation is analyzed. Questions are asked such as:

• How is our knowledge management conducted today?

• Does this still meet the requirements of the digital age?

• Can our company goals, such as responding more quickly and flexibly to market changes, still be achieved this way?

• Where is there a need for change or adjustment?

Building on this, questions related to task clarification arise, such as:

• Which knowledge do we (in the future) need due to its relevance for success and should therefore be continuously developed?

• Is this explicit and/or implicit knowledge?

• Who are the relevant knowledge holders and how long will they be available to us?

Once these questions are provisionally clarified, questions arise such as:

• What resources (including time, money, processes) do we have for knowledge identification, documentation, distribution, and development, or what resources do we need?

• What structural, cultural, and motivational conditions are necessary to create a fluid, cross-departmental and cross-functional knowledge market in our organization?

Goal: create a fluid knowledge market

Once these questions are clarified, initial trial balloons can be launched. It is important that this occurs in an iterative process with built-in reflection loops asking "Are we (still) on the right track?" since companies or project teams are often venturing into new territory—among other reasons, because modern information and communication technology offers them new possibilities for knowledge identification, storage, and dissemination.

Additionally, it is important to regularly check during the process or project progression:

• Are we even capturing the success-relevant knowledge that our organization (in the future) needs?

• Have we gained the relevant knowledge holders as collaborators in the attempt to create a fluid knowledge market?

• Is the gathered knowledge reaching the people who need it for their work, and is it being used effectively by them?

These questions must be continuously asked throughout the project to achieve the overarching goal: to make the company fit for the future.

About the Author

Dr. Georg Kraus is the managing partner of the consultancy Kraus & Partner, Bruchsal. He is also a lecturer at the University of Karlsruhe, the IAE in Aix-en-Provence, the St. Gallen Business School, and the Clausthal University of Technology.