Talent Management, Training & Development

Lost Knowledge — What Are You and Your Organization Doing About It?

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I watched “60 Minutes” a few weeks ago and one segment really caught my attention.

A group of men, most in their late 50’s and early 60’s that had worked at NASA for years were interviewed. Now with the end of the space program, they are jobless. It was a very emotional discussion, and several of them wept during the interview.

These were men that had literally grown up with the space program — most with 25-35 years at NASA. Today only a handful of people are left.

If NASA wanted to send a man to the moon or Mars today, it couldn’t do it. All the knowledge and experience is gone. NASA would literally have to start from scratch.

“Lost Knowledge” of the Boomer Generation

How did a world-class organization like NASA lose the ability to recreate one of the greatest achievements in the history of mankind?

This year the oldest of the Baby Boomers (born between 1946 and 1964) are turning 66. About 10,000 Boomers will reach age 65 every day for the next two decades. We will now begin to see these people leave the workforce. Sure, the current economic downturn is causing some Boomers to delay their retirement, but sooner or later they’ll decide to retire (according to UNC Executive Development 2011).

David DeLong calls knowledge that is not stored, retrieved and transferred “lost knowledge.” The Boomers will take a lot of critical knowledge with them when they leave, says the author of Lost Knowledge: Confronting the Threat of an Aging Workforce (he’s also a research fellow at MIT).

Experts divide critical knowledge into two parts: explicit and tacit.

  • The explicit kind refers to information that can be easily explained and stored in databases or manuals.
  • Tacit knowledge is much harder to capture and pass on because it includes experience, stories, impressions and creative solutions. Tacit knowledge is also much harder to get from people because it accumulates over years of experience, and they may not even know how to verbalize it. Sometimes they don’t even know they have it, says Dorothy Leonard, professor emerita of business administration at the Harvard Business School.

Why ignore the older by hiring the younger?

Tacit knowledge is a big problem, and makes up the majority of “lost knowledge.”

Boomers have a unique character trait. Through the years they have kept a vast amount of knowledge about their jobs to themselves. It has been part of a “job protection” syndrome throughout their careers. It added value and importance to them. The thinking was that if an employee was the only one in a department/organization that knew something important, then he or she was valuable. Even today some Boomers have the belief that younger employees should “pay their dues” and learn by trial and error like they did.

The focus today is all about recruiting young employees. David DeLong says:

This focus on recruiting junior staff fits a pattern we have seen for several years. Many companies become fixated on attracting younger employees, completely ignoring how they might get more out of the resources they have in their mature workforce.”

The fact that older employees have been laid off and are not considered “hire-able” today only compounds the problem.

Simply adding more and younger employees is not the answer even though they are cheaper. You can’t throw people at a project. You can’t expect them to become immediately productive. You need a smarter, more experienced skill base.

This reminds me of a comment between the VP of Research & Development and the CEO at a company I worked for. The CEO was pushing the VP hard to complete development of a new product. He asked the VP, “Can’t you put more engineers on the project?” The VP’s comment to the CEO was, “You can’t make nine women pregnant and have a baby in one month!” Hmmmm … I think he was saying that some things just take time!

2 examples of lost knowledge

Is there a cost to a company for lost knowledge? Absolutely. Here are two examples:

  1. An employee at Texas Instruments who worked on a production line retired, and she was the only one who knew that the best way to work the machines was not what was written in the operating manual. Rectifying the resulting mistake cost $200,000.
  2. A petrochemical executive says that his company thought it could fix the problem of lost knowledge just by hiring more people. Having less experienced people working in sophisticated computer-controlled manufacturing operations increased the risk of serious and costly mistakes. An investigation into an explosion at this executive’s chemical plant found that the engineer in charge had only been out of college a year, and the operators in the control room at the time of the accident all had less than a year of experience in the unit.

Executives have known about “lost knowledge” and retiring Boomers for years, and yet very few companies have taken steps to insure that there is some sort of effective knowledge transfer from Boomers to younger employees.

Do executives know what they are losing?

In many cases, executives have no idea what knowledge they are losing —- from whom and from where. The first step is to think about how the loss of an individual employee’s specific knowledge would impact the company’s strategic plans.

For example, will the departure of an R&D scientist threaten the speed of new product development? Will the loss of a senior salesperson reduce revenues? Exactly which divisions, business units and departments have critical people approaching retirement? What evidence do you have that there is critical knowledge at risk? What will be the impact on the company’s strategic objectives, revenues or costs?

The more clearly you can articulate where retirements are going to cause real damage to the company, the more likely you are to be able to take meaningful action.

In Part 2 of this article, we will look at how companies are taking action, how it is working for them and what they are learning. Don’t miss it — there are some really creative ways that companies are using to transfer knowledge!

Jacque Vilet, President of Vilet International, has over 20 years’ experience in International Human Resources with major multinationals such as Intel, National Semiconductor and Seagate Technology. She has managed both local/ in-country national and expatriate programs and has been an expat twice during her career. Jacque has also been a speaker in the U.S., Asia and Europe, and is a regular contributor to various HR and talent management publications. Contact her at jvilet@viletinternational.com.
  • Joyce Mari

    I do not feel sorry for these old farts that are forced to retire.  Younger people need to work too, and old people need to take a rest.  

    • guest$

      we could comfortably rest if not all but some of the younger people had the knowledge and drive that the older people had. Knowledge in a book is one thing the knowledge the older people have is different and if you are lucky you will hopefuly live to be old and not get offended when someone ask you to leave because you are 50 it is closer than you think

      • Jade Ria

        Where can i find the follow – up article to this. It is very helpful for some research I am doing.

    • guest$

      hopefuly most of the young people will not have diabetes or heart attacts before the get our age either obesity is obivous for the younger generation were old can retire the younger generation with obesity and other diseas gota try to make to our age

    • Guest

      I started to write a rebuttal to this, but it is just not worth my time.

    • Kelli L.

      1) I understand that young people need to work.  I’m a millennial, and my hubby was out of work for 9 months before he found a temp job. 
      2) Many older workers would probably like to stop working, but cannot due to many factors, for example, maybe mortgages, elder care for a parent, saving up for tuition for children, rising health care costs, etc. 
       3) It’s the lack of retaining, then appropriately passing on tacit knowledge that has contributed to this skills gap that we’re currently in.  My proposed solution is an increase in employer-sponsored training and development and some form of a mentor program as a start–but that’s just my $0.02 
      4) Show a little more respect to people when commenting online, and don’t use the perceived anonymity of the Internet as an excuse be rude.  If you wouldn’t say it to their face, don’t say it all.  And if you, Joyce, would say what you said to someone’s face, I don’t have a rebuttal since you’re just being yourself.

  • Jacque Vilet

    That may be Joyce but we need to get all the knowledge we can from them before they leave.

  • Edith Esther Shapiro

    Dear Joyce, I’m so sorry you don’t feel sorry for us old farts. I know you need to work, so we do have a problem. You see I have not been able to find a job in 16 months. My spouse is disabled and I am the breadwinner in the family. My son came home because some other younger people stole all of his money. We had to refinance our house to build an addition for Mom because she is going blind. We don’t put our old farts in nursing homes-that’s not how we were raised. So she will be moving in soon. Then we will have to try and sell her townhouse. 

    I have worked for many years and I have worked very hard. The last year my company was in business, oh excuse me I forgot to tell you that some younger people managing the company ran it into the ground and put everyone on the street with no job. We lost everything including COBRA and the last month of claims because they didn’t pay the bills. So they left a lot of people with some very big bills. 

    So even though I have a degree, certification in my field, over 30 recommendations, I have become invisible to employment agencies, company recruiters, etc. because 1. I am unemployed and 2. I am a baby boomer who worked my rear end off to make it better for my son. No one wants or cares about the knowledge of the past. We are old farts who (just fill in the blanks with your image of a baby boomer) slow, dumb, afraid of the computer, afraid to change, can’t see, can’t hear, mean, grouchy, – - just go on and on, well there are so many fast paced people in this “category” who put new systems in, can’t do the same thing over and over, can’t wait for the next gadget to come out, loves change, wants change and most of all  - just wants to keep a roof over the family, food in the frig, and not be frightened that all of that may just go away. I was collecting soda cans to see if I could get money in NY. I shop in thrift stores. There’s a week each month that we can’t buy food. 

    I went door to door so 18 year olds could vote. I marched against an immoral war in Viet Nam. I fought with the school system for 18 years when they were too complacent with my son and they still failed him. I rescue my animals from shelters so one more creature doesn’t have to die. It is my choice, but I am a vegetarian because I can’t see animals killed for food. I certainly don’t want our young adults killed or maimed so political and greed issues.

    But you would through me in the street now, because I have lived long enough and now it is your turn. Solent Green is People! Sorry, I will keep looking and reinventing myself until I find a job that you can’t take because I have values and ethics and a positive attitude. If you were able at your age, then you would have a job. I got a grant from the State of NJ to get more education. I went to high school classes to keep my technical skills up. I will go for another certification to reinvent myself. Because I have creativity, an imagination, thought processes, 
    I see what isn’t there and can be. So if you want a job, don’t go the easy route and just push someone out, think about creating one for yourself. I will also be starting a site for vintage items which sell for additional income. And if I have to go to NY to sell cans to feed my family or work for $8.05 and hour at a store as a second job then I will. My parents did it when we came to this county and none of us spoke a word of English. So, if you want to try and fill my shoes, go right ahead and try. It takes a lot more than pushing someone out of the way to make it in corporate America today.   I have lived my life, mostly, without regrets and with honor and honesty. Even when I have nothing to give, I still help people in some way because when it is my time, I will be able to look back at my life and smile – even with the tough times. It’s not what happens to you, it’s how you handle it.

    • Sharon

      I feel your pain, and have had similar experience with respect to organizations who feel “young” equals competency.  I’m always amazed when the young and inexperienced run the organization into the ground, invariably, management looks the other way until it’s too late to turn things around.

  • http://www.SmartWorkforceStrategies.com/ David DeLong

    Jacque, Thanks for highlighting the increasingly critical problem of knowledge loss. Not that you need another example, but my recent post “Talent Turbulence at the FAA” (http://bit.ly/IUlzZB) is a troubling illustration of the challenges that await organizations that don’t pay attention to these threats. In reality, we don’t care if the local candy manufacturer or TJ Max loses knowledge, but we need to care a lot when nuclear power plants, hospitals, and organizations focused on public safety start to lose capabilities. Part of the problem is transferring tacit knowledge is very difficult, but the “tools” and practices for doing it are getting better and better.

    It’s also painful to see name calling across generations. EVERY generation is suffering in this economy, and ultimately organizations that succeed are going to be those that learn to maximize the strengths of employees of all ages.

    • Jacque Vilet

      Thank you David.   I am honored by your reply.   FAA is a good example and should be scary for all people that fly!    Recently in Dallas paper American Airlines had 200 pilots retire and they were the ones that flew the newer more complicated planes.  American had to cancel certain routes because of it.   This was before all the bankruptcy mess.  Another good example.

      Agree on generations.  In this fast paced business world, companies don’t have time for Gen Y to learn by trial and error.  That’s why knowledge transfer is so important.  

      Interesting enough, this applies not just to retiring employees.   Even natural turnover in company at any age level and can creat the same issue.

      I’ll certainly read your post.

  • Cleomeri

    I can”t wait for the follow-up article. This was extrely insightful as to many of the attitudes I face at work. It fascinates me how any of us can think we could possibly do without the other. The societies where the elders are honored and treated with respect don’t seem to have the same issues. I remember as a child being sent to elders to learn from them their craft. That is how I learned to crochet, cook, braid (plait) hair, clean well, do laundry, design and sew without purchasing patterns, draw, etc.
    We never felt that the elders were a problem (except the ones who liked to hit a lot). It was clear that they had things to share with us and that we had things to learn. Now don’t get me wrong, they made mistakes like all humans, but we forgave them and were wise enough to learn not make the same ones ourselves.
    Some young people today are wise enough to feel the same way, but far too many see their elders as “the enemy” something to be rid of at the first opportunity. Wonder how they would feel if the elders did not make the sacrifices so these same young people can enjoy the freedoms they inherited? It needs to be made clear that the shoulders young peple stand upon may be old and creaky, but they are for the most part, strong enough to support the dreams of the young, and wise enough to know what is foolhardy.

  • http://twitter.com/SSpanTolero Scott Span, MSOD

    You raise some excellent points. Often in my work with client’s on generational diversity I stress the fact of what a colleague calls “passing the baton.” Cross generational succession planning is imperative to prevent the loss of institutional knowledge and drive ongoing high performance.