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Retaining Valuable Knowledge: Proactive Strategies to Deal with a Shifting Work Force

  • ID: 42777
  • Report
  • July 2002
  • 185 pages
  • American Productivity & Quality Center, APQC
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Organizations face a looming wave of knowledge attrition. Some industries and sectors are at great risk. If present trends continue, America will experience a labor shortage of 4.8 million workers over the next 10 years and 19.7 million over the next 20 years. College-educated, highly skilled workers also will be in short supply. In 10 years, the labor force will be short 3.6 million workers who possess a bachelor’s degrees. Unless these trends can be reversed, the United States will be unable to maintain its rate of economic growth. Failure to close the labor supply gap will lower gross domestic product growth from its projected levels by at least 3 percent in 10 years.

Retirement is not the only factor impacting knowledge attrition. Rapid growth,
turnover, mergers and acquisitions, and internal redeployment also create potential knowledge loss or knowledge gaps. Currently, half of employees have been with their current employer less than 3.5 years, and 25 percent have tenure of less than one year. Much of the turnover occurs in early career years, but even in the 35 to 44 age bracket, median tenure is only 4.8 years, which is down 12.7 percent from 19872. Best-practice study participant Best Buy, for instance, implemented its knowledge management and retention approaches not because of a retirement issue, but because of the rapid
turnover of its young work force and the needs of a rapidly growing organization to tap into its own knowledge. Attracting, developing, and retaining a knowledgeable work force is a major issue for senior management teams, but many are not yet aware of the scope of the problem or potential solutions such as knowledge management.

A Few Lessons Learned About Knowledge Management

This Best-Practice Report, based on a collaborative research consortium, builds on seven years of research and practice in successfully implementing knowledge management. The Center’s goal is to make knowledge management a
systematic strategy to:
- identify important information, lessons learned, and tacit knowledge;
- connect people to people and people to information to enable individuals and
communities to share what they know and create new knowledge;
- create dynamic, people-centered approaches to capture best practices and useful information in a form that other people can use in the future; and
- transfer information and knowledge to others who need and can use it.

To proceed with a collective understanding of knowledge management, condensed
and basic tenets of knowledge management initiatives follow.

1. Knowledge management is a systematic process of connecting people to people
and people to the knowledge and information they need to effectively perform and create new knowledge. The goal of a knowledge management initiative is to enhance the performance of the organization and the people in it, through the identification, capture, validation, and transfer of knowledge. The goal is not to share knowledge for its own sake, although that is a valuable byproduct of the process.

2. If you build it, they will not necessarily come. Technology applications do not, in themselves, create a need or demand to change behavior or share knowledge. Technology is indispensable to knowledge management in modern organizations, but the road to effective knowledge management is littered with abandoned “knowledge management solutions” that were really just applications. These vehicles quickly run out of gas, if they start at all. It is critical to select and implement technology as part of a larger, systematic knowledge management change initiative.

3. Senior executive support is critical to change behavior and institutionalize new approaches to knowledge management. That support follows if knowledge management principles and tools are applied to important business issues. Executives often have a vision of how this capability will enhance the future success of the organization to achieve its mission.

4. Most people want to share what they know; they want to learn from others and not repeat the same mistakes. The barriers to this are often structural: there is not enough time, the process is cumbersome, they don’t know the source or the recipients, they are not sure they can trust the information, and they know instinctively that tacit knowledge is richer than documented explicit knowledge. To ensure knowledge management is successful, work on these barriers, not on the psychological make-up of your employees.

5. Whenever possible, embed knowledge sharing, capture, and reuse into the work
itself and provide value to those who participate. Employees should experience
greater professional development and an easier time getting their work done
correctly. Rewards and recognition are important, but they will not take the place of creating knowledge-sharing systems that work and provide value.

6. Creating a knowledge-sharing culture is the result of a successful knowledge
management strategy. It is not a prerequisite.

7. Knowledge comes in two forms: explicit and tacit. Explicit knowledge, formal and often codified, comes in the form of books and documents, formulas, project reports, contracts, process diagrams, lists of lessons learned, case studies, white papers, policy manuals, etc. The tacit and not codified form, in contrast, can be found through interactions with employees, customers, and the memories of past vendors. This knowledge is hard to catalog, highly experiential, difficult to document in detail, ephemeral, and transitory. It is also the basis for judgment and informed action.

This report focuses on approaches to the identification, capture, and transfer of both explicit and tacit knowledge, with an emphasis on tacit knowledge, which is the most dynamic, people-specific, and at risk of loss.


This Best-Practice Report is the culmination of a collaborative research consortium involving 24 sponsors and nine best-practice partner organizations (two organizations participated both as sponsor and best-practice partner organization), conducted over a five-month period. These organizations joined with APQC to find best practices in retaining valuable knowledge in the face of retirement, attrition, and the normal movement of people through an organization. More specifically, the purpose of the study was to:

- identify potential knowledge loss;
- identify the knowledge that needs to be retained and who has it;
- determine who needs the knowledge and what is realistic to capture;
- design and implement appropriate approaches (e.g., interviews and After-Action Reviews);
- identify processes to make the knowledge useful and applicable to others;
- determine the necessary support structures, resources, and roles needed for the process to work;
- determine the costs associated with these approaches;
- identify the enablers and barriers to successful implementation; and
- assess the health and measure the effectiveness of knowledge retention strategies.

The purpose of this report is to help guide the successful design and implementation of knowledge retention strategies by providing a guide to the options and critical success factors, based on lessons from leading organizations. The report further focuses on a pressing issue looming for many organizations: the massive loss of knowledgeable people reaching retirement.


This four-phased benchmarking methodology was developed in 1993 and serves as one of the premier methods for successful benchmarking in the world. It is
an extremely powerful tool for identifying best and innovative practices and for facilitating the actual transfer of those practices.

Phase 1: Plan
Phase 2: Collect
Phase 3: Analyze
Phase 4: Adapt

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- Sponsor and Partner Organizations

A listing of the sponsor organizations in this study, as well as the best-practice (“partner”) organizations that were benchmarked for their innovation and advancements in retaining valuable knowledge.

- Executive Summary

A bird’s-eye view of the study, presenting the key findings discovered and the methodology used throughout the course of the study and a profile of
participants. The findings are explored in detail in following sections.

- Study Findings

An in-depth look at the findings of this study. The findings are supported by quantitative data and qualitative examples of practices employed by the
partner organizations.

- Best-Practice Organization Profiles

Background information on the partner organizations as well as their innovative knowledge management practices.
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