You Must Remember This

Deep Smarts: How to Cultivate and Transfer Enduring Business Wisdom
By Dorothy Leonard and Walter Swap
Harvard Business School Press, November 2004
304 pages, $29.95
True or false: The chief information officer is the person in charge of the company’s current data.

If you answered “true,” give yourself partial credit. Your current data is certainly important, but what about all the knowledge that disappears every time employees leave the firm? It doesn’t matter if they are retiring, moving to another company or have been fired. A key competitive asset is lost whenever an employee leaves your company, because they are taking with them what they learned on the job.

What they take away is more than knowledge or intelligence. It is what authors Leonard, a retired Harvard Business School professor, and Swap, a former psychology professor at Tufts University, call “deep smarts”—the “experience-based expertise” that comes only from years of hands-on wisdom. And most companies just don’t deal with this loss effectively.

The problem of disappearing knowledge is not new. Just think of the lost library at Alexandria, the fact that no one knows how Stradivari made a violin, or any of the “lost arts.” Closer to home, CIOs have long tried to figure out a way to capture efficiently what the organization knows, but no one will argue that they have been particularly effective at it—consider the history of Knowledge Management. And this is particularly troubling today, for two reasons:

First, members of the largest generation ever to work—baby boomers—have already started to retire. Obviously, since the oldest boomer just turned 58, the number that have left the workforce is still small, but the handful now heading out the door will soon turn into a stampede. Most companies are not prepared for the fact that a significant portion of what those workers know, most of which has never been formally captured anywhere, will be leaving with them.

What makes the problem more severe is that the knowledge we are about to lose is more complex, abstract and costly to recreate than ever before. You need look no further than at all the types of information you yourself are responsible for. And most organizations have done little to prepare for the coming loss.

How do you transfer this knowledge? The authors outline a three-step process:

First, someone needs to figure out what information should be transferred. Next, someone has to do the transferring; the authors refer to this person as a “knowledge coach.” The knowledge coach makes sure all the important information is passed on to the right person—someone who will not only benefit from it but who also wants to possess it.

Finally, the coach checks to see that the knowledge that was transferred was actually understood. She does that by having the receiver put it to use in real-life situations.

This is an important subject. As a matter of course, you back up your company’s data. You should be “backing up” your institutional knowledge as well. If you are not capturing that know-how in a formal way, you’re losing a lot more than you think.

Paul B. Brown‘s latest book is Publishing Confidential: The Insider’s Guide to What It Really Takes to Land a Nonfiction Book Deal.