Risk Insider: Dan Holden

Kiss Knowledge Good-Bye

By: | November 5, 2014

Dan Holden is a Risk Operations Manager at BBSI in Portland, Oregon where he helps employers avoid on-the-job injuries by instilling a zero loss culture. His recent background includes serving as the Risk & Insurance Manager for Daimler Trucks North America. He also worked as Vice President and Senior Workers’ Compensation Consultant for Marsh USA. Holden earned his B.A. in Journalism from Oregon State University and has written for several insurance and risk management publications. He holds an Associate in Claims designation. Dan can be reached at [email protected]

Neil Armstrong became the first man to set foot on the moon, marking the culmination of a $24 billion NASA space program. Ten years later, NASA sheepishly admitted they could not return to the moon even if they wanted to — they couldn’t remember how.

This is a perfect example of what is referred to as the “Knowledge Gap,” or the loss of critical information when employees leave their place of employment. In the case of NASA, all the key people involved in the original Apollo 11 project had retired … and no one thought to jot down what they knew. To make matters worse, blueprints for Saturn V — the only rocket powerful enough to travel to the moon — were lost.

Even though this NASA fumble took place 30 years ago, the exact scenario is being played out in spades as Baby Boomers (those individuals born between 1946 and 1964) are reaching retirement age, and most employers have made no effort to capture their knowledge before they eventually leave.

A study earlier this decade by the Bureau of Labor Statistics reported that more than 17 percent of Boomers holding executive and managerial positions are expected to leave their careers by 2015. Forty percent of the skilled labor force will leave the manufacturing workforce during the next five years and will reportedly cost companies between $50 million and $100 million.

As Baby Boomers are reaching retirement age, most employers have made no effort to capture their knowledge before they eventually leave.

While some companies have begun scrambling to hire trainees and close the potential knowledge gap created by the Boomer exodus, most companies haven’t even taken notice.

David DeLong, author of the book “Lost Knowledge: Confronting the Threat of an Aging Workforce,” recently pointed out that there are direct and indirect costs associated with lost knowledge.

Direct costs occur through the loss of workers with specific knowledge through retirement and attrition. When these experts are no longer around, it accentuates the indirect costs of knowledge loss: poor documentation and storage.

Northrop Grumman has been on the forefront of knowledge management for many years. In 1997 with the Cold War behind them, thousands of NG engineers, who had helped design and maintain the B-2 bomber, were asked to leave the integrated systems sector. In a short period of time, 12,000 workers filed out the door leaving only 1,200 from an original staff of 13,000 employees, to help maintain the current fleet of bombers. The 12,000 took with them years of experience and in-depth knowledge about what was the most complex aircraft ever built.

Without appropriate measures, this could have been a disaster of epic proportions. Instead, prior to the exodus, NG formed a “Knowledge Management Team” who identified the top experts and videotaped interviews with them before they left.

No company wants to be in the position in which NASA found themselves — having to explain why they can’t recreate the single greatest event in modern history. So if employers don’t plug the knowledge gap prior to the great Boomer exodus, it’s going to be more than just Houston that has a problem.

Read all of Dan Holden’s Risk Insider contributions.

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The R&I Editorial Team can be reached at [email protected]