Is your company's knowledge walking out the door and leaving you in the dark? Do your activities, which usually run like clockwork, turn into a nightmare when your employees go on vacation? Why does your quality group complain about the same issues rising every time you have a change in your workforce? Tribal Knowledge, Brain Drain, Human Capital Flight, Retirement or Loss of Know-How, Knowledge Transfer… No matter what you call it, each time it occurs, your company suffers. Figuring out how to retain employee knowledge before you lose it is crucial.
How Big is the Problem in the U.S?
According to the U.S. Bureau of Labor and Statistics, when looking at the last 10 years of data, the average yearly separation rate in the Manufacturing sector is 28.25%.
This means that approximately 3 out of 10 employees will leave your company every year!
The Ideal Labor Market
There is a lot of information out there to say that maintaining an average yearly separation rate of 10% is ideal, but it’s not as simple as that.
Your top performers (approx. 25% of your employees) account for 61% of your company’s success. You don’t want to lose these employees, but at the same time, you still need to capture their knowledge.
Your worst performers (approx. 25% of your employees) cause a loss of -7% to your company.
This means that you need to be targeting your worst performers and turning them over, but how do you do this?
The Problem is Real
Whether your company has to downsize, or your employee’s leave out of their own free will, the problem of losing your know-how is real.
It also leaves you having to actively find a way to reduce or eliminate its negative effects on your company.
The solution is to go back to the fundamentals and use technology in solving the problem of how to retain employee knowledge before it walks out the door.
What Are the Fundamentals?
As human beings, we strive to succeed. How do we do this? Each and every generation has passed down its knowledge, in the hopes that the next generation won’t repeat the same mistakes.
We constantly try to transfer our wisdom, so we can build a better and brighter future.
How can you transfer your knowledge as a company? How can you build upon that knowledge to continuously improve? How can you keep that knowledge so you can easily pass it on to the next generation --or better still-- your next employee?
Many companies have searched for the solution, but only the most successful have captured it, committed to it, and progressed with it. Will your company be next?
The key to your successful future is knowledge transfer.
Knowledge Transfer Solutions
Example 1: Toyota
Every successful company builds upon its success. Toyota is a prime example of this. Yes, they do make mistakes, but it’s more a result of not following their own best practices and knowledge. Their rise to success comes from following basic principles and those principles rely on one common thing, work instructions.
Without work instructions, nothing else matters. You cannot perform a Kaizen if you don’t know what your processes are. You cannot implement your improvements if you cannot standardize them.
You must have clear concise work instructions as the foundation to all of your activities.
Example 2: Deming
William Edwards Deming, an influential American credited with starting the Total Quality Management movement, was a strong advocate of the Shewhart Cycle, also known as the PDCA Cycle. It is basically the method of repeating a process to determine your next actions.
Plan: Clearly define the process you are carrying out.
Do: Follow your process exactly.
Check: Measure the factual results of your process.
Act: Take steps to improve your results.
The Shewhart Cycle is not just for science experiments, it is applicable in every workplace. It relies upon documenting your process and clearly defining all the items you know (or the best of your knowledge so far).
You then follow the process each and every time. Following your process is critical. Committing to it ensures all information gained during the exercise is valid and usable. Each time you execute your process, you measure the results. Using the results, you take actions to improve. Then repeat.
The critical point here is any actions you do MUST be documented into your process. Committing to this ensures your knowledge is captured, followed, and turned into improved results. It also helps to answer the fundamental question of how to retain employee knowledge before an employee leaves.
Don’t worry if the results sometimes go in the wrong direction. You can look back at your process, identify the change, and remove it. By following these strategies, you are improving your knowledge and most importantly learning from your mistakes.
Motorola - DMAIC & Six Sigma
Problem-solving has been and will always be a critical component of competitive business strategy, particularly when it comes to manufacturing. In terms of manufacturing problem-solving efforts, Six Sigma has become the most identifiable approach.
Although Six-Sigma refers to an actual statistical result reflecting the maturity of a process, in more general terms, it refers to a set of tools designed to help organizations improve the results of their business processes by leveraging data to reduce defects.
One of the most popular and effective problem-solving tools applied to existing manufacturing processes is DMAIC.
As GoLeanSixSigma explains, DMAIC is one of the five phases of Lean Six Sigma and is an acronym for Define, Measure, Analyze, Improve & Control. It’s an improvement cycle that was created as a result of Motorola’s development of Six Sigma.
DMAIC: The Problem-Solving Strategy
Although the process appears as a closed-loop continuous improvement (Kaizen) cycle, the reality is more complex. The DMAIC process, by its very design, relies on the existence or creation of a current process, or best-practices to accurately define the problem and identify goals. Without a clear understanding of the current state, attempts to clearly and accurately identify the problem and develop solutions will not be fully optimized.
Lack of accurate process documentation impacts more than just the define phase of a DMAIC driven project. Notwithstanding the impacts of poor documentation on the Measure and Analysis phases (bad inputs = bad outputs), the deployment, and even more importantly, the sustainment of improvements through the Improve and Control phases will be compromised.
This clearly identifies the need for a user-focused process documentation tool where current processes, despite their weaknesses, can be quickly documented before kicking off any Kaizen event. The right tool can then be leveraged for documenting and deploying improvements, which will greatly improve the sustainability of the changes.
The Kaizen 10 Step Process
The Kaizen process can be a great starting point for organizations kicking off just about any improvement effort. The importance of clear process documentation is apparent here as well.
- Define the problem
- Document the current situation
- Visualize the ideal situation
- Define measurement targets
- Brainstorm solutions to the problem
- Develop a Kaizen plan
- Implement the plan
- Measure, record and compare results to targets
- Prepare summary documents
- Create a short term action plan, on-going standards, and sustaining plan
Using Storytelling to Your Advantage
As mentioned previously, human beings have been passing down knowledge since the dawn of time. In the beginning, it was by word of mouth, then came manuscripts, and then came the printed book. With all things we strive to improve - technology moves at a massive pace - now we have access to vast amounts of information on the world wide web. From manuscripts to your favorite websites, they all have one thing in common, everything is documented. And this is exactly the solution to determining how to retain employee knowledge before you lose it.
Documenting Your Process
When taking into consideration the Ideal Labor Market, the Shewhart Cycle, DMAIC, Six Sigma, Kaizen, and storytelling, the best way to capture your knowledge, improve it and to pass it on, then becomes to document every bit of it.
That way, if you lose your star employee to another company, then there’s nothing to worry about it; You have already optimized your processes and their knowledge is captured within the software. Your next employee can just pick up and continue to move forward with your best practices.
When your most relied-upon employee goes on vacation, fear not, everyone is following his processes. Better still, upon their return, they can now stand back, observe their processes and make them better.
Your quality group no longer has to deal with the ‘same old problems’. Instead, they are measuring the results and taking actions to continuously improve.
They are adding value and not just fighting fires.
With contributions from Shannon Bennett.