Institutional Knowledge and Employee Retention

Paul_CollyerBy Paul Collyer, Panelmet Consulting

Institutional knowledge is the knowledge of your business and industry contained within your company. It’s not easy for the accountants to measure, but as any good manager knows, it is one of the key assets of all successful businesses.

Previously in this column we’ve reviewed the importance of mentoring and how it can be used to foster loyalty and longevity, thereby retaining key institutional knowledge (click here to read mentoring column). Today, we’re going to focus on another issue - employee retention - and its role in preserving institutional knowledge.

I recently had the pleasure of dining with the president of a construction products manufacturer, some key members of his staff and several key suppliers to the business. Our main topic of discussion was the difference between “managers” and “leaders”. One side clearly felt that it was possible to be a good “manager” of activities (reliable, well organized taskmaster), while not being a particularly strong leader of people. The other side felt that both traits were necessary to be an effective manager, as leadership is a necessary ingredient of effectively managing people. At the end of the discussion, we agreed that all businesses require the effective management of both people and tasks.

The effectiveness of great managers and leaders most often comes down to people skills, combined with competence and knowledge of the business and industry they are in. Managers who do not properly lead, lack necessary people skills or fail to take genuine interest in their employees will soon lose them. I have heard many managers as of late comment that as the economy improves, the better employees are leaving for other opportunities and the ones that stay behind are often the employees lacking the skills, drive or confidence to advance.

Employee turnover is one of the quickest ways companies lose institutional knowledge and the competitive advantage it provides. It always amazes me how the departure of even one individual can profoundly affect the personality and competence of even a large organization. It amazes me even more how some companies really don’t seem to care about the loss of good employees, and seem to do very little to proactively retain them. As anyone who has managed for any period of time will tell you, the departure of a key individual can set a department or an entire business back several years or more due to lost institutional knowledge.

So, what are some ideas on how to protect our businesses against “brain drain” from happening?

  • Spread the wealth of knowledge through regular, ongoing employee training programs. Nothing is more frustrating to employees than being hired, given one day of so called training, (with little or no follow up sessions), then turned loose to the wolves. By the way, the sink or swim method may be a quick way to identify survivors, but it is also sure to increase employee stress, turnover and to create a bad reputation in your industry and the community in which your former employees live.
  • Investing in employee training shows that you take competence seriously and that you value your employees as real assets to the business.

  • Reward the higher knowledge, higher performing individuals in your organization. At various times over the past several years I’ve heard managers say that “corporate” has capped all raises to the cost of living increase, or that they “don’t have the flexibility to reward higher performing employees more than lower performing ones”. Clearly compensation is one area where “one size does not fit all”. If this is the case in your organization, then you need to evaluate your compensation policies quickly before the “brain drain” heads your way.


  • Encourage further education through tuition reimbursement programs. Tie the reimbursements to academic performance, relevance to the business and the employee’s potential career path(s). Where legally possible, apply reasonable rules and restrictions for program eligibility, such as reimbursements tied to the employee’s future employment with the business.


  • Support employees in obtaining professional certifications offered by industry associations, such as the Construction Specifications Institute. CSI certifications are incredibly beneficial in bridging knowledge gaps of the construction process, and provide much needed information on the roles and responsibilities of the various parties involved.


  • Encourage employee participation in industry councils and associations. They provide a wonderful opportunity to increase practical and technical knowledge of the architectural/engineering/construction industry, and there is no shortage of quality organizations to choose from. They also provide excellent networking and marketing opportunities for both the business and the employee.


  • Create centralized repositories for important information that can be shared by all employees who need access, and regularly review with them where they can find such information. It doesn’t do any good to have all the answers if no one knows they exist or can’t find them. Also make sure critical company intellectual property is available to all employees who need it, and not tucked away on individual employee’s computers.


  • Provide forums for employees to share their experience, ideas, knowledge and solutions with others, especially management. Encourage the exchange of ideas between various management levels. Senior staff may be the best managers and have an excellent understanding of the business, but they can often make decisions that negatively affect others without a thorough understanding of the unintended consequences further down the line.


  • Increase the depth of your key customer and vendor relationships. Upper management tends to be terrified when a top salesperson or manager leaves the business, especially for a competitor. However, much of this angst can be avoided by developing deeper and broader relationships with your key customers and vendors. For instance, do you encourage your internal customer support staff to occasionally travel with your sales team to meet key customers? Customers who get to know multiple people in their supplier’s organization generally feel more secure about their relationship and are much less likely to jump ship when a key employee leaves. The same applies to vendor/supplier and owner/contractor relationships.


  • Make sure your management team is mature enough not to be threatened by other capable people trying to climb the corporate ladder. Great managers understand it takes great people to make them look good, and are confident enough in their own abilities and talents not to be threatened by others. Company minded managers also put the company’s interests ahead of short term personal gain, and want to surround themselves with the best people available. They also have the maturity to understand their own capabilities as well as limitations.

Safeguard your most treasured assets - your employees, and preserve your company’s institutional knowledge. Great employees truly are the most important differentiator in business.

Paul Collyer is vice president of business development for Metl-Span. He holds an Industrial and and Systems Engineering degree from Georgia Institute of Technology (Georgia Tech), with professional affiliations/certifications that include Construction Specifications Institute (member), Certified Construction Product Representative (CCPR), LEED Green Associate (USGBC) and Green Globes Professional (GBI). Collyer has more than 27 years’ experience working for construction product manufacturers in the insulated metal panel, single-element metal cladding and pre-engineered metal building industry.

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