By Dr. Nick Bontis

As we accelerate into the knowledge era, intellectual capital becomes the most important asset of our organizations.  However, every evening, the most important asset goes home – that’s you! This brings the value of intellectual capital down to zero. Thus, we are left with three compelling questions:

·         Will it come back the next morning?

·         Is there a process in place to protect it?

·         How can we grow it for sustainable competitive advantage?

The following top five remedies are suggested for retaining organizational knowledge and stopping it from walking out your corporate front door:

1.    Succession planning must be implemented for all employees in the organization.  That includes everyone from the CEO down to the call centre representative.  If an employee has a known trajectory for departure (e.g., retirement, back to school, maternity leave), a replacement hire must be made early enough to allow for job shadowing to occur.  One rule of thumb is one week of job shadowing for each year of employment.  Indeed, there is a financial cost for having two people do the same job for a short period.  But, the opportunity cost of not having knowledge continuity in place is even worse.

2.    Develop a corporate yellow pages.  In other words, find out and classify who knows what.  In this exercise, the talent and expertise of every single employee should be documented in a searchable file that resides on the company’s intranet.  This way, when you are looking for important information or a key contact, users can just type in a search term and zap, they know exactly who to go to for the answer.  Don’t forget, we typically waste over 25% of our time at work looking for answers to questions that someone else in the company already has.

3.    Exit interviews are a must for every single departing employee.  The biggest mistake companies make is having someone from HR conduct the interview.  This is useless!  The best way is to hire an independent firm to conduct the interview by phone and collect further information using an on-line survey.  This way, sensitive data is protected.  Once the vendor collects information from more than 5 departing employees, results can be reported back to the organization in aggregate, thereby ensuring confidentiality.  Don’t forget to ask the most important question in an exit interview:  What do you know that nobody else in the firm knows?

4.    Where is your alumni network?  A very hot trend right now is to develop an alumni database of all departed employees.  Universities do it, why can’t businesses?  These past employees can become a huge source of intellectual capital for your organization.  You can use them for focus groups, as test clients, as secret shoppers and even bounce ideas off them before new services hit the market.  Plus, by maintaining a useful relationship with alumni, they might come back again as employees in the future.

5.    Information ownership and usage policies must be communicated to current employees so that they understand clearly who owns what data.  An enormous risk for knowledge-intensive organizations is the threat of departing employees taking critical files with them (e.g., client lists, blueprints, marketing plans).  It is important for this issue to be addressed explicitly during the orientation of new employees.  Another potential tool in your arsenal is to make employees sign anti-competitive clauses when they join your firm.  At the end of the day, it’s your intellectual capital that can make or break your organization’s performance.  Be sure to safeguard it.

Dr. Nick Bontis is an award-winning professor of strategy at McMaster University and the Director of the Institute for Intellectual Capital Research. He is recognized as a global thought leader, management consultant and professional speaker in the areas of intellectual capital, knowledge management, organizational learning and human capital measurement.  For further information, check out his new media-rich website at www.nickbontis.com.