November 4, 2014

Knowledge transfer has long been a challenge for businesses. With the large number of Baby Boomers eligible to retire in the next few years, that challenge has been magnified.

Senior businesswoman with laptopThe key to addressing this concern is to start early. For some companies, that ship has sailed, making it necessary to play catch up.

Here are areas to consider to be sure your company doesn’t suffer as longtime employees retire.

Systems and procedures

Does your company have documented systems and processes that govern most functions?

If not, you’re likely relying on tribal knowledge to accomplish tasks and address issues. This is a basic step in knowledge transfer. Look at each department in your company – accounting, sales, customer service, etc. Pretend that the person who usually does the job is removed from the scene and unavailable for questions. Would someone new be able to handle the job, at least on a basic level?

If your departments don’t have written guidelines and procedures to describe what happens in each position, now is the time to establish them.

If there are written procedures, are they up to date? If not, be sure updating takes place at regular intervals.

While it is difficult, and perhaps unnecessary, to capture every nuance, documenting the basic process is critical.

There are software programs and consultants to help you with the process, but it can also be done by creating a Word document or spreadsheet with detailed steps.

Have each department break up its function into pieces. For example, accounting might look at accounts payable, payroll, accounts receivable, cash management, fixed asset accounting and so on.

Then take each piece and have the person who knows the function document the steps in handling the most common tasks. Once documented, have someone who does NOT know the job try to accomplish the task by following the documented process.

Tweak the documentation until successful. Then be sure to update it as processes change.

If you set up your documentation to allow for key word searches, it will be easier for a newcomer to find the instructions he or she needs for each situation.

Effective cross-training

Cross-training is good business, and it is a critical component for knowledge transfer.

One of the keys to effective cross-training is to resist the urge to do the task, opting rather to share information that will help someone else do the task or handle the issue.

This can be difficult for many people. It often feels inefficient, which it is in the short-term, and time pressures can cause us to fall back into doing, just to move the process along more quickly.

Cross-training is planning for the longer-term. If your company is operating at 110 percent of capacity, it is going to be very difficult to find the time to cross train. Cross-training requires an investment of time and money.

It may be necessary to hire new team members far in advance of the actual transition so that they have time to observe, learn and take on the tasks currently held by your Baby Boomer employees. The less repetitive the job, the longer the teaching period needs to be.

As you change the role of the Baby Boomer from doer to teacher, you will need to adjust how that person is evaluated. The senior employee should be measured on how well the understudy is coming along, not on how well the veteran does the actual job. If you continue to evaluate the teacher on job performance, it will be difficult to focus the effort on teaching.

Your veterans may need help learning to teach. They may not see the job in its component parts because they have done it for so long.

You may need to have them make an outline of the job and develop a logical path for training. You can’t expect someone new to grasp everything at once, so developing some structure around how you will train the new person will be helpful.

Capturing the knowledge of your Baby Boomers will take time and money. But not capturing it will cost you time and money in the longer term.

It isn’t a matter of “if” – it’s a matter of “when” – you’ll make the investment. While the transfer process may be stressful when done ahead of time, it can be a business killer if you wait too long.

This article was originally posted on November 4, 2014 and the information may no longer be current. For questions, please contact GRF CPAs & Advisors at