Key Person Dependencies: Managing Human Capital Risk
For decades, organizations have focused on succession planning and preparing for the potential loss of executive leaders. Key Person Risk Management and Human Capital Risk Analysis emerge as critical considerations due to recent studies showing 30% of senior workers are expected to retire over the next three to five years. This loss will result in a gap in expertise and institutional knowledge while increasing the need to effectively transfer knowledge within short time frames.
Key Person Dependency (KPD):
Key personnel possess significant knowledge, experience, and skills that are critical to the growth of the organization. In their roles they have been largely responsible for decision-making that directly impacts the financial and operational success of the organization, as well as its brand reputation.
Organizations must recognize the impact of losing their key personnel and implement effective knowledge management techniques to ensure loss of resources does not equal loss of institutional knowledge.
Knowledge Management Techniques:
Knowledge Management is the process of transferring the expertise, judgment, and competencies of key personnel to the appropriate future successors.
The most common techniques used to transfer knowledge are interviewing resources and documenting processes, creating training videos that can be stored in knowledge repositories, and facilitating job shadowing. These methods can be effective when time permits, but most senior leaders hold positions that limit their availability. As a result, organizations cannot expect to capture everything from key personnel. Instead, they must solicit the most valuable information by applying the KPD assessment methodology and knowledge transfer instruments. Identifying what knowledge is important and necessary to sustain the competitive advantage will help to better define the parameters of what is considered critical knowledge.
To measure knowledge transfer success, companies should begin by determining what is critical from a control, customer, and competency perspective, and then capture that data. Recognizing that explicit knowledge can be clearly measured while tacit knowledge is more challenging to gauge will allow organizations to customize various programs for different types of knowledge transfer. For more information about our website Click Here
