Melanie Sutton – Senior Manager of Knowledge Capital Consulting at IQbusiness
There is a multitude of reasons for employee loss in the South African context. Overall economic sluggishness often leads to downsizing or redundancies, while digitisation of business – an essential process in today’s ultra-competitive landscape – can end in drastic organisation restructuring. A high-profile example of the latter is Standard Bank’s “rightsizing” announcement that they will be closing 91 branches and retrenching 1 200 employees as they shift to a customer-friendly digital banking model.
However, it happens – it could merely be a case of high staff turnover – the negative repercussions of employee loss extend far beyond affected individuals. It impacts organisations heavily as well, in the form of lost intellectual property or capital.
Intellectual property: It’s far more than you think
Intellectual property is far more than tangible patents that most people associate with the term. It includes everything intangible that an organisation produces as well – all the undocumented collective knowledge of the employees within an organisation. Intellectual capital is as much an important currency for companies as money in the bank, as knowledge is the foundation used to build up the business from capable, to competent and, finally, competitive.
Intellectual property has real commercial value, used to generate wealth, multiply the output of physical assets, gain competitive advantage and enhance the value of other types of company capital.
When an employee leaves an organisation, then, they take their intellectual property with them, often putting the company at a disadvantage. It could be as simple as lost business connections as lynchpin figures at the organisation depart. Productivity and competitive capability fall short during restructurings as employed people come to grips with inherited responsibilities from a departee.
With retrenchments in general, gaps appear between staff who have knowledge and staff who don’t, particularly when leavers are older, senior staff in possession of large amounts of institutional intellectual property. In highly-regulated industries, these gaps can lead to financial losses.
How to hang on to valuable knowledge and skills
Most South African companies are aware of the concept of intellectual capital and the vulnerabilities they face if they don’t retain it. However, few local businesses are utilising solutions, like comprehensive handovers, to protect themselves.
Succession planning is a solution that focuses on developing new leaders and experienced employees capable enough to assume different roles in the company as they become available. Companies that are proactive, and establish a reliable and effective succession plan, are in an excellent position to preserve their intellectual capital and retain their market competitiveness.
Other effective solutions include the adoption of more stringent information management strategies. Knowledge mapping encourages a company to identify its critical information and then consider how to store or retain it effectively. Meanwhile, process maps are useful tools – if kept up to date – along with central repositories to store company data in a more organised manner.
Not all intellectual capital can be captured, to be fair, but there are ways to socialise that information. These include encouraging regular informal discussion around work roles and promoting a knowledge-sharing culture centred on employee collaboration. A winning scenario is for this process to become innate, easy and well-embraced at the company.
Whether in stable or transitional periods, it pays for organisations to prioritise and plan for the transfer of their intellectual property. This approach safeguards a company asset that is key to ensuring sustained productivity and competitive performance – and helps to streamline working through inevitable periods of the company change.