The oldest baby boomers are six years away from retirement. Will your company continue to thrive if they take their knowledge with them? Here's how to identify who has key knowledge and how to keep it within the company walls.

READER ROI

• Determine what knowledge is crucial and who has it
• Learn the CIO's role in retaining knowledge
• How to motivate experienced employees to help

IN 1997, with the cold war well behind them, thousand of engineers who had helped design and maintain the B-2 bomber were asked to leave the integrated systems sector of Northrop Grumman. As the nearly 12,000 workers filed out the door, leaving only 1200 from a staff of 13,000, they took with them years of experience and in-depth knowledge about what was considered at the time to be the most complex aircraft ever built.

Northrop Grumman knew it had to keep enough of that know-how to support the division's long-term maintenance of the B-2 bomber, so a newly formed knowledge management team identified top experts and videotaped interviews with them before they left. But it was hard to get everything in a single interview, says Scott Shaffar, Northrop Grumman's director of knowledge management for the Western region of the integrated systems sector. "We did lose some of that knowledge," says Shaffar. "In an exit interview, you can capture certain things, but not a lifetime of experience."

Northrop Grumman scrambled at the time to identify experts in key areas related to the program and to create a central repository for project documents. The aerospace giant kept enough of that knowledge to maintain and move forward with B-2-related upgrade projects, even as some expertise disappeared. Still, Northrop Grumman learned some important lessons about preventing a massive brain drain in the future.

Eight years later, the company uses a variety of tools to retain and transfer knowledge from its engineers - well before they retire. Shaffar and his team have put in place document management systems and common work spaces that record how an engineer did his job for future reference. They have started programs that bring together older and younger engineers across the country to exchange information via e-mail or in person about technical problems, and they are using software that helps people find experts within the company.

While most companies won't face the sudden departure of thousands of skilled workers, as Northrop Grumman did in the late 1990s, they and government agencies alike will need to prepare for the loss of important experience and technical knowledge as the baby boomer generation gets ready to retire over the coming decade. As of 2005, the baby boomers (the generation born after World War II) range in age from 41 to 59, and their numbers almost double the generation X that follows them. And unlike their younger counterparts, many boomers have spent a large chunk of their careers in one company or agency, building up stores of experience and knowledge. While some KM experts downplay the issue, claiming that younger generations will take over and bring new skills as their older colleagues retire, it is clear that many companies are already feeling the pinch as those on the older fringe have started to leave the workforce.

Federal and state governments, as well as industries such as aerospace, defence, energy and utilities, will be hit hard by the large-scale retirement of skilled workers, says David DeLong, author of Lost Knowledge: Confronting the Threat of an Aging Workforce. That's because such sectors generally rely on older, legacy technologies and have not hired large numbers of younger workers in decades. "The demographic shift and change in the coming workforce are incredibly serious in certain sectors and work units," DeLong adds. These companies and agencies in particular need to act quickly.

"Companies need to figure out who has the important knowledge, and they need to capture it before it's too late," says Carl Frappaolo, co-founder of consultancy Delphi Group. "If they don't, they'll be paying to reinvent the wheel."

Costs of Lost Knowledge

While most top managers are aware that they'll soon have a lot of workers retiring, few are doing much to prepare for the event. That's often because it's hard to quantify the cost of losing knowledge. "The baby boomer exodus is the elephant in the room when I talk to managers," says Mary Corcoran, vice president and lead analyst at Outsell, a research and advisory firm. "Most are not doing anything in a major way about retaining knowledge."

CIOs can take a leading role in preventing baby boomer brain drain by being prepared to respond quickly when management decides the company needs a KM system to help retain crucial knowledge. "CIOs need to know what's going on in this area because records management, search tools and databases will be running on their systems," says Frappaolo. In many cases, KM and human resources leaders can work closely with CIOs to put in place databases that track knowledge and other technologies as part of an overall plan. Northrop Grumman's Shaffar, for example, says he works closely with the IT department and spends more than 50 percent of his KM budget on IT - and will continue to do so. "How would engineers connect across the US if they didn't have e-mail, instant messaging or document management systems?" he asks.

Shaffar and other KM experts stress that even within a single company, brain drain won't hit all departments or units in the same way. Larry Mohl, chief learning officer for Children's Healthcare of Atlanta, a paediatric health-care organization, says his past experience at Motorola and American Express showed him that while knowledge loss is an ongoing problem, it's not pressing unless it involves a specialized skill that is crucial to the organization's success. Mohl says that natural turnover from retirement won't create a crisis at most companies. Still, he says, it's important to identify top performers in the organization and work to keep them and accelerate promotions as a way to ensure good succession planning. And if key people are going to be retiring, a company must act quickly to keep their knowledge.