Winning the Knowledge Race

How leading organizations are using strong internal systems and processes to combat the many knowledge-based risks facing the technical enterprise today

In the race to harness and utilize both internal and external content across numerous departments and business functions, companies increasingly turn to their engineers, knowledge workers and other technical professionals to contribute to growth, cost optimization and risk management objectives. Concurrently, knowledge workers are grappling with challenges such as shrinking corporate resources, looming demographic trends (i.e., the retiring baby boomer generation), and unprecedented levels of information overload.

These and other obstacles make it extremely difficult for companies to win the knowledge race—right at a time when effective information management is becoming a critical tool for leading corporations that want to achieve operational excellence. In this article we'll explore the results of the recent Supply & Demand Chain Executive (SDCE) "State of the Professional Workforce" survey conducted in November-December 2015. We'll look at the key challenges facing today's knowledge workers and see how leader enterprises are overcoming these headwinds to deliver increasing value and separate themselves from "laggards" in their respective industries. [See "About the Survey" on page xx for more information.]

 

A Shrinking Technical Workforce

The technical professional workforce has experienced significant changes over the last two years, with 52 percent of firms either shrinking this aspect of their workforces or simply not growing headcount at all during this time, according to the SDCE survey results. Concurrently, nearly 25 percent of firms are dealing with an increase in the number of senior technical employees who are retiring and leaving the workforce completely. Further complicating the situation are the 50 percent of current technical professionals who are on track to retire sometime in the next five to 10 years.

"There's no organization that I know of that isn't concerned about this," says Fred Filler, director of engineering content with IHS Product Design. Filler notes that the high point for engineering graduates from Western universities traces back to the early 1980s, so the "magic 65" retirement age is coming into clear view for a high percentage of these engineers. "As this point, we're expecting half of today's knowledge workers to retire over the next few years," Filler adds, noting that companies dependent on knowledge workers are becoming very concerned about the implications of the coming mass exodus.

And it's not like the engineering pipeline is filled with up-and-coming professionals. During the early 2000s, for example, the technology bubble burst—a phenomenon that pushed potential engineers and technical professionals to seek out alternate educational opportunities and/or lines of work. "When we look at the natural, next progression of engineers coming into the workforce," says Filler, "there just aren't as many." Even for those companies that do successfully recruit technical professionals, the time it takes to train and cultivate them can be five to 10 years or more—yet another obstacle that firms need to be aware of as the big crew change begins.

In some cases, companies work against themselves on the knowledge worker front. During mergers and downsizing, for example, it's often the top-tier, most experienced, and highest paid engineers who receive the early retirement offers. This strategy may make sense from an immediate-term financial perspective, but it can fail miserably when those senior workers are replaced with younger, inexperienced talent. Put simply, there usually is no replacement. Companies subsequently face sudden knowledge gaps that can quickly bring to a halt any growth, cost optimization and risk management objectives.

 

Delivering More Value with Fewer Resources

Under increasing pressure to deliver more value with fewer resources, and to do all of this faster and at a lower cost, the technical enterprise is dealing with a new host of challenges in today's business environment. According to the SDCE survey, 72 percent of knowledge workers say they are having to "do more with less"—take on more work, complete more projects, with fewer resources. At the same time, 64 percent say the pace of engineering is increasing and 54 percent say cost-cutting pressures are putting quality at risk. These complications inevitably have a negative impact on corporate performance in a world where both speed to market and quality of product and service are increasingly seen as "must haves."

Drilling down further, 85 percent of survey participants say a shortage of talent and knowledge are already having a significant impact on the technical enterprise, while 86 percent say the resource/people shortage is negatively impacting product quality. And when asked about the potential knowledge loss due to technical professionals leaving their companies, 75 percent of respondents view this knowledge loss as a "critical issue" facing their organizations right now.

As an example of this sort of impact, Jeff Cloutier, a director with IHS Product Design, relates the story of a manufacturer of hypodermic needles that was dealing with a discoloration issue on its products' plastic bases. Nurses would open the needles, see the discoloration, and promptly toss them in the trash—assuming that they were non-sterile or otherwise unsafe to use. This wasn't the company's first time grappling with the same issue, but this time around the engineer who had solved the problem in the past was now retired.

The company's current engineers couldn't located him, couldn't find the database where he'd recorded the related data, and were unable to access his laptop. "The solution was somewhere within the company, but no one had any idea where it was or how to access it," Cloutier says.

The company eventually located the engineer and the solution, but they lost time and wasted effort in the process—not to mention the loss associated with customer satisfaction issues and the number of discarded (and perfectly sterile and functional) hypodermic needles. This is just one example of how a seemingly minor knowledge gap can create significant—and even irreversible—consequences.

 

It's Not Easy Being a Knowledge Worker

Data complexity and the tsunami of information that knowledge workers are managing are increasing complexities for the vast majority of technical professionals. In fact, two out of three surveyed by SDCE said the volume of information they're dealing with is rising. The number of information platforms that they're working with is also increasing, as is the complexity of the information itself (63 percent) and the number of data sources (70 percent).

These factors are making it more and more difficult to be an engineer, scientist or researcher in today's information-rich world. In fact, 75 percent of respondents say that the challenges associated with managing and accessing information impact production, quality and innovation. The problem isn't going to improve on its own anytime either, what with the nation's 75-million-plus baby boomers making their way into retirement. According to the SDCE report, fewer than 50 percent of organizations have formal knowledge transfer/retention practices in place to ensure that critical information doesn't just "walk out the door."

The reality is, important data, information and knowledge can just walk out the door at any given time. This is an issue that organizations like NASA grapple with on a daily basis. But solutions are available to help organizations overcome these challenges, too. NASA, for example, used a technical knowledge management platform from IHS to index historical internal documents and websites, thus enabling a full-text search across all of the information. The platform proved its value almost immediately when an Orion Crew and Service engineer used it to research the Apollo program's upright landing system—saving NASA from having to reinvent a solution that had made its debut more than a generation ago. (See full article on NASA's use of Goldfire on page 14.)

 

Leaders vs. Laggards

In examining how leading organizations are using strong internal systems and processes to combat the risks facing today's technical enterprise, the lines between the "leaders" and the "laggards" are obvious. According to the SDCE survey, 59 percent of participants see their firms as leaders, 32 percent as "average," and 9 percent as laggards. Overall, the leaders outperform laggards on key measures such as revenue, quality, launch data, customer satisfaction and unit cost. Based on these measures, the case for being a leader versus a laggard is clear-cut; there really is a positive impact associated with the former.

Right now, leaders are growing their technical workforces while laggards are cutting back in this area. Over the last two years, 55 percent of leaders added staff and 14 percent reduced staff (versus 19 percent and 47 percent for laggards). As a result, leaders are losing fewer technical professionals to the competition, and to retirement and layoffs in general. "In most cases, the companies that are not faring well can expect more layoffs and/or a loss of workers to the competition," says

Filler. "Once an organization begins to lag behind, a toxic environment begins to build up, and people don't even want to be associated with that company."

This fact is particularly true within the engineering space, where professionals want to make things better. As such, when engineers begin to see something around them that's not working properly, they're more prone to jump ship. This reality is making companies think more carefully about the potential brain drain taking place within their technical enterprises, where SCDE reports that 51 percent of leading firms are worried about this (compared to 62 percent of laggards). But even among the leaders, a full 48 percent have no formal practices in place to keep knowledge from draining out and disappearing as engineers, scientists, and other knowledge workers retire.

To win the knowledge race, avoid risk, and maintain or improve revenues, leading organizations are using strong internal systems and technology-enabled processes that help them effectively harness and access knowledge across the enterprise. Using the right platforms and tools, organizations can greatly improve upon their current processes, work with fewer resources, and have confidence that their technical workforces have the tools they need to operate in the most efficient and effective manner possible.

 

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About the Survey

Supply & Demand Chain Executive conducted the State of the Technical Workforce Survey in November and December 2015. Survey responses were solicited via email, and a total of 803 respondents provided answers on the survey. In all, 506 respondents self-identified as engineers or other technical professionals. The survey results discussed in this article refer specifically to this latter group of professionals.

 

Pullquotes:

"... we're expecting half of today's knowledge workers to retire over the next few years." Fred Filler, director of engineering content,  IHS Product Design

 

Fewer than 50 percent of organizations have formal knowledge transfer/retention practices in place to ensure that critical information doesn't just "walk out the door."

Supply & Demand Chain Executive "State of the Professional Workforce" survey