Pew Research estimates that about 25 percent of the total U.S. population are baby boomers, and that, every day for the next 16 years, roughly 10,000 baby boomers will hit age 65.
The most obvious implications of this mass exodus are reflected in this anecdote about what happened to Boeing in the mid-nineties: after some 9,000 senior employees took them up on early retirement, Boeing’s production lines were shorted on specialized skills, which eventually halted production and cost Boeing an estimated $1.6 billion charge against earnings.
But companies stand to lose more than defined skill sets. They can lose what some (and we at Leopard) call tribal knowledge. For sales forces, this knowledge is often the secret weapon that differentiates a brand when sellers go head to head with the competition. Not something you want to have walking out the door, never to return.
So there are two kinds of seller knowledge to protect: the explicit knowledge (what you know they know) and the tribal knowledge (what you don’t know they know).
Double trouble: Two kinds of knowledge to protect
Executives recognize that the imminent retirement boom will result in lost knowledge, and some organizations have been attempting to minimize these losses by capturing explicit knowledge: processes, sales figures, client data, mathematical and scientific formulas, etc.
Tribal knowledge, or tacit knowledge, is unwritten, unspoken and hidden within employees’ experiences, insights, intuitions, emotions and stories. Sometimes, with aging boomers especially, employees may intentionally keep mum about intelligence and know-how as a form of job protection—it can give them an edge over younger generations jockeying for similar jobs.
According to the book When Generations Collide, General Mills estimates that it loses millions of dollars in tribal knowledge when its marketing managers leave. These managers usually need over five years to understand and effectively market to their consumers. When they peak and leave, the company loses all their acquired knowledge.
Can’t put a price tag on relationships
Sales is about more than knowing one set of consumers and what’s important to them. It’s about knowing individual customers. Understanding their culture. Creating and nurturing relationships. From learning how to navigate a client’s internal and external teams to finding out how much chitchat she likes before getting down to business, experienced salespeople nourish their connections to establish long-standing accounts. Ever-growing tribal knowledge runs the gamut from ways to finesse processes within one’s own organization (“Enter it, but don’t actually submit it before you’ve run it by so-and-so.”) to what prospects really want to hear when you show them how certain products or programs are relevant to their business.
Client relationships and productivity feel the pain of losing these individuals. Retiring boomers may have more than 20 years of experience with their organization, clients and industries—even the best and brightest replacement will not be armed with the same know-how and intellect, collected over decades.
It’s a competitive differentiator, so put some thought into it
Forward-thinking organizations that attempt to capture tribal knowledge generally rely on shadowing programs that pair up senior and junior sellers. But unless there’s a 1:1 replacement, scalability is an issue. Plus, the ways that baby boomers teach and younger employees learn can make knowledge sharing between the generations difficult.
So the question becomes: How do you capture and share tribal sales knowledge across an entire organization, instead of relying on the 1:1 handoff?
We think it starts simply enough: ask them. Capture the stories, approaches and tricks of the trade that sellers accumulate over the years. Illinois Mutual Life Insurance Company has over 200 employees who systematically share knowledge and then institutionalize much of it. So even when its executives decide to retire, Illinois Mutual retains their experience and makes the company more efficient in the process.
Next, deliver that captured knowledge in a way that engages the next generation of sellers—the millennials, who require a different approach to learning and communication than previous generations. We know millennials respond best to information that is engaging, short and concise. They thrive when they’re reassured of their progress and like their own feedback to be acknowledged.
While many millennials are hired as baby boomers retire, generations X and Y are still in the equation, and knowledge-sharing tools need to address them as well. This variable and many others (company culture, existing training programs, sales goals, etc.) will drive how you collect and share tribal sales knowledge. There are best practices but not prescriptive formulas. What works for Illinois Mutual may not work for your organization. Your most effective knowledge-sharing practices will be uniquely yours.
And, of course, we’d love to help you discover them.