In the late 1990s, consultants and academics began talking incessantly about the ascent of the “knowledge economy.” This invisible system, they posited, encompassed the collective set of ideas and innovations generated by a global workforce. As the competition for customers grew more intense—fueled, in part, by the rise of electronic commerce—companies that mined the collective intelligence of their employees would come out on top. In this gray-matter economy, originality and fresh thinking would be king, and a company’s most valuable assets would be those located in the body electric.
Back in the real economy, however, a stifling recession dashed most talk of a knowledge economy, as companies went into survival mode, paring costs and shoring up balance sheets. But with the recent surge in the U.S. economy, the concept of knowledge management is staging something of a comeback. This go-round, though, companies seem more concerned with what they don’t have, rather than what they do have.
The aging workforce is partly to blame. While an increase in the number of retiring workers can ease payroll burdens, it can also trigger a loss of institutional memory. Managers note that employees—particularly highly trained employees—take their job knowledge with them when they punch off the clock for the last time. Due to this silent brain-drain, managers looking to hire new workers may not know exactly what skills need replacing.
To fill that knowledge void, some companies have begun to take inventory of the abilities of their current employees. The process, often called knowledge mapping, requires the creation of a database of information about the specific capabilities of each worker, including job experiences, areas of expertise, education and training histories, and talents like communication skills. Software or search engines then bring all this information together, enabling managers to see what the organization is good at and where it needs help.
Such insight, say experts, can have a big impact on the kind of talent companies go after in the job market. More important, it can also get managers thinking about the real strengths—rather than the perceived strengths—of a business. “A lot of organizations talk about their core competencies,” says Jon Walker, global leader for HR at Dow Chemical Co., “but unless they measure them, it can be difficult to know what they really are.”
And when it comes to assessing core competencies, ignorance is definitely not bliss. Companies that rely on highly skilled workers—programmers, scientists, engineers—are especially vulnerable to a skills shortage. What’s more, many businesses (technology and pharmaceutical companies, notably) rely on research to develop new products. Without knowing the exact expertise of workers, it can take time to match up the right set of workers for a project.
Indeed, consulting and professional-services firms use knowledge mapping to assemble more-focused—and better- rounded—client teams. “Once you understand the skills you have,” says Ilene Siscovick, a senior consultant in the talent management and compensation consulting practice at Mercer Human Resource Consulting LLC, “you can be much more effective at how you develop them, and how you recruit those with new skills.”