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Ask Your Board – Knowledge Transfer

“In anticipation of employee retirements, members should ensure their succession planning addresses knowledge transfer. How does your company transition when a long-time employee decides to retire?”

Michael Vaughan, CFO, Liftech Equipment Companies, Inc.,  E. Syracuse, NY

We treat this in different ways. There are several different types of knowledge that must be transitioned from a tenured employee to others – knowledge about customers, knowledge about equipment and knowledge about operating systems and processes. Regarding customers, we have been reinforcing the need to maximize the usage of our CRM system and the data regarding customer interactions so we do not lose the nature of the history of visits and discussions. We also try to expand our relationships with customers so that more than one employee is close to the customer. We try to use PTO days as a way to send technicians to customers to cover the needs and gain an understanding of the equipment and the applications. Regarding internal processes, we have been working on completing more SOPs (Standard Operating Procedures) so that employees can research processes in the absence of the tenured employee. My wish list includes developing an employee portal where employees can ask and reply to technical questions preventing redundant activities to find answers to tough technical questions.

Doug Carson, VP Marketing / Sales, Fallsway Equipment Company, Akron, OH

We believe the key to transfer of knowledge with succession planning is dependent upon great communication well in advance of a transition. An atmosphere of mutual respect and trust must exist between the employee and management. Communication starts as early as possible (multiple years if at all possible) with the outgoing employee so we understand their goals and objectives and we can then adequately plan for identifying their replacement. Reinforcing with the outgoing employee their timeframe for leaving multiple times over a long time-span is key. This allows for an adequate training and transitioning period for the incoming employee.

Ted Springer, President Springer Equipment Birmingham, AL

Most members are operating with veteran employees today and we are certainly no exception. We are very fortunate to have “company family” members who have tenure of more than 25 years. Many have worked with us for more than 30 years. Succession planning is one of the most crucial elements to the continued success of any business.

While some continue to work past the traditional retirement age, it is critical to plan for and implement the knowledge transfer process. We recently experienced the retirement of a delivery driver who had nearly 25 years of service with our company. The new driver spent over a month in the truck riding with one of our drivers simply learning the routine, the routes, our safety protocol and their new co-workers. On-boarding for the driver of a heavy hauler with a specialized trailer was critical.

The transition process is long term, particularly for retiring managers who have spent a career in the industry. Our greatest successes have come from promoting within the business, which allows for extensive training and familiarization with the job, often over several years. Employee morale is affected in a positive manner and the learning curve is not quite as challenging.

Some retirements are announced well in advance while health issues and other factors make ongoing training critical to ensure a smooth transition after an unexpected departure. It goes without saying your HR department needs to keep management apprised of your company family’s age demographic as it relates to retirement age.

Thomas Albero, President & CEO, Alliance Material Handling, Inc., Jessup, MD

The best example I can give here is when our three owners decided that it was time for them to retire. The knowledge that they had was not something that we could easily replace. We decided to name their replacement and set a retirement date for 3 years to ensure that each replacement had sufficient time to make sure they gained the necessary knowledge to be able to run the company when they were no longer here. We were very fortunate to be able to plan these three years in advance. Often, we do not have that much time, but we do engage in discussions with employees to determine what their retirement plans are so we can work with them to prepare the company for this transition. Many companies are uncomfortable having these discussions. We do it in a way that ensures the employee that their retirement timetable is on their terms. They appreciate the opportunity to work with someone to transfer their knowledge. Sometimes, we are surprised when an employee announces their retirement and it is unexpected. In those cases, we determine how much knowledge we already have through documentation in our CRM or ERP systems. If we feel like we do not have enough documentation, we work with the retiring employee to either extend their timeline or consider using them on a consulting basis after they retire.

Jeff Darling, VP Operations, Washington Liftruck, Inc., Seattle, WA

You need to be fearful of the “brain drain,” as long-time employees exit the business. To minimize this loss, companies need to plan for these occurrences. As a relatively small, 46 year “young” company we have just begun experiencing this in the last 2-3 years. Six months before their anticipated retirement date, we have had departing personnel spend time with co-workers to begin job sharing to understand the how-to functions of the job and the whys behind what they do. These meetings initially occurred weekly, which then obviously led to daily interactions days before their departure. We have found so many things being performed that are not in their job description that it’s extremely important to have this one-on-one opportunity to spend time together in this regard. (Cross training should probably start much sooner than this, but the smaller your business is the more difficult it is to accomplish.) You may also want to consider part-time work for the departing employee, as we have done, bringing back a manager to work on special projects. This work has kept the employee engaged as (s)he begins retirement and gives us the “book of knowledge” to refer to as we have questions we need answered in the future.

Jim MacGregor, Vice President of Operations, Toyota Forklifts of Atlanta Lawrenceville, GA

We are not doing enough to prepare for the eventual high-performance, long-time employee decision to retire! Most of us are facing changes not only in ownership and retiring senior managers, but also retirement of operational department managers and other critical roles. These transitions represent a huge knowledge gap resulting in a loss of productivity and could jeopardize key accounts. For many of us, this is certainly not our area of expertise and the conversations are difficult. If we are fortunate to have experienced human resource professionals or we fill that role as managers, we should plan and execute effective succession planning now.

Many of us realize that retirement is on the horizon but don’t take time to plan. We fail to document a succession plan to identify and develop successors for many reasons. We often don’t want to have those difficult conversations about mentoring. For some, it can mean generously teaching our job to worthy, capable successors and suddenly losing authority or power and not being needed. Succession planning will increase payroll expense in the short term but provide a long-term benefit in effective knowledge transfer.

Because of the diverse responsibilities within the typical material handling dealership, knowledge transfer is challenging to impart either to a successor or from one part of the organization to another. Even if there is time to overlap the entry of the new hire with the retiree, onboarding and shadowing don’t provide the time necessary to encounter the many challenges and situations that come up over many years of experience. We have developed a written technician apprenticeship program guide which includes several mentors and moves the apprentice through a structured program. This guide provides technician apprentices with clear career path expectations at the completion of the program. We have asked our salespeople to give us adequate notice of retirement to allow an adequate mentorship period for the new salesperson to meet key accounts and learn the sales process.

With evolution and disruption in the material handling industry, we must be inclusive of top talent within our organization and outside to ensure the value of our businesses. There are outstanding individuals that could transition effectively to another department. Because we post all jobs, we have had interdepartmental transfers that fill key positions with company culture already instilled. We have hired, structured and developed a marketing department to serve the sales, used equipment, parts, service and rental departments. Marketing has leveraged our traditional marketing strategy into a robust digital transformation, because we widened our talent pool to include non-traditional material handling jobs.

As we send our future leaders out to seminars, with MHEDA and our OEM’s, we ask those individuals to come back and prepare a live presentation that can be given in small and large group meetings within our organization. This gives that person the opportunity to learn to communicate effectively and gives everyone in the dealership a sense of who that person is, what that future leader is working on and how it will impact the dealership. It also shows everyone the willingness of the company to invest in training and promotion.

Succession planning with successful and effective knowledge transfer is very important to our dealership to continue to grow, serve our clients and remain relevant. It must be a priority and management must support it by acknowledging that we must commit, plan and execute. It also means we must assess talent, train, promote, communicate and generously share what we have learned with others. After all, weren’t we given a chance when we were hired so many years ago?

Nate Storey, VP of Operations Storage Solutions, Inc. Westfield, IN

Storage Solutions, Inc. will be facing several long-time employees retiring in the next 5-10 years. It is imperative that we are prepared for when that time comes so we do not realize a drop off in our ability to perform for our customers. To do this we first had to come to the realization that this was in fact an issue that will affect us in the coming years. The next step was to take a hard look at ourselves and lay out where we currently are vs. where we want to be when some of our employees transition on to the next chapter of life. We identified several gaps from today and where we want to be, but we focused mainly on improving internal processes and employee training. We realized that we did not have standardized & documented processes throughout our organization which ultimately lead to inconsistent training. We needed to get away from allowing everyone to ‘march to the beat of their own drummer’ and start working towards everyone ‘playing from the same sheet of music’. A few of the initiatives we took on were: Continuous Improvement training, Salesforce CRM & Sandler sales training. All three of these have helped us tremendously in executing our plan.

Something else that helps us with knowledge transfer, which has been a part of our company culture for over 10 years, is our team based organizational structure. Every person in our company, no matter their department, has a team around them. This ensures that more than one person is involved in ongoing business matters. If anyone at our company decided to leave at any time, we have several other people intimately involved in their dealings that can jump in and take the baton. This team-based approach has helped to cascade knowledge throughout the company.

Succession planning is a huge topic in today’s business climate. It will impact every business at some point in the future. It is best to plan and be prepared for when that day comes.