Preserving Powerhouse Talent

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Join Kurt Schmidt as he welcomes knowledge preservation expert Ben Bomar revealing the secrets to capturing wisdom from key employees. Don't miss these actionable insights to future proof your business. Hello everyone, and welcome to schmid List. I'm your host, Kurt SCHMIDTZ.

Thank you for taking the time to join me today. I've got my friend Ben, Ben. How are you doing today? Good?

Thank you for coming. I really appreciate it. So, Ben, tell me a little bit about the work you do and who do you work with. Yeah.

So we preserve the institutional knowledge of longtime employees so that it can become a part of succession development and onboarding and really leave a lasting legacy for those people who just know a lot about a lot. We often find those people inside small to medium sized businesses, maybe twenty to five hundred employees. I find the work you're doing fascinating because I've worked with so many businesses in a history and the idea of especially in things like legacy businesses where a family owned business, or businesses that have very long term employees and maybe those people are turning over, maybe they're retiring, or things like that, and the amount of investment that goes into each employee that business makes it's very hard to track sometimes of what that investment actually is a lot of companies don't do it, but they know it's a lot.

The amount of investment that goes into those people, and whether they leave voluntarily or through other means, the ability to be able to replace those people to keep the machine going is just I mean, it was a business owner myself. It's incredibly scary having a key employee leave right totally. And I think there's two ways to think about that. One is, you're right, there's been a lot of investment, and there's been a lot of trial and error and learning by doing that's happened in their career, so they've invested as well.

But it's also fully predictable. We know that eventually everybody's going to log off for the last time and go home, or maybe they want to take another opportunity within your company. Yeah, because again goes back to that investment cost. I mean I remember at my last agency, I think we tracked that replacing employee was anywhere between three to eight thousand dollars in one year.

That was just for your standard sort of entry level person, right, But you take a more senior leader and it triples. And we see a couple of things that are really interesting in that. One, there is the cost of acquisition to go and obtain that new person. Just in that, we also see the risk of that transition going poorly.

The Bureau of Labor Statistics estimates that to be thirty percent of the first year's compensation. And when you think about people who touch revenue or product or customer impact, we find it can be six hundred thousand dollars in impact for a single individual. And the thing is that isn't a new concept. I mean, decades ago having a boss say like, make sure you're tracking the work you're doing and the types of things you're doing and documenting all of that stuff.

I knew that stuff was just going to sit on a dusty shelf somewhere and not be actually utilized. I mean, documenting without a system for how to use it or implement it just seems like a waste of time. Is that sort of the opportunity that you've seen, Ben? Absolutely, When we document in that traditional way, we're thinking about that one to one successor that baton handoff.

You get the massive it's on the shelf and you sleep a little better, but no one's actually digging through it. The real opportunity is to take those lessons, digitize them, and make them we can distribute and scale and share that across the organization. So maybe you know, it's not everything that a person does, but maybe they just really know how to calm this one customer down. They understand that customer persona.

Now suddenly that lesson can be shared by everyone in customer service and in support, and so it just scales this wisdom. It makes mentorship scalable, which is just a totally new concept. It is a new concept because your employees are your number one expenditure. Right.

We just saw this week Amazon's laying off sixteen thousand people. And for a machine that big to do that, and I can imagine Amazon has some sort of way to document what people did at that scale. The idea of being able to to transfer these responsibilities over is that you know, is that just because these layoffs and things are happening, the business still needs to move forward. It's right.

What I see is that a lot of times those needs just get moved over to somebody else. That's right, They get moved to somebody else. It's the knowledge of how to handle edge cases that becomes so much more important. So perhaps there's been automation or systems that have been put in place, or the boogeyman of AI that is handling all of the tik tak stuff, But it's the edge cases that are there's never going to be a rich enough data set to support informing that model, and so we still need to tap into the wisdom of those people who are processing in their minds and solving those problems you might see only four times a year.

Yeah, but those edge cases are sometimes what defines the uniqueness, and it's the way that they can course correct in a matter of seconds because they understand what the boundaries are because they've experienced this for a long time. Oh yeah, you're reading from page six of my presentation. We use this analogy of the art of kinsugi, this Japanese art of mending broken pottery with gold. I'm sure you've seen a picture, and I imagine folks listening at the pottery is the standard operating procedures.

It's what did these people do when it was broken and how did they build it back together? And that's really the goal, that's the value. That is what people come to expect from that brand or that experience. Well, somebody retires.

You see this in the news too. My show tends to focus on the tech side of things, but you see these documentaries. These two businesses that make amazing scissors in England, used by all the top fashion houses in the world for cutting fabric, and these can be eight hundred dollars scissors handcrafted. Just to become an apprentice, it would take you four to five years to learn how to make your first pair, and then they probably wouldn't even sell those.

The idea of apprenticeship in this world has gone away in a lot of cases. A lot of businesses don't have any sort of formal apprenticeship programs anymore. It's more like, well, here's the sla here's the documentation. I'll hand you the three ring Binder, here's a new office.

Go because Bill just retired, so you do his job now, right? And I think we see that America is a relatively young country, and Europe and Asia we're a printing you relatively older cultures. And so I think that there's this thinking about time on a different scale, and how are we going to invest And to me, I kind of associate that no apprenticeship here, apprenticeship elsewhere probably cause correlation without causation, But we're not investing in apprenticeship because it feels like we're paying for two employees, one to watch the other.

How are we going to have people working remotely, perhaps in different geographies. They're never going to find that time to do that apprenticeship, And so we still have this challenge of knowledge. Answer. If you're going to give advice to people that are listening to this and they're thinking, yeah, that's something I A should really be paying attention to, how do you first identify those people that could use this sort of attention.

The first and easiest is to wait until after someone's vacation and then just ask yourself, what did we miss out on? What got delayed last week? What went sideways? Because Gretchen was on vacation last week, and then start there.

That's the first thing that you can start to document. I think thinking about your audience and the kind of folks that I've met with through you. Often these are entrepreneurs, these are leaders where they're figuring out their innovators, their creator. But at some point you reach a moment where you're saying, you know what this works, this is how we operate.

And that's this time when you realize that you really like this process within your organization. You wanted to continue and be consistent, take pride in what you've got, and then think that's something worth memorializing and sharing with others. And that's the challenge right there. A lot of the organizations I work with, they're trying to grow, they're trying to innovate, they're trying to do things better, and there's this push against this idea of well we've always done it this way.

The idea of well, we need to codify what we're good at and we need to etch us in stone sometimes can feel like anti that. Yes, absolutely, I like that you use the stone piece anology. I think you're right. On the one hand, I also feel that tug of we've always done it this way as being a challenge to solve in a paradigm to break.

But who expects you to do it the same way your clients? And so there is some respect for the fact that there are people who really care about the way that you are currently doing it. And so back to the stone idea. I remember the Michelangelo stone.

You he's carving everything a way that isn't the statue. So carve everything away that isn't what you want to be and just get to those core principles and make sure that those are memorialized. They can then inform how you innovate so that you don't throw the baby out with the bathwater. Because again, like you mentioned, you identify with them not just because they do a good job, but they embody the core values of the company.

They may be one of the reasons why they exist in the first place, right because they could be a very early on employee. Do you find a difference between a place that is trying to document these values if it's a workforce that's aging out versus a company that's growing quickly and wants to save those Are there different approaches you take? There are different approaches. When there are war stories to be told, often you have long time legacy employees offer them that opportunity to share those stories.

Narrative is super important, and then you distill that narrative into what does this say about who we are? Why does this one trade show experience from two twenty years ago still show up in how we approach trade shows today. When a founder and an entrepreneur is thinking, I'm going to have to start hiring the people that I hired are going to start hiring now, that's a time to capture ethos, company history and your mythology, your founding stories. You may be changing processes more often because you're new and agile, but you really want new hires and people who join the team to know your early history.

Those principles are going to guide how you make decisions in the coming years. And how do you because that's a lot of data I'm sure you can collect, how do you know what's good and what's not, what's a waste of time? How do you decipher between that data and what is relevant and what isn't when you're looking through it? Because I've done lots of exit interviews with people, and you kind of got to parse what's venting and what's actually a value that I should take back as a learning moment for the company or things like that.

Where do you start, ben. What are the best ways to insulate against that? Is to do it while things are really humming along. If you wait as a leader, it is put in check by a resignation or a retirement or a life event.

Suddenly it does cast doubt on the validity of what's being preserved and shared. If you're in the swing of things, we love to say the only reason I'm talking to you is because your boss thinks you're awesome. We don't recommend that the full manti of knowledge transfer and knowledge preservation happen for every member of the team. There are certain individuals, these key persons.

They are the ones that embody the culture, the knowledge, the executional skill. Maybe it's a subject matter expert, and maybe we help them if they know a lot about a narrow area, maybe we help them codify a best practice or a process step or sop. But it's relatively few people within the organizations we serve that have that sort of key person lynch pin or about them, And then there's a lot of trust built in when they tell us how they do what they do. What kind of investment are we talking I don't mean dollars, but a time, the processes in systems you've developed to do this work.

Ben, Are we talking days, weeks, months? What am I looking at as a business owner in terms of taking time away from the person that is so important to the business documenting what they're doing versus them actually doing that work. Yeah. So we have a couple of principles.

When we facilitate one of these engagements, we say, it's never more than an hour a day, three to four days a week for three or four weeks. We're going to spend about twelve to sixteen hours with this person, but we're going to spread it out. We find that spacing it out and really working a process, just devoting an hour a day makes it palatable and doesn't really interrupt the regular flow. It makes a lot of sense.

Usually wait till it's too late. In so many cases, this is kind of going back to the same challenges that people who sell security or security updates or insurance or those types of benefits. A lot of times, especially with security, I work with a lot of people that sell security services as part of the coaching and consulting I do. They don't use get called until there's a breach, or even lawyers a lot of times they don't get a call until somebody's arrested or whatever the case may be, and then you're kind of behind the eight ball.

Well, I got to. Go with kind of whatever came up, and I got to just do whatever came up. Do you find that that's kind of the same in the work that you're doing and they probably should have called you earlier, Ben. Yeah, it does happen.

And Okay, as much as we say I want people to be proactive, prime of life, in the swing of things, we actually have a whole product that is lovingly named the oh shit, they quit product, and that just means that, you know, if someone quits on you today, we can get started tomorrow. We use some asynchronous tools to be able to do that, and you get the basics. But you're right, we are often sort of held hostage by the tyranny of the now, and there's a ringing phone or an angry email or a person standing in our office and we handle that and we don't do the things that we know we should do.

Proactively. That makes a lot of sense. Could you give me one to three common things that you're discovering through this, and like, what are some of the nug that you're discovering that really makes a difference in the business. Not maybe a specific task, but are there themes that you see.

I think people undervalue traditional exit interviews why activities happen. We've been told time and time again that our process forces people to talk about why they've made the decisions they do, so they feel like they're teaching more than just documenting their work. I think the other thing we see is part of our process, we interview others about what it is like working with this key individual, not in a three sixty evaluation way, but just to say what information flows, what value flows back and forth.

Similar parable of the elephant and the five blind people. Oftentimes we think we understand why our key person is important to the organization, and they fulfill multiple other roles and spaces and value for people that are just one or two steps away in the organization. I've seen that too. I've experienced this a lot during promotion opportunities where I'm going to promote this person and I'm talking to them about who their replacement might be.

One of the exercises I do is have them document what your day to day is, like, break down what you do, and every damn time, Ben, they're doing three and a half jobs. Yes, especially in the work we do for nonprofits, we often find that when we have documented a role and created all these materials, when that person chooses to leave, they are replaced by two people or a time and a half. Because the scope creep, particularly in impact and passion driven projects, everyone understands the mission, they understand the P and L, they say yes to everything.

So scope creep is rampant and jobs nothing like what the title is. Yeah, totally makes sense, right because again it goes back to you know, even just to bring it to some cutting you know, our bleeding edge world of AI. I've talked about this where I think AI is going to create more jobs because once you've got people in your business that know how to talk to AI and know how to prompt it and are very good crafts people with how to get AI to do what it does, it's going to be very hard to replace some of those people.

Right. You can't just copy and paste their prompts and you get the same result. There's a whole thread of continuity that needs to happen, and educases that will come up. Even more so in AI, you'll see more edge cases pop up where the AIS like did you add this?

No, that's ridiculous. But if you gave the same prompt to somebody else, they might look at it and go, well, I guess that's what we do, or I'll just move forward with that. So I don't see AI changing this in any way, because, like you said, it's like, here's the bullet points of the job, right, here's the job description. But then if I get a microscope and look between the lines, it's like, here's why I do this bullet point, and that's like three pages long, and here's the value that comes from that.

That's another three pages long, And that's all zoomed in between each bullet point. That's all that data that is there for that person that needs to get surfaced and exposed so that your company can thrive. Yes, and what's great about that? Why is that?

Why is very transferable? It might be that I'm taking this action in this one part of the software, in this one part of the production area. But if I truly understand that why. As X person's successor, I can start applying that lesson in anything else I do and how I talk with leadership, understand the goals of the organization, talk with clients, talk with suppliers.

The ability to cross pollinate across the team with this valuable why is huge. Yeah, it's amazing. Man. Okay, So last question here I got for you.

If I'm listening to this and I'm like, man, I kind of like what he's saying. You talked about looking at people who go on vacation and see what kind of impact that is. What other piece of advice would you give them to start thinking about this and start moving towards a meaningful way of investing in their business in this way? What are some things they could do on their own right now that would help start them on this path.

I would recommend beginning to think about institutional knowledge and articulating it. We know that we value this person, break that apart. I value them for their knowledge of our industry and our context where we operate. I value them for what they can do, their execution skills, their proficiency at a process, and I value them for who they are They're being are they an inspiring leader.

Are they a steady eddy as a part of an individual contributing team. Break that apart. That's going to help you articulate to those people why they matter and then go do that pay them a compliment today. If that type of thinking works, there is a twenty twenty six toolkit for how to lay out a twelve month plan to celebrate three or four of these people and document this information.

Working that toolkit on your own, give someone a roadmap of how much value there is inside their company and who has it. And it sounds like a fun process. It's great. I was serious about go pay somebody a compliment.

When you can go to someone and say, hey, I sat down yesterday, I was working this plan and I was asked the question who's essential to my business and who do I just love having on the team. I thought of you because you are lights out at this particular challenge, that specific personal compliment. You'll feel better just doing that. Yeah, and it'll make that person's year, honestly completely.

We're all underpaid and underappreciated, right Ben? Yeah? So Ben, if I want to get in touch with you, where do I go and find out more info? How do I connect with you.

Feel free to email me at Ben dot Bomar at Lithius l yus dot com. I love to teach first, sell later, so if you check us out on YouTube, I've got some past webinars on how we do what we do and when and why to think about it. Thanks for listening to schmid List. If you found this episode useful, a quick review goes a long way.

To learn more about the work Kurt does helping businesses grow with more clarity and profit, visit Schmidt Consulting dot group. Have a great week.