A sense of urgency most go toward protecting your tribal knowledge.

Every business keeps a mindful eye on critical assets. On any corporate balance sheet those assets are identified, valued and periodically updated. Indeed, business valuations are often tied directly to those assets, enabling companies to borrow money to acquire additional assets. Regrettably, no balance sheet includes or values the most important and valuable (and perhaps invaluable) asset a company has: tribal knowledge.

The term “tribal knowledge” is used to encompass all the knowledge, experience and wisdom a business’s combined workforce brings to the game each day. It describes what for centuries has been a key asset of all businesses, especially manufacturers. Despite its importance however, historically it has not been universally acknowledged of value nor viewed as a competitive advantage that contributes to organizational profitability.

Much like DNA, tribal knowledge differentiates one company from another. The combined knowledge, skills and experiences of employees from various companies may be similar, but how they are deployed, the problems they have overcome, and their successes shape the character of the tribe, and contribute to one organization looking and acting different from another.

In many ways, tribal knowledge is intellectual property (IP). A company will invest considerably to develop hardware, software or processes and patent or copyright them to protect them from competitors, or to monetize through sale or license to others. Tribal knowledge may have enabled development of those products or processes. That contribution is either unappreciated or undervalued, however.

Why, then, has tribal knowledge been overlooked as a strategic asset all these years, and why do so many now consider it important? The answer to both questions lies with supply and demand.

Historically, the availability of a qualified work force has been a minor problem. Companies hired when they needed talent, and trained and retained that talent. Occasionally employees would leave for a better opportunity elsewhere. The supply of workers seeking a good job and a long-term career was abundant, however. Such workforce stability resulted in managers developing a sense of security, knowing they could rely on a well-trained and experienced workforce to handle whatever opportunities – or challenges – arose. The ease of finding and retaining people lulled many to discount the value of a stable and reliable workforce, and employees were seen less as an asset and more as a given.

The world has changed considerably over the past 10 to 20 years, especially in the world of manufacturing. Those entering the workforce today have altered visions of their career. Younger workers appear less interested in staying with the same company over the long haul and much more prone to change jobs for an immediate pay increase, or if the work environment or benefits appear better. Thanks to Covid, many opt for employers that allow working from home. In short, access to a qualified workforce is far less than in the past.

Worse is the demand side. With an unprecedented number of Baby Boomers reaching retirement age, demand for talent has never been greater.

With such a gap developing between the talent supply and demand, the fear of losing that tribal knowledge has shifted managers’ awareness, alerting them that what they may have taken for granted is in fact one of their business’s greatest assets. More important, it is an asset that takes years to train and develop but could walk out the door at any time with almost no notice.

In any business, especially those in our industry, employee talent is essential not just to get quality product out the door and on time – it also is the strategic differentiator between a company and its competition. As such, the workers that make up your “tribe” are the single most valuable asset you have. Unlike any time in recent memory, there is a pressing need to transition that tribal knowledge to the next generation. And that effort must occur with the same sense of urgency that goes into protecting any other corporate asset.

Any transition often means duplication and repetitive costs to ensure the new can overlap with the retiring, to gain as much knowledge as possible. Documenting even the most basic processes and tasks, especially those performed by the most skilled and experienced labor, requires investment of ample resources and commitment from the top to complete – resources and costs that may seem expensive in the short term, but long term will result in extraordinary returns.

All in industry are facing the same challenge: how to preserve the tribal knowledge long earned by the company’s entire workforce so that future employees will benefit. The task is daunting, however worth the investment so to preserve what is any company’s greatest asset: tribal knowledge. •

Peter Bigelow is president and CEO of IMI Inc.; pbigelow@imipcb.com. His column appears monthly.

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