Oct 29, 2006

People loss may not equal to knowledge loss

Contrary to common wisdom, companies can benefit from the loss of an employee, claims Wharton management professor Lori Rosenkopf in Knowledge@Wharton. In a recent study Rosenkopf analyzed how outward mobility impacted U.S. semi-conductor firms based on patent citations. Her research revealed that many firms enjoyed a reverse flow of knowledge when a technical expert left to join another company. More specifically, firms that lost an expert to a competitor were 8% more likely to cite that firm in new patents. When the expert moved regions, the effect of outward mobility became stronger, with the old firm proving 22% more likely to cite the new employer.

Why? According to Rosenkopf, informal exchanges among tech professionals via email, blogs, conferences etc. transcend their workplaces. In other words, experts still talk to friends and ex-colleagues even after they leave a job. These social networks generate a flow of ideas and information, she explains. Based on a view of experts as social capital rather than skill silos, Rosenkopf argues that the firm losing a professional stands to gain access to his/her new employer’s knowledge. Losing an expert also encourages firms to monitor their competitors more closely for innovation opportunities. Although her research does not suggest that attrition is positive overall, firms should try to stay friendly with ex-employees, Rosenkopf concludes.

[Source : Egon Zehnder Knowledge]

That is some interesting research, and the focus therefore should be of building team and personal bonds between co-workers. Should the organization however, intervene in such a personal sphere? At the most it should provide a culture that fosters open communication and provides for spaces where inter-personal relationships bloom. That would mean performance systems that reward knowledge sharing and team achievement. A promotion process that takes into account the "how" of achievement and not just the "what". The organizational culture should also be non-paternalistic and very adult and mature (in a 'transactional analysis' way)

Of course, provision of usage of tools like blogs and email should not be viewed in a 'big brotherly' manner :-)