The life experience preservers

As aging baby boomers retire, many will leave with a gold watch and something a lot more valuable -- knowledge of how they succeeded in their job.

For the company, that loss might not be readily apparent. But firms large and small likely will find replacing retiring executives and their expertise to be an increasingly expensive proposition.

Knowledge management is the formal term for this practice. Exit surveys or conversations with departing employees may glean some know-how. But deeper, tacit knowledge of why they did what they did might be difficult even for retirees themselves to articulate.

Frustrated with the shortcomings of traditional approaches, the four owners behind Sagis Corp. of Minneapolis have developed a new process for gathering what they call "deep smarts" and preserving that knowledge for future use -- ideally to improve business performance in such areas as sales, recruiting and operations.

"If you could replicate the actions of your top performer and transfer that knowledge to other members of the team, what would that mean for your sales results?" Sagis owner Mike Mohn said. "We've seen dramatic improvements by doing this."

The company's process, which it calls SagisSense, blends what's called "sense-making methodology" (a branch of communications studies) and organizational development tools from the business world.

The result is a process the company says captures both surface and deeper knowledge by using interview techniques that enable people to express in detail how they consciously and unconsciously react and think in certain situations.

In one case, a sales director at a large company first named 12 steps he took to go about doing his job, Mohn said. Once the last interview was done, the SagisSense process had identified more than 200 actions in which the sales director routinely engaged, revealing what Mohn called his "unconscious competence."

Critical-actions list

Sagis narrowed that to a list of critical actions, which it detailed in a 16-page executive summary, part of a bound copy of a report that included interview transcripts. Sagis also produced compact discs with digitally mastered copies of the interviews.

"What drives Sagis is this upcoming wave of retiring baby boomers," Mohn said. "Companies are going to be struggling to replace that lost knowledge, and it's going to decrease their performance. A lot of companies will overlook that knowledge just because it's not on their balance sheet. We think that's a mistake. We look at knowledge as the most important asset in a business."

Sagis hopes to have measurable results in two or three years, Mohn said. Fellow Sagis owner Albert Linderman, an anthropologist and member of an international group of sense-making methodology researchers, achieved strong results with companies when using an earlier version of the SagisSense process.

Baker, Linderman and Bosacker formed the company in 2004; Mohn began advising it last year and became an owner earlier this year. The owners have financed the company themselves.

Sagis expects this year's revenue to total $150,000, a figure expected to double or triple next year, Mohn said. The company hopes to reach agreements to license its process to larger companies to use on a continuing basis while Sagis works directly with small and medium-sized companies.

The company's primary product is called Transition Study, aimed at helping smooth the transition for a new employee or leader.

Sagis also produces Corporate Legacy studies, designed to tell a company's story in a way that communicates the values and beliefs behind its products or services, and Personal Legacy studies, which present an individual's history in narrative form with photos in a hardbound book.

A basic transition or corporate legacy study costs about $15,000, which essentially covers Sagis' costs, Mohn said. The price of the Personal Legacy study begins at $9,500.

David Hussman, founder of Minneapolis software group DevJam, hired Sagis to uncover tacit knowledge from his work in coaching software developers for use in a forthcoming book.

"They're fantastic at coming up with what your experience was, then digging deeper to things you might not remember," Hussman said. "Their process kind of unveils it all, like maybe discussing your dreams or something. It's the combination of who they are and the process they use that allows that to happen."

Frank Berdan spent more than three decades at a Fortune 500 company but after retirement had no way to pass on the knowledge he had gained to help train a successor. A friend of Sagis owner Baker for 20 years, Berdan said he served as a matchmaker, introducing the company from which he had retired to Sagis.

The depth of what Sagis was able to uncover about what Berdan did and why he did it was astonishing, Berdan said.

"It's a structured interview process, facilitated by some software that's pretty clever," Berdan said. "At the end of the process, the keys to my success were a lot more apparent. It was enlightening."

One question Sagis faces is knowing how its product will benefit potential clients, and how likely they will be to access and apply the knowledge Sagis collects for them.

"It can be very time-consuming for the executive to give his or her knowledge, but even more so for the folks trying to learn from experienced managers," Hedberg said.

One solution might be to provide the information in an interactive, user-friendly format, perhaps online, so that a successor can use it as background material in preparing his or her own processes, Hedberg said.