Organizational Alzheimer's:
A quiet crisis

by Brian Marson

People can lose their memory, and so can organizations. My mother had Alzheimer’s. Early on in the progression of the disease, she would search for a lost word or fact until she remembered it – she knew that she knew and would struggle to recall the information. Later on she no longer remembered that she used to know, eventually forgetting my name and who I was.

A similar memory loss is occurring in public sector organizations and will reach epidemic proportions as the ‘retirement Tsunami’ hits. Organizations will develop ‘blank brain cells’ due to the exodus of experienced people and in the absence of knowledge management and knowledge transfer systems.
There is an abundance of memory loss stories. An industry association executive told me that he now briefs many of the new senior executives in government he deals with because they don’t know the history and policies of their department as well as he does. A former colleague at the provincial level now consults back to her former agency as their organizational memory.

At a DMs' breakfast last year, it was reported that a senior federal deputy minister asked if any of his colleagues had worked under a minority government before; only one had. In one agency, a 58-year-old ‘baby boomer’ has served in the same function for thirty years; the next most senior officer has only three years experience. Two colleagues working in different central agencies told me recently they had new directors general; neither had prior knowledge or experience in the government- wide functions they were to lead. As a long-time colleague in a knowledge-dependent agency put it recently, “nobody here knows anything any more.”

THE NEW 3Rs
Organizations are losing their histories, accumulated experience and expert knowledge. In the recent Institute of Public Administration of Canada Deputy Ministers’ Management Issues Survey, one cluster of issues dominated their forward management agendas: retirement, recruitment, retention and succession planning. Knowledge management/ transfer and maintaining corporate memory was identified as a top management challenge.

1. THE RETIREMENT TSUNAMI
Scarcely a week goes by without an invitation to a retirement event for a senior colleague. Baby boomers were born between 1947 and 1965. They have been forming a larger and larger proportion of the public service over the past twenty years. At the executive level over 60% were aged 45 to 54 in 2000. This represents the ‘retirement tsunami’ that is just beginning to break on the shores of public organizations across Canada. It will affect them for the next decade or more. We need to manage the consequences.

The retiring boomers are walking out of the door with their accumulated experience, wisdom, knowledge and organizational memory. Filling in behind them is a much younger generation.
Compounding the problem, most public organizations have no systematic way of capturing, managing and transferring the accumulated knowledge and experience of the retiring generation. This is the main cause of the Organizational Alzheimer’s phenomenon, and it will get more serious as the retirement wave rolls over them during the next decade.

2. RECRUITMENT AND RETENTION DEFICIT DISORDER
The second cause involves deficits in recruitment and retention. Governments are dealing with fiscal deficits, but they also need to address HR deficits. When they downsized in the 1990s, many public organizations undertook minimal recruitment for a decade, resulting in a gap in the demographic profile. While the current wave of new recruits is well educated and very talented, they inevitably carry less organizational knowledge, memory and experience.

Thus, in many organizations, there is a significant knowledge and age gap between those retiring who are 55-65, and those replacing them. Moreover, when staff obtain external promotions (via the ‘promotional thermal’ created by departing baby boomers) they can also leave a knowledge gap in their organizations.

Given the seriousness of this impending problem, how many public organizations have effective programs to identify, retain and replace key staff who carry the organizations’ knowledge, expertise and experience?

The widespread use of departure incentives and early retirement in the last decade encouraged many middle managers and professionals with enough talent to make it on their own to set up external consulting practices and capitalize on the knowledge they had acquired. This magnified the memory loss caused by the generational shift now underway in the public sector. On the other hand, the good news is that organizational memory may still be available from these external resources, and could possibly be recaptured.

3. ROTATIONAL EXECUTIVE SYNDROME
Until the 1970s, the Canadian tradition was that senior officials were professionals in their field of responsibility and grew up within their organization. For example, a study by my MBA students conducted at the University of Victoria found that no deputy minister had been moved from one BC department to another in the postwar period until 1980. DMs generally stayed in place as leaders of their organization for an extended period until their retirement. Lateral movement was the exception not the rule, and the leaders of public organizations had a deep knowledge of the policy field, the services provided, the organization’s professional environment and its people. This all changed in the 1970s and 1980s. For example, in BC from 1980-1990 when lateral rotation of DMs became popular, the average length of stay of deputies and ministers reduced to two years.

Gordon Osbaldeston highlighted this ‘rotational tornado’ at the senior levels of the federal public service in his 1998 report, Keeping Deputy Ministers Accountable. This former Clerk of the Privy Council reported that the rapid and a-synchronistic rotation of ministers and DMs meant that they had only months to establish relationships – never mind to understand and guide the department. Osbaldeston recommended that deputy ministers stay in their jobs a minimum of three years: “Short tenure means that deputy ministers may learn about the current high-profile areas, but may be unable to learn enough about the department in a broad sense to be able to detect potential problems with the department’s continuing operations and responsibilities.”

The rapid-rotation phenomenon may also result in frequent changes of organizational direction. As one veteran DM said when a major rotation of DMs was announced in Ottawa in the mid-1990s, “today, there are 26 DMs who think that they finally got their old departments fixed, and 26 DMs who think they now have to go and fix their new departments."

The system of rapidly rotating executives needs to be rethought. It is important to note that the regular rotation of senior executives has had its benefits, in addition to its dysfunctions. At the federal level, the benefits sought by the Privy Council Office were sound thirty years ago – a greater horizontal integration in policy, programs and management across the public service. Doubtless this objective has been achieved in part through executive rotation. But it has also come with a price.

The systematic rotation of executives now extends to ADMs and directors general in the federal system and some provinces. This means that some public organizations have three layers of executives at the top who have very limited knowledge and experience about the department, its history, its policies and business lines. As long as there were expert middle managers and professionals, rotational senior executives could draw on this knowledge and experience below to guide them.

However, as these specialist and managers hit retirement age, senior executives may be left to lead an organization that has lost its memory. Recall my senior colleague who said, “no one here knows anything any more." In his organization there have been five DMs in ten years, and most of the current executive team has rotated in during the past few years. Most key knowledge carriers left in the late 1990s in a major downsizing, and the few knowledge carriers who were left are now retiring. This federal agency appears to represent a classic case of Organizational Alzheimer’s.

We need to rethink rotational programs at the executive level and slow them down to ensure that leaders stay long enough to absorb the important elements of the organization’s history, knowledge and experience. Consider five-year assignments for rotational executives and a return to emphasis on promotion from within.

This is especially important for central agencies and those departments dependent on deep professional knowledge. To ensure that horizontality in policy development and management is maintained, rotational assignments could be expanded for junior and middle managers, while the executive rotation is slowed.

THREE PRESCRIPTIONS FOR PREVENTION AND RECOVERY
Organizational Alzheimer’s may be reversible. If organizations apply the right prevention and treatment programs, they can prevent, halt and even reverse the loss of organizational knowledge. At-risk organizations should consider the following:

PRESCRIPTION 1: REDUCE ROTATION AT THE TOP
With the ‘retirement tsunami’ and the generational shift going on in public sector organizations, it would seem prudent to ensure that three changes are made in current human resource management practices:
• Executives, especially DMs and CAOs, stay in the job for at least five years, rather than the two or three years that now appears to be thenorm
• Increase internal promotions into the executive team, to ensure that the executive team includes significant levels of organizational memory and expertise
• Increase rotational programs at the level of junior and middle managers to ensure that senior officials have cross-governmental experience, but earlier in their careers when it is less dysfunctional to organizations managing the generational shift.

PRESCRIPTION 2: IMPLEMENT A KNOWLEDGE MANAGEMENT STRATEGY
Since retirement and rotation are draining organizations of memory and expertise, organizations need to manage the retention and succession of key knowledge carriers:
• Identify the key knowledge carriers within the organization
• Actively work to retain the key knowledge experts
• Maintain an active link to retired departmental knowledge and subject matter experts (e.g., establish a cadre of professionals, managers and executives emeritus), and outside academic experts
• Strategically recruit deep-knowledge carriers into key organizational positions. Ensure that successors to key knowledge carriers have systematic access to departmental knowledge management/transfer systems.

PRESCRIPTION 3: DOCUMENT, MANAGE AND TRANSFER ORGANIZATIONAL KNOWLEDGE
Create a Knowledge Management System linked to business lines, as well as to organizational memory, relevant external experts, and expert knowledge:
• Document the organization’s history and lessons learned
• Create a systematic mentoring system
• Create a Knowledge Transfer System; ensure that staff are trained to use the KMS, and systematically learn both subject matter knowledge and organizational history and experience.

By following these three prescriptions, public organizations experiencing symptoms of Organizational
Alzheimer’s may be able to retain or recover the knowledge and organizational memory they have been losing. If successful, they will be better positioned in the years ahead to sustain high levels of policy and operational performance for the governments and citizens they serve.



Brian Marson is senior advisor, Treasury Board Secretariat, co-author of “The New Public Organization”, and past president of the Institute of Public Administration of Canada.