GAFM Articles

GAFM Articles > > Risk Management > The Final Word - September 2004

The Final Word - September 2004

By Michael Vincent

26 December, 2006

The main magazine topics for this month are BCM and Occupational. Health and Safety, both really strong topics and developing an understanding of each is necessary for sustained business survival. Rather than preach to you this month about these issues I ask you to reflect on how the hard earned knowledge is managed and passed from generation to generation in your industry and organisation.

 

How we as a business community manage the risk of information transfer from one generation to another will affect the sustainability and wealth of industry into the future.  Most industries are generational in that experience in built up over time and lost upon the leaving of an individual, either by retirement or severance.  The aim of business must be to build the foundation of corporate memory to minimise the information loss.  However experience cannot be replaced with a rulebook or a set of guidelines.  Experience is usually gained the hard way and then lost, only to be rediscovered in the future possibly by repeating the same mistake.

 

What are the transactional costs in the continual re-invention and implementation, how much can we add to our employer and industry by finding a method of constructive transfer of knowledge that creates sustainable corporate memory?

 

We are in the information age, where wisdom is the currency; we are endeavouring to add value to all products by the application of knowledge.  Accordingly the human becomes the prime key to true wealth maintenance and creation.  This trend will only accelerate in the competitive business environment of the 21st century.

 

The accelerating rate of change, the forced globalisation of the Australian economy, the clogging of traditional promotional pathways, coupled with a flattening management structure and a more diverse cultural base, has confused the process of succession.  Nonconformist talent is destroyed or driven away, reducing the internal drive of organisations. We are seeing more demands on the workforce of today; youth is valued for its energy and ambition.  Age is not a valued commodity many drop by the wayside; this will change as demand for labour grows, why not gain advantage now?  The loss of experience is a hidden risk factor that has the potential for enormous impact both socially and financially on the future of our society.

 

Research demonstrates that there are three stages of executive development, early middle, senior and executive management. These need to be mentored and managed by retired persons of eminence from the industry whose experience is passed systematically to the following generation.

                       

It is a responsibility of industry to prepare the next generation of leaders.  One way of assuring this is to rediscover the value of the middle aged plus by the formation of a properly structured and managed mentor program where the young are nurtured and developed by the old, thus creating the environment for constructive transfer of generational leadership.  The concept would require the establishment within and across firms the idea of mentorship. 

 

The mentor scheme would function in at least two forms.  Firstly individuals of specific or broad based industry skills should be identified from within a group of organisations who share a common vision of mentorship and take the role up upon retirement.  Secondly by allocation across industry of functional managers who as part of their duties formally develop the succeeding generation. 

 

 

Implementation of a mentorship program would benefit an organisation by:

 

1. Provide a continual involvement with the organisation of a retired executive on a worthwhile and value adding basis.

2. Provide an opportunity and a formal vehicle for the active transfer of accumulated skills and knowledge into the ranks of the new and emerging executives.

3. Provide a formal mechanism for accessing many years of industry specific knowledge and skills.

4. Enable an organisation to fast track an emerging executive because of their access to the corporate memory via a mentor.

5. Access and develop of an experienced skills base in the tertiary sector.

 

Another implicit advantage in a mentor program is that it also increases the range of outplacement strategies that corporations can employ for their senior executives.  The business community gains significantly by retaining the valuable skills of senior executives who would otherwise have been lost in the generational change process. 

 

Mentorship should be looked upon as the close of a career and the completion of the knowledge cycle, which for many years has been left open-ended by the loss of the individual knowledge.

About the Authors

Director

Australasian Risk Management Unit

Department of Accounting and Finance

Faculty of Business and Economics

Monash University

Member Login

Username:

Password:

Validate Member