BankIn Minnesota speaker: Knowledge transfers essential for succession planning

WELCH, MINN. — Transferring institutional knowledge is crucial for community banks during the succession planning process, said Wipfli Partner Robert Zondag. .Speaking July 28 on the first day of the BankIn Minnesota’s annual state convention at Treasure Island Resort & Casino, Zondag said banks should identify and prioritize their largest needs before capturing and transferring the information. Bank leaders should ask employees for job responsibilities to understand their roles, he said, and keep that information updated and organized in an easy-to-find location. Institutional knowledge is becoming easier to lose as more experienced employees retire without sufficient succession planning, Zondag said. Complicating this are preexisting labor shortages and talent constraints at community banks along with fewer competitors to draw experienced employees from. He sees high-risk positions for losing internal knowledge as those with extensive responsibilities without widespread knowledge or experience. Other risk factors are jobs with frequent turnover, or a potential companywide reduction in force. He described knowledge sharing as focusing on the informal exchange of information, while transferring knowledge is a formal, structured strategy. “That is going to be the key to your succession plan, or turnover,” Zondag said. Knowledge can be transferred through internal written or video blogs, job aids, written procedures, a company intranet or through artificial intelligence, Zondag said. He also described the difference between explicit knowledge — formalized intelligence that can be clearly recorded and documented in a manual, handout, or procedure — and tacit knowledge, intelligence employees have from experience and their intangible characteristics such as personal beliefs, perspectives and values. “Tacit knowledge can be the most precious source of knowledge,” Zondag added. While having existing employees lead the knowledge transfer process can offend the employee, Zondag said banks should build in time for those emotions to play out. “This is an emotional process,” he added. Zondag called on banks to take four steps to improve knowledge accessibility:Create searchable knowledge bases.Allow employees to quickly locate procedures, policies and historical decisions.Reduce dependence on one subject matter expert.Accelerate onboarding and cross-training.He said artificial intelligence can turn existing content into usable institutional knowledge by analyzing emails, meeting notes, procedures, training materials and policy documents. AI can also help consolidate seemingly disparate information into one reference guide and identify inconsistencies, gaps and duplicate content, Zondag added.