Two state-mandated workforce reductions in the mid-1990s hit the Virginia Department of Transportation (VDOT) hard. VDOT was compelled to cut 20 percent of total staff in less than five years, experiencing a considerable loss of productivity and efficacy as a result. To mitigate these losses, the agency hired former employees as contractors to continue the work. But, this proved an ephemeral solution, evident in early 2003 when VDOT faced a situation in which not only were its rehires approaching their second retirements, but approximately 30 percent of VDOT's 8,600 employees were also eligible for retirement within the next five years.
In an effort to maintain continued high performance and quality service offerings by preventing the expected knowledge loss when long-term staff retires, VDOT established the Knowledge Management (KM) Division. KM was tasked with ensuring that lessons are captured, best practices transferred, and networks established to preserve institutional memory for the benefit of all VDOT employees. KM employs several strategies to achieve its mission. Through specific knowledge-mapping projects, KM helps managers identify succession-planning needs that have improved the use of human capital resources. KM is currently honing an Organizational Network Analysis, a tool that will aid in the identification of where stronger knowledge sharing networks are needed within the VDOT. KM is also responsible for the creation of 31 communities of practice (CoP), forums for effective information sharing. The CoP's exist on single and cross-functional levels-and in partnerships with similar departments in cities and towns across Virginia-eliciting the participation of current VDOT employees, retirees, and their counterparts in other agencies. CoP members meet either in-person or via electronic meeting rooms where they share lessons learned and impart best practices which are then chronicled and placed in a repository on the agency Intranet, making them accessible to all VDOT staff.
Based on conservative estimates of time saved and costs avoided for VDOT compared to the annual cost of funding the knowledge management effort, the KM Division has provided a return on investment of at least 250 percent while developing effective processes for capturing and transferring critical information through employee knowledge networks. A $1.4 million cost savings—the result of resource sharing which negate the need to hire external contractors and consultants—is one example of a direct indicator of cost-avoidance enabled by the KM systems. In addition, project participants have repeatedly indicated that they are impressed with KM's convening power and are appreciative of the opportunity to share good information that enhance decision-making capabilities.