The only surprise about Philanthropy Journal’s breathless October 6 headline, “Nonprofits face leadership shortage,” was its expression of surprise. Warnings about an impending labor crisis have been out for years.

From executive suites to mailrooms, in every industry sector, organizations have been told to prepare for a mass exodus of baby boomers from workplaces. By 2010, says the Wall Street Journal, more than 40% of the US labor force will reach the age of 65, and half the US government’s civilian work force will be able to retire. Canada is on a similar track: the Canadian Policy Research Network reported this February that 39% of this country’s 900,000 voluntary and nonprofit sector employees were over the age of 45 years.

It gets worse: just when employers need to hire, the pool of potential new employees will shrink.

The article is right about one thing: to get ready, nonprofits have to start emphasizing executive leadership development. But apart from this vague notion, there was nothing to suggest in tangible terms what it meant. In failing to be specific, the article missed its chance to identify the real dilemma.

Staff turnover in the coming years will be symptomatic of a more insidious problem that hiring practices won’t be able to solve. The key component helping organizations efficiently and effectively fulfill their missions is experiential knowledge. Extract the experience from your organization, and then watch a real crisis emerge.

It won’t take much to upset the delicate balance inside many nonprofits. “In small organizations,” said a survey respondent to a 2004 Voluntary Sector Human Resources Council study, “changing one staff member can change the culture.” That one change alters perceptions of identity, understanding of practices, and insights about future direction. So imagine the interruption about to take place in Canadian nonprofit organizations, 75% of which have less than 10 employees.

Before the changing of the guard takes place, and organizational knowledge walks out the door, senior management teams have to start managing the transition from one generation to the next by capturing what the old guard knows.

One consequence of forgetting – the expense of recreating what has been lost – is described in David DeLong’s book Lost Knowledge (Oxford University Press, 2004). The Bush Administration has pledged to send American astronauts back to the Moon. The problem is, NASA doesn’t remember how to get there. The engineers who designed the Saturn V rocket used by the Apollo program in the 1960s were given early retirement in the early 1990s, probably about the time the blueprints to build the Saturn boosters went missing. So, according to DeLong, the simple and starling fact is that the $50 billion-plus price tag put on returning to the moon quietly ignores the fact that the agency “has forgotten how they did it in the first place.”

“Leaders who fail to confront this threat,” DeLong says, ominously, “will be held accountable for jeopardizing the future viability of their organizations.” So, if your agency wants to shoot for the stars in the years ahead, its up to you to make sure your successors know what worked – and what didn’t – during your own tenure. Don’t assume they can easily figure out the lessons you learned because, chances are neither you nor anyone else will be around to tell them.

Where to begin? The lessons of experience are constantly being lost in organizations because few have processes enabling them to reflect on their actions. In most organizations, senior managers believe time devoted to rehashing the past is philosophical, hence, unproductive; a luxury.

In fact, the opposite is true: they better be able to bring the past to life. Future success will require all new managers to have a firm grasp of the details of the events that shaped the organization. They must be able to evaluate situations from the perspective they appeared at the time choices were actually made.

Even if you’re already hiring new staff, don’t assume a smooth transition will take place on its own. Many executives have worked together for so long they don’t realize they speak in code and can’t effectively communicate. Break the code, share the knowledge, make “what you know” common property.

What do your successors need to know about the essence of the organization’s culture so they can run this venture? You must harvest everything you’ve learned.

Organizations need processes for debriefing employees on their operational and intellectual work histories. One example comes from IBM, where older employees and retirees share expertise with younger workers. And current employees are encouraged to post detailed descriptions of the job experience in an online directory so their successors can access their knowledge after they’ve walked out the door.

Another is the US Army’s After Action Review, designed so everyone is continuously assessing themselves. This evaluation revolves around four simple discussion points: What did we set out to do? What actually happened? Why did it happen? What are we going to do next time?

Asking questions is important. Knowledge can be lost simply because we remember what we want to hear, and forget what makes us uncomfortable. For that reason, wrote David Garvin in Learning in Action (Harvard Business School Press, 2000), Charles Darwin kept a separate record of observations that contradicted his theory “because he knew they had a way of slipping out of the memory more readily than the welcome facts.”

But interviewing that unlocks the tacit knowledge from peoples’ heads is only part of the task. Even small non-profits these days have complex operations, yet their formal information documentation processes – like those of their larger counterparts – are often non-existent. How can they capture mission-critical information lodged in emails (let alone paper files) scattered all over the organization? An archives increases the chances of recovering critical knowledge that might otherwise be “lost,” erased from your server, or simply thrown away.

This capability alone may be what ensures your successor can still find the blueprint for your own Saturn rocket.