In Afghanistan the British and American armies faced a problem that has become endemic in corporations today. Every six months a battle group would rotate and be replaced by another operational team. All the hard-won knowledge about the enemy was lost or at least severely eroded. Meanwhile, the Taliban just stayed there getting smarter. Faced with this the British army took positive action and created the ‘Lessons Learned’ team, which would develop systems and processes to harvest and spread the accumulated knowledge and operational experience. This quickly improved the army's operational preparations.
Institutional amnesia is not new in business but has become a significant issue. And not just because people are moving between jobs more frequently. The increasing complexity of networks within globalised organisations also threatens the retention of corporate knowledge.
Knowledge is lost within an organisation as a result of four processes:
Leakage – organisations lose the people holding valuable knowledge. They may be experts or the ‘synapses’ connecting people. Retirement is a major issue here – 700 retirements shed an average of 27,000 years of experience – but the high staff turnover in modern business is also facilitating leakage.
Dilution – new starts may be expected to adapt to their latest organisation’s practices and styles. They also bring a tendency to do things the way they did in their last workplace. This is important as only 18% of millennials plan to stay in their company long term. While the effect of getting fresh ideas is positive, the overwriting of existing knowledge and best practice is a risk.
Evaporation – knowledge is lost over time as our minds overlay and 're-write' information. Best practice in an organisation can easily evaporate unless there is a sustained effort to maintain it. One study showed that only 15% of organisations run exit interviews. The task becomes much more difficult as a company expands its global footprint and the speed of doing business and information-sharing goes up.
Isolation – the proliferation of technology can leave individuals feeling less connected than ever. This is because an over-reliance on electronic communications will cause people to communicate less effectively. Poor communications subvert the response of many organisations to a crisis, preventing the knowledge and wisdom of transformative events from being retained and shared.
Nature offers a clue as to how to meet these challenges. Vast amounts of knowledge are stored and transferred through time and creatures by DNA. This is done in packets. If organisations apply the same principle and create ‘packets’ containing multiple nodes of information they will ensure that, as with the internet, one point of failure does not undermine the knowledge base.
One of the best ways a company can improve knowledge retention is by emphasising internal networking. Relying on information systems and databases online is not sufficient.
The first thing any organisation should do is map its knowledge. Only then will it be able to identify ways of ensuring that knowledge is shared, and create safeguards against corporate amnesia.
Paul Heugh is CEO of strategy consultancy Skarbek Associates
