If there’s one word that sums up the reality of managing today’s workforce, that word is challenging. The latest PWC report found that 65% of employees are looking for a new job. Furthermore, 88% of executives say they see higher turnover than usual. The same report states that “the challenge ahead lies in addressing culture, as companies define their work environments." Consequently, culture is the key to transformation, and an essential aspect is preserving it. For companies, the past and its wealth of wisdom are stored in institutional knowledge.
What is institutional knowledge, and why do companies need it?
Institutional knowledge is the collective expertise of the organization. It comprises both hard and soft skills, with a significant component being company culture and employee relationships. Much of institutional knowledge is passed on informally, making it difficult to preserve in a processual, formal way. Even if part of it is intangible, this kind of knowledge needs to be at the base of any transformational endeavor. With teams becoming hybrid or remote and employee turnover at historic heights, it’s essential to preserve and further cultivate your company’s institutional knowledge.
What are the benefits of maximizing institutional knowledge?
Institutional knowledge has more to do with wisdom than information. It's great when you have innovators in your company as they always look for opportunities to do things better. However, there's great value in accumulated experience and tested paths. Here are the top reasons why it's paramount to preserve your organizational knowledge:
- There's a wind of turbulent times ahead. According to Fortune, 70% of economists believe that there will be a recession in 2023. However, this is hardly news, and your company is likely already preparing to tackle this challenge. Being able to rely on institutional knowledge, especially the one acquired during the past few difficult years, will play an important role in your strategy and how well it weathers the storm.
- There's no innovation without a solid base. We like to say that ideas are groundbreaking, but that means there was some ground already there to be broken. Everything your company has learned, through trial and error or chance, is valuable to progress. Knowing what's a mistake and what has worked in the past saves a lot of resources.
- Institutional knowledge can bridge the gap between new hires and seasoned employees. Many baby boomers have left the workplace since 2020. Some have done this ahead of retirement age and are now considering returning to work. That will certainly alleviate some of the effects of the Great Resignation, but it will also create a diverse work environment generation-wise.
- You can avoid single points of failure (SPOFs) if your organization has a healthy learning culture. You shouldn't have irreplaceable employees who leave a major information gap when they quit working for the company. If there isn't a constant knowledge-sharing flow, your organization is susceptible to developing a silo mentality that is terrible for progress and growth.
Read more: How the No Silo Rule boosts organizational innovation
How to make sure you preserve your institutional knowledge
Even if much of the institutional knowledge is informal, there are things you can do to store it in a formal, organized way. Furthermore, you can ensure a smoother knowledge transfer process by facilitating communication between employees and setting up coaching and mentorship programs:
1. Center some of your training programs around organizational knowledge
Today, corporate learning is becoming increasingly autonomous. Employees often prefer informal learning, and companies do their best to accommodate them by offering rich libraries of third-party content. This is great as it provides diversity and has the power to drive high learning engagement rates.
However, remember that your company is unique even in the global business world. You need to translate that into customized in-house training programs that reflect the organization's values and mission. They should convey institutional knowledge that is particular or even exclusive to your company. Everything about branding, customer relations, retention and loyalty programs, and even sales falls into this category. For example, you can have a third-party course on how to address customer complaints in an empathetic and friendly manner, but that will just make your customer support employees sound like everyone else's. Add some branding elements, emphasize organizational values and offer practical examples of what going the extra mile means for your company and you’ll have a superior customer support service.
2. Use an online training platform
These days you don’t need a paperwork trail for everything. Going digital is great for the environment and much easier to track and use. While having internal wikis for employees to contribute to is an outstanding practice, they can be a little hard to follow, and essential information is easily lost.
Depending on the tool you use for these wikis, they can be stored internally or hosted on a third-party server. Not all of these tools have effective search features, so it can be time-consuming to find something specific. Storing essential organizational knowledge in your learning management system (LMS) makes it easier to browse and update when necessary. Furthermore, the LMS also protects your sensitive information, and if you need to migrate the content at one point, you can do so seamlessly. A modern platform also allows you to pack the information in various ways – gamified courses, video tutorials, SME talks, whitepapers, etc.
Read more: 5 Reasons why cross-training employees is beneficial for your company
3. Have strong mentorship and coaching programs
Much of institutional knowledge circulates informally within the organization. You can’t always capture all of it but having good mentorship programs allows new hires or people moving to new roles to benefit from the experience of their more seasoned colleagues. While the structure of these programs makes them somewhat formal, the conversations between people will always touch on matters or points that are not always written on the agenda.
In my experience as a trainer, I’ve seen firsthand that learners tend to remember the stories rather than the theoretical content. The power of stories is even greater when they are personal. Mentorship and coaching allow for a deeper connection and are great mediums for transferring that valuable institutional knowledge.
4. Celebrate success and learn from mistakes
Personal stories are powerful but organizational history is even more so. Significant events such as rebranding, launching a brand new product line, mergers or other transformations generate the company's lore. You often hear some of these stories if you've been with a company long enough. While word of mouth is excellent in getting these across, you should also actively preserve these experiences. Make sure everyone in the company can hear about positive experiences. For example, send congratulatory emails to the teams who had a great impact, celebrate the successful employees in a newsletter and even have a celebratory event.
If you want to replicate a successful pattern in the future, you need to make it visible. The other side of the coin is the failures. These tend to spread informally a lot faster than any positive news, and they are often modified or blown out of proportion. Since your goal is to have accurate information stored in the collective mind, find gentler, non-finger-pointing ways to set the record straight. For example, if a new product launch was supposed to be a secret but somehow got out, own up to that, explain how it was detrimental to the company, and what the next steps are to mitigate the situation.
5. Involve your employees
Even though“institutional knowledge” refers to the organization as an abstract entity, people are the keepers of all that information. Therefore, it's only logical to call on them for help. Seasoned employees have a wealth of experience and can help design curriculums and training programs to preserve and transfer institutional knowledge. You can set up a program where you either pay them extra for doing this or offer other kinds of incentives – such as paid vacations, certifications, or time off.
Don’t forget the people who are leaving the organization either. Offboarding them properly means ensuring that their know-how stays within the company. Ask them to record and organize their standard procedures, best practices, and essential insights for specific clients. If there's the possibility of doing an extended handover to somebody on their team, do that as well. As a rule of thumb, ask all your employees to document their knowledge and experiences, even if they are not close to exiting the company.
Harnessing the power of institutional knowledge
Institutional knowledge sums up your company’s past and has the potential to shape its future. If you aren’t doing this already, it’s time to start documenting and protecting it. The process doesn't need to hinder other activities or consume too many resources; you can turn the recording of institutional knowledge into a part of your company culture. Not doing so can have significant repercussions in the long run as you lose valuable information, and it can affect the company’s bottom line.
