18 Feb The Value of Institutional Knowledge
With the current cost-cutting and reduction of staff in the public services, this is a topic (that if not considered) could have delivery consequences for public services.
Add to this, the issue that New Zealand is in a recession, and many companies are also downsizing and reducing staff.
How many businesses have considered the value of their institutional knowledge – the knowledge, that if missing, can make or break a business?
Institutional knowledge is defined as ‘the knowledge that is known or held within an organization by individuals, groups or as described in policies, procedures and other documents that are accessible to the people involved’.
The purpose of this article is to raise an alert as to the dangers and the potential consequential financial loss to your business if that knowledge is not:
- Recognised and valued;
- Managed;
- And controlled.
An article was written in Hawkes Bay Today that addressed the value of institutional knowledge. The article focused on local bodies and the restructuring that too often happens when a new CEO is appointed. The writer’s comments were also focused on the loss of years of institutional knowledge when people leave or are made redundant from the changes. Institutional change is not necessarily a negative because often some business systems become too employment-bloated, and employees become too comfortable and are not held to account for their actions. But is this the fault of the employee, or that of management for not having annual accountability checks on performances, e.g. KPIs and even staff appraisals?
When employees leave a job, of their own volition or for whatever reason, a business can very often lose the institutional knowledge or history that the employee takes with them. It has been my experience that too many organisations lack the systems or processes to transfer the knowledge to manage this loss, often resulting in a direct and indirect financial loss.
If this sounds like your business, what plans have you put in place to stem and preserve the institutional, propriety and intellectual knowledge that you have built up over your time in business?
A few action points to think about
- Identify one function in your business that relies on the sole knowledge and understanding of one person in your business;
- What would the financial and customer impact be on your business if that person/s were to leave, die, take extended leave, fall ill or even be made redundant?
- Have you carried out an ideal coverage assessment on all positions to identify who has the training, the skills and competency to cover the position in the case of the gaps?
- Go back to 1. This situation is akin to the one-man band event and an example was the cancellation of Neil Diamond as the Mission Concert artist in 2018, that left many people unhappy and many out of pocket.
Can your business afford to do nothing?