ULSTER UNIVERSITY
Is it dangerous to lose your business memory ?
Nikki McQuillan – Ulster University Business School
hen Hilary Clinton and Donald Trump were publically sparring for
WPresidency of the United states it was fascinating to witness their public blunders . Any employer knowing this information about its employees would probably like to ‘ fire ’ both of them !
In an age of flexible labour markets and constant job changing corporate amnesia is a condition businesses and organisations increasingly have to live with .
Arnold Kransdorff , who first used the term ‘ corporate amnesia ’ reveals it to be the garbage bin of repeated mistakes , reinvented wheels and other unlearned lessons that clutter the knowledge banks of modern businesses and organisations .
Knowledge management is powerful for organisations , when effective it relies on what is in people ’ s heads . When they leave however , that knowledge and understanding often goes with them .
Bill Gates once said he was acutely aware of the threat of company memory loss where it would only take the loss of 20 key people to put the business at risk of bankruptcy .
When things go wrong in a business , or someone makes a mistake or is accountable for something that has failed , all too often the first reaction would be to ‘ fire ’ them .
This , however leads to forgetting what went wrong and why . A legendary story from a young executive at IBM who lost the company $ 10m on a failed venture and went to the Company ’ s founder , Thomas Watson , to ask if he was to be fired . “ Hell no ” was Watsons reply “ we just spent $ 10m educating you ”. This brave retention of experience is certainly not a widely adopted approach to people management .
The question is , with digitisation , disruption and the transformative dynamics in business and organisations today , is corporate memory really that important ?
Yet , the financial crisis of 20078 is a sharp
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reminder of what happens when mistakes from the past are overlooked .
Having cofounded , grown and developed the Streat to acquisition over ten years , there are countless stories from franchisees and ourselves around the frustration of employees making mistakes , affecting the bottom line and challenging our passionate belief in developing our people to reach business goals .
The Streat iterated to employees , ‘ it is acceptable to make a mistake once , share the learns and avoid making the same mistake twice ’. This was reinforced through comprehensive training systems and coaching on the job .
This knowledge transfer between employees in the streat is known by academics as ‘ explicit knowledge ’ and could be written down and explained in training manuals . This knowledge in larger companies can be shared through IT driven knowledge management systems .
Conversely these systems cannot capture ‘ tacit knowledge ’. This is acquired through experience , used without thinking and difficult to explain in words … it is just known knowledge , found in your ‘ own head ’ and relationships and networks both internal and external to your work place .
It is reported that 90 per cent of the knowledge in any organisation is embedded and synthesised in people ’ s heads .
Robert Bains argues robustly “ Tacit and explicit knowledge come together to form organisational memory and in many cases a shared narrative or interpretation of the past will emerge providing valuable lessons from a collective community ”.
Employee relationships and networks with others both inside and outside their workplace and their embedded behaviours resulting from experiential learning are therefore a valuable resource that business leaders may not even be aware of .
When working in teams for example employees can acquire and build informal unquantifiable knowledge for a business that is difficult to measure and capture but would be a sound basis for innovation .
Some employees may have extensive but mainly invisible networks of key advisers that can be overlooked by businesses .
This comes particularly to the fore when people leave , retire or indeed are fired for making a mistake .
The building and harnessing of social human capital amongst loyal employees can make a business remarkably efficient .
Indeed , a culture of ‘ community ’ in a business workplace creates a ‘ trustful ’ environment for untapped potential into new ideas and therefore conversations that are not on the agenda should perhaps be encouraged .
On reflection , the high retention of our teams in the streat and the generation of this social human capital through employee ‘ community ’ conversations underscored our continuous improvement culture , built trust and nurtured an active learning business .
This led us through the growth of a business , internationally recognised for people development , innovation and to acquisition .
The Ulster University Business School , provides ‘ work ready ’ graduates that can contribute actively to the socioeconomic fabric of Northern Ireland through the businesses , organisations and communities they work in .
Developing our student ’ s tacit knowledge underpins Ulster ’ s learning and teaching strategy through experiential learning and other innovative techniques .
Find more information on our suite of programmes from www . ulster . ac . uk / courses / coursefinder or email n . mcquillan @ ulster . ac . uk Twitter : @ nikkimcquillan