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He Belongs in an Institution

Most people wholeheartedly will agree that knowledge is a good thing. No argument here. But, are some forms of knowledge more valuable than others? Are some forms of knowledge more easily transmitted than others? Intriguing thoughts to be sure.

All of this brings us to this month’s topic: institutional knowledge (IK).

Let’s start by getting some agreement as to what institutional knowledge actually is. According to, “Institutional knowledge is the collective information an organization and its people possess… Some of it is intentionally developed while other information is learned on the job and possibly even intuitive.”

The importance of IK typically rears its ugly head when individuals leave an organization and take their knowledge with them and there is no effort to capture what they know before they leave. There are tangible forms of IK which are easy enough to identify (i.e. reports, data, forms, etc.) and subsequently store and transfer. It’s much more difficult to retain the intangible forms of IK such as context, skills and intuition. These typically must be transferred through some form of personal interaction such as mentorships or direct training.

A study by Panopto estimated the cost of inefficient knowledge sharing for U.S. businesses varied with the size of the workforce. They estimated that the annual cost to an organization with 1,000 employees at $2.7 million. With 30,000 employees, the cost rose to $79.6 million.

McKinsey notes that some employees spend, on average, 20 percent of their workweek looking for internal information or finding the right colleague to help with specific tasks.

To prevent losing IK, many experts point to documentation and creating a collaborative workforce. The problem with trying to minimize the damage from lost IK is that it’s usually personal, meaning it varies widely from employee to employee, from organization to organization. That, and you may not realize that you’ve lost it until you need it. And by then, it’s usually too late.

“Between calculated risk and reckless decision making lies the dividing line between profit and loss.”

— Charles Duhigg

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