Institutional Memory

One of the technical terms you hear B-school types throwing around sometimes is “institutional memory,” which refers to the knowledge accumulated by all of the people who work for a given organization during the time they are employed. Some experts will include all of the working experience and job skills accumulated by the employees in the definition as well, but the term is more commonly applied to the facts, concepts and non-task experiences that the people working in a given group accumulate. Thus, a given retail employee may know everything you could ask for about inventory control, customer service, store maintenance, shipping and receiving, and running a cash register, but only someone who has actually worked in the Sav-on (now CVS) store in Silverlake California knows that you have to shift loads going up the conveyor belt to the storage attic to the left so they don’t fall off going around the turns.

That may not sound important in itself, unless you’ve ever had to clean up a few cases worth of corned beef brine from the floor after the cases fell and the cans shattered. Or, worse yet, had to fill out the accident report and the Worker’s Compensation forms after a case falls off and lands on someone’s head. Since it would cost more than the store’s net income for several years to have the conveyor system ripped out and replaced with something more functional, however, new employees being assigned to that unit will probably have to learn how to avoid this type of product spill for many years to come. It’s something that someone who has worked in that location would know, and could easily pass along to new employees, but which someone who has never worked in that unit would not know, regardless of how knowledgeable or how experienced they happen to be.

All right, it’s a rather slapstick way of making a serious point. In any business unit, whether it’s a low-end retail store or an elite University department, there are going to be odd bits of knowledge that can not be contained in any job description or procedures manual; that can only be obtained from actually doing the job and having the experiences that come with it. Maybe it’s how to keep the computers running; maybe it’s who to call in Payroll when the checks aren’t on time; maybe it’s what part of the day the office will be the least busy (best time to schedule tours, interviews, staff meetings, etc). It’s why experienced personnel will always out-perform new personnel, regardless of relative levels of training or ability, at least until the learning curve catches up to the level of the more experience workers.

It’s also the main reason why employee retention is so important. Certainly, the costs associated with recruiting and hiring new personnel can be huge, as can the costs of certification and/or formal training. But the biggest single drawback to new personnel is just learning curve – how long it takes the new people to learn the nuances of the job. This is just as true for management personnel as it is for the rank and file, by the way; General George S. Patton once said that it took at least five years for an Army officer to learn enough to begin earning his pay – and that some of them never did. Of course, there will always be those cases where an employee is costing the company more to retain than the cost to replace them, just as there will always be employees who receive job offers with salaries the company can’t match. But any Human Resources policy that does not take into consideration the learning curve and institutional memory factors is just (there’s no nice word for it) stupid.

Of course, the ideal situation would be to capture the institutional memory of a work group in some permanent form external to the workers themselves, so that it can be retained no matter how the employees come and go…

But that’s my next topic…