Processes and the importance of institutional knowledge
Tribal knowledge?
In his now infamous Slack message, Salesforce co-CEO Marc Benioff added fuel to the fire of the ongoing discussion around remote workers and productivity. My interest in his message has less to do with Salesforce in particular, and more to do with the relationship between organizational knowledge and employee performance – Salesforce just happens to be a relevant use case.
Benioff asks if the lower productivity “facing” new employees is because Salesforce is “…not building tribal knowledge with new employees without an office culture?” – this, of course, in reference to the dramatic increase in remote work since 2020.
For context, here is his Slack post in its entirety:
“How do we increase the productivity of our employees at salesforce? New employees (hired during the pandemic in 2021 & 2022) are especially facing much lower productivity. Is this a reflection of our office policy? Are we not building tribal knowledge with new employees without an office culture? Are our managers not directly addressing productivity with their teams? Are we not investing enough time into our new employees? Do managers focus enough time and energy on onboarding new employees & achieving productivity? is coming as a new employee to salesforce too overwhelming? Asking for a friend. (I’m leaving this open ended to get the broadest level of response.)”[1]
Benioff is not alone in this line of thinking. This accurately reflects the assumptions made by many CEOs regarding the sharing of knowledge within their own businesses.
The logic goes something like this:
1) To maximize productivity, we should be sharing know-how with each other and learning from one another.
So far so good…
2) To learn from one another, we have to work in the same building and create an “office culture” where “tribal knowledge” is shared through physical interactions.
This is where I beg to differ.
Now, don’t get me wrong, I am convinced that teams who share a workspace benefit greatly from that synergy. But I am not convinced that sharing a workspace is the only way – or even the best way – to ensure a robust and free-flowing exchange of tribal knowledge, and to reap the benefits thereof.
To maximize the benefits of tribal knowledge, organizations must transfer the knowledge that exists in the minds of their employees into explicit intellectual assets that can be refined and shared.
Relying entirely on watercooler conversations as the medium for knowledge sharing is bound to fail – this is increasingly true for large organizations such as Salesforce. It is impossible to facilitate the number of conversations and physical interactions necessary for a robust exchange of knowledge. There are simply too many people!
This is where the practice of knowledge management comes in. Organizations can codify know-how and best practices in the form of processes, guides, policies, trainings, etc. This codified knowledge can then be organized and shared through various channels – making tribal knowledge available to remote and office workers alike.
Accurate and accessible knowledge is certainly a key component to what Benioff calls “building tribal knowledge with new employees.” But, contrary to his suggestion, relying on random and casual office interactions is not sufficient to help upskill new employees and maximize their productivity.
What else is at stake?
Of course, lower employee productivity is not the only risk organizations take when they fail to create and manage intellectual assets from the tacit knowledge of the business – other negative effects can be expected. For example:
Employee frustration may increase if access to key business knowledge is limited. They are forced to “reinvent the wheel” as a part of everyday business.
More defects will be created and, thus, require precious worker capacity to correct if no clear “best way” is shared with the workforce.
Moreover, customers may become frustrated with the inconsistency in goods and services that may arise from a lack of shared business knowledge.
Finally, the organization may be exposed to unnecessary risk because access to key knowledge is limited.
So, as relevant as “new employee productivity” is to our discussion, we can see that there are other traps that exist within organizations where knowledge is not managed as a business asset.
Who holds the knowledge?
In its raw form, institutional knowledge lives in the brains of the workforce.
As Patrick H. Sullivan observes in his book, Profiting from Intellectual Capital: “The firmwide human capital resource is the know-how and institutional memory about topics of importance to the company. The human capital includes the collective experience, skills, and general know-how of all the firm’s people.”[2]
As a result, the unharnessed and mystical nature of institutional knowledge in its raw form naturally limits 1) by whom, 2) where, and 3) when this knowledge can be accessed and put to work in the organization.
By whom - In its raw form, institutional knowledge is limited to the person possessing said knowledge, or to individuals with direct access to the person possessing said knowledge. This, obviously, is not ideal. We want knowledge to be widespread and not overly compartmentalized.
Where - It then follows, that in its raw form, institutional knowledge can only be accessed from the physical location of the person possessing the knowledge. To be sure, certain technologies expand from where knowledge is accessible – phones, email, messaging apps all do their part to make the knowledge holder more accessible to people in a different physical location. But, in large part, access is still restricted to those who have a direct connection with the knowledge holder.
When - But even if I can use technology to gain access to the knowledge holder, in its raw form, institutional knowledge can only be accessed at a time when the possessor of said knowledge is available.
Do you see the bottleneck here? In its raw, intangible form, institutional knowledge is held captive by the physical and mental state of the knowledge holder.
This truth highlights another major problem with Benioff’s strategy of putting workers in an office together as the primary means to facilitate “building tribal knowledge with new employees.”
We can look at recent events with Salesforce to illustrate this.
They very recently laid off 10% of their workforce. Because raw institutional knowledge exists in the brains of employees, we can safely assume that in this round of layoffs, Salesforce potentially lost 10% (perhaps more depending on the density of business know-how in that 10%) of their institutional knowledge overnight!
Needless to say, when employees leave, they take their brains (and business know-how) with them. If we are solely relying upon peer-to-peer interactions to facilitate the transfer of business knowledge, this becomes much harder when we account for the reality of employee turnover. Ironically, in this case, Salesforce just made it harder to enable new employees to be productive!
This highlights the necessity and urgency organizations should have regarding the creation of intellectual assets that can be managed and shared. In other words, the extracting of business know-how from the brains of employees and putting it into some explicit format that can be leveraged across the business should be a priority.
But what format?
Assuming you are convinced that unseeable, untouchable, and inaccessible knowledge is not sufficient to help gain a competitive advantage, in what format should you work to capture and share knowledge?
Strategy pioneer Michael Porter states in his book Competitive Advantage, that the only way shared business knowledge can have any impact on competitive advantage is:
“…by identifying specific ways in which know-how can be transferred so as to make a difference. The mere hope that one business unit might learn something useful from another is frequently a hope not realized.”[3]
And do not our own experiences prove this to be true? How many of our own initiatives, projects, and efforts have seemed so grand in theory, only to die out without so much as a whimper? I’m afraid it happens all too often.
Without a clear methodology for knowledge sharing, our efforts may more closely resemble a broken clock that is right only twice per day instead of the fine Swiss timepiece that never skips a beat.
So, what is the best format (“specific ways” as Porter words it) with which to capture, manage, and share business knowledge? In what form should the collective experience, skills, and general know-how of the workforce be packaged to support value creation?
Process as a medium to convey knowledge
There are many forms that knowledge might take within a business. Attempting to curate a comprehensive list here would be a fool’s errand. However, here is a short list of several knowledge formats (or types, or categories) that I have used in the past.
Policy – a set of rules, regulations, and/or guidelines which are intended to reduce the risk of running the business.
Process – a set of business activities performed to generate value for external and/or internal customers.
Lessons learned – a work experience that is used as an example for similar future work scenarios.
Training – a mechanism for teaching a worker a skill or behavior with the specific goal of improving one’s capability, capacity, productivity, and/or performance.
Form – a workable document designed to ingest information to be processed in downstream actions or decisions.
Guide – a resource used to inform a decision or direct action.
Of the several categories listed here, processes stand out as unique. Processes are designed and executed to generate value. And this is what enables a business to remain in operation – they provide goods and/or services that their customers find valuable. So valuable in fact, that they are willing to pay for them. So, in a very real sense, any attempt at intentionally collecting, managing, and sharing institutional knowledge should have its end rooted in generating customer value.
Quoting Michael Porter once again, “The importance of the transferred know-how is a function of its contribution to improving competitive advantage in the receiving business unit. The transference of just one insight can sometimes make an enormous difference to competitive advantage, so even business units that are not very similar can have important intangible interrelationships.”[4]
The importance of knowledge management is in direct relation to the value it helps create. In other words, knowledge without action is useless – it is not a value add to any organization. Any knowledge management efforts must be undertaken to assist in value creation.
For this reason, processes are a very natural starting point for organizations looking to convert the tacit knowledge of their workforce into explicit assets to be managed. Processes enable the creation of value. Processes give context to much of the knowledge within a business. If you will, processes give business knowledge legs – processes put business knowledge to work.
A clear process framework that represents how organizations go about creating value for their customers can provide the needed “anchor points” from which to “hang” various types of institutional knowledge.
Knowledge artifacts embedded in process for added work context
As a worker, processes help me make sense of and make use of institutional knowledge.
As a manager, processes allow me to ensure that the right information is given to the right person at the right time. Processes allow me to blend information into the flow of work as it is needed.
After all – what is the point of working to intentionally manage institutional knowledge if not to accomplish some type of work? – to generate some value for our customers? Processes bridge the gap from knowledge to value.
When we have a system of visually documented processes which reference and tap into other types of business knowledge as needed – then we have a situation where employees are released from much of the uncertainty and doubt that plagues a typical workday. We have a system where knowledge is actively contributing to the creation of customer value. We create an environment where tribal knowledge is harnessed and put to work for the good of the business and the workforce, which is the goal.
[1] CNBC.com. https://www.cnbc.com/2022/12/16/marc-benioff-says-newer-salesforce-employees-are-less-productive.html (accessed January 12, 2023), emphasis mine.
[2] Patrick H. Sullivan, Profiting from Intellectual Capital: Extracting Value from Innovation (John Wiley & Sons, Inc., New York, 1998), 22.
[3] Michael E. Porter, Competitive Advantage: Creating and Sustaining Superior Performance (The Free Press, New York, 1985), 353, emphasis mine.
[4] Porter, Competitive Advantage, 352.
