Knowledge is not power. Sharing knowledge is power.
General Stanley Mc Chrystal
Information age people still think that knowledge is power. I know, therefore I have the power. This thinking will sink your company in the long term.
At our May Acumen Advanced Leadership Workshop, we welcomed Scot Hunsaker, a former business owner and now author and consultant with the Ardent Group, who specializes in company succession and legacy.
Some surprising stats he shared:
66% of companies fold when current leadership leaves.
73% do not have a succession plan. (I lied. This one wasn’t surprising.)
One of the themes that stood out was driving company value through sharing institutional knowledge.
Institutional knowledge would be your secret sauce, the way, why, and how you do your business. It’s all the nuanced decisions and information that allows you to run smoothly and profitably.
In most organizations, It’s an oral tradition.
It’s the story that gets told in culture conversations or when a new employee asks dumb questions. It’s how we get to “we’ve always done it that way” when “that way” is the right way.
An example Scot shared from his time running his company was that you didn’t send the final architect plans until the last bill was paid. This tradition was created through real-world experience.
You know why they did this, don’t you?
When a client doesn’t pay, you need a conversation starter where you have some leverage. The plans are leverage. Imagine how an overeager account manager could lose that leverage if they don’t know the process and why it’s important.
Institutional knowledge is the experience that resides in the minds of executive leadership and subject matter experts. When those minds leave, so does all that knowledge.
Capturing and being able to communicate this knowledge instantly is a significant driver of value in your organization (whether you plan on exiting the business or not).
Think of it this way; if you need to show up at work for the place to run, the business has less value. If the next leadership team cannot succeed without you there, the business has less value.
What’s your method for capturing and transferring institutional knowledge?
Knowledge moves from institutional to organizational knowledge when the entire company has access to the same information.
How do you transfer knowledge? How do you capture the essentials so that everyone in the organization can access and your company has more value, can run faster, and healthier?
Scot mentioned a company owner in a larger organization where only he, the owner, could sign checks. If he were hit by a bus or incapacitated for any amount of time, they would miss 2-3 payrolls. That would be crippling.
What about the subject matter or technical expert inside your company who has been there for 25 years? If they left tomorrow, would you be able to provide the same level of service? If not, then you need a process to capture institutional knowledge and make it organizational learning.
1.Identify the information
What should you capture?
Specs, details, data, documentation, contracts, pricing, marketing materials, accounting practices, tips, tricks, gotchas, the perfect project, the most common pitfalls, always do this, never do that, the “way” we do things. You get the idea.
Make this a whiteboard session with your executive team. What needs to be captured? Then each department head should have the same conversation with their team. The lists get big quick. That’s a good thing.
Prioritize by the crippling effect.
Anything that has a high “pucker” factor should be at the top of the list. What keeps you up at night? What can sink the ship? Who are your top people that if they were to leave unexpectedly, there would be a Grand Canyon size gap?
3. Pick the medium and mode
Formalize the documentation process. Will you have a standard one-pager, audio, video, screen capture, PowerPoint, what? Think about someone starting at your company tomorrow. What would be the easiest way to get them up to speed on how you do business and all the complexity that goes with it?
4. Provide Access
Anyone in your company should be able to learn what they need to know when they need to know it in 30 seconds or less.
We’re all professional researchers with the internet. Your knowledge base needs to be the same.
Creating your knowledge-base of institutional information is not a one-time thing. This is a new competency for your company. You’ll be surprised at how fast your teams will start to run and how you will solidify your culture because employees can row in the same direction understanding how and why.
This isn’t just for your transition. This is for every manager, leadership, and front-line transition as well. Promotion, hire, fire, exit – you need to prepare for them all. The bonus is that your company is more valuable to the next generation and to your pocketbook.
Create value, empower your employees, build a stronger organization. Become a Knowledge Sharing company.