5 Reasons Why Institutional Memory Matters
If you’ve ever watched a movie where a character wakes up every morning with no memory of the day (or week) before, you know that it can complicate things. That’s actually a real (although rare) condition, but it’s also how a lot of businesses run their day-to-day affairs.
Instead of recording and standardising their processes, they do new and different things every time, and just like the movies, it’s quite chaotic.
The answer lies in what is known as “institutional memory.” Here’s what that is, and how you can use it in your business.
What Is Institutional Memory?
Before we get into the how let’s look at the what and why.
Institutional memory refers to a body of knowledge gained during the course of doing business that is independent of any one person. In other words, you record how you do things, why you do them that way, and what your processes are. If a key staff member were to leave at any point, you would still have that institutional knowledge to allow you to fill the void. Now on to 5 reasons why it really matters to build this body of knowledge.
1. So You Don’t Reinvent the Wheel
Many companies save successful bid and quote information, and then add all the related project information. This creates a library that they can refer to the next time they are quoting a similar job. They know exactly how they got the job, and how their pricing strategy worked out for them, so they don’t have to reinvent the wheel next time they bid a similar job.
2. So You Can Improve Speed, Productivity, and Efficiency
Imagine if you tried to invent new processes every time you did anything in your business? It would take a lot longer to get any task done, and the results would be unpredictable, so would probably require some revision later on. Having clear, defined, tried, and true ways to do things makes it faster and easier to get everything done.
Often, when you start a new project, the hardest part is to figure out how to start. Institutional memory can shorten or even eliminate that part of the process, so you can get to work faster.
3. So You Have a Baseline
Processes and procedures never stay the same — and they shouldn’t. Everything should change and evolve over time, but it’s very hard to review and revise your processes and procedures if you aren’t sure what you have done in the past!
A body of institutional memories or knowledge lets you go back and review not only how you have done things in the past, but also how you have changed your approach over time — so you don’t try things that didn’t work in the past again!
We usually have a very good handle on things we do every day, simply because they are repetitive tasks. But institutional memory lets you go back and review things that you don’t do as often, whenever you need to.
4. So You Can Transfer Knowledge
Every company loses people and hires people all the time. Sometimes, those people are in key positions, and replacing them can be very difficult. However, when you have a body of institutional knowledge to fall back on, you can always refer back to what was done in the past, and how it was achieved. This helps to fill gaps for new hires because let’s face it, the standard two-week handover will never be long enough!
Staffing changes are a fact of business life and having key knowledge already “downloaded” and ready to pass on makes everything a lot easier.
5. If You Ever Want to Sell Your Business
Some people stay in business for life and leave their business to their heirs when they die. Most, however, do not.
At some point, there’s a good chance you might want to sell your business, and when you do, the buyer will want to know how you do what you do. A well-organised, documented institutional memory bank is one of the most valuable assets you have, even if it’s not as tangible as your property and equipment.
It’s Never Too Early to Start
If you’re reading this, realising the value of having a documented and formalised institutional memory bank and wondering how to get started, the good news is it’s never too early to start.
Make a point of recording and documenting everything you do. This could mean developing written processes and procedures, or it could mean keeping careful records of every project you do, or something else.
Take a long, hard look at your business, and consider what aspects of it might be affected if you and your key employees weren’t there tomorrow. What would you not know how to do? What would you struggle with? Start by formalising that knowledge and work your way out from there.
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