Knowledge: a company's most valuable asset?
Enterprises work hard to hire and retain the most talented, experienced, and knowledgeable people. But the thing about knowledge is: it’s finite. Something that’s true today may not be true tomorrow.
Pluto was considered a planet for 70 years. But not since 2006. Diamond was the hardest substance known to man. Until it wasn’t. The earth was thought to be flat. Now, we know that it’s round – though some will try to convince you that it’s flat again.
What is knowledge decay?
Put simply, knowledge decay refers to the loss of institutional knowledge.
Whether you're an enterprise, a department, a team, or an individual, it is near-impossible to hold on to every morsel of learned information; any student that's crammed for an exam could tell you that.
Knowledge decay occurs for various reasons, which can be broadly categorized as:
- Employee turnover sees expertise walk out the door – When employees leave your enterprise, any specialist knowledge and skills leave with them. If a company has a high employee turnover or large number of contractors, it can be difficult to hold on to crucial knowledge.
- The relevancy and accuracy of knowledge expires – Knowledge can decay simply because it is no longer correct. As human knowledge advances, we make new discoveries that put either the efficacy or value of previous learning in jeopardy. For example, with the onset of cloud computing, expertise relating to system networking is less coveted.
- Knowledge isn't documented – Most crucially, when knowledge isn't properly stored or documented, it becomes obsolete. If knowledge is only retained in the human mind or in the culture of process, it cannot be shared, reviewed, or built upon.
The point is, knowledge can quickly become outdated, irrelevant, and defunct. Skills learned years ago may not serve a purpose anymore. Expertise that once provided a competitive advantage can leave your business for good. This phenomenon is called knowledge decay, and it poses an underrated threat to business continuity.
The hidden cost of knowledge decay
Aside from hampering innovation, knowledge decay poses a serious threat to profitability.
As knowledge advances and expires at an accelerating rate, businesses are scrambling to equip their workforces with relevant and up-to-date expertise. Currently, around 10k Baby Boomers retire every day. This exodus puts immense pressure on enterprises to close the knowledge and skills gap that these experienced employees leave in their wake.
Failing to address this skills gap is costing enterprises. In 2005, following the departure of their senior corrosion technician, a BP oil refinery didn’t notice a quarter-inch hole in a pipeline, causing 250k gallons of oil to leak into Prudhoe Bay. The environmental incident cost BP millions, but it seems they failed to notice the root cause of the disaster – knowledge decay.
Less than five years later, BP was again forced to witness the cost of inadequate knowledge management. An almost identical incident at the Deepwater Horizon oil rig occurred, this time costing BP over $65 billion. Several experts weighing in on the topic cited knowledge decay as the primary cause of the incident.
"There were exhaustive investigations as to its causes, [but] nobody did very much to encode the memory."
BP experienced first-hand the threat that knowledge decay poses. In the future, the most successful enterprises will not only collect and analyze data, but also maintain, update, and transfer knowledge over time.
The half-life of knowledge
Knowledge has a half-life. It used to be that your skillset would last you throughout your career. Now, estimates put the half-life of professional skills at just five years.
Human knowledge is expanding exponentially. Today, we are exposed to 34 Gigabytes of information a day, more than ever before. Up until 1900, human knowledge doubled approximately every century. By 1982, it was doubling every 12-13 months. Now, in 2020, IBM estimates that human knowledge will double once every 12 hours.
When human knowledge increases – as big data and advanced analytics provide greater insight into the inner workings of business – so does the cost of wrapping your head around what we already know. As the half-life of knowledge continues to drop, one major question arises: How are we meant to keep up? It seems that enterprises must run faster and faster just to stay in the same place.
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Why many enterprises fail to safeguard knowledge
More often than not, the institutional transfer of expertise is ineffective, inefficient, and met with resistance. There are several reasons why enterprises struggle to keep pace with the speed of knowledge decay, most of which center around knowledge management:
- Transferring insight is disruptive for experts
- Knowledge is only transferred on a one-to-one basis
- Information isn't updated or reviewed
- Knowledge transfer only occurs once
Unsurprisingly, the majority of these issues are due to inefficient knowledge management processes. The human mind forgets more than half of what it is told within two days. Failing to document expertise means that, within a week, any knowledge transfer will have been in vain. Similarly, if knowledge transfer only occurs once, information can quickly become outdated. Documented knowledge that isn't regularly updated spreads misinformation and leads employees to waste time locating information that is no longer beneficial.
When knowledge transfer is done on a one-to-one basis, only one person benefits. Knowledge holders will be continuously interrupted each time a colleague makes a new request for their expertise. This process is disruptive and keeps knowledge siloed among experts and the few they are able to teach directly.
How to protect your business against the threat of knowledge decay
With the speed at which knowledge decays, enterprises must employ more advanced knowledge management systems to remain informed. To future-proof your business, you must look to new technologies and agile systems that prevent the loss of expertise:
#1. Build a knowledge base
A platform for storing and accessing information is the backbone of knowledge management. Curating a searchable knowledge base on your intranet lets employees locate relevant resources and gain the most up-to-date knowledge to perform their role.
Categorizing documents and assets according to department or job function empowers employees with even easier access to relevant information. Organizing and structuring knowledge bases also allows enterprises to enforce a hierarchy of information and maintain security for different levels of the business.
#2. Uncover knowledge with enterprise search
Where’s the first place you turn to when you need quick answers? 92% of you will have just said Google.
We’ve come to expect the ability to quickly and easily search for exactly what we need, with no irrelevant results, errors, or complicated interfaces. The same applies to your digital workplace.
For employees to find relevant and up to date information in an instant, your enterprise search needs to be as powerful and reliable as consumer offerings. That’s why Unily’s unified search is built to deliver the perfect search experience, giving employees unlimited access to knowledge from across your enterprise.
#3. Provide learning and development centers
If professional skills are becoming outdated every five years, creating cultures of teaching must become a priority for enterprises. For employees to keep their expertise relevant, they must have ample opportunity to upskill and retrain.
Providing learning and development centers on an intranet gives employees a one-stop training hub to develop their skills whenever it suits them. Gamification features and interactive media can be incorporated into these centers to incentivize learning and drive engagement.
#4. Make mentoring a part of your culture
Communication and collaboration are two pillars of business success. As such, discussion and knowledge sharing is crucial to unlocking expertise within an enterprise. Cultivating a growth mindset where mentoring and sharing knowledge is a part of your culture makes learning a priority for employees.
"The faster the pace of knowledge change, the more valuable the skill of learning becomes."
Senior individuals will need to share expertise across departments to avoid knowledge silos. Younger employees may bring new knowledge they can impart to your enterprise through reverse mentor programs.
In the coming years, continuous learning will become more of a priority. Relying on employees to mentor and teach one another will be a crucial step in combatting knowledge decay.
#5. Recognize and reward contribution
One of the most significant challenges to overcome when it comes to knowledge decay is encouraging employees to share their expertise. Millennials and Gen Z bring with them new insight, but on average, only stay in their current position for 13 months. Employees that plan to stay in their role for a short period may not be eager to share their expertise, which can lead to a culture of knowledge hoarding.
Employee recognition tools are one way to encourage knowledge sharing. With the features of a digital workplace, employers can create a culture of learning to combat knowledge decay. Gamification features, like profile badges, reward those who share insight and allow colleagues to identify experts within your enterprise. Similarly, employee spotlights and peer-to-peer recognition tools encourage employees to acknowledge each other for their help.
Future-proof your expertise with a digital workplace
Knowledge decay has the potential to seriously harm an enterprise. To find out how a digital workplace builds knowledge management systems that preserve your expertise, get in touch with our team of experts today.