How Organizational Knowledge Empowers Enterprises
Organizational knowledge – it’s not a term commonly associated with business continuity, resilience, or disaster recovery, but it is a critical component.
First, let’s briefly explore the concept of knowledge. Merriam-Webster offers several definitions of knowledge, including “the sum of what is known: the body of truth, information, and principles acquired by humankind.” Take a London Black Cab driver as an example – they spend several years studying the streets and buildings so they can get anywhere by the fastest route by address or building name, all without GPS assistance. They each know what few others know – every nook and cranny of London. This indispensable body of knowledge gives them a strategic and tactical advantage in conducting their business.
Before I co-founded Fusion Risk Management, I was the general manager of a Fortune 500 enterprise that sold one of its subsidiaries. Of course, whenever a large acquisition occurs, due diligence is of utmost importance. The potential purchasing companies needed their teams to review all elements of the business to ensure everything was in order.
To do this, we created a “data room.” We took over a large conference room and filled it with filing cabinets, stacks of paper, and thick binders. This was the only way we could demonstrate a complete view of the business. In came hordes of people from a myriad of potential acquirers, and they spent several days to weeks painstakingly digging through these physical documents and putting all of the information they needed into spreadsheets. It’s hard to believe, but that was just in 2001. Things have certainly changed.
The “data room” we put together now seems like a relic of the distance past. Today, a business can gather all of its data virtually and store it in one place, creating a level of efficiency that was completely unimaginable less than 20 years ago. Moreover, information can be stored in its raw form rather than embedded in documents, enabling leadership to gain valuable insights and make more informed decisions.
Any business that evolves beyond a few people in a single location runs the risk of developing information silos that different departments or people are responsible for. There is not a person or group that knows every process, asset, vendor, and dependency that allows the organization to operate successfully. It is inefficient and can cost a company time and money, while also creating unnecessary risk. This leads to a fundamental need to avoid the many pitfalls of a fragmented company through the use of organizational knowledge.
An organization improves over time as it gains experience, and experience enables an organization to equip itself with a broad base of knowledge to make the best decisions for continued success. When a company commits to ensuring all leadership and employees understand the process of creating, retaining, and transferring knowledge, it is much better positioned for that success. The concept is simple – the more we understand how an organization works, the better we can understand how it might break or fail. With that knowledge, we can best implement processes to protect and recover it.