It's 3:53 on a Friday afternoon and your scheduling system has gone down. Appointment requests are coming in for the next week, and you don't know who’s available for install on Monday, let alone whether permits are in place, materials are available, or vehicles have been scheduled. The system has gone down before, but not on your watch. When your supervisor doesn't respond to your panicked text, you start wandering through the building to see if anyone has any ideas. Marcia from accounting leads you to the software chatbot, which tells you to contact your system administrator, which is a dead end because the last you heard, that was Dave, who retired eight months ago. An hour and a half later, your phone finally pings with an answer from your supervisor, who tells you to go ask Javier to update the software permissions because the system updated at the end of the month. Finally, you're able to schedule next week's work orders — only several hours after everyone else has left.

Sound familiar?

The specifics are different in every business, but the fact of institutional knowledge — or institutional memory — plagues every organization. "Oh go ask so-and-so, they know everything about [that process, that account, that machine, that filing system].” And, if you're so-and-so, it might make you feel good to be the go-to person on XYZ. Being the only one who knows how something works is pretty good job security.

But squirreling information away in one person's head is a dangerous game of telephone to play. When knowledge about special processes, equipment, relationships, etc. lives and dies with one individual, it creates information bottlenecks and confusion, perpetuates risk if the person retires, leaves, or gets hit by a bus, and prevents the development of new employees and ideas.

That's where documentation comes in. And, it's not as scary as you think.

The Curious Incident of Institutional Knowledge in Small Business

It's no surprise that small businesses are riddled with information that only lives in one person's head (or email chain, or text history). Small businesses start as a few people just trying to survive the day-to-day and doing everything for the first time. Silos form, habits and systems and processes and workarounds are developed, and it seems like nothing will ever change. But then the business grows and you hire more people. You develop departments and an org chart that's more than two levels deep. People change roles, leave the company, or retire.

While institutional knowledge starts out as a necessity — just doing what needs to be done – in the long run, it can turn into everybody spending valuable time trying to find where a piece of information lives and then communicating it, again and again. And that's the best-case scenario. In more toxic environments, it can fester into knowledge hoarding, misinformation, or worse. In any case it means inefficiencies and mistakes.

The thing is that institutional knowledge is an underestimated asset — there's real value there, but you can only truly harness it if you can get it out in the open. Or, "It only counts if you can trip on it."

"Documentation" can seem like a big ask for a small team. Done right, though, and with buy-in and collaboration, it doesn't have to be a massive overhaul. Even modest efforts can have a huge impact on processes, equipment or software use, customer relationships, etc. And, bringing transparency to how things are done now lets you think more clearly about how you want to do them in the future.

How Do You Make Institutional Knowledge Institution-Wide?

If you start your process of getting processes out into the open from a place of "we've got to do everything all at once," you're going to fail before you get going. Plus, try getting the people around you to get on board with that kind of effort — even if they would like to know where to get their expense report questions answered.

Even for small enterprises, it's too much to tackle all at once. But you don't have to.

• Start small but mighty. What can you document first that will benefit the most people? Are there core practices, processes, or systems that are crucial to how the business runs? Is there a key piece of equipment or technology for which only one person knows the standard operating procedure? Are there new employees who would benefit from records of customer needs and metrics?

• Study your best – and partner them up. Who are your long-term high performers? The people who've made your organization successful and have seen both its ups and downs? To capture their experience and make sure that it gets passed from the old guard to the next frontier (or better yet, that it's in a place that's widely accessible, editable, and shareable), create intergenerational partnerships and teams. Note: "Intergenerational" in this context means experience and tenure in the organization and may or may not actually correlate with age out in the wider world. Then, create an expectation that the young guns are documenting what they've learned.

• Get in the trenches together. While you'll probably need someone to run point on the process of getting institutional knowledge out of people's heads, it's worth it to make it a collaborative and ongoing process. That means doing the hard work of creating buy-in. How? Creating transparency around processes ultimately means empowerment, both for the guardian of the process and for the people who’ll be able to use that knowledge on a go-forward basis. And, it's a service issue for your customers and your teammates.

• Pick up lots of rocks to see what's under them. There are lots of ways to unlock institutional memory — "write down how you do that" can, understandably, be intimidating. Observation by a new hire can be a great methodology – have them write down what they observe, and then have the person being observed read through and fill in the details. Mentorship and shadowing are ongoing options for hands-on knowledge sharing (see above). 

• Look beyond the text document. The point of documentation and knowledge-sharing is to bring deep-seated institutional memory out into the open in a systematic way so that it can be easily found, referenced, shared, expanded on, modified, scrapped, codified, whatever. In short, the point is to build a shared vocabulary and a shared grammar. That means creating, storing, and organizing information in a way that makes sense and is accessible to everyone in your organization. So it may be a series of exhaustively written documents that lives on a shared drive. But it may also include videos, wikis, interviews, screenshots, etc. Some powerful tools include Notion or Loom, but whatever you use, the key is that it's useful, editable, shared, and updated.

Small businesses are their own ecosystems, and within that ecosystem, things can get a little wild. Departments, teams, and individuals experience particular problems. They latch on to different initiatives, tools, and systems. Every project has a specific history of successes, failures, detours, derailments, champions, naysayers, false starts, and false finishes. Software has quirks. Equipment has quirks. Employees have quirks. Customers have quirks. This information lives in someone's head. When that person is no longer around, knowledge gets lost – sometimes never to be found or recreated again. The bottom line: Institutional knowledge well-documented buffers against instability and the unexpected.

Want to learn more about the dangers of letting information live in one person’s head can increase a business’s owner dependence and decrease its value? Read our essay “The Kingdom or the Crown.”

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