Restructuring? You may be leaving tens of millions of dollars on the table.
Through any restructure, whether M&A, off- or near-shoring, debt, cost, or other business transformations, you lose a great deal of talent — high performing salespeople, long-tenured developers, or A-players of any description, as well as solid contributors who perform day in, day out, over years. This kind of brain drain is costly at any time, and much more expensive during a restructure, when you may say goodbye to hundreds or even thousands of people.
You can’t avoid losing talent. However, if you can retain the bulk of your organization’s institutional knowledge in-house, in spite of the loss of talent, you have an enormous opportunity to set up your organization for success. And with business transformations seeing a 78% failure rate, this is, in fact, a critical, but frequently missed, opportunity.
In this post, we will look at the size of this opportunity, why it is misunderstood, and in practical terms how you can retain and share institutional knowledge at scale.
Defining institutional knowledge, and its risks through restructuring
First, the concept of institutional knowledge is one that many people think they understand, but is actually broader and deeper than commonly assumed.
For example, a key assumption is that it is limited to explicit knowledge, such as policies, SOPs, data, hard skills, techniques, processes, and values. However, a huge part of institutional knowledge — at least 80% — is tacit; the information that is held in people’s heads, and not captured in any formal system. This is critical knowledge companies need to keep their business running effectively and successfully, but it means different things in different contexts. For example, in a tech team, it may be information about the best approach to work with an existing code base or who has specialized expertise. In a finance team, it could be information about how budgets are set and the financial strategy for the company. In the sales department, it may be related to key relationships, or an understanding of pain points that can make a deal close faster. And so on.
During business-as-normal situations, institutional knowledge loss is already a large, but under-the-radar, problem. Consider the following:
The average large US business loses $47 million in productivity each year as a direct result of inefficient knowledge sharing.
It is estimated that almost half (42%) of the skills and expertise required to capably perform in a given position will be known only by the person currently in that position. Therefore, when a skilled employee leaves their role, their coworkers or new hires will need to learn 42% of their role from scratch.
Knowledge workers waste over five hours every week either waiting for information from their colleagues or working to recreate existing institutional knowledge.
In a restructure, these risks are amplified, due to employees beginning new roles without institutional knowledge being readily available, and employees leaving, and taking valuable knowledge with them. In worst-case scenarios where valuable knowledge is lost and time to productivity delayed, it can put the entire restructuring process at risk.
How Sugarwork enables organizations to retain and share institutional knowledge at scale
Yet in spite of the enormous risks, during restructuring most organizations make several assumptions about institutional knowledge — if indeed it is considered at all.
First, while it may be acknowledged that retaining knowledge in the organization is important, the focus of most companies is on tasks related to legal, financial, or HR issues. Second, significant loss of knowledge is unavoidable, so the focus is on retaining important but obvious explicit knowledge. And third, if a plan is made to retain knowledge, tools are frequently not built for the purpose, and techniques are ad hoc. For example, one Fortune 50 pharmaceutical company shared with us that they used Microsoft docs and Sharepoint — two tools built for totally different purposes — to capture knowledge during a spinoff of one of their divisions, refreshing every day to see if new content had been posted.
This is where Sugarwork comes in. A solution purpose-built to retain and share institutional knowledge — both explicit and tacit — at scale, Sugarwork provides a structured, easy to implement process to capture, aggregate, and enable access to knowledge on an as-needed basis, whether employees are new, changing roles, or trying to understand the nuances of new responsibilities in their existing roles.
Here’s how it works:
1. Employees transfer targeted knowledge on video using conversation templates.
Through the platform, leaders pair or group experts and learners based on roles and functional expertise. Expert-developed questions are deployed for each pair or grouping, spanning topics of key relevance to your organization. These knowledge sharing conversations are conducted on video (e.g., Microsoft Teams, Google Meet) and are captured and summarized by the platform.
2. Leaders track progress through an admin dashboard.
HR admins and managers are able to effectively monitor and track the progress of knowledge capture and sharing down to individuals, and quickly assess if key topics are covered and/or pairs or groups should be switched up.
3. Employees access knowledge as needed, with conversational AI.
New or existing employees — not only those involved in the knowledge share — can interact on an as-needed basis with captured knowledge in two key ways: via a document of insights and summaries generated by Sugarwork’s LLM, and a conversational interface that enables employees to quickly find relevant information.
With Sugarwork, you can reduce onboarding time by 70%, mitigate the risks of knowledge loss, and unlock the full potential of your restructure
Sugarwork mitigates the risk you face when your employees leave, and sets you up for success through the restructuring process. For example, when AI data solutions company Appen underwent a restructuring process, they leveraged Sugarwork to help transition engineering functions from one geography to another. The result of capturing institutional knowledge in a structured and targeted way enabled the organization to reduce onboarding time by an impressive 70%.
Transformations are often high-pressure, time-poor situations, and up until now, retaining institutional knowledge has taken a back seat to seemingly more pressing issues. But with tools such as Sugarwork, that no longer needs to be the case. In as little as two weeks, Sugarwork enables you to take a structured, structured, scalable, and secure approach to retaining and sharing institutional knowledge, quantifiably reduce the time to onboard your new employees, and/or reduce the time to productivity for existing employees in new roles. With this approach, the risks of institutional knowledge loss at a highly sensitive moment is not only reduced, but the chances of a successful restructure are substantially increased.
To find out more about how Sugarwork could be applied to your restructuring process, contact us.
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