The Importance of Institutional Knowledge and How to Preserve It in the Company

Nataša Mlađenović
Nataša Mlađenović
Feb 28, 20237 minute read

Employee attrition is a major concern in the business world, as employees that leave the company cost the company both time and money to replace.

But what oftentimes gets overlooked is the loss of invaluable knowledge that some employees take with them when they go.


A 2018 study found that US businesses lose $47 million each year because of inefficient knowledge sharing.

The study also found that 42% of what people learn on the job is never shared with anyone else at the company. This means that if someone leaves their job, almost half of what it takes to efficiently fill their role is lost.

So finding ways to protect and preserve institutional knowledge is critical for any business. But how do you do that, and why is that so difficult in the first place?

In this article, we’ll discuss the importance of institutional knowledge and how to successfully preserve it in your company.

What is Institutional Knowledge?

Institutional knowledge, often also called institutional memory, is a term used to describe the collective knowledge, experience, and wisdom of an organization’s staff.

Things like processes, procedures, best practices, as well as historical data and other information that is vital to keeping the business running.

Institutional knowledge is unique to each company, as it encompasses things learned over time and honed through experience. Think of it as the “secret sauce” that makes an organization unique and successful.

Why is Institutional Knowledge Important?

Institutional knowledge is one of those things that you don't notice until it's gone.

It's something that is acquired passively by your workforce, and it's what makes your processes go smoothly.

But when a key employee leaves the company, taking their institutional knowledge with them, the rest of the staff is left blindsided and scrambling to make up for the lost information.

Even if you fill their role with a qualified new hire, it'll still take months for them to get up to speed, costing the company time and money in the process.

Why would it take so long?

Well, because while some knowledge can be shared quite easily (policies, procedures, etc.) other knowledge such as relationships between departments or customers, company culture, or informal processes are much harder to share.

The types of Institutional Knowledge

In order to understand why it's so important to hold on to institutional knowledge, we first need to understand the different types of it.

Knowledge, in general, can be divided into two categories:

1. Explicit Knowledge

Explicit knowledge is the type of knowledge that can easily be shared between two people. It's the knowledge you gain by simply asking a question or reading a book.

In the business world, explicit knowledge is often found in documents, like manuals, procedures, and guidelines.

Sharing and storing this type of knowledge is relatively easy and is often done through digital means, such as intranets, shared cloud drives, or even old-school filing systems.

So if you have to bring a new hire up to speed on the company's policies and procedures, you can do so relatively easily.

2. Implicit Knowledge

Implicit or tacit knowledge is the knowledge you gain by experience, trial and error, and intuition. It's a lot more complex than explicit knowledge, and therefore a lot harder to capture and share.

Think trying to explain to someone how to ride a bike, but in an email. If they have never ridden one, they will have a hard time understanding your instructions, no matter how detailed they are.

It's not because the skill is hard to learn, but the knowledge required is more a complex network of skills and know-how that is hard to impart without actually being there and doing it, or even showing someone how.

Create a Culture of Learning

Help your employees share knowledge by setting up a space for informal learning in your company.

In an office setting, this type of knowledge is often found in relationships between departments or customers; processes that have been fine-tuned over time; or tips and tricks for streamlining workflows.

It also includes things like customer service skills, sales tactics, organizational processes, etc.

This type of knowledge is usually held by your senior staff, people that have been in the company for years and have an intimate understanding of how things are done.

And if you don't find a way to capture and share this type of knowledge, the loss of one key employee can have a huge impact on the organization.

How to Capture and Share Institutional Knowledge?

We see now that when talking about holding on to institutional knowledge, we're actually talking about two different things:

  1. Capturing explicit knowledge and making sure it's stored somewhere accessible to all staff members.

  2. Making sure that tacit knowledge is passed on to other staff members.

Sharing explicit knowledge

Let's start with the easier of the two. Capturing and sharing explicit knowledge is relatively straightforward.

The key here is to make sure that all policies and procedures are stored in a central place. As we mentioned before, most companies already have some kind of system in place for that, but not all are equally effective.

Ideally, the system should be easy to use and accessible to all staff members so that they can refer to it when they need to. It should also be updated regularly and accessible from any device, so that employees can access it anytime, anywhere.

For more information on that, check out these 6 signs that your company needs a knowledge-sharing platform like Lorino.

Sharing tacit knowledge

Capturing and sharing the more complex tacit knowledge is a bit trickier, but not impossible.

The key here is to find ways to capture the knowledge of senior staff and pass it on to other employees, in a way that is both easy to do for the senior staff and easy to understand for the new employees.

One way to do this is through mentorship programs, which allow senior staff to share their experiences with more junior colleagues.

This is quite effective, but not really efficient. Having your senior staff mentor each and every new hire on all the little things that could come up, is not only time-consuming but also not really scalable.

Another way to do this is through job shadowing, which allows senior staff to show new hires how things are done and explain the processes that have been perfected over time.

Again, this is not really efficient either and can be quite distracting for both the mentor and mentee. And in hybrid or remote settings, job shadowing clearly becomes impossible.

A more cost-effective and practical solution is to turn to technology.

Meet Lorino

Lorino is an internal communication tool, that is designed with two main goals in mind:

  1. To make it easy for companies to capture and store all their knowledge in a central hub so that it's easily accessible by anyone.

  2. To connect employees within a company, promoting a collaborative work environment in which everyone feels comfortable sharing their knowledge and expertise.

The Obstacles to Knowledge Sharing and How Lorino Helps

There are a lot of obstacles to knowledge sharing that companies face, leading to employees hoarding their knowledge rather than sharing it, but most of them come down to three things: a lack of trust, a lack of communication, and a lack of means.

Lorino helps you tackle all three of those in one go. It helps to build trusting relationships, encourages communication between employees, and provides the means for knowledge sharing.

This way, you can create a culture of informal learning, where employees can easily access the knowledge they need to do their job, and easily share the knowledge they have with their colleagues.

How Does Lorino Help Hold On to Tacit Institutional Knowledge?

Remember the example of trying to explain how to ride a bike in an email?

Now imagine if you'd try the same thing, but instead of having to explain every little detail in one email, you could break this complex skill up into bite-sized pieces of information and share them over time, in a fun and engaging way.

That's exactly what Lorino was designed to do.

It's not only a platform that makes knowledge sharing easier but also one that makes it more fun. Employees can share their knowledge in a series of bite-sized portions - be it in form of short self-written posts or by sharing a useful video, article, or another piece of content that would help someone out.

No more worrying about having to explain an entire process in one go, but rather breaking it down and sharing it over time, in a way that's easy to understand.

Plus, with Lorino's analytics suite, you can track how your employees are engaging with the knowledge shared, and where to focus your efforts in the future.

So if you want to create an environment of continuous learning within your organization, Lorino is the perfect tool to help you do that.

Book a free demo, and our team will be happy to show you how Lorino can help you not only capture your institutional knowledge but also create a culture of learning and collaboration.

It's time to embrace the power of technology and make knowledge sharing easier than ever before! Get in touch with us today and let's get started.

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