Losing Organizational Knowledge: How to Get off the Dysfunctional Hamster Wheel

The Scenario

You run your business lean.  There is no excess headcount and every dollar counts. Other business leaders could learn something from how you do this year in, and year out.

Yet, every functional department leader in your business is maxed out.  Some of them are on the verge of burn out.  Every one of them can probably take their experience and knowledge and  leverage it all for higher compensation and less workload at a new employer and, occasionally, some of them do.  Yet, in general, most of them love your culture and your mission and they stay put.  The real issue is just that life still happens, and you naturally lose key people from time to time because of the usual wide range of real life reasons.

Each time this happens, intelligence walks out the door. Everything that person knows about how your organization does things, why you do things in the exact way that you do, and their external (and internal) relationships disappear.

You then must cover the newly vacant role and responsibilities for an unknown period of time, essentially running blind until you can find a suitable new hire.  The obvious consequences are timeliness of the work being performed and the quality of the work output generated.

Eventually, you find and hire a suitable and experienced replacement. Then, the new person has to figure out the whole mess under stress and often without assistance. During this stage, the person is keenly aware of (understandably) continually dropping one ball or another at any given time. Everyone else knows it, too.  This continues until the person figures out which balls absolutely need to be kept in the air, which are less critical, and how to do it all without dropping any most of the time. In doing this the person, just like their predecessor, has no time to document any of it.  The person barely has the time to just get every critical task done. Even then, the person immediately focuses on the action-item backlog (which grows with every passing second).  You might describe it as “keeping one step ahead of the avalanche”.  Your key people may describe it as “the dysfunctional hamster wheel that has no exit”.

The Diagnosis

The bad news is:  This is not sustainable.  The fact you have sustained this approach for a lengthy period of time it not actually a feather in your cap. It is a sign you have been in denial while being highly fortunate.  All it takes is a couple of poorly timed events outside of your control for the consequences to gang up on you and maybe even take you down. Your business is living on borrowed time.

At some point the law of large numbers catches up with us all and you will experience a nasty financial shock due to loss of vital organizational knowledge.  Maybe you will lose one or more key customers.  Maybe other employees will leave, as they now have too much work on their plates, too much stress and feel nothing will ever be done to help prevent them from going through this again and again.  Maybe you will just lose a key employee and then the exciting and strategic new potential customer will decide to engage a different firm instead, as your key employee was an important part of their having chosen your company.  Maybe all of these occur, although we hope not.

How To Get Off The Hamster Wheel

The good news is you can mitigate this risk in all affected areas of your organization, now that you are aware of it.  The short version is you bring in a resource to map the process flows and to document the main steps so you can use the documentation to train one or more additional people (usually existing headcount) for each vital role within your organization.

Worst case, a new (replacement) person can follow this documentation and significantly speed up  his or her learning and accuracy in carrying out their new role effectively. It is a win for all concerned.

Best case, you can assign a junior employee to handle the majority of the tasks now, since you now have a clearly documented process in place for them to follow.  You effectively delegate the work to a less expensive resource and allow the more experienced/senior resource to take on value- added work for which there was not time previously.

You can also ensure — as a matter of ongoing business operations– that with each affected role, you cross-train at least one other person. using the new documentation, and then in time you no longer have any people-level single points of failure in your organization.  Each affected role now has backup persons in case of illness, vacation, busyness, and separation/departure.

This makes you failure tolerant in this area as the risk has been substantially mitigated and you have also baked value into the increased net worth of the organization.

Out of the three key operational areas all businesses have traditionally relied on – People, Processes and Technology – you can further improve your situation by deploying technology to support and automate the updated processes that you have just put in place.

Remember, risk can only be reduced by actively taking steps to mitigate the risk.  If you do not recognize your own organization in the above example, then perhaps congratulations! Otherwise, it is wise to take a closer, more honest look at the inner workings (or not-workings) of your precious business asset.

Most businesses have plenty of areas to improve, all of which shape and polish the business into an attractive and valuable asset which others want to have for themselves. Establishing properly systematized and documented processes is key. If you want your diamond-in-the-rough business to go from a dull and dirty pebble to a shining cut and polished diamond, this lets you then tap into the true potential of your employees by freeing them up from the mundane workload so they can really drive growth and add value.

The only thing left to do then, is to work out what to do with that unused old hamster wheel.


 

Peter Gray brings years of comprehensive operational management experience to our clients seeking guidance and surefire methods for top operational performance. He helps business executives to develop and grow their businesses by offering expert ways to implement their operations, finance, growth and product management. He helps companies to integrate innovative methods and strategies so they function effectively.

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