The Problem of Lost Knowledge

How much vital information and knowledge will your company lose when one key person retires? What if five key people leave the company? Or consider this less dramatic but more insidious problem: how much existing information do your employees have to recreate because they cannot find it? How much more information is simply lost because it was never explicitly captured and made available? At what point does potential knowledge loss pose a serious risk to your ability to do business productively?

Research indicates that the average company loses over 12% productivity annually from recreating explicit knowledge and data that they already possess but cannot find. Searching for the information alone accounts for a third of that time. And when people leave a project or position, knowledge loss approaches 90%. As shown in the figure to the right, the knowledge loss carries many negative consequences.

Typically, organizations lose both implicit and explicit knowledge:

Implicit knowledge:
Knowledge, information, and skills that are created and carried about in people's heads. This knowledge is lost when people leave projects or the organization.

Explicit knowledge:
Knowledge, information, and skills that have been officially documented. Often, this knowledge is so hard to find that people spend large amounts of time looking for it or having to recreate it.

Knowledge Loss in the US Shipbuilding Industry: An Example

KSS recently conducted a survey of knowledge workers (designers and engineers) in the US shipbuilding industry as part of a US Navy Small Business Research Investment (SBIR) contract. This survey shed light on the consequences of inadequately capturing of these two types of knowledge.

In the shipbuilding industry, explicit knowledge often exists as design drawings, simulation models, and technical manuals. Survey respondents indicated that they spend at least 17% of their time recreating information that they know exists but they cannot find. They spend an additional 33% of their time searching for the information they need in order to complete a given task.

And even when they do have access to the explicit documents, the implicit knowledge that went into creating that information is almost certainly lost:

• Who made each decision?
• What alternatives were considered?
• Why was each decision the best choice?
• Is data in the documents based on precise calculations or intuition and judgment?
• What are the rules for making calculations and judgments?
• What lessons did the project team learn from making such decisions?

The survey indicates that, in most cases, the answers to these questions are nowhere to be found. Why? Because the people who possessed this implicit knowledge either moved on to other projects or left the company without ever capturing this knowledge or passing it on to incoming team members. The result is that knowledge workers spend as much or more time looking for and recreating knowledge than they do using it to create solutions.

KSS tools provide an immediate solution to the problem of lost knowledge. Workers can easily capture implicit knowledge and convert it into explicit knowledge that can be easily found and reused. By using episTree, organizations can dramatically reduce the amount of lost knowledge, as well as support the proliferation of best practices, standard operating procedures, and continuous improvement.