It is a well-known fact that unwanted employee turnover can have a significant negative impact on an organization’s performance. These impacts include recruiting and training expenses, remarking salary to market, business interruption or slowdown in areas affected by the turnover, stress to employees picking up extra workload, higher expenses from slower process execution and process errors, customer defection, and a loss of management’s leadership credibility with remaining employees and stakeholders. Many similar negative consequences can arise from poorly managed, but intentional, employee attrition and downsizing, management restructuring, organizational expansion, mergers and acquisitions, business process changes, and hiring the wrong person for a job.
The more complex the affected activities, the greater the organizational scope of the activities, or the greater their importance to strategic objectives, the greater the inherent risk to the organization. Although the frequency by which these situations occur is often within management’s control, the likelihood of these situations occurring over the long-run is certain. How significant the residual risk will be when these situations arise, depends directly on how well prepared the organization is to manage their impact. Preparation relies largely on the collection, management, and dissemination of institutional memory.
Institutional memory is a collective set of facts, concepts, experiences and know-how held by an organization that defines the organization and how it operates. It informs members of the organization about:
- The organization’s mission, purpose, and values
- Assets and liabilities of the organization
- How the pieces of the organization fit together and operate to deliver the organization’s mission, purpose, and values
- Internal and external threats
- Who is responsible for each of the pieces and activities of the organization
- How, when, why, and by whom decisions are made
Institutional memory grows and changes as the organization changes, retaining memories of best practice and supplanting suboptimal practices with better ones. Leveraging institutional memory avoids “recreating the wheel” and promotes organizational agility. The negative impacts of unwanted employee turnover, employee attrition and downsizing, management restructuring, organizational expansion, mergers and acquisitions, business process changes, and hiring the wrong person for a job, can all be significantly mitigated by leveraging institutional memory.
How effective an organization leverages its institutional memory depends on the formality and scope of the memory. Organizations that have implemented broad eGRC programs utilizing robust eGRC technology are best able to collect and manage institutional memories and disseminate them to affected members of the organization as needed. Dissemination of the memories is not only by way of the information being available through the eGRC technology but through the appropriate enforcement of significant memories via automated process and decision workflow, escalation, and reporting.