The Corporate Amnesia Phenomenon

With job discontinuity now commonplace, employers lose their valuable OM at conveyer-belt speed. The phenomenon is called corporate amnesia, when organizations literally lose their memory (Kransdorff, 1998). The loss of one’s own memory ensures that institutions cannot efficiently evolve incrementally, which is the way most organizations progress. Experientially nonlearning and the commonplace 12 months that it takes for employees to be inducted are among the largest contributors to decision-making weakness and productivity shortfall.

The second reason for the importance of institution-specific knowledge and experience is that individuals, even if they stay with their employer, have innately short, selective, and defensive memories. For conceptual advocacy, Harvard scholar Alan Kantrow observes that “when we go to work, we forget” (Kantrow, 1984). To Kantrow, managers’ choices and actions may find a ready place in memory, but the reasons and the intended significance of their deeds quickly float out of reach and beyond recall. He observes that while all organizations have some form of recall, their memory is frequently inaccurate:

The style of a business presentation, the kinds of evidence that tend to sway decisions, the shared sense of what constitutes relevant information about a new market or product, the deep-seated visceral preference for certain lines of business—all these characteristics, and a thousand others like them, are the subtle products of memory. In no two organizations are they exactly the same, nor in any two parts of the same organization. Intuitively we know this. But on the job we usually disregard it. In particular individuals forget both the density and duration of the activity underlying the surface facts. We forget that, like an iceberg, nine tenths of the mass lies hidden, well below the normal waterline of vision. And we forget that the part we can see is not just “there” but is very much something built, something constructed or pieced together over time. (Kantrow, 1984)

What Kantrow is referring to is the already mentioned tacit element of OM, the doubtful recall of which is ineffectual for both present and future employers.

The third reason why OM is important is that no two organizations are the same. The approach necessary for one, even if it is in the same sector, is not the same for another, so to depend on the one-size-fits-all approach to management education as well as individuals’ experience with other employers is half baked. Each institution has its own special way of working that differentiates it from all other organizations, a characteristic that allows it to be competitive. Knowing that difference, specifically its specialized knowledge and the detail of its unique experiences, and then how to apply it to changing circumstances, allows walkabout employees to make decisions that do not have to rely on relearning the ropes. In corporate terms, tacit knowledge is a passive misnomer for active sharing of knowledge to make an organization more productive, whereas good decision making is truly environment specific, an observation that can be illustrated by Snowden’s imagery of London cabbies’ use of tacit knowledge.