Learning takes many forms. Some methods are formal in their approach, such as elementary school and high school. Others, like mentoring, take a more informal approach. Institutional knowledge is a blend of the mentoring and formal teaching.
It is estimated there are approximately 15 million species on Earth. Most species develop a method of communication that allows all members of the species to understand one another regardless of the geographic region where they are raised. Some animals communicate using sound, and others communicate using motion. Humans are just one species in this mix. However, they have developed 7,117 known spoken languages. Although roughly 50 percent of the Earth’s 7.8 billion humans speak one of 23 unique languages, humans worldwide are not spending their time inventing the wheel over and over again. This is due to institutional knowledge.
Institutional knowledge is information that is handed down from a group of elders to a younger group, typically devoid of any documentation or data to substantiate the information being passed is true. It is typically understood that due to wisdom of the elders and their collective experiences, it is assumed that the information being passed down is true.
Formal learning can teach language, mathematics, history, and science. All formal teaching involves the transfer of facts, theories, and formulas. These formulas can take the form of a physics equation that explains the theory of relativity, or it can explain how to conjugate a verb. The questions answered by formal learning include the who, what, when, where, how, and why.
Mentoring takes many forms but is always less formal. It can be an assignment from a superior that stretches an employee’s understanding of a business process or it could be the preparation of a classic family holiday dish under the tutelage of your grandmother. In the business world, mentoring is an important part of professional development. Once formal education, whether it be high school, vocational school, or university, is completed, mentoring is necessary in order to learn the hows and whys of a business’s operations, policies and procedures.
Grandma’s mentoring is a form of institutional knowledge. While teaching you how to make that family dish, she will inevitably impart some wisdom about a secret ingredient that she includes that you would never find in any cookbook recipe. This same type of wisdom occurs in machine shops daily. Over the course of many years, lead machinists begin to know the idiosyncracies of the various machines that they operate. When apprentices are hired, they are taught the basics of the machinery operations, but they cannot duplicate the performance of the lead machinist because they don’t know the idiosyncrasies of each machine. Even an experienced machinist will need to learn these variants in order to achieve the same results.
If you walk through any machine shop, you will notice that the emergency stop, or e-stop, button is always red. This color is not chosen at random. It is based on observations that have become institutional knowledge. The first observation is that the color red is the easiest color for the human eye to see. The second is that red occurs frequently in nature as the color of things that are dangerous. Earth tone colors such as greens and browns blend into the subconscious, but red evokes an immediate reaction.
Institutional knowledge is the reason that society does not re-invent the wheel. The downside to institutional knowledge is that it needs to be passed on in order to be of future value. Unfortunately, its true value is never known until it is gone. Corporations lose institutional knowledge when employees are laid off during mergers; they lose it when employees retire; they lose it when COVID takes an employee’s life.
Management in small machine shops realizes the value of this knowledge and work to cultivate this knowledge. Larger shops develop layers of bureaucracy that insulate management from understanding the nuances of operations that exist due to institutional knowledge. This lack of vision can contribute to the downfall of any established business.
Vocational schools and universities provide an excellent platform for formal learning. Mentoring is more subjective in its outcome as the learning is dependent on the actions of the mentor. Institutional knowledge is the most opaque form of knowledge. It can only be taught if the holder of the knowledge imparts it to others. All three are necessary for the development of exemplary employees who will drive the success of your business.
