Manjari Raman: Forget about it!

OUT OF THE BOX/Corporate amnesia is as important as corporate knowledge

Over the past two decades, most companies have invested in knowledge management tools, which usually range from functional newsletters to sophisticated relational database management systems.

Predictably, the focus of firms has been on improving the scope and scale of organisational remembering. After all, the raison d'être of knowledge management is to ensure that like elephants, companies never forget what they know.

Or is it? In a recent Sloan Management Review article, three academics argue that the deeper side of learning is darker: organisation forgetting.

Says co-author Thomas Lawrence, a professor at Vancouver's Simon Fraser University: "Forgetting is important because organisations have only a certain memory capacity. In order to remember new ideas, beliefs, or assumptions, a company has to actually forget other ideas, beliefs or assumptions." Only by managing both organisational learning and forgetting, therefore, can companies truly manage organisation behaviour.

Lawrence and his co-authors "" the Madrid-based Instituto de Empresa's Pablo Martin de Holan and Nelson Phillips, a professor of management at Cambridge, UK "" primarily based their findings on a study of Cuban hotels that Holan conducted between 1995 and 1999.

After parent companies renovated and refurbished seven hotels, they tried to improve service standards in order to match the levels of counterparts in the US and Europe.

Surprisingly, despite the high spend on training, standards failed to improve. "Not only did the hotels have a great deal to learn from US and European hotels, but there was also a lot they had to forget. They had learnt a great deal about service, how to manage people, and how to deal with customers in a particular way because they had operated in the Cuban environment for years. To attract global customers, the hotels first needed to expel all that knowledge from the system," says Lawrence.

The three academics marshalled their findings to arrive at a classification of all the kinds of forgetting that companies must remember. The two dimensions of the forget-ability matrix, as it can be called, are sources of knowledge (from existing stock or newly innovated knowledge) and the mode of forgetting (accidental or incidental).

That results in four unique kinds of forgetting, each of which requires different management skills. Consider the first two quadrants of the two-by-two:

• When companies accidentally forget new knowledge, it leads to "failure of capture". That happens when a company fails to make valuable new information available across the rest of the organisation. When key team members leave or work teams disband, the knowledge is lost, and with it, valuable learnings that might have benefited the entire organisation.

To prevent that kind of organisational forgetting, companies need to institutionalise systems for capturing, codifying, storing and sharing knowledge.

In like vein, when a company accidentally forgets its existing stock of knowledge, it leads to "memory decay". Key nuggets of knowledge like concepts, practices, or even values get eroded, which is a costly loss for the organisation. In such cases, the authors suggest that companies invest heavily in systems that are designed to prevent the organisation from forgetting.

While prevention is the best cure for all forms of accidental forgetting, in the case of intentional forgetting, companies need to focus on replacement: that is, substituting the negative knowledge that employees might be carrying around, with more productive, positive knowledge.

Pointing to the torturous recovery process that discredited companies like Tyco and Worldcom are undergoing, Lawrence says: "In large corporate transformations, especially when there is a crisis, a significant episode of forgetting needs to occur. That's necessary both to get rid of problematic knowledge and for motivational reasons." In such cases, companies have two options:

• When companies intentionally forget existing knowledge, they unlearn knowledge that acts as a hindrance. By breaking routines, changing structures, and bringing in a new culture, a company can get rid of deeply ingrained ways of doing things that are no longer relevant or positively harmful.

Any company that has gone through the hiccups of a change management initiative "" employees stubbornly clinging to old ways, for instance "" will relate to the importance of unlearning.

Finally, companies must also intentionally forget new knowledge in order to avoid bad habits. The idea is to nip counteractive routines, practices, ideas and values in the bud before they become embedded in the organisation's way of doing things.

Organisation forgetting might sound like a familiar by-product of organisation learning. Not so, warns Lawrence, because organisation forgetting requires a fundamental shift in managing organisation behaviour.

"One of the key differences is that when a company thinks of forgetting, as opposed to changing old habits, it can identify more clearly where problems lie," he points out. Clearly, there's hope yet for managers who have struggled for years with change management initiatives.

Instead of focusing only on drumming new ideas into employees, perhaps what they now need to do is to first dispense a healthy doze of amnesia.