Technology Is Not Enough: Improving Performance by Building Organizational Memory

Knowledge management promises to improve business performance by using technology to capture and share the lessons of experience.1 Truly improving business performance, however, demands more than simply putting more knowledge into databases; it requires leveraging the many ways that knowledge can migrate into an organization and strengthen business performance. Distributed technologies, such as Lotus Notes or intranets, can be used for disseminating information and creating virtual forums that connect experts. But they are only one of many ways in which learning from a significant organizational experience can be captured and integrated into an organization’s operations. For example, an organization may be able to embed knowledge gained from an experience by altering work processes or a product’s architecture. By embedding learning, companies can reduce the information overload of their employees and improve the consistency and effectiveness of knowledge use throughout an organization.

One way to make organizational learning more tractable is to consider it as the development of an organization’s memory.2 The concept of organizational memory is not new; for some time researchers have pointed to various features of organizations as key components of memory.

These discussions, however, focus on organizational structure, physical layout, cultural values, or tacit routines—forms of memory that change only slowly over long periods and bear an indirect relationship to business performance. Managers need to know where important forms of memory reside. By defining the myriad ways to embed knowledge in an organization’s memory, we believe companies can leverage learning from key experiences and improve business performance.

Organizational Learning as Organizational Memory Development

To better understand how knowledge that develops from significant experience migrates into an organization, we examined learning from 22 projects in professional services, financial services, and manufacturing organizations. The projects ranged from new product development and roll-out initiatives to process improvement efforts to consulting services and development of financial solutions for investment banking clients. The companies were primarily Fortune 250 organizations that had global operations. We asked people what they had learned from their experience on these projects and where the knowledge gained had migrated within the organization. To capture both operational and strategic perspectives on learning, we conducted the interviews across several hierarchical levels (e.g., in a consulting firm, we interviewed the partner of the office, the partner managing the identified project, and the manager and consultants working on the project).

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References

1. T. Stewart, Intellectual Capital: The New Wealth of Organizations (New York: Doubleday, 1997);

T. Davenport and L. Prusak, Working Knowledge (Boston: Harvard Business School Press, 1998);

C. O’Dell and C.J. Grayson, If Only We Knew What We Knew (New York: Free Press, 1998); and

R. Ruggles, “The State of the Notion: Knowledge Management in Practice,” California Management Review, volume 40, number 3, 1998, pp. 80–89.

2. R. Stata, “Organizational Learning: The Key to Management Innovation,” Sloan Management Review, volume 31, Spring 1989, pp. 63–74;

P.M. Senge, The Fifth Discipline: The Art and Practice of the Learning Organization (New York: Doubleday Currency, 1990); and

J. Slocum, M. McGill, and D. Lei, “The New Learning Strategy: Anytime, Anything, Anywhere,” Organizational Dynamics, volume 23, number 2, 1994, pp. 33–47.

3. Researchers in organizational learning theory diverge on the study of cognitive or behavioral learning. See:

C.M. Fiol and M.A. Lyles, “Organizational Learning,” Academy of Management Review, volume 10, number 4, 1985, pp. 803–813.

The cognitive tradition views learning as a process of revising assumptions through reflection and dialogue or through interpretation of the environment. See:

Senge (1990);

C. Argyris and D. Schon, Organizational Learning II: Theory, Method, and Practice (Reading, Massachusetts: Addison-Wesley, 1996); and

R. Daft and K. Weick, “Toward a Model of Organizations as Interpretive Systems,” Academy of Management Review, volume 9, number 2, 1984, pp. 284–295.

The behavioral tradition views learning as a product of change in behavior; learning takes place through modifying an organization’s programs, goals, decision rules, or routines. See:

R.M. Cyert and J.G. March, A Behavioral Theory of the Firm (Englewood Cliffs, New Jersey: Prentice-Hall, 1963);

R. Nelson and S. Winter, An Evolutionary Theory of Economic Change (Cambridge, Massachusetts: Belknap Press, 1982); and

B. Levitt and J.G. March, “Organizational Learning,” Annual Review of Sociology, volume 14, 1988, pp. 319–340.

Research on the learning organization (as a particular kind of organization) does not describe what organizational members learn from experience or where that learning comes to reside within the organization. In contrast, research in organizational learning has begun to address these issues by demonstrating:

Learning curves

L. Argote, S.L. Beckman, and D. Epple, “The Persistence and Transfer of Learning in Industrial Settings,” Management Science, volume 36, number 2, 1990, pp. 140–154; and

D. Epple, L. Argote, and K. Murphy, “An Empirical Investigation of the Microstructure of Knowledge Acquisition and Transfer through Learning by Doing,” Operations Research, volume 44, number 1, 1996, pp. 77–86.

Learning from unique events or small samples

J. March, L. Sproull, and M. Tamuz, “Learning from Samples of One or Fewer,” Organization Science, volume 2, number 1, 1991, pp. 1–13.

Innovation efforts

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Strategic alliances

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A.C. Inkpen, “Believing Is Seeing: Joint Ventures and Organizational Learning,” Journal of Management Studies, volume 32, number 5, 1995, pp. 595–618.

Individuals

D. Kim, “The Link Between Individual and Organizational Learning,” Sloan Management Review, volume 35, Fall 1993, pp. 37–50; and

M.D. Cohen and P. Bacdayan, “Organizational Routines Are Stored as Procedural Memory: Evidence from a Laboratory Study,” Organization Science, volume 5, number 4, 1994, pp. 554–568.

To date, little work exists that shows how various forms of learning from key experiences migrate to a truly organizational level and how managers can influence that process.

4. For some time, researchers have considered various features of organizations as key components of memory. See:

Cyert and March (1963); and

J.P. Walsh and G.R. Ungson, “Organizational Memory,” Academy of Management Review, volume 16, number 1, 1991, pp. 57–91.

Some have demonstrated how work processes and product or service offerings constitute important components of memory. See:

D. Leonard-Barton, “The Factory as a Learning Laboratory,” Sloan Management Review, volume 34, Fall 1992, pp. 23–82; and

R. Sanchez and A. Heene, Strategic Learning and Knowledge Management (Chichester, U.K.: John Wiley, 1997).

Still others have demonstrated the importance of cultural norms and patterns of interaction as a form of memory in a collective. See:

K.E. Weick, The Social Psychology of Organizing (New York: McGraw-Hill, 1979);

Levitt and March (1988);

B.T. Pentland, “Organizing Moves in Software Support Hot Lines,” Administrative Science Quarterly, volume 37, number 4, 1992, pp. 527–548; and

S.D. Cook and D.Yanow, “Culture and Organizational Learning,” Journal of Management Inquiry, volume 2, number 4, 1993, pp. 112–134.

5. In this effort, we employed a case-based logic in data collection by doing semi-structured interviews guided by a theoretical model that we adhered to “loosely” to allow for inductive theory development. Walsh and Ungson’s framing of organizational memory, which includes individuals, culture, transformations, structure, and ecology influenced our initial perspective.

Walsh and Ungson (1991).

In addition, we were attuned to two other organizational features: electronic information stores that are becoming increasingly prevalent as the use of distributed technologies expands and the characteristics of relationships through which experiential learning is acquired from peers and others.

For information about the theoretical model, see:

R.K. Yin, Case Study Research: Design and Methods (Newbury Park, California: Sage, 1994). For information on inductive theory development, see:

B. Glaser and A. Strauss, The Discovery of Grounded Theory: Strategies for Qualitative Research (Hawthorne, New York: Aldine de Gruyter, 1967); and

Y. Lincoln and E. Guba, Naturalistic Inquiry (Beverly Hills: Sage, 1985).

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Ruggles (1998).

11. Structures and processes containing embedded knowledge serve to “remove from conscious consideration many agreements, decisions, and commitments that might be subject to renegotiation in an organization without a memory.” See:

Cyert and March (1963), p. 38;

M. McGill and J. Slocum, “Unlearning the Organization,” Organizational Dynamics, volume 22, Autumn 1993, pp. 67–79; and

G. Stasser, “Expert Roles and Information Exchange during Discussion: The Importance of Knowing Who Knows What,” Journal of Experimental Social Psychology, volume 31, issue 3, 1995, pp. 244–265.

12. J. Lave and E. Wenger, Situated Learning: Legitimate Peripheral Participation (Cambridge, U.K.: Cambridge University Press, 1991);

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J.E. Orr, Talking About Machines: An Ethnography of a Modern Job (Ithaca, New York: Cornell University Press, 1996); and

E. Wenger, Communities of Practice (Oxford: Oxford University Press, 1998).

Acknowledgments

This article has benefited from the constructive comments of three anonymous reviewers. In addition, we are grateful for the comments of John Henderson and Amy Edmondson about a previous draft.