The extent to which a company makes use of the collective insights and expertise that it accumulates over time—what we refer to as institutional knowledge—can significantly impact operational performance. When successfully captured and made easily accessible to employees (and to machines and the systems we work with), institutional knowledge can propel efficient and effective processes, enabling the company to function like a well-oiled machine. However, when institutional knowledge is poorly managed, bottlenecks and disrupted operations inevitably emerge.

These disruptions typically stem from two primary flaws. First, companies may fail to capture knowledge entirely, leaving it trapped in the minds of individual employees. When this occurs, the availability of experts directly determines whether critical tasks can be completed. Second, when knowledge is captured, employees may not effectively utilize it—whether they are unaware it exists, they do not trust its accuracy, they choose to ignore it, or they cannot easily access it when needed. In these cases, task execution by non-experts becomes slow and error-prone, creating growing backlogs and requiring frequent rework. When employees lack the expertise or resources needed to perform essential tasks, the result is often the same: compromised operational effectiveness.

A Peek into US Manufacturing

Based on a number of converging trends and factors, a strong case can be made for assessing institutional knowledge and its role in the manufacturing industry in particular. Downtime (when production halts or slows in manufacturing) has major implications to companies in terms of costs. A 2024 report indicates that an hour of complete downtime for major manufacturers can cost between $36,000 in fast moving consumer goods to $2.3 million for automobile manufacturing. When compared to five years prior to the report, the average recovery time increased 65% based on the report findings (from 49 minutes to 81 minutes). The increase is partially reflected by the lost skilled labor during the “great resignation” following the COVID-19 pandemic, which contributed to gaps in knowledge among workers. This challenge has intensified as US manufacturing also faces a concerning productivity decline. A review of US manufacturing data over the past twenty years shows an industry slowdown in labor productivity overall. From 1987 to 2007, labor productivity grew on average 3.4 percent each year, compared to a 3.9 percent drop per year in the same measure from 2010 to 2022. Meanwhile, an aging manufacturing workforce has been top-of-mind for industry leaders, as a study by the Manufacturing Institute recorded that 97 percent of industry respondents noted some level of apprehension about the aging workforce and its negative impact on institutional and technical knowledge. As experienced workers retire, they take with them decades of process knowledge and troubleshooting expertise that can play a part in helping to minimize production disruptions. These converging factors create a perfect storm where institutional knowledge gaps translate into longer production bottlenecks, extended downtime events, and increasingly costly disruptions.

A Case Study in Knowledge Management and Operational Effectiveness

EK partnered with an international goods manufacturer operating in more than 12 countries across the Americas to address critical content and knowledge management issues affecting their operations. Our initial assessment revealed significant bottlenecks and disruptions stemming from poorly preserved and inaccessible knowledge, most evident in their critical operational procedures and knowledge assets crucial for maintaining operations and ensuring compliance across multiple jurisdictions. Experts stored these assets on local hard drives and shared them through email, creating confusion with duplicate and conflicting versions. The absence of formal processes to track changes, establish any formal governance, or manage accountability for these vital resources eroded employee trust in the existing documentation. Consequently, employees relied heavily on individual experts to validate processes, creating workflow bottlenecks that dramatically slowed operations.

Following our evaluation, EK developed targeted solutions to dismantle knowledge silos and enhance knowledge capture across the organization. Our approach embedded knowledge management into daily operations with the implementation of improved systems and mechanisms to encourage capture and transfer at the right times. For example, development of a content model for process instructions would better enable employees to author and update process versions as they were realized, while implementing a compliance communications workflow would identify when and how employees were informed of regulatory changes that affected their day-to-day work. We also recommended establishing designated shared repositories to improve accessibility for non-experts and better match content needs with system capabilities. For example, we recommended using a product lifecycle management (PLM) system to manage formulas and product label designs for better versioning management, while SharePoint could effectively manage permits, registries, and licenses. We devised a plan for enriching knowledge resources with metadata and a semantic layer to enhance findability and discoverability. The workflow initiated for departing employees would trigger newly structured offboarding procedures to preserve critical knowledge. Furthermore, to help rebuild employee trust in the upkeep of company knowledge and systems, we designed a knowledge management governance plan and operating model with clear guidelines and measurable success criteria. Overall, the approach aimed to eliminate the barriers that stifled institutional knowledge capture and sharing and operational effectiveness. 

Lessons Learned and Considerations

Leveraging institutional knowledge to prevent bottlenecks and enhance business functions has proven to yield a positive return for many organizations. Below I outline the lessons learned and additional considerations that help improve successful operations:

• Embedding knowledge capture and retrieval into existing processes so it becomes an expected and intentional part of regular workflows, normalizing and promoting a knowledge culture. Consider building and implementing standardized operating procedures (SOPs) for common processes early, so employees come to expect and adhere to guidance that plainly states how tasks should be performed and encourages them to initiate changes to written procedures when they are needed.
• Designating specific repositories to store knowledge and writing clear purpose statements for them, so employees become familiar with the right repository for the right knowledge. Ensure employees have appropriate and easy access to query relevant knowledge from those systems, whether through an integrated search or alternative solution. 
• Templatizing key types of knowledge that supports the application of consistent metadata, so that knowledge can be formatted for quick consumption and easily retrieved from knowledge bases. Building a business taxonomy to provide structure for metadata profiles further helps to standardize the language that is used around company concepts and terms. 
• Integrating large language models (LLM) with knowledge graphs to analyze and synthesize content. With a semantic approach that embeds business context into meaning, utilizing artificial intelligence (AI) with large and/or complex data saves employees time and enables processing that may be beyond the ability of employees alone. 
• Building a search engine for employees to query enterprise content with natural language. Leveraging LLMs that can interpret conversational language in a search engine or portal can deliver accurate results and reduce the cognitive load on employees who need information in workflows quickly.

Closing

Bottlenecks and disrupted processes frequently signal underlying knowledge management challenges, as employees struggle to access or apply critical information to their daily work. A solution that starts by diagnosing these knowledge management challenges is often a winning strategy for improving operational workflows and outcomes. 

Enterprise Knowledge’s team of experts evaluate knowledge management gaps behind operational bottlenecks and disruptions, providing tailored solutions to improve information access and workflows. To understand how our services can help serve your needs, reach out to us at info@enterprise-knowledge.com to learn more.

Institutional knowledge is the sum of experiences, skills, and knowledge resources available to an organization’s employees. It includes the insights, best practices, know-how, know-why, and know-who that enable teams to perform. This knowledge is the lifeblood of work happening in modern organizations. However, not all organizations are capable of preserving, maintaining, and mobilizing their institutional knowledge—much to their detriment. This blog is one in a series of articles exploring the costs of lost institutional knowledge and different approaches to overcoming challenges faced by organizations in being able to mobilize their knowledge resources.