On Institutional Knowledge in a Family’s Continuity Journey

A couple of weeks ago, I had a few instances where the idea of “institutional knowledge” came to the fore, so I decided that this could be something around which to build a blog post.

As usual, I sent myself an email and stuck it in my Blog Ideas folder and there it sat, simmering.

Lo and behold, even more recently, another example landed in my lap, giving me a “three-legged stool” to work with.

We’ll see what my friend Mr. Google has to add, and then look at how the concept ties into the challenges that families face when working on intergenerational wealth transitions, as usual.

Here’s some of what my friend’s AI summary came back with:

There are plenty of good reasons to believe that it’s important to make sure our organization treats such experience as worthy of respecting and preserving.

And, of course, there are occasions where leaning too far into the idea has its own drawbacks.

There are plenty of posts on my website in which I sing the praises of peer groups, and every such group is different.

Most are run on a volunteer basis, and so institutional knowledge is not constrained to “employees” only.

As a relatively new member of a group that’s been running for over 3 decades, I’m seeing this at play now.

I was recently added to a committee, joining a couple of longtime members. A few short months later, I became the only member of that committee.

I insisted that we needed someone with more seniority than me and twisted the right arm just enough, and we also added a newer member.

A couple of close family members both happen to work for the same arm of a university department.

One has been there almost since the department’s inception, the other for less than two years.

As I listen to them talk about the structural changes currently taking place, it strikes me that having institutional knowledge provides one with more flexibility in how closely one needs to follow new rules.

When you’ve been around longer, you can get away with more because they really need you.

When you’re newer, you’re easier to replace.

While writing about my own family members needs to be done carefully, so does my next example.

I was involved in a local charity for many years, and they experienced a good amount of turnover during that time.

One employee was there for so long that their seniority was probably triple the next closest person’s.

While I served on that organization’s board of directors, I constantly referred to that person as the one with the most institutional knowledge, and everyone bought into that.

One of the downsides of having so much of that knowledge in a single person is the risk to the organization when that person is no longer there.

A person may suddenly no longer be available due to an accident or health reason, a fight with their superior, or even having been caught with their hand in the proverbial cookie jar.

In a family, the parents naturally have more institutional knowledge than their offspring.

In my first example above, the committee lost so much of it when I became the senior person with not enough of it to play the role properly.

Giving too much power to someone too junior has risks you want to mitigate.

The second example reminds us that the rules apply to everyone in theory, but not always in practice. Families need to be aware of this and find ways to minimize this happening.

The most positive lesson from the third example is that it’s important to have younger and more junior people begin to get involved in matters earlier, so you don’t end up with the sudden exit of someone with lots of institutional knowledge creating a problem.

Knowledge should be shared with more people, and there needs to be both a “push” and a “pull” element to make this work sometimes.