Companies Know How To Save Money; Here’s Why They Don’t Do It
Jan 19, 2017   |  Views : 1604

Go to the gym at peak time and you’ll probably find it packed. It might seem like every gym member decided to show up at once just to ruin your workout—but that crowd you saw probably represents less than 10% of that gym’s members. To stay profitable, gyms need to sell about 10 times as many memberships than they can squeeze through the doors at once. Luckily for them, less than a fifth of members will ever show up on regular basis, let alone all at once.

People know going to the gym has significant, measurable benefits. That’s why they sign up, and stay signed up. But despite the clear health benefits and the intense social pressure, they tend to stop actually going after the first few weeks. They know what the problem is, and they know how to fix it, they’re even spending money every month on it, but most people just don’t go.

1 — What Does This Have To Do With Knowledge Management?

Companies have the same problems with knowledge management that people have with going to the gym.

Modern companies are built on information. Managing that information is vitally important, and companies know it. Research shows that employees spend nearly 20% of their time just searching for information. Six full months of productivity is lost every time a new hire replaces an old employee, mostly because of lost knowledge. Firms have to spend $2,500 per employee per year on useless duplicated work, all because employees have trouble finding the work their colleagues have already done.

Effective knowledge management and collaboration tools have a large, direct, and measurable impact on all of this. They can save employees time on searching each and every day, accelerate onboarding, improve knowledge retention and eliminate a lot of redundant work.

Most companies that I worked with during my management consulting career know this. Employees experience all of it firsthand, managers constantly hear about problems with information accessibility, and executives understand the magnitude of the problem and know there are solutions out there. They have a problem and they know how to fix it—but most of them never do.

2 — So Why Don’t Companies Do Anything?

Just like with regular exercise, knowledge management requires discipline, constant effort, and engaging with a lot of difficult and initially unrewarding tasks. The fact that you know it will be more than worth it in the long run only helps so much. It’s hard right now, and you’re not seeing results yet.

It turns out companies have just as much trouble with long term thinking as individuals do. After a short optimistic burst of trying to implement sound knowledge management practices, other projects start to take priority over knowledge management and information organization. Information management might save you money in the long term, but it’s taking time away from much “sexier” projects right now. Just like people justify skipping the gym to themselves, companies are great at at coming up with reasons why now isn’t exactly the right time to dedicate resources to organizing information.

3 — What Can We Do About It?

The thing about exercising is that it becomes easier, more rewarding, and more fun the more you do it. As you get in better shape going to the gym becomes less of a slog, and the benefits get more and more obvious.

It’s the same with knowledge management. Once employees learn their way around their new knowledge management tools, once they embrace knowledge management processes, it takes progressively less effort to keep using them. And once it becomes obvious that the tools are saving you time and making everyone’s lives easier, everyone is keener to keep using them, and management is more willing to dedicate resources to them. This virtuous cycle keeps knowledge management going, and keeps the benefits rolling in.

I often hear managers say “we know we have an issue, we know it costs us, but we just have don’t have time to fix it right now.” This usually is a sign of fixation on short-term goals while ignoring tangible long-term benefits. Just like with regular excise, the long term benefits of good knowledge management far outweigh the initial pains of getting started, and the sooner you start the bigger the gains.

The productivity losses from bad knowledge management are bigger than pretty much any other productivity killer. The return on investment can be enormous —as good or better than any other productivity improvement investment that the company could make.

It’s just short term thinking and a lack of dedication that’s holding companies back.

 

Alec Pestov and the Meemim Team

Meemim, the Knowledge Management solution your colleagues love to use.

Image Credit: Mike Poresky
Alec Pestov
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