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Sunday, 3 April 2016

Do You Have a Formal Corporate Memory? What About Innovation?

It is accepted wisdom that we don’t necessarily learn from our successes but we do and certainly should learn from our mistakes and failures.

A well-known mantra goes like this:

·      “If we always do what we always did then we will always get what we always got”

It is a matter of corporate memory and how it should be used positively as a springboard for the future.  The point is that as a business grows and changes it has inbuilt experience and memories that can materially affect the way that we operate; things that are in the DNA of the business.

For example let us postulate a situation where an energy company has a bad experience leading to injuries and worse on an oilrig.  Management learns from the problem and puts in systems to ensure that it doesn’t happen again.

Fast forward ten years: the same problem arises on another platform with the same results. What then has gone wrong and why has it not been picked up?

Corporate memories can be short.  The original people involved have gone, new people have come in, the culture has changed, no one remembers what happened ten years ago and so on.

Perhaps then there is a case for formalising in some way the corporate memory bank.  In fact I have heard it said that every company of any size and perhaps age should have a CMO, a Chief Memory Officer.

Rather over the top as a solution I would suggest but there is undoubtedly a case for formailising what are known and regarded as important events in the business.

I heard recently of a clothing manufacturer who kept a formidable spreadsheet of information about the staff and found it very valuable.  The information included date of birth and tenure of employment and when he did a re-ordering of the information he discovered that more than 20% of the workforce were over 60 years old and tenure ranged from 15 to 30 years.

The obvious implication was that as people decided to retire a vast stock of experience would be dissipated and the Managing Director decided that this was untenable.

Accordingly he devised a scheme whereby his experienced staff could formally retire as and when they wished but he suggested that they could come in part-time to help train new employees.  This had two advantages; retirement was phased rather than absolute and the experience was being passed down and not lost.

This is all good stuff and makes a lot of sense in whatever way it is accomplished.  There is a caveat however.

Remember, “We have always done it that way”?  If we constantly harp on about tips and tricks that have been inherent in the business over the years then we can stultify as a consequence, not allowing new ideas or techniques to be brought in.

Consider the different approaches between Sony and Apple.  Sony was extremely successful in designing and marketing the Walkman in its various guises right up to the portable DVD player all with very little real innovation.  It was evolution rather than revolution.

Apple on the other hand were not burdened by the past and decided that they could design a product that would take the Walkman out. It would hold a vast amount of music, it would be smaller, easy to operate and generally more acceptable to the consumer.  It was called the iPod and that technology has now been incorporated into the iPhone and iPad.  You can’t buy a Walkman now and who would want to anyway?

Strong emphasis on the corporate memory can be valuable but it must not become the be all and end al.  It is far better to appoint a Chief Innovation Officer than a Memory equivalent simply because innovation is a leading not a lagging route for the future.

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