To better understand the past, and to create a better future, many of us often turn to collective human wisdom of eons gone by. That provides us the context, continuity, and often the connection that we can relate to, something we are comfortable with. Institutional Memory (IM) performs the same critical function in a business environment.
Why did we do that? This question is frequently posed in organizations that have been in existence for a few years. Not many organizations can answer that question because they did not continually gather the context around their decisions: Why certain decisions were made, why one path was chosen over another, and indeed, why the organization operates the way it does? In other words, such organizations did not develop an Institutional Memory (IM).
IM performs a critical function of providing collected wisdom to the members of the organization: It sets them up for success through an unbroken chain of organizational familiarity and conformity, fostering a long term organizational culture.
In addition to knowledge, IM also helps share organizational values — does an organization put profits above people? Does the organization recognize its social mission? — and provides concrete examples of how it was done. This not only fosters conformity and buy-in of core values that an organization strives for, but also provides a sense of continuity, organizational pride, and team cohesion as members share the same beliefs. It also helps avoid frequent ideological conflict by providing a stable value platform. All of this contributes to a business’s competitiveness.