History of an idea

“It’s those who look back wot make it ….”, a personal journey

into corporate amnesia and non-learning by Arnold Kransdorff a.k.a. Mr Corporate Amnesia

My relationship with the subject of corporate amnesia began in the 1980s when I was working for the Financial Times as a company commentator and feature writer for the Management Page. Close contact with the business world and many dozens of companies and their managers over a 10-year period coincided with the onset of the flexible labour market, which was being punted by a whole range of institutional bodies as an alternative to the ‘job-for-life’ experience that was then commonplace in the workplace.

 

I very soon started to notice something unexpected and seemingly trivial.

 

Against the backdrop of historical economic decline, the Thatcher era offered much excitement, especially at the entrepreneurial level as trades union power waned. Managers came and went with two distinct philosophies. There were those, seemingly the majority, who insisted on NOT looking back and those who did. If it was puzzling, it was because ‘history’ was such a large part of almost every other aspect of society.

Any further interest in the subject lay dormant until I started to notice the escalating extent of staff turnover in the workplace and the coincidental and deafening chorus of ‘we must learn the lessons’, many from repeated mistakes. I started to wonder if there was some connection with the constant exiting of employers’ tried-and-tested practices. My research at the time indicated that employers were not addressing these knowledge losses but perhaps the leavers’ replacements were expected to compensate with the awareness of their previous employers’ experience …?

 

The national and international figures reflecting the nation’s declining productivity growth gave me two more questions to ponder.

Staff turnover starts to escalate

Two important questions asked and answered

How important was employer-SPECIFIC experience to ORGANISATION-specific growth? And against the reality that every business was different and their raison d’être unique, how useful was the replacement blanket of OTHERS’ knowledge and experience? I began to think it had to be unhelpful when turnover was at such high levels but I only found the research to confirm this some years later when Harvard Business School investigated the phenomenon of corporate poaching (Groysberg, Ashish, & Nitin, 2004), which represents a large proportion of executive and vocational churn. Contrary to popular belief, they found that after supposed ‘stars’ moved from their old employers, their performances invariably plunged, as did the effectiveness and market value of their new paymasters.

 

And the stated reason? Most companies overlook the fact that executive performance is not entirely transferable because personal competencies invariably include company-specific resources, which had been left behind. I extrapolated this conclusion to also apply to lesser mortals ….

 

By then I had bravely left the FT to start Pencorp, which provided businesses with the service of capturing their long-term memory in the form of corporate histories. It was a lively sector that was served by both academics and non-academics, who produced books that, with only a few exceptions, had embarrassingly low readerships and no application beyond public relations once or twice every 100 years. I had a mission to produce them more often as serious and readable books that could be used for the induction of all flexible working’s replacements and in-house management education, even wider recruitment. When they were  done well, I would also argue that business schools should put them on their recommended reading lists; students wanting to work in, say, the textile industry, should, I would suggest, have access to at least several histories of local textile companies. Et al other industries.

Then the ‘young Turks’ started to take over

In its own diffident British way, this worked well until the early 1990s, when the flexible labour market kicked in its BIG shakeout of older employees. The university-educated ‘young Turks’ who replaced them – clearly among those who, a decade earlier, were uninterested in looking back – were in charge. They said they knew better and the corporate history market died on its feet.

 

Henceforth began Pencorp’s foray into Oral Debriefing, my serious attempt to provide businesses with a way of capturing, sharing and learning from their short- and medium-term knowledge and experience, which was departing their hosts’ custody at an even greater rate. Flexible working’s churn level was up to 25% a year, recruitment bureaus had become a big new expense, induction and training costs had escalated and there was no let-up in the number of repeated mistakes and other unlearned lessons that littered the workplace. The conventional way of organic growth – the building of one experience on another – was upturned and productivity growth, the benchmark of all progress, was stalling.

 

For almost three decades since, the magnitude of workplace disruption has been huge. With flexible working impacting almost every worker, every job and every organisation across the entire industrial spectrum continuously, there are congruently few employees in-situ long enough to remember what actually happened with their employers outside of relatively short periods. And with replacements typically reluctant to take ownership or responsibility for said experiences by others, experiential learning just wasn’t happening. It’s been a sad outcome for the world’s oldest industrial nation that has more experience than anyone else with which to work …

The link between short-tenure employment and difficult productivity growth

Remember the days of a job-for-life?

1980

1985

1989

1990s

My deduction? With the experts still unsure why productivity growth is suffering, the advent of short-tenure – the child bride of flexible working - is exactly why employers find it so difficult to keep on improving their output.

 

The twin ironies of this single biggest change in workplace practice since the Second World War haven’t escaped me, notably that many employees, who initially resisted flexible working, are benefiting more than their employers with their many movements resulting in many more employment opportunities and higher remuneration. And while flexible working enabled employers to better cope with the fast-changing marketplace, the output of all those supposedly more experienced replacements that are available for hire (as well as their in-situ, short-tenure colleagues) is actually LOWER.

 

In the world of good decision-making, whatever benefits accrued were being offset by the truancy of their new employers’ working practices, among them the disoriented awareness of processes, conventions, methods, customs, rules, habits, successes, failures and more. Simply stated, employers have been expecting their employees to work with just a half-deck of cards that was more attuned to their former employers’ experiences.

More or less Adam Smith’s invisible hand?

It looks suspiciously like one of Adam Smith’s unintended consequences, the work of one of his invisible hands.

 

This account reflects my own Pencorp-specific experiences of trying to raise to adulthood three of commerce and industry’s orphan godchildren that I’ve identified as Flexible Working, Corporate Amnesia and Experiential NON-Learning. Their wilful activities have cost us dear.

 

The short- and medium-term knowledge capture has been adapted from my own experience as a journalist with the Financial Times in London alongside the work of Studs Terkel, the American Pulitzer Prize-winner who elevated oral history to an art form with his projects to record individuals’ experience around war and employment. For the capture of long-term memory – i.e. corporate history – I’ve tailor-made conventional practices to overcome the problems associated with perceived lack of independence from subject financing. And for the learning process for the rolling generations of new employees who now have the opportunity to apply this additional employer-specific evidence to their determinations, I’ve customised Professor David Kolb’s seminal work on experiential learning as an option to conventional decision-making methodologies.