Organizational Forgetting: A Tacit Source of Competitive Advantage

Organizations have, in recent times, become more aware of the worth of regulating their Organizational Knowledge. Extensive studies in academia have been conducted on the subject, because of its importance.

Organizations learn with time and experience. The cause-and-effect relationship is gathered in the collective memory of the organization in the form of:

  • Shared mental models
  • Standard operating procedures
  • Rules and routines
  • Assets

This learning, in some cases, becomes a source of Competitive Advantage for the organization.

New learning, in organizations, is possible when redundant knowledge and bad habits are effectively erased from the organizational memory. Managing Organizational Forgetting has to be part of Strategic Planning because of:

  1. Wasted resources — Knowledge forgotten, that should not have been, has to be re-acquired by diverting resources that could have been used elsewhere or for acquiring new knowledge.
  2. Opportunity cost — Required knowledge not available (because it was forgotten) at the time an opportunity arose.

Effective Organizational Forgetting should be an Organizational Culture so as to keep organizations on their toes and maybe preserve or gain Competitive Advantage.

Organizations that intend to manage their Organizational Forgetting effectively, need to comprehend 2 dimensions of Forgetting and the relationship between them:

Dimension 1: Accidental Forgetting vs. Intentional Forgetting

Dimension 2: Entrenched Knowledge vs. New Knowledge

The process of Forgetting is altered depending on the interaction of the elements of the 2 dimensions.

Interaction of the above 2 dimensions results in 4 processes that constitute the Forms of Organizational Forgetting:

  1. Memory Decay
  2. Failure to Capture
  3. Unlearning
  4. Avoiding Bad Habits

The interaction of the 4 processes has been conveyed in the form of a matrix dubbed the Organizational Forgetting Matrix. These processes explain an array of Organizational Forgetting that may occur. Each of the 4 processes need distinct management approaches because each process is connected with a disparate set of challenges.

Let us delve a little deeper into some of the processes.

Memory Decay

Memory Decay is exacerbated in the process of downsizing. Extremely valuable pieces of knowledge and skills can be lost if proper retention measures are not put in place.

Failure to Capture


Interested in learning more about Organizational Forgetting? You can download an editable PowerPoint on Organizational Forgetting here on the Flevy documents marketplace.

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I blog about various management frameworks, from Strategic Planning to Digital Transformation to Change Management.