In the mid-1990s, Delta Airlines Inc. sought to restructure their costs by cutting almost $2 billion from their operating expenses and eliminate up to 15,000 jobs. Delta made small adjustments throughout the organization, such as replacing linen cocktail napkins with paper napkins, eliminating dozens of small offices, and reducing employee benefits. While Delta was making these reductions, they continued to receive awards for outstanding customer service. To stay on track and meet their three-year reduction plan, Delta stepped up their pruning while trying to maintain the high level of customer service they had been recognized for in the past. To Delta, it was business as usual – until it wasn’t. Suddenly, Delta faced an enormous amount of customer complaints. Lost luggage, flight delays, cancellations, airplanes taking significantly longer to repair, even the disappearance of in-flight meals. Delta soon realized that they made a serious calculation error when they started to eliminate jobs. In their haste to meet the deadline, Delta forgot one crucial element in their organization: employee institutional knowledge. In the short term, Delta had significant savings by eliminating many of their experienced and highly paid employees (mostly mechanics), but in the long term, this left the organization with less-experienced employees. As a result, these employees lacked the institutional knowledge to address and solve organizational problems expeditiously. Delta’s lesson is two-fold: institutional knowledge is invaluable and with the departure of those experienced employees, the organization lost employees who knew how to collaborate and get work done on time and efficiently.
As discussed in the previous post, knowledge is power. It is human capital that employees possess that can help an organization create and sustain a competitive advantage. Asrar-ul-Haq, Anwar, and Nisar describe knowledge as the “lifeblood of an organization” and a “crucial element for the survival of organizations in today’s dynamic and competitive area” (p. 2). Organizations have not only recognized this value, but they have recognized that tacit knowledge, a type of knowledge that is difficult to transfer, is critical for organizational success. The first step for an organization is to recognize the value of tacit knowledge. The second and most important step is the ability of the organization to encourage their employees to engage in knowledge sharing. Since organizations cannot create knowledge, only employees can, it is critical that organizations have in place the necessary strategies to encourage employees to share their knowledge as well to store that knowledge for future employees to be able to access.
In a previous post, we discussed how monetary and non-monetary awards could facilitate knowledge sharing in employees. Organizations can offer these incentives to encourage employees to engage in knowledge sharing, especially those employees who are hesitant to share their knowledge when they view this knowledge value as a personal gain within the organization. These incentives are not always the best approach or applicable for all environments. Another strategy that organizations can implement is in the form of formal and informal interactions or described herein as simply interactions. Interactions can include weekly or monthly team meetings, meeting outside of work, having lunch together, “water-cooler talk” or just casual work-related conversations in the hallway. Not only have studies shown that people work better in teams but the lack of these interactions has shown to serve as a barrier for employees from engaging in knowledge sharing. The lack of these activities is a prominent reason why employees are not facilitating knowledge transfer.
Trust by employees continues to be a significant problem in organizations with 57% of employees not trusting their leaders. Indeed, one study found that the lack of trust in an organization by and between employees is the most important and extensively studied barrier that prevents knowledge sharing. Therefore, if an organization wants to encourage their employees to engage in knowledge sharing, the organization must foster an environment of trust. A significant problem that employees face is that they lack the confidence in the organization that their contributions will not jeopardize their position in the organization or place them at a disadvantage compared to their peers.