The challenge with insitutional knowledge

How much of your company's success relies on information that only a few people have? Many organizations unknowingly put themselves at risk by relying on institutional knowledge, or historically known as “tribal knowledge,” which is critical know-how that lives in the heads of just a few experienced team members.

This issue is especially common in frontline work environments, where tasks are often passed down informally to individuals who have been around the longest. Over time, people specialize, stay in their lanes, and unintentionally become the sole holders of essential knowledge. But when these employees take time off, retire, or leave suddenly, teams are left scrambling to fill the gap.

So what happens when that knowledge walks out the door?

Frontline workers comprise 80% of the global workforce, yet much of their expertise remains undocumented and is at risk of being lost. In manufacturing, for example, one-third of workers are already over the age of 55. By 2030, the sector could face over 2 million unfilled jobs due to this growing knowledge gap. In fact, 97% of manufacturers are concerned about the impact of losing undocumented knowledge on productivity and operational costs.

But there is hope. Recent research shows that 80% of frontline workers are able to get what they need from AI-powered tools on their first try, compared to just 34% of office-based knowledge workers. This highlights the powerful potential of AI to help organizations quickly capture, digitize, and scale institutional knowledge before it is lost.

The hidden risks of undocumented knowledge loss

Experiential knowledge may seem harmless until it slows down your operations. When vital information is undocumented and stored in the minds of a few experienced employees, it creates bottlenecks throughout the organization. The longer this knowledge goes unshared, the greater the risk of outdated SOPs, increased errors, and rising operational costs. This is the reality of knowledge loss. Below are just a few examples of how inefficient institutional knowledge management can negatively impact a company. 

Onboarding delays

Scenario: A new technician joins a manufacturing plant and needs to learn how to operate a complex machine. The only person who fully understands the system is a senior technician nearing retirement.

Impact: With no documented procedures or knowledge-sharing system in place, the new hire spends weeks shadowing the senior employee. This not only delays productivity but also prevents the senior technician from focusing on other high-priority tasks.

Increased errors‍

Scenario: In a call center, a customer service rep encounters an unusual issue. A long-time employee knows the solution, which isn't documented in the company's knowledge base.

Impact: The rep puts the customer on hold while scrambling to find someone who knows the fix. If the veteran is unavailable, they risk giving incorrect information, leading to poor customer experiences and more follow-up calls.

Operational inefficiencies

Scenario: A logistics company relies on one dispatcher who has a mental map of the most efficient delivery routes.

Impact: When that dispatcher is out sick, the rest of the team struggles to plan routes efficiently. Delivery times increase, fuel costs rise, and service quality drops.

These are just a few examples of how institutional knowledge loss can start to erode performance. Without scalable systems to capture and share frontline expertise, businesses risk losing their most valuable insights the moment someone walks out the door.

Tacit knowledge vs. documented knowledge

Tacit knowledge refers to the skills, insights, and instincts a person develops through experience. It is knowledge that is often difficult to articulate or document. For example, a seasoned mechanic can diagnose an engine issue just by listening to it. Approximately 90% of the total knowledge in an organization is held in tacit form. 

Tacit knowledge is harder to transfer but more valuable

The challenge with tacit knowledge is that it lives in people, not in easily accessible formats like repositories.. It is acquired over time, often without deliberate effort, and is rarely written down. That makes it significantly harder to pass along and incredibly easy to lose.

The knowledge drain is real: The problem with tacit knowledge is that when expertise is not documented, organizations struggle to retain it. This gap leads to operational slowdowns, reduced productivity, and the loss of hard-earned insights.

Tacit knowledge drives competitive advantage: Because it is rooted in experience and intuition, tacit knowledge is difficult to replicate. That uniqueness is also what makes it so valuable. AI-powered knowledge bases, automated expertise tools, and structured workplace learning initiatives are proving to be powerful ways to surface and share this hidden knowledge before it walks out the door.

Capturing, transferring, and scaling tacit knowledge is no longer just a nice-to-have. It is a critical element for your long-term operations strategy. Through smart knowledge management, organizations can protect what makes their teams effective and unlock new opportunities for growth and innovation.

AI-powered solutions for tacit knowledge capture

The good news is that businesses are no longer powerless against the risks of experiential knowledge loss. Advances in AI and immersive learning are making it possible to capture, scale, and share the kind of expertise that once lived only in the minds of experienced employees.

AI-powered platforms can capture work procedures, identify patterns, and transform those insights into accessible on-the-job learning tools. Combined with immersive learning technologies like VR, teams can simulate real-world scenarios and transfer knowledge at scale with greater consistency and speed. Instead of relying on job shadowing or outdated manuals, employees can access realistic, hands-on training that reflects the best practices of top performers.

This is a vital part of Strivr's mission: elevating workforce performance by helping organizations turn human expertise into scalable learning experiences and real-time guidance in the flow of work. When knowledge is captured and shared effectively, businesses reduce training time, improve employee confidence and productivity to create a more resilient workforce.

Invest in frontline teams

Relying on tacit knowledge might work for a while, but it is by no means a sustainable strategy. As experienced employees leave or retire, the cost of lost expertise becomes real and measurable.

By investing in the right tools and strategies to capture institutional knowledge, organizations can future-proof their workforce, speed up training, and avoid costly disruptions. At the end of the day, your people are your greatest asset. Preserving what they know is one of the smartest moves you can make. If you're curious how Strivr can help you improve knowledge retention and on-the-job performance, contact us. Our experts are here to help you find the right tools.