The hidden cost of knowledge failures

What's slowing your organisation down has nothing to do with the tools your people are using

The hidden cost of knowledge failures

When a key person takes a leave of absence, it’s not uncommon for group task performance to slip amid a kind of mild, sustained panic as the rest of the team flounders. How do you deal with that tricky client? What is the approval process for X? Where is that critical document?

As work falls behind, people are forced to start guessing – if you are lucky, the fort is held until the key person gets back.

This is a knowledge failure, and it happens in organisations of every size and sector, often without anyone naming it for what it is.

Sarah Stone, co-founder of learning and development solution provider linkABLE, has seen this pattern play out repeatedly across her work with organisations. She argues that the risk is most concentrated in specific types of roles.

"The biggest risk tends to sit in roles that are highly experienced, cross-functional, or relationship-driven," said Stone. "When knowledge about key processes, clients, or systems lives primarily in individuals rather than being shared, it creates fragility."

That fragility does not always announce itself until something disrupts the normal rhythm of work. "This becomes especially visible during turnover, leave, or rapid growth, where continuity depends too heavily on specific people and delivery across the business becomes inconsistent."

Spotting the signs before they become problems

For HR and People and Culture professionals, the challenge is identifying a knowledge risk before it tips into a knowledge crisis. Stone said the warning signs are often right in front of leadership, if they know what to look for.

"Early signs often include repeated questions, inconsistent outputs, heavy dependence on a few individuals, and slower onboarding," said Stone. "There may also be duplication of work or difficulty scaling processes."

These indicators are worth taking seriously. When different team members produce different outcomes doing the same task, the problem is rarely individual competence. More often, it signals that no shared, trusted source of knowledge exists.

Stone pointed to a few specific signals that HR professionals should watch for:

  • Frequent reliance on specific individuals for answers
  • Inconsistent ways of completing the same task
  • Slow onboarding and upskilling of new employees

"If people are asking around instead of referring to a shared source, or if outcomes vary depending on who is involved, it often indicates that knowledge hasn't been captured effectively," she said.

The documentation trap

Many organisations believe they have solved their knowledge problem because they have documentation. They have wikis, shared drives, process manuals, and onboarding folders. What they often do not have is documentation that anyone actually uses.

Stone drew a clear line between the two. Useful documentation, she explained, is easy to find, clearly written, and embedded into day-to-day workflows.

"Documentation that isn't used is often hard to access, too generic, or disconnected from how work actually happens," she said.

The distinction matters more than it might seem. A document no one reads is not a knowledge asset. It is noise that gives leaders false confidence that the problem has been addressed.

The deeper issue is that knowledge decays. Processes change. Teams restructure. New tools replace old ones. Without someone accountable for keeping documentation current, even well-intentioned knowledge systems drift into irrelevance.

Stone described what real accountability looks like in practice. "Accountability usually sits with the people closest to the work, or a dedicated subject matter expert once set up, supported by leaders who set expectations around knowledge sharing," said Stone. "Day to day, this looks like updating documentation as processes change, capturing decisions and learnings, and making knowledge part of normal workflows rather than a separate task."

The real cost of knowledge friction

Stone talks about the useful concept of knowledge friction. This is the cumulative drag created by all the small moments in a working day when someone cannot find what they need, has to ask someone else, waits for a reply, or redoes work because they lacked context the first time around. Individually, each moment seems trivial. Collectively, it adds up to a huge and invisible productivity cost.

Stone described a pattern she sees regularly. "A common example is when teams rely on messaging or meetings to access information that could be documented," she said. "People pause their work to seek clarification, wait for responses, or redo tasks due to missing context. Over time, these small delays add up and reduce overall productivity."

When organisations do not address this, the compounding effect can be substantial. "Work slows down due to repeated questions and rework, onboarding takes longer, and risk increases when key people leave," Stone said. "It can also affect consistency and decision-making, as different teams rely on different versions of how things are done."

AI will not save you if your knowledge is a mess

There is considerable excitement in business circles about artificial intelligence as a productivity tool, and the potential is real.

Stone’s advice to organisations tempted to leapfrog the hard work of knowledge management by adopting AI tools is "don't use AI in workflows until your knowledge is documented."

The solution to knowledge friction starts with the unglamorous, necessary work of capturing, maintaining, and sharing what people already know. Yes, AI can help an organisation move faster. But if the knowledge underneath it is incomplete, outdated, or locked inside people's heads, faster is just a quicker route to the same problems.

"AI is making it easier to surface and reuse existing knowledge, but it also highlights gaps where knowledge isn't well documented," said Stone. "Organisations that have structured, accessible information tend to benefit more, while those relying on informal knowledge may find it harder to apply AI effectively."

Implementing AI without having your knowledge management ducks in a row will only lead to a faster set in of mild panic when key people are away.

This article was produced in partnership with linkABLE

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