Clarity from Complexity: Institutional Memory vs Innovation

Harvey Belovski’s Newsletter #104

I heard about technology company that decided to dismantle its most experienced team in pursuit of “fresh thinking.”

Within eighteen months, they had repeated three costly mistakes that the departed team had learned to avoid a decade earlier. The institutional memory walked out of the door, but it seems that no one noticed.

I find this loss of institutional memory deeply upsetting.

This is because I watch organisations I really care about repeat major errors from years ago. They forget the circumstances that led them near to the brink, spent years, huge sums and enormous expertise correcting, only to do the same all over again 15 years later. Worse still, among the numerous deficiencies of our chaotic political world, ‘goldfish memory’ rates among the most serious.

Yet this tension — between what an organisation has learned and what it needs to unlearn — sits at the heart of every strategic conversation, whether or not it is acknowledged.

Institutional memory says: we tried that in 2016 and it failed. Innovation says: the conditions that made it fail have changed.

Both can be right. Both can be wrong. The organisational challenge is holding both perspectives without letting either dominate.

George Santayana’s oft-quoted warning that “those who cannot remember the past are condemned to repeat it” only captures half of the truth. The other half, less frequently cited but equally important, is that:

those who cannot release the past are condemned to be imprisoned by it.

In my experience, the organisations that navigate this tension well share a common characteristic: they treat institutional memory as data, not doctrine.

They ask: what did we learn? rather than what did we decide?

The distinction matters enormously. Learning is adaptive. Decisions are contextual. What was decided under previous market conditions, with different technology and different leadership, may be entirely wrong now — but the learning underneath it may still hold.

The organisations that get this wrong tend to err in one of two directions. Either they worship precedent, becoming sclerotic and risk-averse, or they fetishise novelty, cycling through initiatives with the attention span of a distracted child. Neither approach serves the people inside the system, who need both stability and stimulation to do meaningful work.

Here are some tips to navigating this tension:

Separate the learning from the decision. When someone invokes “we tried this before,” ask what specifically was learned — not just what was concluded - and record it. The context may have changed; the underlying insight may still be relevant.

Protect institutional memory carriers. Long-tenured employees are not obstacles to innovation. They are repositories of pattern recognition. Before restructuring them out, ask what knowledge leaves with them — and whether you can afford the loss.

Create structured forums for past and future to meet. Pair experienced team members with newer ones on innovation projects. The friction between “here’s what we’ve seen” and “here’s what we imagine” is not a problem to manage. It is precisely where the best organisational thinking emerges.

Next up: Clarity from Complexity: The Informal Power Behind the Throne: Who’s Really in Charge?