Why Tribal Knowledge Alone Can't Scale: Lessons for Growth

As companies evolve from a small group of founders in a shared workspace to a multi-floored corporate operation, an intangible essence begins to form—shaping the day-to-day work culture and setting their product development apart from the competition. The "day one" members transition into "veterans," victories are memorialized behind glass, and selected lessons from shared experiences are passed down like rituals. Over time, the way the company prioritizes, delegates, supports its products, and manages crises forms a pattern. The "secret sauce" of their designs and workflows becomes an unwritten recipe.

However, many elements of this recipe remain undocumented, shared informally between employees only when deemed necessary.

This informal exchange of knowledge often adds value to a growing company. Unwritten rules, cultural practices, and organizational themes make businesses unique. Attempting to capture every nuance of a company's character would be unnecessary and overwhelming.

But as companies grow, the complexity of their practices and the demands of modern markets necessitate more than word-of-mouth traditions. At some point, standard operating procedures (SOPs) transition from being a luxury to a critical component of survival. Without them, the risks become significant

When Should Knowledge Capture Begin?

As a company grows, a tipping point—often around 15 to 30 employees—marks the moment when tribal knowledge must be formally documented for the organization to remain effective. Informal processes, like relying on "Phil to show you," may suffice in a small office but quickly become unsustainable as teams expand.

Failing to capture this knowledge not only risks operational inefficiencies but also places undue burden on individuals, such as "Phil," who will eventually move on or retire. Proactively documenting essential knowledge early ensures smoother transitions and reduces the costs of catching up later.

The Risk Without Knowledge Capture

Tribal knowledge has indeed built ships for the sea, but I have seen it sink them once they leave the harbor.

Here are two real examples, one from a startup and another from an established corporation, that illustrate the risks of failing to document critical information.

Example 1: A Startup

I once arranged a meeting between a promising startup and industry experts for consultation. The startup had everything going for it: a strong prototype, a well-rounded team of engineers, and significant funding. Yet, the meeting quickly derailed.

A key team member was unexpectedly unavailable, and the rest of the team couldn’t fill the gaps. When asked basic questions about their product, they struggled to answer. They resorted to calling a specific engineer back at headquarters—a process that underscored their reliance on individual knowledge silos. They couldn't simply ask their engineering team; it had to be a specific person.

What could have been an exciting collaboration left us doubting their ability to scale or deliver.

Example 2: An Established Corporation

Years ago, I oversaw a project to modernize testing tools at my company. We were in discussions with a reputable manufacturer for a bespoke product, but the process stalled when our point of contact retired.

What followed was a cascade of inefficiencies:

• Weeks of silence while the account transitioned to a new representative.

  • Only after repeated requests for updates did we receive word of what was happening on their end.

• A restart of discussions as the new rep sought input from their engineers

  • We had already discussed their technical capabilities before, and yet it seems this had not been properly documented or shared within their teams.

• Inconsistent pricing and delays that eroded trust.

Eventually, we abandoned the project. The manufacturer's inability to manage a simple handover reflected deeper systemic fragilities. If they couldn’t handle a sales process, how could they manage long-term product support?

The Cost

Failing to document and institutionalize knowledge affects both your team and your clients.

• Your Team: Without clear processes, team members face unnecessary stress and inefficiency. In the second example, the new representative was professional and attentive but hampered by a lack of internal support. They spent weeks trying to piece together a puzzle that should have been readily available. I could tell during our calls that they were genuinely doing their best, but too much ground had been lost.

  
  

• Your Clients: Clients may initially tolerate delays or missteps but will quickly lose patience. In my case, our excitement about the project turned to frustration. We ultimately sought alternatives, costing the manufacturer not only revenue but also their reputation.

Turning Experience into Action

These examples illustrate the importance of formalizing knowledge early. Organizations that fail to capture tribal knowledge jeopardize their ability to scale, retain clients, and adapt to change.

Documenting takes real time, and real investment. The earlier the better.

By recognizing the tipping point and taking proactive steps to document critical processes, companies can set themselves apart and build trust that withstands the everyday transitions and movement of business.

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• All statements in this article are the sole opinions of the original author and do not represent the stance or perspective of any associated companies or groups.

• Any mention of specific products is not an endorsement but rather an illustrative example. Please do your own research and due diligence before pursuing any solution mentioned on this site.

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