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Managing Organizational Forgetting

December 2004
MIT Sloan Management Review 45(2):45-51

Authors:

Pablo Martin de Holan

HEC Paris

Nelson William Phillips

University of California, Santa Barbara

Thomas B Lawrence

University of Oxford

Companies focus on creating processes and structures that allow them to learn, but recent research shows that they must also effectively manage how they forget. Through the examples of the Central Bank of Argentina, Ford Motor Co., Gucci Group and others, the authors illustrate the crucial importance of organizational forgetting.

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The Richard Beckhard Memorial Prize

The editors of the MIT Sloan Management Review are once

again pleased to announce the winners of this year's Richard

Beckhard Memorial Prize, awarded to the authors of the most

outstanding SMR article on planned change and organizational

development published from Fall 2003 through Summer 2004

(Volume 45).

Summer 2005, Vol. 46, No. 4, p. 25

The Winners:

Pablo Martin de Holan

Professor, Instituto de Empresa, Madrid, Spain

Nelson Phillips

Professor, University of Cambridge, United Kingdom

Thomas B. Lawrence

Professor, Simon Fraser University, Vancouver, Canada

Authors of:

Managing Organizational Forgetting

Reprint 4529; Winter 2004, Volume 45, Number 3, pp. 45–51

This year's winning article is based upon the intriguing premise that,

although companies often focus on creating organizational processes

and structures that allow them to learn quickly, an organization's

effectiveness is equally determined by what it chooses to remember,

to unlearn or not to learn in the first place. In other words, real

learning and real growth require a selective, discriminating and

active approach to acquiring and utilizing knowledge.The authors

offer a framework that categorizes forgetting along two dimensions.

The first differentiates between accidental and intentional forgetting.

The former is most often associated with the loss of valuable

knowledge, which thus reduces a company's competitiveness.

Intentional forgetting, on the other hand, can benefit an organization

by helping to rid it of knowledge that has been producing

dysfunctional outcomes. The second dimension highlights the

difference between knowledge that is entrenched and knowledge that

is new to the organization. When juxtaposed, the two dimensions

suggest four types of organizational forgetting: memory decay,

failure to capture, unlearning and avoiding bad habits. Each form is

associated with a distinct set of processes and contexts that result in

a specific set of challenges and therefore must be managed

differently.

The panel of judges found the idea of organizational forgetting to be

amuch needed concept to add to the study of organizational learning:

"The paper does a wonderful job of laying out how systems increase

their overall effectiveness by figuring out what they must remember,

by monitoring what they forget to insure that valuable knowledge

and skill is not forgotten, and by setting up learning mechanisms to

acquire knowledge and skills that they will need to adapt to ever

changing environmental circumstances. The authors have many

suggestions for how to enhance the whole knowledge acquisition and

retention process as organizations cope."

This year's panel of judges included three distinguished members of

the MIT Sloan School of Management faculty: Sloan Fellows Professor

of Management Emeritus Edgar H. Schein, Society of Sloan Fellows

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Richard Beckhard

One of the founders and architects of the field of organizational

development, Prof. Richard Beckhard was a member of the MIT

Sloan School of Management faculty for more than 20 years. A

longtime friend of the MIT Sloan Management Review, Beckhard

was known for his efforts to help organizations function in a more

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