Utilities have long managed through periods of operational and regulatory complexity. Aging infrastructure, capital investment pressures, evolving regulatory requirements, cybersecurity concerns, workforce changes and rising customer expectations are not new challenges. What is changing, however, is the pace and scale at which utilities are being asked to respond to them. Utilities are now being asked to modernize core operations, adopt new technologies and redesign how work gets done while continuing to deliver safe, reliable and affordable service.
At the center of this shift is a less visible but increasingly consequential factor: knowledge. A utility’s ability to develop, access, apply and sustain operational knowledge is increasingly shaping its capacity to transform. In this environment of increasing enterprise demands, knowledge itself is emerging as a strategic capability, and the inability to operationalize it consistently is becoming a growing source of risk.
This dynamic can be understood as knowledge risk: the risk that critical operational, technical or organizational knowledge is unavailable, inaccessible, insufficiently scalable or unable to keep pace with the rate of change required by the business. In practice, this risk appears when critical decisions depend on a small number of experienced individuals; when new processes or systems are introduced faster than the organization can absorb them; or when teams must rely on informal workarounds to bridge gaps in training or documentation, often affecting how well the organization can sustain change under real operating conditions. Knowledge risk is less visible and harder to measure than capital, technology or headcount risks, but utilities that don’t recognize it will struggle to realize value from their modernization initiatives.
Distinguishing Institutional Knowledge From Operational Intelligence
The issue is broader than the traditional concept of institutional knowledge. Utilities have always relied on experienced personnel who understand the nuances of how systems behave in the real world: field conditions, historical anomalies, asset-specific workarounds or operational judgment developed over decades. That kind of knowledge remains critical, but it does not scale on its own. Utilities are now operating in an environment where success depends on something broader: the organization’s ability to convert individual knowledge into collective operational intelligence that can be scaled across teams, systems and decision-making processes.
This distinction between institutional knowledge and operational intelligence matters. Institutional knowledge is individual, experience-based and difficult to transfer fully through formal means alone. Operational intelligence is organizational and reflects the utility’s ability to identify patterns, connect information across systems, support decision-making and make knowledge usable where work happens. Modern utilities require both.
For example, a veteran field operator may know from experience that a particular circuit behaves unpredictably during extreme weather conditions. At the same time, advanced operational analytics may identify broader system-level risk patterns across thousands of assets and millions of data points. The challenge for utilities is integrating individual wisdom and data-driven insight into a coherent operating model so the individual is ready to respond to the issue while the utility works to decrease variability across the whole system.
Knowledge Risk Endangers Operational Performance
This challenge is becoming more pronounced as utilities undergo workforce transition. Industry analyses from the Edison Electric Institute, American Public Power Association and others continue to highlight the scale of pending retirements and the resulting experience gap across utility operations. These shifts are likely to result in loss of context, as well as a loss of knowledge that is often hidden until something changes. At the same time, utilities are implementing increasingly complex technologies and processes that require faster learning cycles and more adaptive ways of working (see Figure 1).
Contrary to conventional assumptions, this does not necessarily mean utilities are becoming less dependent on informal knowledge transfer. In many cases, the opposite is true. The pace of transformation is often moving faster than formal training and documentation processes can reasonably keep up. As organizations deploy new tools, integrate systems and redesign workflows, employees frequently rely on peer networks, field experience and informal collaboration to bridge operational gaps in real time.
This support for change creates a compounding challenge. As transformation accelerates, utilities need operational knowledge to move faster and farther, but the mechanisms for transferring and maintaining that knowledge remain fragmented, informal and person-dependent.
Building Knowledge Readiness for Adaptability
The implications go beyond operational inefficiency to encompass reduced organizational readiness for the transformation itself. Utilities that effectively reduce knowledge risk are going beyond documenting procedures. They are building knowledge readiness: the organizational ability and capacity to continuously capture, maintain, distribute and operationalize critical knowledge as conditions evolve. In practice, this means creating operating models in which knowledge is reflected in system and process design, connected to systems and assets, reinforced through governance, and made accessible at the point of decision-making.
This capability is becoming increasingly important because transformation efforts depend on it. Organizations introducing new technologies, operating models and decision frameworks require personnel who can interpret changing conditions, adapt processes and make sound operational decisions in environments that are often still evolving. Transformation also requires decision-makers at the leadership level who understand the technology as well as how operational realities, workforce capabilities and organizational behaviors interact with those investments over time.
Utilities have long recognized the interrelation of infrastructure, capital and technology as foundational to performance. Increasingly, the utilities positioned to sustain transformation will be those that recognize knowledge as infrastructure as well — an operational asset that must be intentionally developed, maintained and scaled across the enterprise.