This article first appeared in the April, 2004 edition of the Jacksonville Business Journal
Why is it that most companies make the same mistakes over and over again? One company is always late with deliveries. Another never gets the bills right. A third can't process an order correctly. It seems that every company has some things it does well, and other things it just can't get right. The fixes cost time, money and customer satisfaction.
Most people are able to learn and improve over time. Can organizations do the same? How can we help companies work smarter?
Some companies have the ability to get better over time. They learn from their mistakes and change the way they do things. They are learning organizations. For a company to become a learning organization, it has to apply the following four rules.
Rule #1 - Support Innovation and Risk
Most companies say that they want their employees to take initiative. They want their employees to innovate and take risks in finding better ways to do their job. But when things go wrong what they focus on is blame. Blame can sound like the following phrases. "Who did this crazy thing?" "Who made this stupid mistake?" "Who's fault is this?" "Don't blame me - I didn't do it." "That's not the way we do things around here."
Where comments like these are common, innovation, creativity and risk-taking are being discouraged. The real message here is that it's much safer to keep your head down and do your work the way it's always been done. Don't take risks. Don't innovate. This almost certainly guarantees that this company will continue to repeat the same mistakes over again.
People actually learn more from failure than from success. When we are successful we believe it's because of what we did. But we may be successful in spite of what we did, rather than because of it. And it's usually impossible to tell the difference. But when we are not successful, we have the opportunity to study why our efforts didn't work, and change our approach.
Encouraging people to innovate and take risk, and not punishing or blaming failure is the first step in making a company smarter.
Rule #2 - Capture the Lessons Learned
New learning must be captured before it is lost. Learning may come from a mistake or failure. It may come from an experiment that worked well. It may come from customers, competitors, technology, or business partners. Whatever the source, when new learning occurs the company needs to be able to capture it for future use.
Companies that implement client projects often call this their "lessons learned" or "post mortem" exercise at the end of a project. Organizations that have continuous improvement programs - such as six sigma - capture their data while it is being created so they can learn and apply improvements in the future.
If a company has no tool or vehicle to capture new learning and no place - no repository - to hold this knowledge for future use, then very little learning will remain.
Rule #3 - Organizational Learning Requires Teams
Organizational learning has to go beyond one individual. Learning is limited if one person learns something but does not share it with anyone else. When that person leaves the organization or moves on to a different role, the learning is lost.
If one person learns something and tries to bring it to the company alone, the new learning is likely to be rejected. When teams learn from their work, they can bring the learning to their company with a much higher probability of integrating it into how the company does its work. Companies become smarter when teams learn together.
Rule #4 - Institutionalize the Learning
Institutionalizing learning is the process a company uses to embed new learning it into its operation so the "new way" becomes the "standard way." When a company does this successfully, new learning becomes an embedded part of the way the company conducts its business.
The difficulty of this integration is easy to see in project-driven companies. At the end of a project, the project team conducts a comprehensive "lessons learned" exercise. A number of solid items are identified that will be very useful on future projects. These ideas are discussed, recorded and presented in a report to management. Management acknowledges the report and thanks the team for diligent work.
The report then dies. There is no vehicle to translate these recommendations to future projects. When this company is asked about their "lessons learned" reports, they point to a database where they are all carefully kept and filed. But no project manager assigned to a new project has the time to go wading through all those reports to find something that might be useful. It's too hard, and is not the normal work method.
Consider a project team that did innovate. It learned new approaches, it shared its results, but the last step of incorporating these new ideas into regular company operations was lost.
Seize The Opportunity
Some companies never learn from their mistakes. Some companies learn at the moment but can't apply these new ideas in the future. By applying these four rules an organization can continuously improve - creating higher efficiencies and better quality at lower cost. The result is both increased profitability and much happier customers.
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