A November 2015 Harvard Business Review article titled Why Organization’s Don’t Learn did a good job of outlining the main cultural reasons that organizations fail to learn and adapt. The concepts introduced can be equally applied to why organizations struggle or fail to successfully transform themselves. However the article falls short in addressing exactly why leaders allow this condition to persist.
These reasons are grouped into what the authors call the Four Biases: success, action, fitting in, and expertise. By themselves, these would all appear to be good things. Who doesn’t want to fin in, enjoy expertise, action and success? As the adage goes, too much a good thing can be bad, perhaps? The article provides illustrations of how each of these biases can dampen learning and adaptiveness through fear of failure, lack of frontline empowerment, lack of reflection, lack of fact-based thinking, failure to use one’s strengths, and so forth, and then offering remedies to each. To those of us working with continuous improvement and striving towards lean, much of this is familiar territory.
The article is worth reading and discussing in small groups, leadership teams, or any gathering of people who could agree to institute some of these idea outlined. Tanmay Vora of the QAspire blog provides a simple and excellent summary of the HBR article. I recommend reading both the HBR article and using Vora’s sketch below as discussion guide and visual reminder.
The remedies outlined by the authors of the HBR article are all good and necessary. Yet there is a glaring omission, hinted at yet not directly addressed in the closing paragraph of the article.
It may be cheaper and easier in the short run to ignore failures, schedule work so that there’s no time for reflection, require compliance with organizational norms, and turn to experts for quick solutions. But these short-term approaches will limit the organization’s ability to learn. If leaders institute ways to counter the four biases we have identified, they will unleash the power of learning throughout their operations. Only then will their companies truly improve continuously.
The first two sentences are brilliant. The authors’ advice to “institute ways to counter the four biases” follows logically. But why don’t leaders do this? That is the important question. What happens when leaders do not have financial incentives that put the long-term interest of the shareholders, through organizational learning on, at least at par with incentives to do what is cheaper and directly financially beneficial to them in the short-term? This situation results in cutbacks on education and training budgets, overburdening workers to make any reflection (much less improvement) impossible, creating a “performance culture” that creates fear of failure, demanding immediate action versus thoughtful planning, even off-shoring and outsourcing which in effect sets organizational learning back by years by dumping one set of brains for cheaper ones elsewhere. Simply put, organizations don’t learn because leaders are financially motivated not to allow it. Leaders who are measured and motivated mainly by near-term financial gain, and have no skin in the game or accountability for the long-term damage they may do to the business, will under-invest in creating a learning organization.
None of the countermeasures listed in the HBR article are novel. They are, as we say, old hat. So how do we convince current and new leaders to wear old hats? A rational design of incentives must be part of the discussion. When customers, shareholders, and leaders balance the short-term financial and material rewards with the long-term health of the organization, only then will their companies truly improve continuously. What each of us can do is to continue having such discussions with our peers and leaders, modeling behaviors whenever we can by setting up the right balance of incentives whenever, and as consumers rewarding those organizations that behave as we wish them to in regards to adaptiveness and organizational learning.