Organizations that are good learners continually adapt successfully to a changing environment. An organization cannot read a book or attend a course, so how does it learn? One thing an organization can do is regularly assess what’s working and what’s not, then make changes accordingly. This is learning from experience and it depends on rigorously facing reality. Studies have shown that the main reason high fliers in business fail to learn is that they never admit to making any mistakes. Someone or something else is always to blame. Being defensive is a sure way to avoid learning.
Sometimes we are not very good at being honest with ourselves. Defensiveness is like an immune system. It serves to protect us from a serious crisis of confidence but it can block us from really learning how we need to change. The old saying ‘’nothing succeeds like success’’ has been turned on its head of late so we now say ‘’nothing FAILS like success.’’ The moral of this story is that success can set us in concrete and prevent us from learning new ways of behaving until it is too late. Many successful organizations have failed because they stuck to the knitting long after it was still useful to do so.
There are two kinds of learning an organization can foster: constant individual renewal and a culture of organizational learning. The former is not enough. There is little point in developing talent if the organization is so risk averse that it waits too long to try new things. The need to get things ‘’right first time’’ can induce a reluctance to experiment. Fundamentally, the best learning organizations are entrepreneurial. They launch new products quickly, not worrying if they are 100% perfect. They are religious about getting feedback from customers and other stakeholders so they can modify products or services quickly. Such trial and error learning is becoming a necessity in a world that is too complex and fast changing to plan ahead with any degree of certainty. In the past you could lay out your strategy as confidently as you could plan your vacation. Now, it is like planning a holiday in a world where prospective destinations are continually disappearing or changing beyond all recognition. For this reason, you have to be prepared to combine your strategy with an entrepreneurial adaptability so you can change directions quickly. This means creating a culture where such organizational learning is encouraged and rewarded. This is especially important if your business competes on the basis of innovation, less so if cost, efficiency and service are paramount. But no organization can rest on its laurels for long.