Introduction to the series
The term “learning organization” crossed over from academia to the world of business with the publication of “The Fifth Discipline,” by Peter Senge in 1990. The book achieved wide acclaim and in 1997 Harvard Business Review identified it as one of the seminal management books of the past 75 years. Nevertheless, like so many other discussions on how business should change, after a flurry of initial interest, the topic disappeared from discussion and was largely forgotten by the mainstream business community — until recently.
Over the last few years, people have begun talking about learning organizations again. This time around, however, the discussion is driven less by novelty or intellectual curiosity and much more by serious concerns on how best to confront the challenges of an increasingly VUCA world. However, even as more and more leaders recognize that the need for their organizations to learn is urgent, it becomes increasingly evident that most organizations never will develop this capability.
Many organizations, perhaps most organizations, will fail in this endeavor by default, since they have no interest in learning. As we will see (and it might come as a surprise), resistance to learning is especially pronounced in historically successful organizations. But even for organizations that want to learn, that spend millions of dollars to learn, and that after experiencing catastrophe or existential threat have every motivation to learn — they likely won’t learn to learn either.
In this blog series, we will identify what we mean by organizational learning, why it’s needed, what is blocking organizations from learning and what they must do to become learning organizations. In part one, we will discuss why organizations need to learn.
Why Organizations Need to Learn
Put succinctly, organizations need to develop the capability to learn to survive the 21st century challenge of ever mounting uncertainty. Let’s start to unpack that statement by discussing more concretely what it is about the VUCA world that poses unprecedented challenges for our organizations.
Every day we see the headline: things are speeding up. It’s not just that things go faster but that they go faster and faster. Each new advancement in technology increases the speed of the next advancement. Perhaps the most famous articulation of this effect is Moore’s Law that for fifty years has successfully predicted that the number of transistors that can be contained in a square inch will double every 24 months. Although we emphasize the startling changes we see in computer technology, the acceleration of change is evident across all technologies and reaches every corner of our lives. Although we talk a lot more about technology change in recent times than we did in the past, the effect itself has been rolling along since the industrial revolution, if not the beginning of civilization. We talk about it now because we have hit the steep part of the curve.
For most of human history, technology has changed so slowly that it did not appear to change at all over the course of a human lifetime. Plows, ships, horse carriages like rocks and trees were static features of the natural landscape that reinforced the permanence of day-to-day life. Now entire platforms are born, age and die in a matter of a few years, sometimes a matter of months. We can now see the world around us change with our very own eyes.
If the change equation had but one variable — speed — we’d be in pretty good shape. We would just need to go faster and going faster is something we do pretty darn well. Doing things faster, as well as cheaper and better, has been the chief concern of management practice since its origin during the industrial revolution. After focusing on production for nearly two centuries, we can display an impressive track record of performance improvement. Consider that the first commercially available microwave oven, introduced in 1947, was about six feet tall, weighed about 750 pounds and cost about $50 thousand in today’s dollars. Twenty years later, the microwave was successfully launched as a consumer good and cost about $3500 in today’s dollars. Today I can log on to Amazon.com and have a microwave oven shipped to my house in a few days for just over $50 bucks.
Unfortunately, speed is not the only variable in the change equation. Technology change not only speeds things up it but it increases the number of subsequent outcomes — good, bad and unintended. More possibilities increase uncertainty and social volatility, which in turn undermines the status quo. Therefore, as the rate of change increases, it’s more and more likely that change will be disruptive. Therein lies the rub.
Factors that once were reliably constant have become variables that interact in surprising ways. Past performance is no longer a sound guide for future action. Long standing assumptions (e.g., house equity increases over time) go belly up overnight (e.g., the housing bubble burst). Small incremental changes trigger tipping points that transform market behavior and public opinion. Slight hesitations to emergent issues snowball into catastrophic business failure. Product life cycles shorten and end abruptly. The impact of what otherwise would have been minuscule local events are exploded to gigantic proportions by the mindless 24-hour-news-cycle-social-media-complex. Consider how the self-immolation of a Tunisian street vendor triggered revolution in four Arab countries in a matter of months. Consider the rapid decline in once dominant brands such as Nokia and Blackberry. Consider, too, that the average tenure for a corporation in the S&P 500 today is less than twenty years, one-fourth what it was in the 1960s. This is the world that we live in.
Just as a world of ice turns liquid, as the ambient temperature reaches a tipping point, we now live in a world that is fundamentally different from the world from which most of us were born. Still holding an ice pick in one hand, we stare stupidly at the recently melted water swirling around our feet. We are perplexed. The tools that worked so well when the world was comparatively orderly no longer cut it. Today, organizations have no choice but to learn new ways to cope and compete in a world without precedent. And since uncertainty is now a permanent part of our world, our organizations will need to learn continuously.
Creative Destruction Whips through Corporate America. Innosight. 2012.
“Moore’s Law is 50 Years Old But Will It Continue?” Bailey, David H. and Borwein, Jonathan. 2015.
“What VUCA Really Means for You”. Bennett, Nathan and Lemoine, G. James. Harvard Business Review. 2014.
Read more of the series: