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Managing to Learn: How Companies Can Turn Knowledge into Action

In too many companies, says HBS professor David Garvin, there's a critical gap between encouraging innovative thinking and putting it into action. A true "learning organization," he says, involves not just new ideas but a process for sharing knowledge that lets every member of the organization to act in an informed way upon what's been learned before.

Managing to Learn
(Illustration: Dave Cutler)

After a decade of extraordinary growth, Nike faced slowing sales in the early 1980s because the normally market-wise company had missed a major turn in the road. Reebok had introduced softer and more comfortable athletic shoes with broad consumer appeal, while Nike stuck to the unrealistically purist view that it was in the business of producing only high-performance footwear for competitive athletes. Nike has since changed its ways, but several years of less-than-stellar sales was the price the company paid for being insufficiently nimble on its own playing field.

In his book, Learning in Action: A Guide to Putting the Learning Organization to Work (Harvard Business School Press), HBS professor David Garvin argues that Nike left open a critical gap between encouraging innovative thinking and putting it into action throughout the organization. In particular, Nike managers failed to pick up the relevant market signals and learn from them. It took them too long to figure out that consumers wanted something different from what Nike was offering at the time.

Unfortunately, Garvin states, this is not an isolated incident in the corporate world. According to his research, few managers know how to channel innovative thinking into practice by making sense of the overwhelming amount of market, financial, and technical data now available and then sharing discoveries and strategies with other members of the organization. In short, they don't know how to create organizations that keep learning.

Firms that come up short in this regard, Garvin asserts, may be condemned to repeat mistakes endlessly, fail to adapt to changing conditions, lose employees who are repositories of important knowledge and skills, and ultimately perish. In contrast, Garvin's concept of a learning organization is one that is "skilled at creating, acquiring, interpreting, transferring, and retaining knowledge and at purposefully modifying its behavior to reflect new knowledge and insights." Although new ideas are essential, he advises, lots of lightbulb epiphanies alone do not a learning organization make. The necessary complement is a mind-set of inquiry and experimentation, plus a knowledge-sharing process that enables everyone in a company to act in an informed way upon what's been learned before.

At the heart of Garvin's book is a guide for firms to transform themselves into learning organizations, a path that requires the willingness to change routines and not bow down before conventional wisdom. In general, there are three steps needed for learning to occur, no matter what learning style is used. "Organizations must first acquire information," he writes. "The crucial questions include, What information should we collect? From where? How should it be obtained and by whom? Next, organizations interpret information. At this point, the crucial questions include, What does the information mean? What categories should we apply? What cause-and-effect relationships are at work? Finally, organizations use or apply information, translating it into action."

Each task involves distinct challenges. Most companies, Garvin found, commonly take the first step, but the next two are more difficult and more rarely done. He recommends that organizations take a careful look at what they need to know to meet their challenges and leverage their opportunities, and then figure out how to go about learning it. Although Garvin's prescription sounds simple in the abstract, he finds that it's often hard for companies to follow. A frequent stumbling block is the pervasiveness of what he calls "learning disabilities," which impede the learning process at every stage.

"Problems in acquiring knowledge arise from oversights, omissions, and errors in the way information is collected," Garvin writes. "Interpretation problems arise from distortions in the way information is collected," as well as from poor statistical methods." Application and use problems arise from corporate risk aversion and the difficulties people have in recognizing that their actual behavior often deviates markedly from their espoused behavior. Together, these problems conspire to undermine learning and reduce its effectiveness."

Garvin also describes three distinct modes that successful learning organizations have adopted: intelligence gathering and interpretation, reflecting on experience, and experimentation. L.L. Bean, for instance, is a company that has excelled at learning through customer intelligence. The outdoor products retailer has gained success not only by accumulating information in a thorough way but by interpreting it with great creativity and discipline. The company's product testers assess goods by using or wearing them in the field, noting comfort, fit, functionality, and limitations. Back at L.L. Bean's corporate offices, staff members then evaluate these observations, writing significant phrases on Post-its and using this array of on-the-scene reactions to facilitate the product-improvement process and evaluate a new item's potential in the marketplace.

Boeing has used learning from experience to smooth out difficulties facing its new development projects. For example, a high-level employee group that had been involved with the 737 and 747 aircraft created a "lessons learned" manual to apply to the 757 and 767 models. Allegheny Ludlum, meanwhile, continuously experiments with its steel products, interpreting and applying the results, while allowing work teams freedom from departmental budget constraints as they pursue new products and quality improvements.

Garvin also emphasizes the importance of establishing an atmosphere conducive to organizational learning — a task he entrusts primarily to corporate leaders, who, he says, need to be tolerant of dissent and ready to hear new views. Learning leadership requires distinct skills, Garvin argues, including the ability to ask open-ended questions, listen to the responses, and lead a productive discussion free from superficiality, rigidity, or miscommunication.

At American Express, for example, CEO Harvey Golub tells his direct reports that he is "less interested in people having the right answer than in their thinking about issues the right way. What criteria do they use? Why do they think the way they do? What alternatives have they considered? What premises do they have?" Similarly, at Serengeti Eyewear, a division of Corning, General Manager Zaki Mustafa notes that when employees come to him with a problem, his response focuses on helping them come to their own decision rather than telling them what he thinks they should do. In addition, says Garvin, the top management of a learning organization should allow individual workers to experiment without reproach and send the message loud and clear that knowledge is something to be shared throughout the firm, not hoarded.

In the long run, Garvin observes, a learning organization doesn't rely on old answers to new problems but stimulates each generation of employees to collect and examine new data and come up with new approaches. After all, he concludes, "learning is a profession of faith in the future, an admission that progress is possible."

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From Working Knowledge: A Report on Research at Harvard Business School, Vol. IV, No. 1.