Principle 8: Learning, innovation and continual improvement (Item 8)
Continual improvement and innovation depends on continual learning.
You must be continually learning (from others; from what you do; from
your mistakes; from your varied success; from your strategies and approaches;
from your customers; from your competitors; from your employees; from
technology; from each new idea you implement).
Principle 8 gives you the concept of a `learning company' – that
is an company that creates better solutions by using its ability to:
- use its knowledge and core competencies to create superior value
- use the individual learning and experience of its staff
- undertake meaningful reflection
- use the tension of unresolved dilemmas
Principle 8 goes further than saying that learning is a `good idea';
a good thing to do. According to Principle 8, continuous improvement
and innovation (that we have described as essential to company success
and sustainability) is dependent on the company's continually
learning. In terms of the previous discussion, lack of a process of
continual learning by the company is a significant barrier to innovation
and the company's success and sustainability. A huge barrier that is
worthy of its own discussion.
`Company learning' is not synonymous with `individual learning'. Company
learning is about how the company uses and grows its base of knowledge
in pursuit of its business results. It requires capturing and using
the learning and knowledge of individual members.
A learning company is skilled at creating, acquiring, and transferring
knowledge, and at modifying its decisions and behavior in response to
new knowledge and insights.
Peter Senge and others have described this Learning Organization in
a number of books – for example The Fifth Discipline Fieldbook
and The Dance of Change. (See
our recommended reading list.)
There are four stages of competence. All of us are at one stage or
another about everything:
- Unconscious incompetence – you don't know you don't know.
- Conscious incompetence – you know you don't know.
- Conscious competence – you have only recently learned and have
to think about it.
- Unconscious competence – you know it so well, you can do it
in your sleep.
For example – driving a car. When you were
very young, you did not even know what a car was. In your early teens,
you knew you wanted to learn but couldn't yet. When you were learning
to drive and had recently obtained your license, you had to think about
what you were doing. After you have been driving for 20 years, no thought
is needed. Except when conditions change – icy or slippery road,
mud – and you suddenly go back to Stage 1 or 2.
There are hundreds of other examples that you can relate to: skiing,
walking, e-commerce, video games, palm pilot, computers.
All of your skills and learnings fall into those categories. For many
of them, you stay in the unconscious incompetence stage. For others,
you progress to the unconscious competence stage. The stage you are
in can suddenly change as the thinking is suddenly overturned, revealing
yet another unconscious incompetence – where most people are for
most things.
In the chapter `Important Concepts', we described the `Cycle of Improvement'.
That cycle is also a `cycle of learning'. It requires you to stand back
from the process and review – to reflect, to take stock.
 "What have we learned
from what we have been doing and what has happened to us?" "Is
it still appropriate?" "Is it achieving what we wanted it
to achieve?" "Could we do it better?" "Are there
unintended and unforseen side effects that we should address?"
"Have changes in the market, technology and customer needs that
would cause us to make a different decision if we made it today?"
"Are our assumptions and decisions still valid?"
This questioning sets us off in a new round of improvement. This, in
turn leads to another.
This cycle amalgamates Senge's double loop learning process with the
Plan, Do Check, Act (PDCA) cycle originated by Shewhart. The diagram
shows the steps in the process. The essential difference from PDCA is
that the cycle initiates from the perceived need to close a performance
gap. A realization that you cannot keep going with what you are doing.
This creates the essential tension to stimulate action.
A sign of stupidity is to keep doing the same thing while hoping for
a different result. Yet you (and we) see it all the time. People and
companies following exactly the same path they have followed in the
last several relationships or product releases, none of which have worked
in the past. But now hoping for a different result.
People learn most from mistakes. One theory of learning is that people
only learn from making mistakes. This implies that people do
not learn from having someone (an expert or boss) tell them what to
do. People only learn from making the mistake themselves. The
role of the expert or coach is to guide them through their learning
– to get the most out of it. In an educational setting, the teacher
sets up lots of harmless opportunities for learning through making errors.
A company must do the same – set up lots of opportunities for failure.
Though, because this is real world, not all will be harmless. You can
reduce the harm by risk analysis and practice. A role of the manager
is to guide the learning.
Make lots of mistakes. For two reasons.
First, "nothing ventured, nothing won". If you do not take
risks, you do not gain ground. If you are too complacent and only do
what you have done before, you will be left behind by the market and
customer demands. If you do things you have not done before, there is
a good chance you will be making mistakes. Good executives have large
numbers of low risk failures behind them. Unfortunately, most company
cultures punish mistakes. People who make mistakes are `moved on'. Other
companies (often competitors) pick up that experience and learning.
Second, make lots of mistakes so that you have lots of mistakes to
learn from. And have in place coaches and mentors to guide people at
all levels in the company so they make the most of the learning. A role
for leaders!
Every day do something that scares you!
Company learning also occurs when learnings made in one process or
work unit are replicated and added to the knowledge base of other projects
or work units.
Companies do this by sharing successful strategies across the company;
benchmarking – within and outside the company; using information
from customers of the processes – within and outside the company.
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