How to Build a High-Impact Learning Culture

Over the last ten years we have studied many elements of Human Resources and corporate training with a goal of identifying which practices, processes, structures, and systems drive the greatest business impact.

This week we are launching one of the most significant research reports we have published to date:   High Impact Learning Culture®:  40 Practices for and Empowered Enterprise.  The core of this report is one major finding:  among all the HR and training processes we study, the single biggest driver of business impact is the strength of an organization’s learning culture.

At first glance, of course, this appears to be a very vague and undefined statement.  But over the last two years, under the leadership of David Mallon, we studied this area and have now published 40 practices which will directly improve your organization’s learning culture.

This research was extensive:  over more than six years studying best-practices in corporate training, we identified more than 100 possible business processes, programs, and strategies which fall into the area of “culture.” These include many formal things like “creating development plans” and many informal things like “regularly conducting after-action reviews” and “leaders listen to mistakes.”

During 2008 and 2009 we interviewed and surveyed over 40,000 organizations to understand how well they adopted these practices and simultaneously studied how well these organizations performed on ten well-defined business measures (innovation, workforce productivity, time to market, customer satisfaction, customer responsiveness, customer input, workforce expertise, learning agility, and cost structure).

After correlating this information carefully we found that among all industries and company sizes, there are 40 practices which rise to the top.  These practices we call the “40 High-Impact Practices for a Learning Culture” – and as you read them you will see many things your organization can do better.

What is Culture Anyway – and why is Learning Culture Important?

Let me speak briefly how culture and why it is so important.

The topic of culture is not new.  Many have studied this topic, including Edgar Schein from MIT (who’s book The Corporate Culture Survival Guide informed much of our research), Chris Argyris (who pioneered the concept of “double loop learning” – rethinking your assumptions as part of a learning process), Peter Senge (author of The Fifth Discipline, the Art and Science of the Learning Organization), and Kim Cameron and Robert E. Quinn, who authored Diagnosing and Changing Organizational Change, The Competing Values Framework, a book I found very transformational in my own thinking.

These experts, along with many others, have pointed out that culture is a real and changeable part of any organization.  It can be monitored, measured, and adjusted.  While changing culture is like “moving the mountain,” you can in fact move it if you first understand what it is.  A few keys to this topic:

• First, culture is like the air we breathe – it is all around us yet very hard to see.  It is a real thing – and as you read the 40 practices you will start to see actual evidence of culture in almost every process, decision, and interaction in your company.
• Second, culture is hard, not soft.  It is not a “touchy feely” thing – but rather an important set of behaviors and processes which impact your organization’s success.  What do your leaders do when something fails, for example?  How do they treat the people who deliver bad news?  How well are decisions delegated to owners of a problem?  These are critical questions which deal with culture – and their answers often mean success or failure for many business initiatives.
• Third, culture is created by, reinforced by, and often destroyed by leaders.  Among the 40 high-impact practices we found, we estimate that 8 are owned by top leadership, 25 are owned by line management, and only 7 can be owned by HR or L&D.  In your efforts to change culture, you must work with leaders at all levels – and often help them question what they do and how they work.
• Fourth, a learning culture is very business-relevant and not at all academic.   “Learning Culture” is what enables BP, Toyota, Microsoft, or IBM to identify the problems in their products and fix them quickly.  It is what enables Cisco and Google and Apple to “out-innovate” their competitors.  It is what enables Wal-Mart, UPS, and Dell to drive down costs and maintain service quality.  It is what enables ING Direct, Zappos, and Starbucks to grow at rates 10-100X their competitors.  And it is what prevented Digital Equipment Company, Tandem, Apollo Computer, Silicon Graphics, and hundreds of other defunct companies from embracing changes in their markets and evolving their products.  This topic is important:  it means life or death for many organizations.

Our research, which includes many detailed examples and tips for building a stronger learning culture, is built around a simple model (shown below).  The seven elements of culture and the 40 practices impact leadership, management, and the entire organization’s ability and motivation to learn.  These elements, working together, result in a wide variety of business benefits.

Fig 1:  The Simple Model of Organizational Learning Culture

As you can see from the model, the seven elements of culture are big:  building trust, encouraging reflection, demonstrating the value of learning, enabling knowledge sharing, empowering employees, and formalizing learning. These are important strategies, each of which has many practices to consider.

One element which ranks very high in these seven is empowerment:  without empowering employees to listen to customers, speak truth, make decisions, and control their environment, organizations fail to learn.  One might guess that problems like the BP oil spill and the Toyota accelerator problem are rooted in a lack of empowerment, among other things.

Why Organizations Fail to Learn – Failure of the Learning Curve

In the last few months many of our clients have told us they have new CEO-level initiatives to “build a learning organization” and “drive innovation” in their organizations.   What these executives are saying is that “what worked in the past doesn’t seem to be working now.”  Given the tremendous changes in technology, communications, environmentalism, and consumer demographics this is no surprise.

Our findings point out clearly that the solution to this challenge is to create a “continuous learning curve” – one which forces the company (and its leaders) to constantly challenge existing assumptions and try new things.  Chris Argyris calls this “double loop learning” – I like C. K. Prahalad‘s better words, the need to create the “forgetting curve.”

Remember “The HP Way?” and “The Xerox Way” and “The Toyota Way?”  These were all efforts by a company to institutionalize their own learning curves – what worked for them.  Unfortunately all these systems, philosophies, and cultures had to change over time.  And the biggest threat here is not failure but success – when “your way” works you become blind to the things that change around you.

A Failure of Learning: The Story of IBM’s SNA

I remember vividly my days at IBM when the company essentially owned the market for computer networking. Believe it or not (and many of you are probably too young to have experienced this), in the 1970s and 1980s, before TCP/IP and the internet became popular, almost all business computers in the world were connected to each other using a technology called SNA (“Systems Network Architecture”), a set of proprietary protocols by IBM.

SNA was a brilliant technology – it enables applications and systems to talk with each other on a peer-to-peer basis long before we even had PCs.   It ran on low speed and high speed connections, it was secure, and it was cleanly layered so any software engineer could understand it.  And it was hard-coded into IBM’s proprietary communications controllers (called 37xx devices) which cost hundreds of thousands of dollars.  And all IBM customers gladly purchased these things since they worked so well.

Around the mid 1980s, when PCs became popular, a small company called Sun Microsystems took some academic and government technologies called TCP/IP and started selling it into the business world.  In a very short period of time, engineering computers and then later database systems started using these open protocols – and slowly but surely big companies realized they could get their computers to talk with each other without the use of SNA.

IBM, of course, spent many years in denial.  The general manager of the SNA business was famous around my sales team for being one of the most hated executives in the company.  Our customers were rapidly adopting this new, almost free technology, and we could not get the SNA people (who happened to be in Raleigh, NC) to pay attention.  We used to have a joke, “if Raleigh made vacuum cleaners, they wouldnt suck.”

Guess what happened.  A little company named Cisco figured this out and wiped out IBM’s multi-billion dollar networking business in less than 10 years.  IBM was so successful with SNA that the company simply could not learn fast-enough.  The billions of dollars of 37xx and SNA software revenues were blinding the IBM executives toward the huge, rapid, transformational change which took place.  Somewhere in Raleigh, I’m sure there was a philosophy of “leaders are not open to bad news” (#1 in our top 40 practices for high-impact learning culture).

To give you an example of how important this topic is today:  Cisco, one of the most creative companies we have the opportunity to work with, has taken its top leaders and put them into a highly unstructured leadership development program they call the “Center for Collaborative Leadership.”  These leaders are expected to break down existing barries and build new businesses as part of their development plan – and these businesses get funded and go live.  The Cisco Telepresence business and acquisition of Tandberg grew out of this approach.

Bottom Line – You can Transform and Build a Learning Culture:

The reason I am so excited about this research is that we took this amorphous concept of “learning culture” and nailed down some very specific things you can do.   You can diagnose your learning culture and you can change it.   No matter how big your organization is, you cannot ignore this topic.

The concepts of organizational learning have been around for years.  Well-used phrases like “continuous reinvention (Hammer),” and “only the paranoid survive (Grove),” and “if it ain’t broken, break it (Welch)” are not just cute concepts – they reflect the actions of a thriving, enduring, continuous learning organization.

We hope that in this research we have given you the tools to clearly understand your culture, diagnose its weaknesses, and put in place strategies to improve.

I look forward to hearing from you on this important topic.