In today’s competitive, rapidly evolving global marketplace, says Professor Edward D. Hess, the only way to develop and sustain a competitive advantage is to create a “learning organization.” In today’s and tomorrow’s Advisors, Hess explains what that means and shares four key points to keep in mind as your company makes the transition.
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Technology has reduced the capital needed to start and build businesses, reducing an historical barrier to entering the marketplace. And new competitors can reach your customers from thousands of miles away. Technology has also given customers tremendous power in comparison shopping your product and telling the world how happy or unhappy they are with your product or service. That doesn’t bode well for the staying power of the better mousetrap you’ve just built (or for the lifespan of your company or for your job security). Standing still is a losing strategy in many cases.
“To stay relevant, companies can no longer rely on traditional competitive advantages like location, capital, lack of choices for customers, and lack of market transparency; instead, they must transform themselves into ‘learning organizations,’” says Hess, author of Learn or Die: Using Science to Build a Leading-Edge Learning Organization (Columbia University Press, 2014, www.EDHLTD.com). “Today’s technological and marketplace developments necessitate faster adaptation, and adaptation requires institutional learning processes such as critical and innovative thinking, critical conversations, and experimentation.”
In other words, the only way to sustain a competitive advantage is to make sure your people have the tools, motivation, and support to learn better and faster than your competitors. In his new book, which is packed with research and case studies, Hess shares his detailed formula for building what he calls a High-Performance Learning Organization (HPLO).
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Four Steps to a Learning Culture
Here, he spotlights four key points to keep in mind when building a learning culture:
1. Leadership must shift toward “coaching-ship.” Unless you’ve been living under a rock, you know that command-and-control structures with Theory X leaders, who think management’s job is to use rewards and punishment to direct, motivate, control, and even modify employees’ behavior in order to get organizational results, are on their way out. If we want adaptable learning organizations, we need to humanize our management models, and that requires many leaders and companies to fundamentally change their attitudes and behaviors toward employees.
Personal and intellectual humility, empathy, emotional intelligence, and self-management are required leadership capabilities within HPLOs, because these qualities nurture the very human capabilities that are at the root of adaptation and innovation: the ability to ideate, create, emotionally engage, and learn in conditions of uncertainty, ambiguity, and rapid change.
“Instead of ‘knowing and telling,’ which can cause progress-limiting dependence, leaders should work with employees as coaches, or even allow them to experiment on their own,” Hess instructs. “I recommend following Intuit’s example by consciously choosing to bury the ‘modern-day Caesar’—the kind of boss who gives thumbs up or down on all decisions. In India, this policy allowed young Intuit innovators to conduct an experiment on helping farmers get the best price for their products—even though management initially wasn’t interested in the idea. The result: 1.6 million Indian farmers now use the successful program these innovators developed.”
2. Your work environment must be an emotionally positive one. Positive emotional work environments are no longer negotiable. They’re a requirement. Positive emotions are associated with openness to new ideas, better problem solving, openness to disconfirming information, less rigid thinking, resilience, creativity, collaboration, better recall of neutral or positive stimuli, and mitigation of ego defenses. (Negative emotions inhibit all of these things.) So a positive emotional state is essential to developing employees who are motivated, productive learners.
“If you still feel that building a positive workplace environment is too ‘soft’ to suck up your organization’s limited time and energy, consider that none other than the U.S. Army has recently begun an initiative to promote positive psychology,” Hess says. “The training includes learning about emotions and their effects on the body and mind, learning how to manage emotions, reducing the frequency of negative emotions, and increasing the frequency of positive emotions. It’s directed toward producing soldiers and leaders who can adapt to new and challenging situations and uncertainty—that is, learn.
“Your people may not be tested on a literal battlefield, but these skills will still be crucial in helping you maintain a competitive advantage as your organization navigates the cutthroat landscape of the global marketplace,” he adds.
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Edward D. Hess is a professor of business administration and Batten Executive-in-Residence at the University of Virginia’s Darden School of Business and the author of 11 books.
In tomorrow’s Advisor, we’ll get the last two steps for building a learning culture, plus Hess’s final thoughts on the topic.