Willie’s Blog Posts

Learning How To Learn

In a 1997 article with the propitious title, The Living Company, Arie de Geus declared: “In the future, the ability to learn faster than competitors may be the only sustainable competitive advantage.”

Of course change has always been with us. The list of corporate casualties is a long one: Kodak, General Motors, Sears Roebuck, US Steel, Borders, Pan Am, to name a few. But they represented a slow descent to the bottom. Today’s digital environment is more disruptive than ever, with sudden revolutions that can change the rules of success almost overnight. Witness the rapid demise of Nokia and Blackberry, the two giants of the smart phone industry, in the wake of the launch of the iPhone in 2007. “Welcome to the Exponential Age,” to quote Robert Goldman, chairman of the International Medical Commission.

de Geus’s prediction was based on Darwinian principles. The life expectation of a species is dependent on its ability to generate favorable variations – those that will enable it to flourish as the environment changes. In nature this happens through natural selection – random genetic variations over numerous generations. The “survival of the fittest” signifies those variations that are best suited to the shifting environment.

For organizations to survive, however, they must generate favorable variations within their lifetimes. They cannot rely on the genetic lottery. They must instill this adaptive capacity willfully. Here we return to de Geus and his concept of a “living company.” In an increasingly turbulent world, the crucial life-sustaining competency is learning how to win at learning.

Executives appear to recognize this learning imperative and frequently exhort their companies to become “learning organizations.” Despite these calls, many businesses fail to instill the right practices for developing a thriving learning culture. In my experience, these five precepts have proved to be powerful drivers of organizational learning.

The first order of business is defining what to learn about

Learning is a demanding pursuit. The human brain typically comprises about two percent of our body weight, but consumes roughly twenty percent of our metabolic energy – more than any other organ. There are many ways to deploy that energy. To be strategic, organizational leaders must direct these intellectual resources towards the right goals through a process of guided learning.

By far the most advantageous learning is outside-in. This means incessantly honing practices to achieve a superior understanding of the external environment before looking inwards. Research done by Unilever, the Anglo-Dutch consumer products giant, confirms the primacy of understanding customers. Their investigation concluded that customer centricity, not operational efficiency is a firm’s main source of competitive advantage. The winning way is to turn the learning about customer needs into a collective obsession.

Learning is a journey, not an event

Shortly after I became an American citizen, my son and daughter finished school. Where I was raised in South Africa these events are exclusively called a “graduation.” This suggests the end of something. But in the US these milestones also have another name, a “commencement”, meaning the beginning — or at least the continuation — of something. This exactly conveys the essence of learning as a way of life, not a once and done enterprise.

Oliver Wendell Holmes, the famous US Supreme Court judge, serves as an inspiring example. When he was 91 and in retirement, president Franklin Roosevelt paid him a visit and found him reading Plato. Roosevelt asked him why, to which the old man replied, “To improve my mind.”

In too many companies, learning is treated as a seasonal occupation, something that is given its due at strategy time, and then brushed aside as they turn their attention back to operational matters. Change won’t stop on the outside, so we can’t stop learning on the inside.

Instilling learning as a habit starts at the individual level. A practice I recommend is to keep a learning journal. We take in learning continuously from diverse sources such as newspapers, books, conversations, and experiences. But these insights are soon lost in the ferment of everyday life. Research by psychologist Herman Ebbinghaus shows that in the absence of counter measures the average person loses up to 90 percent of new information after 30 days. He recommended the following crucial antidotes to forgetting: Promptly record new learning; review these insights regularly; and apply them in practice as soon as you can.

I have kept a learning journal since I was sixteen, and now have a number of these books. I regularly refer to them during times of reflection, and often draw on them in my teaching. Dr. Ash Tewari, the Chairman of Urology at the Icahn School of Medicine at Mount Sinai Hospital, goes a step further. He insists that everyone on his team keep a learning journal. Then at his weekly meetings he calls at random on members (including himself) to share their learning. Tewari has created a team of learners. He serves as a role model to leaders in every organization.

Questions are more important than answers

Learning is engendered by the ability to ask the right questions. Most advances in knowledge through history have stemmed from a searching question dauntlessly pursued. In fact, producing answers without the right questions can be downright dangerous. As noted by the eleventh century poet and philosopher, Solomon Gabirol, “A wise man’s questions contain half the answer.”

Socrates, as we know, was the great exponent of learning through questions. His method was revolutionary. Before him, learning was mainly about mastering the art of rhetoric – demonstrating knowledge by making impressive speeches. Socrates turned this method inside out. He compared his approach to that of his mother, a midwife, and sought not to give birth to an insight, but to facilitate its delivery.

Socrates showed that entrenched answers create fixed mental models and become substitutes for critical thinking. Inevitably these fixed ideas – and the organizations that cling to them – are overtaken by events. The right questions force us to challenge our underlying assumptions. They unfreeze us and open our thinking to new vistas.

What often brings us down is the question we failed to ask. Just look at the tragic collapse of General Motors before it was rescued by the government. As their market share and profitability declined year after year, they obsessed over their cost disadvantages versus Toyota and in the process lost touch with their customers. Questions exploring the decline in customer satisfaction – the root cause of their market share collapse — were simply not pursued.

A key part of a leader’s mission is to serve as the chief learning officer. This involves cultivating the practice of asking good questions as a driver of organizational learning. But there is an important caveat. Questions can also be used as weapons. These are the intimidating “gotcha” kind, designed to expose ignorance or incompetence. Such questions shut down discussion and produce fear and evasiveness, not learning. The key is to promote the habit of asking non-threatening questions that invite exploration and dialogue, and that demonstrate an honest interest in the answers.

Learning from mistakes

Decision-making is not the pursuit of certainty; it is about choosing actions in the face of uncertainty. It involves taking risks. In today’s turbulent environment, the outcomes are harder to predict than ever before, and the chances of being wrong are rising. Nevertheless we know that unless organizations are prepared to take risks, they cannot expect to reap rewards.

Faced with this challenge, many CEOs are urging their employees to take “prudent risks.” However, failures are often punished, resulting in the opposite effect — a culture of risk aversion.

I have found that it’s fruitful to look at this issue differently. Risk-taking is one side of a coin; the other side is mistake-making. A certain percentage of mistakes is the inevitable by-product of risk-taking. Although it sounds counter-intuitive, I submit that encouraging sensible risk-taking is all about how an organization deals with the reverse side of the coin, mistake-making.

There are dumb mistakes and smart mistakes. Dumb mistakes are repeating your own mistake, repeating someone else’s mistake, betting more than the organization can afford to lose, and acting without a strong enough case. These are unacceptable. But what’s left over are smart mistakes, under one crucial condition: that the value of the learning is greater than the cost of the mistake.

This approach shifts the culture from blaming to learning, and forces the organization to define, measure and act on what has been learned. This is the way science learns. Scientific experimentation produces progress based on the strict premise that if a failure is buried or denied, we cannot learn from it.

It is chilling but noteworthy that every time there is a plane crash, aviation gets safer. The industry is relentless in its quest to identify the root causes of failures. Once the diagnosis is complete, the learning is rapidly disseminated across the entire global industry. This capability has been enhanced through practice over the years, and the steadily improving statistics on airline safety testify to its success.

Getting away from the urgent to think about the important

In the words of futurist Paul Saffo, “Our dilemma is the growing gap between the volume of information and our ability to make sense of it.” Our problems accumulate at a rapid pace. How can we make creative decisions in such an intense environment?

The remedy lies in understanding how our brain works. The evidence is clear. When we have been hammering away at a problem, the secret is to not go on hammering. It is to withdraw and change our mental state.

Nikola Tesla is famous for the invention of the induction motor, a motor that can run on alternating electric current without rapidly burning out. But it was a huge struggle getting there. Tesla slaved obsessively for years with countless designs but was stymied and gave up in despair. Some months later, while walking in a Budapest park, the answer flew into his head unbidden. In that unexpected instant, the tremendous industrial value of alternating current was born.

This could never have happened without his prior mental engagement – there is no substitute for hard work — but the breakthrough came when a different set of stimuli opened his mind.

Some years ago, I worked with Aviva, a UK based insurance multinational. The chairman had instituted the practice of quarterly two-day retreats away from the office for the executive team. I was invited to facilitate some of these meetings and was deeply impressed with what I saw. The team discussed market trends and their implications, examined alternative scenarios, reevaluated their priorities, listened to an outside speaker, and went on walks together. They also bantered and had a bit of fun along the way, creating a relaxed and open atmosphere. Invariably this process yielded unexpected insights and a firmer strategic footing for the business.

Do these retreats slow organizations down? Not at all. A good investment in time for reflection actually speeds them up. The most effective mental process in a chaotic world is: stop, look, go.

Retreats of this kind also yield an enormous social dividend. Thomas Friedman, in his latest book, Thank You for Being Late emphasizes how spending time together and sharing perspectives helps teams develop understanding and trust, vital elements for greater collaboration and teamwork.

The ideas I have offered draw their power from fundamental principles about the nature of learning. We are reminded of Alvin Toffler’s profound definition of the learning process: “The illiterate of the future are not those who cannot read or write, but those who cannot learn, unlearn and relearn.”

In my seminars I ask executives which of these challenges is hardest to master. A chorus of agreement invariably comes back, “the ability to unlearn!” This limitation is the biggest barrier to adult learning, and the most dangerous in today’s changing world. The psychologists call this the “confirmation bias” – our tendency to adhere to our preconceived notions regardless of evidence to the contrary. We tend to argue backwards from our biases. As the saying goes, letting go is hard to do.

There is a story – possibly apocryphal — that as an experiment scientists placed fleas in a glass jar. They eagerly jumped out. The fleas were returned to the jar and a lid was placed over the top. When the fleas jumped up, they hit the lid and fell back. After a period the lid was removed, so the fleas were once again free to jump out, but none did. For the rest of their lives they never again jumped higher than the imaginary lid.

While this might or might not be true of fleas, as humans we too often allow our learning to be conditioned by an imaginary lid of our own.

Posted by Willie Pietersen at 11:08 AM | 0 Comments

Great Decisions: An Art of Sacrifice

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Before you can decide what you will do, you have to decide what you won’t.

Albert Camus famously said that our lives are the sum of the choices we make. The same holds true for organizations. Executives and their teams are charged with making momentous decisions that will shape the destiny of their organizations and impact, in some cases, thousands or even millions of people.

Effective decision-making is, however, fraught with difficulties. The world is constantly changing and the future is uncertain. We will never have perfect information, and we are prone to all manner of biases that can trip us up. But one crucial requirement of decisiveness is frequently overlooked: deciding what not to do.

The Latin root of the word decide is caedere, meaning to “cut down” or “kill.” Yet we tend to balk at this act of sacrifice — and this failing carries a heavy cost.

A decision is a choice between alternatives in service of a desired outcome. The reality of limited resources makes this a zero-sum game: every additional thing we do subtracts attention and energy from everything else we do. Choosing a series of actions without any subtraction is just “piling it on,” which, eventually, will stifle an organization, blurring its focus and sapping its resources.

A choice is not a choice until we decide what we will give up. We must subtract first, then multiply.

Learning from nature

Nature can be our best teacher. Successful adaptation in the natural world occurs through favorable variations that confer a survival advantage on organisms within their niches.

In this battle for survival the common red clover has devised a remarkable strategy. Its flower has a unique feature — a long, thin funnel leading to the nectar at its base. Only bees, which have very long tongues, can reach the sweet nectar. Other insects are shut out. It’s a strategy based on what this plant has “decided” not to do.

The beauty of this choice is that bees fly farther than other insects, stopping at more flowers and thus increasing the chances of successful pollination. In effect, the red clover has formed an exclusive alliance with bees that ensures that its pollen is distributed more widely than other plants, giving it a crucial competitive advantage.

This strategy is not without risk of course, no decision is. What if another plant produces a sweeter-tasting nectar and bees “switch brands”? What if the bees themselves are outmaneuvered and become extinct? Yet for the red clover this trade-off has captured a significant advantage that no other plant has been able to usurp.

Deciding what not to do

Just as in nature, human decisions are about creating favorable variations that confer competitive advantage.

Some years ago a friend of mine, Commander Noel Evans, retired from the British Royal Navy and bought a fruit farm in the Elgin Valley, a lush region known for its orchards, near Cape Town in South Africa.

It was planting time, but having spent his whole life at sea, Evans knew nothing about farming. So, he drove up and down the valley and asked his new neighbors for their advice on what he should plant: plums or peaches?  The majority agreed: “There has been a glut of peaches this year. You should plant plums.”

Evans assessed his three alternatives. He could plant plums as recommended by his neighbors; a mixture of plums and peaches to hedge his bet; or peaches only. His decided on the last.

With his neighbors all planting plums, Evans sought to corner what was sure to be an undersupplied market. Sure enough, when the trees matured, Evans was one of the few with a full crop of peaches. By deciding not to plant plums, he became one of the most successful farmers in the valley. His success was driven not by expertise in farming, but by skill in decision-making.

Deciding what not to do takes courage, particularly in business where it often means turning away from the apparent safety of the herd, and Evans had it in spades.

Steve Jobs provides another telling example. Nearly universally heralded for turning Apple around and setting it on the road to becoming the most valuable company in the world, Jobs has been hailed by commentators for his creativity, his aesthetic sensibilities, and his keen understanding of the customer. All no doubt played a role, but Walter Isaacson, in his wonderful biography of Jobs, stresses one strength above all others: Jobs’ ability to focus on very few things and exclude the rest.

Jobs would typically charge 15 teams with exploring new opportunities. Three months later each team would eagerly report its recommendations. Jobs would huddle briefly with his top team and deliver his verdict: “We will do these three things. The other twelve are off the table.” No back burners, no side shows; everyone’s energy would be devoted exclusively to those three things. Even today, Apple has a leaner portfolio than its competitors. It has steadfastly avoided the deadly trap of “all things to all people.”

The importance of priorities

An organization without clear priorities is like a ship without a rudder. But defining those priorities is not as simple as it sounds.

First we must define the outcome we seek, otherwise priorities have no meaning.

The crucial outcome in a competitive world is your winning proposition, the unique benefits you will offer your customers that give them a compelling reason to choose you. It is a statement that clarifies how your organization will capture competitive advantage in the marketplace. For Amazon, for example, the winning proposition for its online retail business is, “We make it easy for people to buy things by offering a wide range of products at great prices with fast delivery.”

Your priorities then define the crucial steps necessary to achieve that winning proposition.

Amazon has succeeded brilliantly by focusing the entire organization on its winning proposition and lining their priorities up behind it. Paramount among these priorities is an obsession with making the shopping experience easier and more enjoyable, even at the expense of short-term profits or the share price. In the words of Amazon CEO, Jeff Bezos, “Determine what your customers want and work backwards. If customers don’t want something, it’s gone, even if that means breaking down a once-powerful department.”

When it comes to setting priorities, it’s essential to remember the Pareto principle, more commonly known as the 80/20 rule. The rule tells us that there is an imbalance between inputs and outputs, that the majority of inputs have little effect while a small minority (the “vital few”) make a huge difference. Identifying and leveraging the vital few is essential for success.

That raises the question, how many priorities should there be? The common answer is between three and five. Research by psychologist Nelson Cowan suggests that the right number is four (a finding that appeals to reason given that four is the only number between three and five!), but the key is this: if you can’t remember them, you are in trouble.

The vital need for simplicity

The principle of decision-making as sacrifice serves a greater purpose — that of simplicity, for simplicity demands the ability to streamline and subtract. Albert Einstein was renowned for his ability to simplify complex ideas. He admonished, “Any intelligent fool can make things more complex. It takes a touch of genius — and a lot of courage — to move in the opposite direction.”

Complexity paralyzes organizations. Simplicity empowers them. A crucial role of leaders is to create simplicity in a world of increasing complexity. If we cannot do that we cannot succeed.

Marco Pierre White, a British chef who, at the age of 33, became the youngest person ever to receive three Michelin stars, ran a string of successful restaurants under this credo:

Complexity causes confusion. Confusion creates inconsistency. Inconsistency creates failure.

These same rules apply to all organizations, large and small.

Posted by Willie Pietersen at 12:03 PM | 0 Comments
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