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Why Organizations Don t Learn

2015-11-17 09:13:43

Francesca GinoBradley Staats

Virtually all leaders believe that to stay competitive, their enterprises must

learn and improve every day. But even companies revered for their dedication to

continuous learning find it difficult to always practice what they preach.

Consider Toyota: Continuous improvement is one of the pillars of its famed

business philosophy. After serious problems in late 2009 led Toyota to recall

more than 9 million vehicles worldwide, its leaders confessed that their quest

to become the world s largest automobile producer had compromised their

devotion to learning.

Why do companies struggle to become or remain learning organizations ? Through

research conducted over the past decade across a wide range of industries, we

have drawn this conclusion: Biases cause people to focus too much on success,

take action too quickly, try too hard to fit in, and depend too much on

experts. In this article we discuss how these deeply ingrained human tendencies

interfere with learning and how they can be countered.

Bias Toward Success

Leaders across organizations may say that learning comes from failure, but

their actions show a preoccupation with success. This focus is not surprising,

but it is often excessive and impedes learning by raising four challenges.

Challenge #1: Fear of failure.

Failure can trigger a torrent of painful emotions hurt, anger, shame, even

depression. As a result, most of us try to avoid mistakes; when they do happen,

we try to sweep them under the rug. This natural tendency is heightened in

companies whose leaders have, often unconsciously, institutionalized a fear of

failure. They structure projects so that no time or money is available for

experimentation, and they award bonuses and promotions to those who deliver

according to plan. But organizations don t develop new capabilities or take

appropriate risks unless managers tolerate failure and insist that it be openly

discussed.

Challenge #2: A fixed mindset.

The psychologist Carol Dweck identified two basic mindsets with which people

approach their lives: fixed and growth. People who have a fixed mindset

believe that intelligence and talents are largely a matter of genetics; you

either have them or you don t. They aim to appear smart at all costs and see

failure as something to be avoided, fearing it will make them seem incompetent.

A fixed mindset limits the ability to learn because it makes individuals focus

too much on performing well.

By contrast, people who have a growth mindset seek challenges and learning

opportunities. They believe that no matter how good you are, you can always get

better through effort and practice. They don t see failure as a sign of

inadequacy and are happy to take risks.

Challenge #3: Overreliance on past performance.

When making hiring and promotion decisions, leaders often put too much emphasis

on performance and not enough on the potential to learn. Over time, Egon

Zehnder, a global executive search firm, had developed a sophisticated means of

evaluating candidates that considered not only their past achievements but also

their competencies. However, it found that in numerous instances, candidates

who looked equally good on paper performed differently on the job. Why?

A partner at the firm, Karena Strella, and her team believed the answer was

individuals potential for improvement. After a two-year project that drew on

academic research and interviews, they identified four elements that make up

potential: curiosity, insight, engagement, and determination. They developed

interview questions to get at these elements, along with psychometric measures

applied via questionnaires. This new model now plays a key role in the search

firm s assessments of job candidates. Egon Zehnder has found that

high-potential candidates perform better than their peers with less potential,

thanks to their openness to acquiring new skills and their thirst for learning.

Challenge #4: The attribution bias.

It is common for people to ascribe their successes to hard work, brilliance,

and skill rather than luck; however, they blame their failures on bad fortune.

This phenomenon, known as the attribution bias, hinders learning (see Why

Leaders Don t Learn from Success, HBR, April 2011). In fact, unless people

recognize that failure resulted from their own actions, they do not learn from

their mistakes. In a study we conducted with Chris Myers, we asked participants

to work on two different decision-making tasks spaced one week apart. Each task

had a correct solution, but only a few people were able to identify it. We

found that participants who took responsibility for doing poorly on the first

activity were almost three times as likely to succeed on the second one. They

learned from their failure and made better decisions as a result.

Leaders can use the following methods to encourage others to find the silver

lining in failures, adopt a growth mindset, focus on potential, and overcome

the attribution bias.

Destigmatize failure.

Leaders must constantly emphasize that mistakes are learning opportunities

rather than cause for embarrassment or punishment, and they must act in ways

that reinforce that message. Ashley Good, the founder of Fail Forward, a

Toronto-based consulting firm that helps companies learn how to benefit from

blunders, often begins by asking a client s employees questions such as Do you

take risks in the course of your work? and Is learning from failure formally

supported? The answers help leaders understand whether their company has a

culture in which failure is openly discussed and accepted, and what steps they

should take if not.

Embrace and teach a growth mindset.

Leaders need to challenge their own thinking about whether people can improve.

Research by Peter Heslin and colleagues found that managers with a growth

mindset notice improvement in their employees, while those with a fixed mindset

do not because they are stuck in their initial impressions.

When people are taught a growth mindset, they become more aware of

opportunities for self-improvement, more willing to embrace challenges, and

more likely to persist when they confront obstacles. So tell employees that you

believe they can expand their talents if they apply themselves. Reinforce that

message by educating them about the research on growth mindsets and relaying

stories about high-performing employees who were dedicated to their jobs and

developed skills over time. Finally, in formal and informal performance

reviews, praise their efforts to learn.

Consider potential when hiring and promoting.

Doing this and making it clear to employees that it is being done will help

counter managers incorrect first impressions, along with their natural

inclination to hire and promote people like themselves. It will also encourage

employees to try new things and seek support in developing their competencies.

Considering someone s potential to improve will almost certainly surface

candidates who otherwise would be overlooked for jobs and promotions. When Egon

Zehnder began including potential in assessing possible contenders for

managerial positions, the resulting pools of candidates were more diverse in

terms of race and gender.

Use a data-driven approach to identify what caused success or failure.

Most leaders know that data is critical to uncovering the true causes of

successful performance, but they don t always insist on collecting and

analyzing the necessary information. One exception is Ed Catmull, the president

of Pixar and Disney Animation Studios. He is a big believer in conducting

data-based postmortems of projects including successful ones and stresses that

even creative endeavors like moviemaking involve activities and deliverables

that can be measured. Data can show things in a neutral way, which can

stimulate discussion and challenge assumptions arising from personal

impressions, he says (see How Pixar Fosters Collective Creativity, HBR,

September 2008).

People who are taught a growth mindset see more opportunities for improvement.

Of course, collecting the data is one thing; accepting what the data tells us

is another. We have both worked with all too many organizations where

data-driven decision making is code for contorting the facts until they reveal

whatever senior management expects to see. It s the role of leaders to ensure

that they and other executives are sensitive to this tendency and don t succumb

to it.

Bias Toward Action

How do you usually respond when you are faced with a problem in your

organization? If you re like most managers, you choose to take some kind of

action. You work harder, put in even longer hours, and place added stress on

yourself. You re more comfortable doing something, even if it is

counterproductive and doing nothing is the best course of action.

Consider professional soccer goalies and their strategies for defending against

penalty kicks. According to a study by Michael Bar-Eli and colleagues, those

who stay in the center of the goal, rather than leaping to the right or left,

perform the best: They have a 33.3% chance of stopping the ball. Nonetheless,

goalies stay in the center only 6.3% of the time. Why? Because it looks and

feels better to have missed the ball by diving, even if it turns out to have

been in the wrong direction, than to have stood still and watched the ball sail

by.

The same aversion to inaction holds true in the business world. When we

surveyed participants in our executive education classes, we found that

managers feel more productive executing tasks than planning them. Especially

when under time pressure, they perceive planning to be wasted effort. This bias

toward action is detrimental to improvement for two reasons.

Challenge #1: Exhaustion.

Not surprisingly, exhausted workers are too tired to learn new things or apply

what they already know. For example, research conducted by one of us (Brad)

with Hengchen Dai, Katherine Milkman, and David Hofmann found that hand-washing

compliance by hospital personnel widely known to be critical for preventing

hospital-acquired infections fell nine percentage points, on average, over a

typical 12-hour shift. The drop was even greater when health-care workers had a

particularly busy shift. However, compliance increased when the workers had

more time off between shifts.

Challenge #2: Lack of reflection.

Being always on doesn t give workers time to reflect on what they did well

and what they did wrong.

Research that we conducted at a tech-support call center of Wipro, a global IT,

consulting, and outsourcing company based in India, illustrates this. We

studied employees during their initial weeks of training. All went through the

same technical training, with a key difference. On the sixth through the 16th

days of the program, some workers spent the last 15 minutes of each day

reflecting on and writing about the lessons they had learned that day. The

others, the control group, just kept working for another 15 minutes. On the

final training test at the end of one month, workers who had been given time to

reflect performed more than 20% better, on average, than those in the control

group. Several lab studies we conducted on college students and employed

individuals in a variety of organizations produced similar results.

The following antidotes to the bias for action may sound obvious, but they are

infrequently applied.

Build breaks into the schedule.

Make sure workers take sufficient time to rejuvenate and reflect during the

workday and between shifts. In many organizations, hourly workers are entitled

or actually required to take periodic breaks.

However, our research suggests that companies should provide even more downtime

than they do. At Morning Star, a vertically integrated tomato-processing

company, the workers in the fields not only get mandated breaks, but they also

sometimes have to suspend their work for periods that can last nearly an hour,

as a result of glitches in other parts of the system (such as a tomato trailer

s failure to show up). Company data that we examined revealed that workers were

actually more productive over a 12-hour shift if their day included such

unexpected breaks. The message: Leaders should conduct experiments to determine

the optimal number and length of breaks.

For many management and knowledge-worker positions, of course, there are no

mandatory breaks. Individuals have to decide for themselves whether to pause

and recharge. Virtually everyone in such jobs recognizes the benefits of

watercooler conversations for learning and exchanging ideas. People also agree

that it s important to get enough sleep and take vacations. Yet many of us don

t practice what we preach. A recent survey conducted by Staples drives this

point home. When Staples asked more than 200 office workers in the United

States and Canada about their work habits, more than a quarter reported that

they took no break other than lunch. The vast majority of those cited guilt as

the main reason. Yet 90% of the bosses surveyed said that they encouraged

breaks, and 86% of employees agreed that brief respites from work make them

more productive.

Make sure workers take time to rejuvenate and reflect.

So urge employees to take breaks and vacations, and set an example. Research

shows that the restorative benefits are greatest when you get out of your

office or go for a walk. Don t have lunch at your desk then; head outside for a

stroll instead, especially in a park. It will put you in a better mood and

reinvigorate you, allowing you to accomplish and learn more.

Take time to just think.

In the same way that you block out time on your calendar to plan an initiative

or a presentation, you should block out a short period each day even just 20 to

30 minutes to either plan your agenda (in the early morning) or think about how

the day went (in the late afternoon). If time is really scarce, try to reflect

on your way to or from work. A study of commuters in the United Kingdom that we

conducted with Julia Lee and Jon Jachimowicz showed that those who were

encouraged (through text messages) to plan for their upcoming day during their

journeys were happier, less burned-out, and more productive than people in a

control group.

Leaders can help by thoughtfully structuring the workweek for instance, by

insisting that no meetings be held on Fridays, as Tommy Hilfiger and other

firms have done.

Encourage reflection after doing.

Through reflection, we can better understand the actions we re considering and

their likelihood of keeping us productive. Don t avoid thinking by being busy,

a wise mentor once told one of us.

Some organizations are finding ways to incorporate reflection into their

regular activities. One powerful approach treats reflection as a post hoc

analytical tool for understanding the drivers of success and failure. The U.S.

Army is well known for its after-action reviews (AARs). To ensure that a

rigorous process is followed, AARs are run by a facilitator rather than the

project s leader. An effective AAR involves comparing what actually happened

with what should or could have happened and then carefully diagnosing the gap,

be it positive or negative.

Whether reflecting with a group or by yourself, keep a few things in mind.

First, remember that the goal is to learn. That means being honest with

yourself something an outside facilitator can help ensure in group settings.

Second, try to get a full and accurate picture of what occurred. That requires

considering multiple perspectives (because we all have incomplete and often

biased opinions) and using data. Third, work to get to the root of why things

played out the way they did. Finally, think about how the work could be

improved. Beyond the obvious fixes to the existing process, take time to

imagine how you would do things completely differently if you could.

Bias Toward Fitting In

When we join an organization, it s natural to want to fit in. But this tendency

leads to two challenges to learning.

Challenge #1: Believing we need to conform.

Early in life, we realize that there are tangible benefits to be gained from

following social and organizational norms and rules. As a result, we make a

significant effort to learn and adhere to written and unwritten codes of

behavior at work. But here s the catch: Doing so limits what we bring to the

organization. As Steve Jobs famously said, It doesn t make sense to hire smart

people and tell them what to do; we hire smart people so they can tell us what

to do. In fact, being unafraid to stand out can actually garner respect,

despite beliefs to the contrary. Research conducted by one of us (Francesca)

with Silvia Bellezza and Anat Keinan found that nonconforming behaviors (such

as dressing down at a business meeting or using one s own PowerPoint theme

rather than the organization s) raise others estimation of a person s

competence and status.

Challenge #2: Failure to use one s strengths.

When employees conform to what they think the organization wants, they are less

likely to be themselves and to draw on their strengths. A Gallup survey of

thousands of people across the globe shows that an affirmative answer to the

question At work, do you have an opportunity to do what you do best every day?

is a significant predictor of engagement and high operational performance.

When people feel free to stand apart from the crowd, they can exercise their

signature strengths (such as curiosity, love for learning, and perseverance),

identify opportunities for improvement, and suggest ways to exploit them. But

all too often, individuals are afraid of rocking the boat.

Leaders can use several methods to combat the bias toward fitting in.

Encourage people to cultivate their strengths.

To motivate and support employees, some companies allow them to spend a certain

portion of their time doing work of their own choosing. Although this is a

worthwhile practice, firms should strive to help individuals apply their

strengths every day as a normal part of their jobs.

Following workplace norms may limit what we bring to an organization.

Toward that end, managers should help individuals identify and develop their

fortes and not just by discussing them in annual performance reviews. One

effective method is to give someone an appreciation jolt in the form of

positive feedback. It s particularly potent when friends, family, mentors, and

coworkers share stories about how the person excels. These stories, our

research shows, trigger positive emotions, cause us to realize the impact that

we have on others, and make us more likely to continue capitalizing on our

signature strengths rather than just trying to fit in.

This approach helped a major global consulting company address a problem: Its

employees tended to view their jobs as money-for-labor contracts and often

would do the bare minimum instead of seeking to create win-win outcomes for

themselves and the firm. We found that the jolts delivered during the

onboarding, or orientation, process gave new hires a more personal, less

transactional relationship with the organization and correlated with reduced

burnout, less turnover a year after the intervention, and improved performance.

Earlier work that we did at an Indian call center generated similar results: A

focus on individuals and their strengths during the onboarding process was

associated with significantly lower turnover and higher customer satisfaction.

To understand whether their organization is helping people identify and

leverage their strengths, managers should ask themselves the following

questions: Do I know what my employees talents and passions are? Am I talking

to them about what they do well and where they can improve? Do our goals and

objectives include making maximum use of employees strengths?

Yuko Shimizu

Yuko Shimizu

Increase awareness and engage workers.

If people don t see an issue, you can t expect them to speak up about it. Lowe

s, the home-improvement retail chain, prides itself on its commitment to worker

safety, and most employees report in anonymous surveys that they feel safe on

the job. Yet for Hank Jones, the company s director of safety and hazardous

materials, even one safety lapse is too many. His team takes a multipronged

approach to get employees to speak up about potential safety hazards in stores.

During meetings with workers throughout the organization, team members increase

awareness of specific problems by asking questions such as Do you know how

many people we injured last year, and do you know where those injuries

occurred? The company has also started publishing safety outcome data in its

annual social responsibility report.

In addition, Jones changed the way managers run safety meetings: Instead of

reading the latest safety policies or rules, they ask questions or pose issues

and give the group time to tackle them. Meetings become less about passively

learning material and more about actively improving processes.

Model good behavior.

During store walks, Lowe s executives look for opportunities to highlight the

importance of safety and get to the root cause of unsafe behavior, including

their own. When one senior executive stepped onto a pallet a clear hazard a

store associate asked him to get down. The executive complied, hugged the

associate, and thanked him in front of others, sending the message that the

organization values employees who speak up.

Bias Toward Experts

Beginning in the early 20th century, the scientific management movement

introduced a rigorous approach to examining how organizations operate. In the

process, though, it solidified the notion that experts are the best source of

ideas for improvement. Today companies continue to call in consultants,

industrial engineers, Six Sigma teams, and the like when improvement is needed.

The bias toward experts creates two challenges.

Challenge #1: An overly narrow view of expertise.

Organizations tend to define expert too narrowly, relying on indicators such

as titles, degrees, and years of experience. However, experience is a

multidimensional construct. Different types of experience including time spent

on the front line, with a customer or working with particular people contribute

to understanding a problem in detail and creating a solution.

A bias toward experts can also lead people to misunderstand the potential

drawbacks that come with increased time and practice in the job. Though

experience improves efficiency and effectiveness, it can also make people more

resistant to change and more likely to dismiss information that conflicts with

their views.

Challenge #2: Inadequate frontline involvement.

Frontline employees the people directly involved in creating, selling,

delivering, and servicing offerings and interacting with customers are

frequently in the best position to spot and solve problems. Too often, though,

they aren t empowered to do so. Even in organizations that espouse lean

thinking a process-improvement approach that is intended to involve all

employees standard work practices seldom change, and only expert

recommendations are implemented.

The following tactics can help organizations overcome the tendency to turn to

experts.

Encourage workers to own problems that affect them.

Make sure that your organization is adhering to the principle that the person

who experiences a problem should fix it when and where it occurs. This prevents

workers from relying too heavily on experts and helps them avoid making the

same mistakes again. Tackling the problem immediately, when the relevant

information is still fresh, increases the chances that it will be successfully

resolved.

For example, at Morning Star s tomato-processing facilities, individuals are

expected not only to meet specific targets for themselves but also to look for

ways to improve their work and the overall performance of the operation. When

something goes awry on a worker s watch, she is responsible for fixing it. That

might involve enlisting others to help or even going out to purchase new

equipment (although there are understood limits to what workers can spend

without authorization). The company encourages problem-solving behavior not

only through its culture but also through its compensation practices: Pay is

based both on meeting goals and on improving over time.

Give workers different kinds of experience.

In our research at a Japanese bank, we looked at how data-entry workers

performed when they were doing the same task repeatedly ( specialized

experience ) and when they were switching between different tasks ( varied

experience ). We found that over the course of a single day, a specialized

approach was fastest. But over time, switching activities across days promoted

learning and kept workers more engaged. Both specialization and variety were

important to learning.

In addition, giving workers new types of experience and greater depth within

each of them is valuable. One of us (Brad), along with Jonathan Clark and

Robert Huckman, studied the operational performance of radiologists who read

digital images (X-rays or CT scans) remotely for hospitals. Although a doctor s

total experience mattered, another important predictor of performance over time

was how often that individual worked with a given hospital. As the radiologist

gained experience with a particular hospital, he could respond more quickly to

its requests and help it improve its processes.

Yet another factor that affects improvement is team members familiarity with

one another. In studies across settings including software development

companies, consulting firms, health care organizations, and laboratories we ve

found that working repeatedly with the same people can enhance coordination,

optimize the use of valuable expertise residing within a group, speed the

response to new circumstances, and improve how people combine their knowledge

to solve problems effectively. In light of research showing that software teams

were more likely to deliver projects on budget and with higher quality when

their members had prior experience working together than when they did not,

Wipro began staffing its projects accordingly.

Given such findings, leaders should strive to deepen their understanding of the

kinds of industry, customer, and team experiences that affect their operating

environments. They should then use this information to develop employees, track

their experience portfolios, and deploy them strategically. Companies may have

to change their enterprise systems, analytics capabilities, and staffing

models. But the investment will help them build a richer understanding of how

to improve learning and performance over time.

Empower employees to use their experience.

Organizations should aggressively seek to identify and remove barriers that

prevent individuals from using their expertise. Solving the customer s problems

in innovative, value-creating ways not navigating organizational impediments

should be the challenging part of one s job. Ethan Bernstein found that

employees at a leading global manufacturer were working less productively when

managers were watching them (see The Transparency Trap, HBR, October 2014).

The company claimed to be in the lean camp, but its practices suggested

otherwise: For example, workers were not sharing their ideas for improving

processes with others. Bernstein s innovative solution was to put curtains

around a factory production line so that employees could work in privacy. The

result: Productivity increased significantly. Leaders should identify ways they

can truly empower employees whether by giving them more privacy, publicly

acknowledging their contributions, or providing monetary rewards.

It may be cheaper and easier in the short run to ignore failures, schedule work

so that there s no time for reflection, require compliance with organizational

norms, and turn to experts for quick solutions. But these short-term approaches

will limit the organization s ability to learn. If leaders institute ways to

counter the four biases we have identified, they will unleash the power of

learning throughout their operations. Only then will their companies truly

improve continuously.

A version of this article appeared in the November 2015 issue (pp.110 118) of

Harvard Business Review.

Francesca Gino is a professor at Harvard Business School, a faculty affiliate

of the Behavioral Insights Group at Harvard Kennedy School, and the author of

Sidetracked: Why Our Decisions Get Derailed, and How We Can Stick to the Plan

(Harvard Business Review Press, 2013). She cochairs an HBS executive education

program on applying behavioral economics to organizational problems. Twitter:

@francescagino.

Bradley Staats is an associate professor at the University of North Carolina s

Kenan-Flagler Business School. Twitter: @brstaats.

The Neural Implications of Different Mindsets

What happens inside our brains when we make mistakes? That depends on our ideas

about learning and intelligence.

Individuals with a growth mindset, who believe that intelligence and talents

can be enhanced through effort, regard mistakes as opportunities to learn and

improve. By contrast, individuals with a fixed mindset, who believe that

intelligence and talents are innate and unchangeable, think mistakes signal a

lack of ability.

Jason S. Moser and his colleagues at Michigan State University examined the

neural mechanisms underlying these differing reactions to mistakes. The picture

below illustrates neural activity in people performing a task and making

errors. Those with a fixed mindset display considerably less brain activity

than those with a growth mindset, who actively process errors to learn from

them.

Blinded by Expertise

To examine how experience can increase resistance to change, we looked at the

ways cardiologists and investors with different levels of experience responded

to bad news that required some professional judgment.

One standard cardiology procedure is placing coronary stents in constricted

arteries to maintain proper blood flow. In the early 2000s a new kind of stent,

with a drug-eluting coating, was released to the market. Because reimbursement

rates were comparable for the new and the traditional devices, cardiologists

could primarily consider the medical merits when deciding which one to use.

In reaction to evidence that the drug-eluting stents might be dangerous in

certain situations, an advisory panel of the U.S. Food and Drug Administration

recommended in late 2006 that they not be used in off-label applications. But

doctors were not obligated to follow this advice. Our empirical analysis of

data from before and after this shock revealed that experienced cardiologists

were less likely than newer doctors to respond to the recommendation by

discontinuing their overall use of drug-eluting stents.

Since the data was unclear as to whether drug-eluting or non-drug-eluting

stents were better for patient outcomes, we conducted follow-up laboratory

studies with people making investment decisions and receiving unequivocally

negative news. We found the same results: Decision makers who had significant

expertise weren t as willing to heed the negative information as their less

experienced peers were. The message: If you are not careful, your experience

may hinder your learning.