Make Learning part of your Business Strategy

One of the important lessons we have learned from our High Impact Learning Organization® research is the simple but profound fact that learning is part of a corporate business strategy.   While many HR and business leaders still believe that “training” is department which improves workforce productivity and should be treated as an expense item, our research clearly finds otherwise.  Corporate learning is a critical part of any enduring business strategy, similar to finance, marketing, sales, and manufacturing.

Consider the following:

Change is the biggest challenge organizations face: There are five distinct phases of any business – startup, rapid growth, maturity, decline, and rebirth (or death).

Every company we talk with is going through this cycle – whether its Apple with the i-Pod, Starbucks in Coffee, AIG with its insurance business, Fidelity in 401k, or Target in retail.  The lifecycle takes place across its entire organization or across its individual products and services.  (We will be talking much more about the way talent management strategies vary across these phases in upcoming research.)

The reason for this cycle is the nature of competitive markets.  Whenever a company finds a profitable market, others eventually find new ways to serve it.   This process creates competition and buyers become more savvy.  Prices go down, and the leaders must now find a way to climb further “up the value chain.”  Today we see this happening to Starbucks, for example.  This process of continual evolution is not something you do occasionally, in today’s rapidly changing markets you have to do it all the time!

Caterpillar, one of our best practice research companies, is a good example here.  The company has evolved from steam tractors into a highly diversified global manufacturer of engines, machines, tractors, equipment,  services, and apparel.  During its  100+ year history Caterpillar’s people have had to “learn” a lot – and the company views learning as a strategic part of its business planning and execution process.

We call the companies which succeed over these cycles “enduring organizations,” and they are the focus of a major research effort we have been working on this year.

If you accept the fact that change is one of the biggest issues a business faces, then the ability to continuously adapt to change (organizational and individual learning) is one of the most important parts of a long term business strategy.   Unfortunately, many organizations don’t internalize this.

For example:  One of the most frequent questions we discuss with L&D leaders is the question of how to measure the value of training.  They ask this question because their leaders (VPs of HR or business leaders) question the investment in L&D and want to do a “zero based budget” each year.

The critical issue here is the top finding in our High Impact Learning Organization research:  the biggest driver of impact from learning investments comes from the development of an organizational “learning culture.”

A learning culture has many elements, including the organization’s:

• Ability to face up to its mistakes
• Ability to use errors as a learning process, not a punishment process
• Ability to sustain workforce development through bad times and good
• Ability to break things that seem to work and improve them before they really break
• Ability to coach people (the #1 high impact talent process)
• Ability to rotate people into development roles at all levels.

These “cultural” processes in companies go far beyond the L&D organization – they infiltrate leadership, management, operations, rewards and recognition programs, and values.  (The top 50 elements of such a learning culture are part of our HILO research.)

We are just about to announce our HILO Top 80®, the 80 Leading organizations in our High Impact Learning Organization research.  When you look at this list, you will see many iconic brand names – but you will also see many small and mid-sized companies which are highly profitable, highly successful, and owners of their markets.  These organizations realize that learning is part of a business strategy.

Learning vs. Execution Culture

Many organizations call us to ask for help in “measuring training” or “reorganizing L&D” or “building a blended or collaborative learning strategy.”  These are critically important parts of executing the learning strategy of an organization.  But the learning culture goes further – it means that you must balance learning with execution in every single business process.  And we must be careful to balance the focus between “learning” and “execution.”  Many companies think they compete against each other, while in reality they are totally aligned.

Consider the following.  Are the two columns competitive or complimentary?

Figure 2:  Execution Culture vs. Learning Culture

One may argue that “we don’t have time for learning,” we have a job to do.  Well that is true.  But of course if you are not “learning” while you “execute,” you are likely to “execute” yourself into oblivion.  Learning and Execution go together.

Examples of Learning as a Business Strategy

Consider Toyota.  How can Toyota manage to be first-to-market in hybrid automobiles, yet still continously compete against GM in trucks, mid-sized cars, and other existing markets.  Are the engineers at Toyota smarter than the engineers at GM?

Absolutely not.  I have met several GM executives and they are among the smartest and most focused leaders of any business.  But somehow they have not built the same culture of continuous learning which Toyota has.  Toyota has many well documented processes which build and reinforce this culture of learning:  quality programs, Kaizan, career development, experimentation, and empowering line workers to identify problems and fix them.

Consider GM.  GM, for all its challenges, is an amazing company.  As they fight their high labor and medical costs and work to trim products, they are instituting many innovative new learning programs – and I sense that their learning culture is undergoing tremendous change.

For example, GM has recently created a program called its “JumpStart” program for younger employees.  These GenX and GenY engineers and marketeers get together and have created career paths and development strategies in conjunction with the top 72 leaders at GM.  Recently the JumpStart team created a “car of the future” and went out and purchased a wide variety of electronic devices, music players, cell phones, and PC’s to demonstrate the opportunity for GM leaders to further innovate on user design and consumer electronics integration.  These initiatives are being thrust upon the “old guard” at GM to shake up complacent thinking and encourage innovation in products like the Volt, GM’s new electric vehicle.

Consider Bank of New York/Mellon.  In this organization, as in many other strong learning organizations, there is an assigned organizational effectiveness consultant located in each major business area.  This individual monitors and evaluates all work processes to look for opportunities to measure job effectiveness, find errors, and implement new opportunities for learning and performance improvement.  In effect, this role is a “learning culture” manager.

Consider EMC, one of the most successful high technology companies ever founded.  EMC sells a wide variety of disk storage, enterprise software, and IT services.  EMC has a business manager role entitled “Director of Business Performance” who serves as the performance consulting manager in each and every major business unit.  This person reports to the corporate university structure, but their job is to help the business unit implement continuous learning in all aspects of the business — including identifying processes with errors and flaws.

Learning Culture means Honestly Identifying Errors

Once an organization considers learning part of the business strategy, they look at “execution” differently.  They rigorously measure performance, constantly looking for errors and variances, and reward and incent managers and employees to fix errors.  They empower line workers to fix things immediately, and they provide a wide variety of formal and informal learning solutions at all levels.

Our research identifies the top 50 elements of a strong learning culture, and you find that every one of these elements is “good business.”  If you are an HR or L&D leader, you can promote and spearhead this philosophy through your programs and organization and approach.  If you are a line manager or leader, you can think about how “learnign and execution” are both different sides of the same coin, not necessarily in conflict with each other.

More to come on this critically important topic…