Life or Death: Building a Corporate Learning Culture

Witness the number of companies undergoing a wrenching transformation (read “potential death”) in today’s economy: the US Auto industry (GM, Ford, Chrysler) , the US Newspaper industry (LA Times, NY Times), and many elements of the financial services industry.

A recent global survey of 1100 business leaders by Boston Consulting Group found that one of the top three things keeping CEOs awake at night was their ability to “build a learning organization.” Our research shows clearly that organizations can be broadly grouped into two types: those that “learn” and those that “don’t.” Those that “learn” have an uncanny ability to evolve: they are what we call “enduring” companies, and they find ways to continuously change their products and services as markets change.

Examples of companies that “learn” include UPS – which started as a horse and buggy delivery company and is now a global logistics company operating in every mode of transportation. Another is Caterpillar, a company which has evolved its products from steam-driven tractors to a broad array of building equipment and services around the world.

Our High Impact Learning Organization® research demonstrates that companies which have a “learning culture” have much greater financial returns over a 10-20 year period – in fact the HILO 80, the 80 top companies in our 780 company research group, deliver more than 10% greater earnings growth and over 15% revenue growth over a 10 year period than the average in their industry.

Building a Learning Organization is a Matter of Life or Death

Today, with the economy clearly at a low point, an organization’s ability to learn is a matter of life or death.

So what is a “learning culture” and how do you build one? Well there When we look at companies which endure and prosper over long periods of time, we see that they have an uncanny ability to innovate, reinvent themselves, and adapt to change. Our research and upcoming Learning Culture assessment discovered that there are nine independent pillars which drive an adaptable learning organization:

  1. Executive Culture. Do line executives truly support and reinforce the business processes and investments needed to support innovation and learning? Do they take a personal interest in employee and leadership development? Do they regularly move business leaders throughout the company to gain new perspectives? Do they maintain funding for learning and innovation initiatives? Do they drive and manage change? Do they take risks and encourage and support new products?

  2. Managerial Culture. Are line managers incented, coached, and directed to build capabilities in their teams? Are they paid to develop people and innovate? Are they empowered and motivated to be coaches and not just managers? Are their a variety of support and development programs for managers to provide feedback and development for their people? Are they rewarded for experimentation and innovation? Are they open to “bad news?”

  3. Customer Culture. How close are product, service, and support teams to customer needs? Are there vigorous and regular processes for customer input? Do customers have many ways to interact with the company and provide input? Is customer input considered sacred and valuable? Are customer facing roles given high priority and respect in the organization? Is there a free-flowing set of customer needs available to everyone who creates or produces a product or service?

  4. Operational Culture and Process. How are line organizations incented and organized? Are employees provided with the opportunity to change processes and products when necessary? Are their programs and systems to monitor and improve quality and customer service? Are customers intimately involved in process and product development? Are their processes in place to learn from mistakes or does the team “shoot the messenger?”

  5. HR, L&D, and Leadership Development. Does the HR and L&D organization have the funding, mandate, and executive support to build organizational and leadership development programs? Do they support knowledge sharing programs? What stage of maturity is the company’s leadership development program? Are their regular opinion surveys and other forms of feedback from employees and customers which drive organizational change? Is innovation rewarded and incented?

  6. Financial Support. How is employee development, knowledge management, innovation, and training funded? Does each business unit or operational unit have to find money in their own budget to accomplish such tasks? Is there budget for skunk works or new ideas? Is there a corporate funded group which promotes innovative development teams and programs? Are such programs monitored and supported year after year or do they get cut during bad times? Does the organization benchmark its spending against its peers?

  7. Career Planning and Employee Mobility. Does the company have a plan, model, or process for career planning? Is it easy or possible for someone to change roles or move into a new position regularly? When a reorganization takes place, is there a way for people to move from team to team without penalty? Are job rotation and developmental assignments regularly offered? How well do managers understand and participate in the career planning process?

  8. Employee Development and Alignment. How are employees developed and measured? Do they have an incentive to build new skills, learn new things, and get involved in new projects? Is development considered a valuable part of an employee’s career? Is there a widespread goal development process and how does it accomodate the time needed to build new processes and systems?

  9. Technology Investment. Is there an ongoing investment in technology infrastructure to support learning, knowledge sharing, employee connectivity, social networking, e-learning, content management, and other tools.

These nine pillars are not easy to build. In fact, they often take years to build – but we find that high performing, enduring companies do each of these things well. In the coming months we will be introducing a new set of research and assessment tools to help organizations understand their ability to “learn.”

While many of these things seem “soft” – in fact they are “hard.” They demand a focus from business leaders, HR, IT, and line management. They touch the way a company is managed and the way the company works. Does this matter today, in the middle of a recession? You bet it does: if your company wants to survive during a slowdown, you must be able to adapt quickly and effectively.

Watch for more on this topic in coming months – and a major launch of our research in this area at IMPACT 2009®.