We’ve been bench-marking the Japanese, particularly Toyota. Their capabilities are tremendous; and yet, on a technological basis, there’s no difference. Our engineers are as good if not better. The difference is that they’ve developed a different process of communication and behavior — how they think, vision, and interconnect. Once you get the behavior right, you can take the engineering tools and apply them more effectively.

At Ford, the Lincoln Continental team has been trying to do something dramatically different with product development. The program consists of a cross-functional team of approximately 200-300 engineers, planners, manufacturing and finance people, etc. We’re talking about a major program — the responsibilities are very heavy, and the expectations are very high. A core team of six to eight people decided to apply systems thinking and the discipline of mental models to help us think differently about problem articulation — about how we create our own problems and how we can resolve them. So we began to have meetings with the MIT Organizational Learning Center to put together a project. Daniel Kim from the Organizational Learning Center became our facilitator, teacher, and mentor, and with a cross functional group of managers on our team, we began our journey (see “Pilot Project Plan”).

Importance of Changing Behavior

Keep in mind that many people at Ford are engineers. We were taught in the Cartesian/Newtonian paradigm — nonlinear systems thinking is not in our vocabulary. Our language is one of certainty, prediction, and results. Complexity is to be eliminated; the unknown is unacceptable.

In the 1980s going into 1990, I was responsible for several programs that were very successful. But we had huge armies of engineers and manufacturing people to deliver those programs, and every time we went into the implementation of a program, we were in trouble. The prototypes were late, we had too many engineering changes, there was confusion on the assumptions. We were missing our objectives, we were missing timing, and we had to allocate incredible resources to recover. We recognized that it just wasn’t the way to manage a program, so we began to look for better ways.

Through our work with MIT, we’re beginning to realize that certainty is not possible. The world is more complex than it used to be. Competition forces us to realize that some people do things better than we do, and the reason they do things better is not because they have more technical knowledge, but because they have better behavior.

Organizational and Mental Barriers

Our organization is not any different from most product development organizations in North America. They tend to be very control-oriented, risk-averse, authoritarian, and hierarchical. There’s a tendency for line management to walk into a situation and think they have the answer. They’re very hesitant to admit that they don’t know. To turn that around and to get people talking to each other and thinking together — developing shared mental models — is very difficult.

In most organizations there’s a tendency to advocate individual positions rather than inquire into other people’s thinking, which creates barriers to real communication. We wanted to eliminate the barriers we had created in our own minds about how we should communicate and what our belief systems are about one another. To help, we used a tool called the Ladder of Inference (see “Ladder of Inference” diagram). It’s very simple. When you have a conversation, or if you’re articulating what you think is a problem or issue, the ladder gives you a way of questioning at what level of thinking are you discussing those issues. Is it at the level of beliefs, inferences, conclusions, cultural meaning or directly observable data We found most of our discussions were somewhere up at the level of beliefs.

For example, we had some serious arguments with our finance office regarding what we wanted this car to be. The finance office wanted to achieve certain financial objectives, and we wanted to achieve certain product objectives. In the midst of an argument, one of the core team members said, “You want a Lexus at an Escort cost, that’s what you want! That’s an oxymoron.” A heated debate ensued, but there was insight when we suddenly realized we were talking at a belief system: as a finance person, my job is to control you and get certain financial results; as an engineer, my job is to get a product that’s competitive, and I need to get the kind of costs into that car to make it competitive!

In retrospect, this seems very simple. But at the time, we were trapped by our own vision of what our jobs were. Instead of thinking of what we wanted the car to be, we were thinking about our positions—my job is to be the controller, my job is to be the engineer, my job is to build the car. And we couldn’t communicate because we were operating at the level of beliefs.

In addition to the Ladder of Inference, we also used systems archetypes such as “Fixes that Fail,” “Shifting the Burden,” and “Tragedy of the Commons” to see our product development process more systemically (see “Tragedy of the Commons” for a systems archetype example). We struggled with them, but as a result of our work with archetypes, we were able to identify the leverage in managing change on our program. And because we’re able to manage change more effectively (and earlier in the program), we will save millions of dollars in tooling.

The learning Lab

We, the management group, needed to go through literally seven to eight months of working together to become a cohesive core group, before we could think about how to intervene in the rest of the organization. Throughout the project, the line managers were responsible for learning and applying the tools to our own issues. The MIT people assisted us, providing the knowledge and the tools, but we were the ones who had to conduct our own interviews, analyze our own data, and learn to see and think differently. We changed as a result. We began to realize that the role of manager is not to boss and to direct, but to also become a teacher, a facilitator, and a coach.

We put together a two-day learning lab in order to share what we had learned with some of the other members of the Continental team (see “Learning Laboratories: Practicing Between Performances,” October 1992 for a typical learning lab design). I was a co-facilitator with Dan Kim because I was being trained to ultimately train others.

We started with a short introduction to tell them what this was all about and how we got where we did. We then went through some exercises on the way we think and the way we create our current reality, but we were very careful not to abstract this too much. We talked a little bit about deconstructing problems; how problems are very frequently created by the way we look at them. We also introduced them to the five disciplines of the learning organization—shared vision, personal mastery, mental models, team learning, and systems thinking (from The Fifth Discipline: The Art and Practice of the Learning Organization, by Peter Senge).

Throughout the day, I brought up specific problems we were having on the program to help ground the issues in our current reality. On the second day, we used a management flight simulator for the product development process and challenged the participants to balance three objectives: timing, cost, and quality. It was a big hit. By practicing with the simulator they discovered how difficult it is to balance the three and how little changes in the beginning can dramatically affect the final outcome.

A Measure of Success

The success of that first learning lab was really surprising. I asked the participants to go hack and start using these techniques and tell us about their experiences by keeping journals. When attending meetings with other learning lab participants, they’ve found that they understand each other when someone tends to respond in classic behavior. In other words, they’re beginning to see the tools helping to surface their mental models.

For example, I was concerned about one of my younger engineers because he was working extremely long hours. One of the managers said the guy was going to bum himself out and I’d better go talk to him. So I walked up to him and started fishing for stuff, asking how he was doing. After a few minutes he said, “Nick! What are you trying to say? What’s on the left-hand column of your mind? Why don’t you just come right out and tell me?” I did, and the issue was resolved. I was impressed! I’m beginning to see that type of exchange happen more in meetings. Now someone will say, “John, where are you on the ladder of inference? We’re not going to get anywhere if we’re going to discuss this at a belief system level.”

The real test is going to be taking these 20 engineers and cross-functional leaders and going through another couple of pilot programs, training them to be trainers. In the next pilot program, Dan is going to watch and I’m going to teach. One or two after that, I’m going to watch and they’re going to teach, and then their team members are going to teach other team members. I want to be able to take this to the whole team of approximately 200 people in the next six months or so.

Learnings

There are four main lessons I’ve learned through this project. One is the role of the manager—it is critical. The best place to start with a project like this is to find some people who are willing to experiment, and work with them first. You have to have a champion, someone who’s committed. It’s best if this role is assumed by the line manager.

Next, we need to work on getting rid of this obsession with problem solving. It becomes a barrier to more effective, learning. We need to start thinking about re-articulating issues—to get people to redefine what they think is the problem. Many people have heard the story that we actually create most of the problems in our own mind. They’re not out there; they’re in our minds.

I’ve also found the systems archetypes are very useful, but I have this fear that they will become an obsession in themselves. I think many people believe the more complex they are, the better they are. That’s wrong. In my opinion, the simpler we can make the archetype, the better. The archetype is a convenient tool to hang our thoughts on, and that’s all it is. If you can do without them, fine, but I think they’re very useful. When people start saying things like “that’s a ‘Shifting the Bunten!”‘ Or, “those are ‘Fixes that Fail!” Or, “this is a ‘Tragedy of the Commons!”‘ everyone instantly understands what you’re talking about. They all have the same picture, and that is a basis for communicating.

The fourth insight is the importance of the individual and of personal transformation. One of my engineers said, “Okay, I’m enlightened. I know what to do, I know how to do it. But what about THEM? I have to go hack to that place, and it’s awful! I’ve learned so much, but then I have to go back there!” I told her not to worry about that; just worry about herself. It starts with personal transformation. Start using these tools yourself, and let others watch. They’ll ask; they’ll wonder.

The Ladder of Inference

The ladder of inference gives you a way of asking, “Atcwhat level of thinking are you discussing those issues: the level of beliefs, assumptions and conclusions, cultural meaning or directly observable data?”

I believe the most powerful point is that in the end it’s really up to the individual. We have to stop trying to be advocates and fighting the system. We have to start realizing that if we fix ourselves, then even if we can’t fix that other person, it’ll be easier to deal with the situation. The point to remember as we proceed in the direction toward change and becoming enlightened, is that conventional wisdom is also present, and when situations get a little tough, there’s a tendency to go back to conventional ways. We need to realize that this is our work. It’s how we can become better and more effective at our behavior.

Nick Zeniuk is a leader for organizational and behavioral change in Ford’s product development process. He has extensive multifunctional experience in planning, finance, engineering, manufacturing, and marketing. Nick was the Planning Manager for several key products, including the Brazilian Del Ray (1981 Car of the Year Award), Mark VII and Lincoln Town Car (1990 Car of the Year Award).

Further Reading: Chris Argyris. Overcoming Organizational Defenses (Needham Heights, MA: Allyn and Bacon, 1990) . Available through Pegasus Communications.

The post Learning to Learn: A New Look at Product Development appeared first on The Systems Thinker.

Why is this relationship problematic? First, although learning is clearly essential for sustained individual and organizational performance in a changing environment, at times the costs may be more visible than performance benefits. Learning can be messy, uncertain, interpersonally risky, and without guaranteed results. Moreover, not all learning leads to improved performance; it depends on what is being learned and how important it is

for particular dimensions of performance. Although some learning is straightforward (the knowledge is codified and readily used by newcomers), other forms rely on experimentation and exploration for which outcomes are unknown in advance. Lastly, time delays between learning and performance may obscure or even undermine evidence of a clear causal relationship.

As described in this article, organizations can at least partly address these challenges through leadership that creates a climate of psychological safety and that promotes inquiry. But first, let’s go into more detail about some of the ways in which a focus on learning can actually appear to undermine performance.

Impediments to Learning

Where catastrophic failure is possible, mistakes are inevitable, or innovation is necessary, learning from failure is highly desirable. Yet research suggests that few organizations dig deeply enough to understand and capture the potential learning from failures. Why this resistance to learning?

Psychological and Organizational Barriers. A multitude of barriers can preclude learning in teams and organizations. These include limitations in human skills or cognition that lead people to draw false conclusions, and complex and cross-disciplinary work designs that can make failures difficult to identify. Additional barriers include lack of policies and procedures to encourage experimentation or forums for employees to analyze and discuss the results.

Learning about complex, interconnected problems also suffers from ineffective discussion among parties with conflicting perspectives. Status differences, lack of psychological safety, and lack of inquiry into others’ information and experiences related to substantive issues can combine to ensure that a group as a whole learns little.

Powerful individuals or respected experts can stifle dissent simply by expressing their opinions. Social pressures for conformity exacerbate the impact of leaders’ actions, particularly when large status and power differences exist among leaders and subordinates. In addition, people in disagreement rarely ask the kind of sincere questions that are necessary for them to learn from each other. We tend to try to force our views on others rather than educating them by providing the underlying reasoning behind our perspectives, as Chris Argyris and Donald Schön showed long ago (see Argyris, C. and Schön, D. Organizational Learning: A Theory of Action Perspectives, Addison-Wesley, 1978).

More generally, the human desire to “get it right” rather than to treat both success and failure as useful data greatly impedes learning. Individuals prevent learning when they ignore their own mistakes in order to protect themselves from the unpleasantness and loss of self-esteem associated with acknowledging failure. People may also deny, distort, or cover up their mistakes in order to avoid the public embarrassment or private derision that frequently accompanies such confessions, despite the potential of learning from them. In addition, people derive comfort from evidence that enables them to believe what they want to believe, to deny responsibility for failures, and to attribute a problem to others or the system.

Similarly, groups and organizations tend to suppress awareness of failures. Organizational incentives typically reward success and punish failure, creating an incentive to hide mistakes. Teams and organizations are also predisposed to underreact to the threat of failure when stakes are high, different views and interests are present, and the situation is ambiguous. Such groups can fail to learn and hence make poor decisions.

Multiple mechanisms can combine to inhibit responsiveness and preclude learning in group settings. First, people tend to filter out subtle threats, blocking potentially valuable data from careful consideration. They also remain stubbornly attached to initial views and seek information and experts to confirm initial conclusions. Groups silence dissenting views, especially when power differences are present. They spend more time confirming shared views than envisioning alternative possibilities. Organizational structures often serve to block new information from reaching the top of the organization. Rather, they tend to reinforce existing wisdom.

IMPACT OF PSYCHOLOGICAL AND ORGANIZATIONAL BARRIERS TO LEARNING

While proactively seeking to acquire new capabilities often takes a toll on short-term performance, over time, it benefits both the individual and the organization. Avoiding learning behaviors, on the other hand, can undermine long-term performance.

Inability to Learn from Failure. Most organizations’ inability to learn from failure stems from a lack of attention to small, everyday problems and mistakes. Organizations that embrace small failures as part of a learning process are more likely to innovate successfully. Likewise, organizations that pay more attention to small problems are more likely to avert big ones, especially where tasks are interconnected. Despite the increased rate of failure that accompanies deliberate experimentation, organizations that experiment effectively are likely to be more innovative, productive, and successful than those that do not take such risks (see especially Sitkin, S. B., “Learning Through Failure: The Strategy of Small Losses,” in L. L. Cummings and B. M. Staw (Eds.), Research in Organizational Behavior, Vol. 14: 231–266, JAI Press, 1992, and Cannon and Edmondson (2005), cited above).

Small failures arise not only in the course of purposeful experimentation, but also in daily work that is complex and interdependent. When problems inevitably arise during the course of business in these situations, workers can either simply compensate for or work around problems, or they can seek to resolve the underlying cause by notifying those who can help to correct them. The former would likely go unnoticed, while the latter would expose poor performance. Nevertheless, compensating for problems can be counterproductive if doing so isolates information about problems such that no learning occurs.

In hazardous situations, small failures not identified as problems worth examination often precede catastrophic failures. Small failures are often the key early warning sign that could provide a wake-up call needed to avert disaster down the road. Yet, in recognizing small failures in order to learn from them, individuals and groups must acknowledge the performance gaps.

Collective learning requires valuing failure and being willing to incur small failures in front of colleagues. It requires being willing to enhance rather than reduce variance. Learning groups must proactively identify, discuss, and analyze what may appear to be insignificant mistakes or problems in addition to large failures. When organizations ignore small problems, preventing larger failures becomes more difficult (see “Impact of Psychological and Organizational Barriers to Learning”).

The Learning Mindset

Given the above challenges, this section describes some of the theoretical alternatives for promoting organizational learning that enhances future performance. It ties together different but related ideas from research at several levels of analysis (see “Learning Mindsets at Multiple Levels of Analysis,” p. 4).

Advocacy and Inquiry Orientations. As discussed above, organizational structures and processes can severely inhibit the ability of a group to effectively incorporate the unique knowledge and concerns of different members. Key features of group process failures include antagonism; a lack of listening, learning, and inquiring; and limited psychological safety for challenging authority. These kinds of individual and interpersonal behaviors have been collectively referred to as an advocacy orientation (Garvin and Roberto introduced this term in “What You Don’t Know About Making Decisions,” Harvard Business Review, Vol. 79, No. 8, September 2001).

For example, simple but genuine inquiry into the thinking of other team members could have generated critical new insights about the threat posed by the foam strike to the Columbia space shuttle. Instead, NASA managers spent 16 days downplaying the problem and so did not view the events as a trigger for conducting detailed analyses of the situation. A recent analysis by Roberto, Bohmer, and Edmondson concluded that NASA’s response to the foam strike threat was characterized by active discounting of risk, fragmented, discipline-based analyses, and a wait-and-see orientation to action. When engineers became concerned about the foam strike, the impact of their questions and analyses was dampened by poor team design, coordination, and support. In contrast to the flat and flexible organizational structures that enable research and development, NASA exhibited a rigid hierarchy with strict rules and guidelines for behavior, structures conducive to aims of routine production and efficiency. The cultural reliance on data-driven problem solving and quantitative analysis discouraged novel lines of inquiry based on intuitive judgments and interpretations of incomplete, yet troubling information. In short, the shuttle team faced a significant learning opportunity but was not able to take advantage of it due to counterproductive organizational and group dynamics.

In contrast, effectively conducting an analysis of a failure requires a spirit of inquiry and openness, patience, and a tolerance for ambiguity. Such an inquiry orientation is characterized by the perception among group members that multiple alternatives exist, frequent dissent, deepening understanding of issues and development of new possibilities, filling gaps in knowledge through combining information sources, and awareness of each others’ reasoning and its implications. Such an orientation can counteract common group process failures. Learning about the perspectives, ideas, experiences, and concerns of others when facing uncertainty and high-stakes decisions is critical to making appropriate choices.

Confirmatory and Exploratory Responses. Leaders play an important role in determining group orientation to an observed or suspected failure. Analyzing the Columbia Shuttle tragedy, Edmondson and colleagues suggested that when small problems occur, leaders can respond in one of two basic ways. A confirmatory response — appropriate in routine production settings, but harmful in more volatile or uncertain environments — reinforces accepted assumptions, naturally promoting an advocacy orientation on the part of leaders and others. When individuals seek information, they naturally look for data that confirms existing beliefs. Confirmatory leaders act in ways consistent with established frames and beliefs, passive and reactionary rather than active and forward-looking.

In uncertain or risky situations or where innovation is required, an exploratory response may be more appropriate than seeking to confirm existing views. An exploratory response involves challenging and testing existing assumptions and experimenting with new behaviors and possibilities, the goal of which is to learn and to learn quickly. By deliberately exaggerating ambiguous threats, actively directing and coordinating team analysis and problem solving, and encouraging an overall orientation toward action, exploratory leaders encourage inquiry and experimentation. Leaders seeking to encourage exploration also actively foster constructive conflict and dissent and generate psychological safety by creating an environment in which people have an incentive, or at least do not have a disincentive, to identify and reveal failures, questions, and concerns. This form of leader response helps to accelerate learning through deliberate information gathering, creative mental simulations, and simple, rapid experimentation.

Rather than supporting existing assumptions, an exploratory response requires a deliberate shift in the mindset of a leader — and of others — that alters the way they interpret, make sense of, and diagnose situations. When leaders follow an exploratory approach, they embrace ambiguity and openly acknowledge gaps in knowledge. They recognize that their current understanding may require revision, and they actively seek evidence in support of alternative hypotheses. Rather than seeking to prove what they already believe, exploratory leaders seek discovery through creative and iterative experimentation.

Learning-Oriented and Coping-Oriented Approaches. When implementing an innovation such as a new technology or practice, leaders can orient those who will be responsible for implementation by responding in one of two ways. They may view the innovation challenge as something with which they need to cope or as an exciting learning and improvement opportunity. A coping-oriented approach is characterized by protective or defensive aims and technically oriented leadership. In contrast, learning-oriented leaders share with team members a sense of purpose related to accomplishing compelling goals and view project success as dependent on all team members.

In a study of 16 cardiac surgery departments implementing a minimally invasive cardiovascular surgery technique, successful surgical team leaders demonstrated a learning-oriented approach rather than a coping approach. Learning-oriented leaders explicitly communicated their interdependence with others, emphasizing their own fallibility and need for others’ input for the new technology to work. Without conveying any loss of expertise or status, these leaders simply recognized and communicated that in doing the new procedure they were dependent on others. In learning-oriented teams, members felt a profound sense of ownership of the project’s goals and processes, and they believed their roles to be crucial. Elsewhere, the surgeon’s position as expert precluded others from seeing a way to make genuine contributions beyond enacting their own narrow tasks, and it put them in a position of not seeing themselves as affecting whether the project succeeded or not. Learning-oriented teams had a palpable sense of teamwork and collegiality, aided by early practice sessions.

Organizing to learn and organizing to execute are two distinct management practices, one suited to exploration and the other to exploitation respectively.

In addition, team members felt completely comfortable speaking about their observations and concerns in the operating room, and they also were included in meaningful reflection sessions to discuss how the technology implementation was going. In teams that framed the innovation as a learning opportunity, leaders enrolled carefully selected team members, conducted pretrial team preparation, and engaged in multiple iterations of trial and reflection. Dramatic differences in the success of learning-oriented versus coping oriented leaders suggest that project leaders have substantial power to influence how team members see a project, especially its purpose and their own role in achieving that purpose.

Organizational Exploitation and Exploration. Inquiry and advocacy orientations describe individuals and groups; exploration and exploitation are terms that have been used to describe parallel characteristics of organizations. In mature markets, where solutions for getting a job done exist and are well understood, organizations tend to be designed and oriented toward a focus on execution of tasks and exploitation of current products or services. In more uncertain environments, knowledge about how to achieve performance is limited, requiring collective learning — or exploration in which open-ended experimentation is an integral part. In sum, exploration in search of new or better processes or products is conceptually and managerially distinct from execution, which is characterized by planning and structured implementation and amenable to formal tools such as statistical control.

Organizing to Learn and Organizing to Execute. In the same way that leader response drives group member orientation, the mindset of organizational leaders as well as the structures and systems they initiate play a large role in determining firm behavior and capabilities. Organizing to learn and organizing to execute are two distinct management practices, one suited to exploration and the other to exploitation respectively.

Where problems and processes are well understood and where solutions are known, leaders are advised to organize to execute. Organizing to execute relies on traditional management tools that motivate people and resources to carry out well-defined tasks. When reflecting on the work, leaders who organize to execute are well advised to ask, “Did we do it right?” In general, this approach is systematic, involves first-order learning in which feedback is used to modify or redirect activities, and eschews diversion from prescribed processes without good cause.

In contrast, facing a situation in which process solutions are not yet well developed, leaders must organize to learn: generating variance, learning from failure, sharing results, and experimenting continuously until workable processes are discovered, developed, and refined. Motivating organizational exploration requires a different mindset than motivating accurate and efficient execution. Leaders must ask not “did we succeed?” but rather “did we learn?”

In this way, organizing to learn considers the lessons of failure to be at least as valuable as the lessons of success. Such a managerial approach organizes people and resources for second-order learning that challenges, reframes, and expands possible alternatives. Practices involved in organizing to learn include promoting rather than reducing variance, conducting experiments rather than executing prescribed tasks, and rewarding learning rather than accuracy.

Creating systems to expose failures can help organizations create and sustain competitive advantage. For example, General Electric, UPS, and Intuit proactively seek data to help them identify failures. GE places an 800 number directly on each of its products. UPS allocates protected time for each of its drivers to express concerns or make suggestions. Intuit staffs its customer service line with technical designers, who directly translate feedback from customers into product improvements. At IDEO, brainstorming about problems on a particular project often enables engineers to discover ideas that benefit other design initiatives. At Toyota, the Andon cord, which permits any employee to halt production, enables continuous improvement through frequent investigation of potential concerns.

Leading Organizational Learning

Edmondson’s research has identified several success factors for leaders seeking to incorporate learning into their efforts to manage their organizations effectively. These include recognizing and responding to the need for learning versus execution, embracing the small failures from which organizations can learn, and maintaining the ability to shift nimbly between learning and execution as needed.

Diagnose the Situation and Respond Accordingly. Rather than vary their style as appropriate for the situation, in practice leaders tend to employ a consistent approach. They frequently gravitate toward organizing to execute, particularly when associated practices are consistent with the organization’s culture. However, being good at organizing to execute can hamper efforts that require learning. When leaders facing a novel challenge organize to execute rather than employing a learning approach, their organizations miss opportunities to innovate successfully.

Several years ago, the new chief operating officer at Children’s Hospital and Clinics in Minnesota, Julie Morath, exemplified a mindset of organizing to learn. Emphasizing that she did not have the answers, she invited people throughout the organization to join in a learning journey, aimed at discovering how to ensure 100 percent patient safety.

Organizing a team to experiment and learn about an unknown process requires a management approach that embraces failure rather than seeking perfect execution.

Embrace Failure. Organizing a team to experiment and learn about an unknown process requires a management approach that embraces failure rather than seeking perfect execution. Discovery and expeditious trial and error are the keys to successful learning. In the Electric Maze®, an interactive learning exercise created by Interel, participants recognize how unnatural collective learning is for most managers. Teams of students must get each member from one end of the maze to the other without speaking. Individuals step on the maze until a square beeps, at which point the individual must retrace his or her steps back to the start.

To optimize the learning process, the team should “embrace failure” (symbolized in the Electric Maze exercise as “beeps going forward”) and systematically collect as many “failures” as quickly as possible. More typically, however, the need to learn is hampered by the perceived interpersonal risk of “failing” in front of colleagues by stepping on a beeping square. In reality, only by stepping on beeping squares can the team learn quickly and discover the true path forward. The exercise offers a palpable experience to show managers that the desire to look as if one never makes mistakes hinders team and organizational learning.

Maintain Flexibility and Shift as Needed. Some business situations require innovation and execution simultaneously, or in rapid sequence. However, shifting from organizing to learn to organizing to execute can be difficult. Participants in the Electric Maze exercise come to appreciate this challenge as well. To find the correct path through the maze requires organizing to learn.

Once the path is discovered, teams are required to have participants walk through the path as quickly as possible with minimal error. In practical terms, this means the teams must shift their behavior from learning to execution, something that most teams find difficult. The Maze exercise illustrates that managing a team for superb execution of a known process calls for a different approach than managing a team to experiment and discover a new process. The ability to recognize situations that require learning and the flexibility to shift from execution to learning requires awareness as well as skillful management, posing significant challenge to many leaders and competitive advantage to leaders with such ability.

Implications for Performance Measurement

The implication of the complex relationship between learning and performance for performance measurement is worth a brief discussion. Performance is easier to measure in execution contexts than in exploratory learning contexts. In the latter, performance can be challenging to measure in the short term, even if it contributes to clear performance criteria in the long term.

Consider the Electric Maze exercise again. In the second phase, excellent performance is error-free, rapid completion of the task—every member traversing the discovered path. In the first phase, success requires encountering and learning from failures, but how many is the right number? How fast should experiments be run? As in this example, the success of experimentation is far more difficult to assess than the success of execution.

Clearly, there are situations in which it is appropriate to measure performance against quality and efficiency standards. This is true when tasks are routine. However, employee rewards based primarily on indices measuring routine performance, such as accuracy and speed, can thwart efforts to innovate. Stated goals of increasing innovation are more effective when rewards promote experimentation rather than penalize failure. At Bank of America, for example, innovation was an espoused value. Leaders targeted a projected failure rate of 30 percent as suggestive of sufficient experimentation. However, few employees experimented with new ideas until management changed its reward system from traditional performance measures to those that rewarded innovation. Truly supporting innovation requires recognition that trying out innovative ideas will produce failures on the path to improvement.

Leaders need to align incentives and to offer resources to promote and facilitate effective learning. Supporting improvement requires understanding that mistakes are inevitable in uncertain and risky situations. Organizations must reward improvement rather than success, reward experimentation even when it results in failure, and publicize and reward speaking up about concerns and mistakes, so others can learn. Policies that reward compliance with specific targets or procedures encourage effort toward those measures but may thwart efforts toward innovation and experimentation.

Given the problematic nature of the relationship between learning and performance, to provide incentives for learning, performance measurement must examine learning, not just performance. Useful tools include surveys, questionnaires, and interviews to examine attitudes toward and depth of understanding regarding new ideas, knowledge, and ways of thinking. Process measures are also helpful. Direct observation is useful for assessing behavioral change due to new insights. Finally, performance measurement must consider improvement by measuring results over time. Groups that improve more over a fixed time frame or that take less time to improve must be learning faster than their peers.

Supporting improvement requires understanding that mistakes are inevitable in uncertain and risky situations.

Conclusions

This brief article calls attention to some of the challenges and tensions that exist when trying to improve team or organizational performance through proactive learning. We note several ways in which learning and performance in organizations can be at odds. Notably, when organizations engage in a new learning challenge, performance often suffers, or appears to suffer, in the short term. Struggling to acquire new skills or capabilities often takes a real, not just apparent, toll on short-term performance. Moreover, by revealing and analyzing their failures and mistakes — a critical aspect of learning — work groups may appear to be performing less well than they would otherwise.

The work reviewed here has elucidated the challenges of learning from failure in organizations, including the challenges of admitting errors and failures and production pressure that make it difficult to invest time in learning. These challenges are at least partially addressed by managerial efforts to create a climate of psychological safety and to promote inquiry. Leadership is thus essential to foster the mindset, group behaviors, and organizational investments needed to promote today’s learning and invest in tomorrow’s performance.

Amy C. Edmondson is the Novartis Professor of Leadership and Management and chair of the doctoral programs at Harvard Business School. Her research examines leadership influences on psychological safety, learning, collaboration, and innovation in teams and organizations.

Sara J. Singer, M. B. A., Ph. D., is assistant professor of Health Care Management and Policy at Harvard School of Public Health and an assistant in Health Policy in the Institute for Health Policy, Massachusetts General Hospital. Her research uses organizational safety, organizational learning, and leadership theories to understand and address the causes and consequences of errors and adverse events.

The post Confronting the Tension Between Learning and Performance appeared first on The Systems Thinker.

Meanwhile, the boss perceives this worker’s hesitation as a sign of dependency. He figures that he was right all along, that this individual is lazy and can’t be trusted to assume responsibility. The boss takes back the project and vows never to take this kind of risk again. The worker, meanwhile, feels vindicated that her view of the boss was correct, and she vows, in turn, to never assume new levels of responsibility if ever asked to again.

Latent Barriers to Change

This story highlights a number of “land mines”—or latent barriers—in the business of change that managers need to be aware of.

Resistance to Change

The first land mine is launching a change action without first acknowledging and working through workers’ natural resistance to shifts in the status quo. Human beings often enjoy the security of familiarity. It is difficult to part with that which has become customary. To do so, we need to know how the change will benefit us as individuals and not only how it will serve the organization as a whole.

In the vignette above, the process would have been easier for both the manager and the employee if they had known what they were giving up and what they were moving toward. Clearly, if the manager planned to embark on a “participation program,” he would have done well to conduct

Some employees might not throw themselves completely into the new assignment, fearing that during a moment of stress, the boss might resort to his old, domineering ways.

a series of informed dialogues with his workers ahead of time. By doing so, he might have learned that, based on the organization’s existing culture, people felt safer taking a dependent position within the hierarchy than “sticking their necks out” and facing the consequences of taking initiative. Responsibility is often accompanied by risk and accountability. Why assume some level of responsibility if all the critical decisions are being handled by those above you?

Lack of Patience

A related land mine is not having the patience to let a new change effort take hold. In the aforementioned vignette, some employees might not throw themselves completely into the new assignment, fearing that during a moment of stress, the boss might resort to his old, domineering ways. From the manager’s point of view, resisting the urge to intervene in the project can be frustrating, because mistakes and performance lapses are bound to occur. Enduring these errors is often the most difficult task of all during a transition period. Here’s how Bill O’Brien, former CEO of the Hanover Insurance Company, describes this experience (from an interview in B. Frydman, I. Wilson, and J. Wyer, The Power of Collaborative Leadership, Butter- worth Heinemann, 2000):

“…what kept me up at night? It was when I had to deal with poor performance. I said to myself, ‘If I’m going to do this, I’d rather take a little more time and do it too late than do it too early because I have a human being’s life here.’ Finally, you get signals that tell you you’ve waited too long. Some of your direct reports are coming to you, trying to drop hints that . . . there are missed deadlines—a whole host of things. I erred by being too late. I was late partially by design because I wanted to minimize the fear. For the most part the fear in corporations today is very debilitating so I wanted to keep us at a very low level of fear. I would rather have a lot of other people say, ‘It’s about time O’Brien woke up!’ than having people say, ‘Where is O’Brien going to strike next?’”

Low Readiness for Change

A third land mine is that change efforts are often dependent on the system’s readiness to change. In the Catch-22 case, we have a system that has rarely, if ever, experienced participative management. The worker in question may not even be interested in taking responsibility for her actions, never having been given the opportunity to do so. Hence, we can say that this worker—and the system as a whole—is in a low state of readiness. In what we might call a medium state of readiness, at least the members of the community are curious about a possible change, enough to be openminded about the effort. Still, they may continue to be uncertain about how to make a shift and what the outcome might be. In a high or primed state of readiness, the members may have already begun the process of change but just need encouragement as well as support and resources.

People will undertake change when they feel committed to both the process and the goal.

In the vignette, both the manager and the worker seem uneasy about engaging in the change effort. Perhaps the manager has been given a mandate to be participative with his workers or to delegate more to them. Exacerbating the dilemma, he himself may not have been given an opportunity to prepare for the change or to build his collaborative leadership skills.

Attempt to Apply “Fix-It” Techniques

Another land mine in the process is the view that people and organizations can be changed through “fix-it” techniques that have been successful with physical or financial assets, such as assuming that one action, say x, will automatically produce a change, say y. But what would happen, for example, if a product manager decided to increase the quality control over a product that the sales staff had long ago given up on? The effort may fall short of her expectations, because human beings are more complicated than physical or financial assets, in that we have feelings! Not only do people sometimes fail to do what they’re told, especially if they determine that it is not in their best interest, but they may be affected by others who have their own agendas. Any change process, then, has to take into consideration people’s feelings, values, and behaviors in addition to the physical resources they need to implement the desired shifts.

Belief That We Can Decree Change

The last land mine is believing that we can decree change. Change rarely occurs if it is commanded. People will undertake change when they feel committed to both the process and the goal. As Peter Senge likes to say, effective leaders are preferably gardeners or seed carriers who plant the seeds for releasing the energy of others (from an interview with Allan Webber in “Learning for a Change,” Fast Company, 24: May 1999). They are not so ego-involved as to have to be at the center of all change efforts. They allow change to evolve, often first in small doses, until it becomes contagious and spreads to other locations.

Viewed as a collaborative process, creating change does not have to be a daunting task. It can be seen as a natural ecological event that is inherent to our human condition. Land mines may also be seen as barriers that we impose on ourselves only because we create an “us against them” dynamic by believing that no one will go along with us. But what if instead we created an environment in which our fears and aspirations, and those of our collaborators, could be brought onto the table and openly addressed?

Overcoming the land mines of change, then, becomes easier as we involve others in what I call “leaderful practice.” Leaderful practice occurs when all those affected by a change are deliberately involved in the planning and implementation of that effort. In this way, everyone shares leadership, not just sequentially, with different people acting at different times, but concurrently, with all acting in complementary ways at the same time. When we act leaderfully, we develop our capacity to take mutual action.

Joe Raelin holds the Asa Knowles Chair of Practice-Oriented Education at Northeastern University and is author of the just-released Creating Leaderful Organizations: How to Bring Out Leadership in Everyone (Berrett-Koehler, 2003), from which this article was adapted.

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