Guiding Quote

“Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning.” Einstein

Tuesday, December 17, 2013

Corporations as learning organizations ?

One of the great book selling ideas of the late nineties was the concept of the learning organization. It was based on the premise that organizations that are successful in the long run are those that are continually educating themselves and in order to do this they have created sustainable methods to institutionalize it. Each book usually finished with the ubiquitous check list and a road map of how to get to there.
Rather than trying to quantify the impact of this strand of management literature the approach should be to ask the question are corporations actually learning organizations?
I would contend that most, not all, corporations are very poor at learning the lessons of their own history never mind the history of their industry.
In this past week Lloyd's Bank in the UK was fined $42M for mis-selling to its customers. It had instituted, after the 2009 crash, a regime where its staff either made their sales quota or they where fired. The phrase was a "grand in your hand or you're managed out of the business" -that's the new euphemism for firing someone. Customers were pressured to buy financial products they didn't need or understand. So bad behavior, but surely it was an aberration for such a large and venerable bank? Well in 2003 the bank had been severely criticized by the regulators for the same sort of behavior. So not much learned there, then.
Then we have JP Morgan who has paid out a $920M, a fortune in shareholders money, in fines over the "London Whale" episode, as well as losing $6.2B on the derivative trades, the same sort of reckless speculation that brought down other large banks in 2008/9. They exhibited the same toxic mixture of gambling on derivatives allied with poor internal controls and risk management. Again not much learning taking place.
So to paraphrase one of our great presidential orators - George W Bush - "Our companies ain't learning!"
What are the implications of this state of affairs for project managers?
It means that we cannot assume that our leaders are actively conducting lessons learned over their stewardship of the company or that they are harvesting our lessons learned work sessions to ensure that it "never happens again". All the evidence indicates that all our wisdom is not resulting in changes in behavior. Corporate incentives overpower evidence based recommendations for improvements. George Santayana adage; "those who fail to learn from history are condemned to repeat it" rings all to true in too many organizations.

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