Clay Christensen, Scott Anthony and Erik Roth in Seeing What’s Next (Harvard Business School Press, 2004) outline how an organization’s Resources, Processes, and Values (RPV Framework) affect, if not determine, how an organization behaves in the marketplace and ultimately, what an organization can and cannot do. And, Judith Estrin in Closing the Innovation Gap (McGraw Hill, 2009) states that “the implicit values of our organizations… can either reinforce or dilute the core values of innovation.” Given that a goal of most organizations is profitable growth, and a widely accepted source of profitable growth is the ability to successfully bring new innovations (businesses, products or services) to the market, I felt it would be worth exploring the values most critical for success.
As I contemplated the body of work surrounding this, it struck me that the one common ingredient across successful and innovative organizations is the commitment to learning; alternatively, having a Learning Culture. But, what does it mean to have a learning culture?
A learning culture is not the same thing as learning; much in the same way that innovation is not the same thing as an idea. The commonly accepted goals of learning are: Evaluation, Analysis, Synthesis, Comprehension, Application, and Knowledge – and, a learning culture tends to foster and leverage each of these components. Similarly, an idea is simply an idea – and innovation is the process of identifying new opportunities, coming up with and creating new innovative things (businesses, products or services), and implementing these new innovations into the market in order to create new value.
Unfortunately, the key component of learning which is most often overlooked and significantly under emphasized is ‘Application.’ This then tends to result in the current growth dilemma many firms face today. That is, many firms have a lot of data and often have a pretty good level of understanding about what their data is saying. But far too often, firms lack the mechanisms, or processes to take the next step. Seth Godin in Poke The Box (Do You Zoom, 2011) refers to this as Instigation Capital – “the desire [and competency] to move forward”, in a new or different way. In order to make a difference, you’ve got to actually do something with your smarts. If an organization doesn’t fully leverage their learning, they are wasting capital and they are impeding forward progress.
Thus, a learning culture is more than simply hiring and creating a smarter workforce. A learning culture is about obtaining, creating, and applying the “smarts” that you’ve gained in such a way as to create defensible new consumer and shareholder value in the marketplace. I tend to think of organizations with learning cultures as having these innovation competencies in common:
1) Information – Continually seeking and obtaining an array of input and feedback
2) Interpretation – Thorough and deep understanding about what the information does and does not mean
3) Initiation – Leveraging Information and Interpretation to develop and launch new businesses, products and/or services
Innovative organizations with a learning culture have an insatiable appetite for the right kinds of information. This will span from macro consumer and economic trends; detail about their specific industry and their competition; developments in related and/or adjacent industries; consumer and customer feedback related to the effectiveness of the firm’s current activities; and internal business performance metrics.
Innovative organizations with a learning culture have a never ending list of questions. These questions often begin with: Why is…, What about…, What if…, How might…, How else… and commonly, initial answers are met with yet more questions. These firms want to understand what their information is telling them about their current state of operation, and also what opportunities might exist under different scenarios. Relating back to the goals of learning; interpretation is about Evaluating, Analyzing, Synthesizing and throughly Comprehending the totality of an organization’s information. It is the iterative and evolving web of processes which leads to significant insights. Innovative organizations with a learning culture also have an ongoing commitment to the skills and tools required to elevate their interpretation of their information.
Innovative organizations with learning cultures are always looking to start something new. They are not seeking new for newness’ sake; rather, they are always trying something new in the hopes of forging into new uncontested profit sanctums. Initiation is often the ingredient differentiating really good organizations from truly great organizations. Initiation not only requires a commitment to learning, but also a willingness to fail as well as an openness to being wrong. Unfortunately, many of the Processes and Values firms adopt in order to scale profitably, in fact end up inhibiting initiation and innovative growth.
Seldom will an organization excel at all three innovation competencies (Information, Interpretation, and Initiation). But, given nearly every firm faces the challenge of producing new profitable growth, it seems that a commitment to the further development of each competency is worthwhile.
image credit: dceventjunkie.com
Bradley (Woody) Bendle is Director, Insights & Innovation at Collective Brands, Inc. A former Vice President of Marketing, Customer Analytics & Strategic Systems at Blockbuster and formerly a consulting economist. His focus areas are: Brand & Market Strategy, Product & Service Innovation, Consumer Behavior, Quantitative & Qualitative Research Methods, and Applied Econometrics. (twitter – @wbendle)