Why Johnny Corporation can’t learn

Learn from your mistakes.

It’s barely adequate advice. You can fail in a thousand ways. Learn from one and, like bottles of beer on a wall, you still have 999 left.

Compare that to what you can discover from success. Learning how to avoid one route to failure leaves you many ways to fail again. Learn how to succeed and you succeed.

Learning from mistakes matters. Learning from successes is vital.

So here are two questions to ponder: Why are most organizations more than willing to repeat their mistakes and so unwilling to learn from their successes?

These are two entirely different questions.

One reason organizations refuse to learn from their mistakes is well-known and obvious: To learn from a mistake, the organization’s decision-makers first have to acknowledge it. That’s a problem in our winning-is-the-only-thing, hold-people-accountable, lean-and-mean (really, famished and feeble) business culture.

We might encourage risk-taking, but that doesn’t mean we’re willing to accept a little failure now and then. That we have to redefine “risk” to mean “sure-things-only” is a small price to pay.

As is making the same mistake over and over.

Another reason organizations refuse to learn from their mistakes is more subtle: Very often, those who make the mistakes are also those who define the metrics that measure success. This might not seem to be a problem but it is because of the three fallacies of business measurement: Measure the right things wrong and you’ll get the wrong results; measure the wrong things right or wrong and you’ll get the wrong results, and anything you don’t measure you don’t get.

Example: A CIO who presided over an enterprise with four business units. He established measures of success for the four service desks that supported them. Unsurprisingly, he established productivity as a key metric, defined as the number of incidents resolved per technician.

One of the service desk managers seriously underperformed the others — productivity was truly awful. Here’s what he did wrong: He established a very effective program of end-user education. Because it was so effective, end-users in his business unit reported many fewer incidents.

The CIO held him accountable for his failure and praised the other service desk managers. His metrics defined failure as success, ensuring the perpetuation of a mistake — failing to educate the end-user community.

This really happened. It probably has really happened in company after company. It wouldn’t surprise me a bit to learn that someone has enshrined “maximizing technician productivity in service desk environments” as a best practice.

This example also illustrates one reason businesses sometimes fail to learn from their successes: Metrics that define failure as success also define success as failure (if they don’t just ignore it completely).

For more than a decade, the business punditocracy has blathered incessantly about success being the creation of shareholder value. There’s a problem with shareholder value as a measure: It’s hard to know whether today’s rise in the price of a share of stock is a blip that’s due to actions that will harm a company’s long-term competitiveness, or is the result of a real improvement in the health of the enterprise.

Even worse, it isn’t clear that it matters. I created shareholder value today. Next year, or the year after that is Someone Else’s Problem.

Just an opinion: The proper definition of business success is that it is sustainable. Never mind that sustainability is hard to measure. Never mind that it’s hard to recognize. It’s the only goal that matters.

If knowing what success looks like is hard, connecting actions to results is even harder. The actions that lead to sustainable success rarely produce immediate, dramatic results. Important change takes time and patience. By the time the impact of successful effort is visible, many business leaders will have given up on the effort.

Then there is the most common reason businesses refuse to learn from success: The Not Invented Here Syndrome (NIHS).

Very few enterprises reward managers for sharing their formulas for success with their peers. They don’t reward managers for emulating the practices of other managers either. Nor does emulating a peer do much to feed the average ego.

Being the first to spot a useful idea from outside the company looks and feels a lot like creativity. But if I borrow an idea from you, you get more credit and I get none. Where’s the value and satisfaction in that?

Why do businesses so rarely learn? The barriers are immense.

The miracle is that, occasionally, they do.