Why do organizations fail to learn how to learn and therefore remain competitively marginal? In this article, I try to explain why organizational innovations either don’t occur or fail to survive and proliferate. Some typical explanations revolve around vague concepts of “resistance to change,” or “human nature,” or failures of “leadership.” I propose a more fundamental reason for such learning failures, derived from the fact that, in every organization, there are three particular cultures among its subcultures, two of which have their roots outside the organization and are therefore more fundamentally entrenched in their particular assumptions. Every organization develops an internal culture based on its operational success, what I call the “operator culture.” But every organization also has, in its various functions, the designers and technocrats who drive the core technologies. I call this the “engineering culture”; their fundamental reference group is their worldwide occupational community. Every organization also has its executive management, the CEO and his or her immediate subordinates — what I call the “executive culture.” CEOs, because of the nature of their jobs and the structure of the capital markets, also constitute a worldwide occupational community in the sense that they have common problems that are unique to their roles.
These three cultures are often not aligned with each other, and it is this lack of alignment that causes the failures of organizational learning that I will discuss. The question is whether we have misconceived the initial problem by focusing on organizational learning, when, in fact, it is the executive and engineering communities that must begin their own learning process if we are to meet the challenges of the twenty-first century.
Organizations Don’t Learn; Innovations Don’t Last or Diffuse
The ability to create new organizational forms and processes, to innovate in both the technical and organizational arenas, is crucial to remaining competitive in an increasingly turbulent world. But this kind of organizational learning requires not only the invention of new forms but also their adoption and diffusion to the other relevant parts of the organization and to other organizations in a given industry. Organizations still have not learned how to manage that process. The examples of successful organizational learning we have seen either tend to be short-run adaptive learning — doing better at what we are already doing — or, if they are genuine innovations, tend to be isolated and eventually subverted and abandoned.