(This post is co-authored with David Grebow.)

Gearing Up for the Cloud, AT&T Tells Its Workers: Adapt, or Else (New York Times)

To cut costs and boost collaboration, IBM forces some remote workers back into the office (TechRepublic)

Ford signals willingness to change to boost stock price (USA Today)

According to these news stories, three venerable companies are making major changes that they believe will help them move into the future and implement a winning business strategy. This reminds us of the At&twarning attributed to Peter Drucker: “Culture eats strategy for breakfast.” If these companies are making these changes to compete in today’s market, or cut costs now, or boost their stock price tomorrow, they are likely to be sadly disappointed in long-term results. Strategy is important, but given the kind of transformation that must happen in preparation for the future, creating an organization that fundamentally changes the way people are managed and learn must be the focus. It’s more about developing the right culture than implementing the right strategy.

One of the questions Corporate Rebels heard frequently from the many business leaders they interviewed is, How do we structure our organization in such a way that it is future proof? How do we create a culture that will be sustainable and successful?  This is the same question that AT&T, IBM, and Ford Motor must be asking themselves.

The answer is to create an organizational culture in which learning is the primary job. This means not only Ibm encouraging people to learn but rewarding them for learning. And rewarding them for working collaboratively, communicating openly, and cooperating with a high degree of trust. People must have access to the knowledge and skills needed when and where they are needed. People must be able to fearlessly practice and apply new knowledge and skills without being punished for failing.

Creating a culture that supports learning also means that management must remove barriers in order to enable and not disable learning. Command-and-control leadership, hierarchies, bureaucracies, secrecy and compartmentalization of information all stop the free flow of information and inhibit learning. There are managers and companies around the workd that are profitably and successfully moving in the direction of eliminating these barriers.

It’s the difference between a culture characterized by “managing hands”, an Industrial Economy mindset developed when we made things and managed hands, and a “managing minds” culture, developed in the Ford_Motor_Company_Logo.svgnew Knowledge Economy, in which we - especially those of you reading this - produce work using our minds. Most companies, like the three giants mentioned in the headlines, are still managing hands. Not surprising since they achieved greatness by making things – telephones, cars, computers - during the Industrial Economy. Their thinking and resources go toward control and efficiency that maximizes production and profits. Much like the automotive assembly line of 100 years ago, people are treated like cogs in a wheel, not respected or promoted for their ability to use their minds to successfully communicate, collaborate, innovate or create.

To compete and survive in today’s global, technological, multi-generational, and diverse marketplace, companies need to focus on helping people develop their minds, and find ways for people to continuously increase their knowledge and skills. Managers must take the lead to make sure that people can get the knowledge and know-how they need as products, services, regulations and business situations rapidly change. And people must learn how to learn in this new environment, and take responsibility for their own learning.

People who work in companies like AT&T, IBM, and Ford, as well as most other companies large and small, are not creating the kind of culture that will prepare them for a fast evolving future. They cannot solve the problems of the 21st century using 20th century solutions. They need to stop managing hands and start managing minds.

 [Look for our forthcoming book from ATD titled, Minds at Work: Managing for Success in the Knowledge Economy.]