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Learning Culture & Human Capital: The Reality, the Myth and the Vision

[This post is by Sally Ann Moore, the Director General iLearning Forum at Closer Still Media. iLearning Forum is the most important learning meeting in Europe. Sally Ann wrote this as part of her preparation for the conference.] 

While preparing the Learning technologies France 2018 conference programme, I have been doing research and reading, and in particular looking at L&D trends, Talent Management and Human capital management. I unearthed a real shock and a paradox about the value of people to organizations.

Business Leaders don’t really Value People

In November 2016 The Korn Ferry Institute published their grim findings of a global study:  In August and Paradigm September, 2016, Korn Ferry interviewed 800 business leaders in multimillion-dollar global organizations on their views on the value of people in the future of work. These leaders were in the United Kingdom, China, the United States, Brazil, France, Australia, India, and South Africa.

  • 63% of the CEOs said that in 5 years, technology will be the firm’s greatest source of competitive advantage.
  • 67% said that technology will create greater value in the future than people will. (and 64% believed people are a cost, not a driver of value)
  • 44% said the prevalence of robotics, automation and artificial intelligence (AI) will make people “largely irrelevant” in the future of work.

Worse still, the study found that when asked to rank what their organization’s top five assets will be 5 years from now, the company’s human resources  did not make the list. The top five assets were:

  1. Technology (product, customer channels);
  2. R&D / Innovation;
  3. Product / Service;
  4. Brand; and
  5. Real Estate (offices, factories, land).

So much for Human Capital Management and Learning Culture! I can even affirm that some of the companies in the survey also like to say people are their greatest asset. Ha! (They just don’t tell shareholders that – 40% of respondents in the Korn Ferry survey said they have experienced shareholder pressure to direct investment toward tangible assets like technology). This is known as a “tangibility bias”.

As someone deeply involved in learning and people development, I had to follow my strong belief that it is people that make THE difference, its people that add value and people are the best investment we can make. So I dug deeper. Eureka!

But the Tangibility biased are wrong!

In December 2016, in an economic analysis also commissioned by Korn Ferry, they report that human capital represents to the global economy a potential value of $1,215 trillion – more than DOUBLE the value of tangible assets such as technology and real estate (valued at $521 trillion today).

So, while large organizations put technology in the spotlight in the future of work, it is, in fact, human capital that holds the greatest value for organizations now and in the future.

Human capital is also the greatest value creator available to organizations: For every $1 invested in human capital, $11.39 is added to GDP, (the Korn Ferry economic analysis finds). The CEO’s should note that the return on human capital—value versus cost—is by far the best investment over time.

The problem is “Leaders may be facing what experts call a tangibility bias,” said Jean-Marc Laouchez, at Korn Ferry. “Facing uncertainty, they are putting priority in their thinking, planning and execution on the tangible – what they can see, touch and measure, such as technology investments. Putting an exact value on people is much more difficult, even though people directly influence the value of technology, innovation and products.”

How can we, the L&D specialists address this issue?

We are faced with a constant threat of budget cuts and lukewarm commitment from the executive.  I have always said that if you can’t measure it, you can’t manage it. Also what you measure is what you get…..

What are you measuring? My casual research suggests that most training managers measure learner satisfaction with their training, and there are plenty of tools for measuring knowledge and skills attainment. Sadly this doesn’t lead us to a tangible ROI. We can only measure that if we measure outcomes of the L&D investment. That is to say the change in work performed and the increased value of that work.  In this respect, I am glad to say that we are now making big strides implementing the Kirkpatrick model over here and addressing the 70:20:10 rule in our L&D projects. (More on this in my next article)

Managing Minds, not Hands

Additionally I came across some new thinking published this year by David Grebow and Stephen J. Gill in the USA. They have been researching for a book to be published in early 2018 by the ATD press, entitled:  “Minds at Work: Managing for Success in the Knowledge Economy”

They began the research by looking for examples of companies that said they were learning cultures, where learning was continuous and supported in every aspect of organizational life. They never found one. They found some examples of learning cultures within companies, in various departments and units, but never consistently across the whole enterprise. They eventually realized why:  A company can tell the world it has a learning culture, provide lots of learning opportunities, and supply eLearning for everyone. But if management support for learning is not apparent and not constantly on display by managers every day, the original culture that supported and rewarded “not learning” will dominate over any attempt to be a learning culture.

They realized that a culture focused on learning needs leaders and managers focused on learning. So they looked at the critical relationship between managers and learning. Managers are expected to direct people’s daily work and performance. They are not usually expected to develop employees. In the research the authors (Grebow and Gill) identify two basic categories of business organization:

  • 19th style Century “managing hands” older companies, an endangered species
  • 21st century knowledge economy, new companies “managing minds”

The business results of the latter group are far more spectacular than the former. The authors go on to look at several case studies, in order to identify best practice of managing minds. David Grebow will present their results (and the book) at Learning Technologies France, international conference stream,  on 22nd & 23rd January 2018.

Minds at Work will be published this December 2017 by ATD Press and is available now for preorder on Amazon.



Learning for a Rapidly Changing World

The safest prediction is that reality will outstrip our imaginations. So let us craft our policies not just for what we expect but for what will surely surprise us.Sendhil Mullainathan, professor of economics, Harvard University

Professor Mullainathan argues that, in this age of disruption when constant innovation results in creative Economist-lifelong-learningdestruction of businesses, we need to think differently about the education of people throughout their careers. He writes:

… in a rapidly changing world, the fundamentals that were useful decades ago may be obsolete now; more important, new essential skills may have arisen. Anyone helping a grandparent navigate a computer has experienced this problem.

Once we recognize that human capital, like technology, needs refreshing, we have to restructure our institutions so people acquire education later in life. We don’t merely need training programs for niche populations or circumstances, expensive and short executive-education programs or brief excursions like TED talks. Instead we need the kind of in-depth education and training people receive routinely at age 13.

I don’t think we want to subject adults to the kind of learning experiences typical of a 13-year-old’s classroom. But I do agree that all workers today need to be continually learning and our institutions need to recognize and support this learning.

In the Knowledge Economy, learning cannot end with school. Learning at the individual, team, and whole organization levels must be continuous. Training programs are not sufficient. E-learning programs are not sufficient. On-the-job coaching and mentoring are not sufficient. Workplace learning must be all of these and more.

Former mine workers are learning coding. Car prototype builders who used to build clay models are learning how to use a 3D printer. Teams that previously took years to develop a new product are learning to be agile and develop new products within weeks or months. Organizations are learning to experiment with new structures, without the controls that bureaucracy and hierarchy have provided.

The economy depends on people learning throughout their careers. A special report in The Economist titled, Lifelong learning is becoming an economic imperative, concludes:

To remain competitive, and to give low- and high-skilled workers alike the best chance of success, economies need to offer training and career-focused education throughout people’s working lives.

We need to prepare people for jobs that don’t currently exist. Tom Friedman, in an interview for Deloitte Review, said:

If work is being extracted from jobs, and if jobs and work are being extracted from companies...then learning has to become lifelong. We have to provide both the learning tools and the learning resources for lifelong learning when your job becomes work and your company becomes a platform. So I'm not sure what the work of the future is, but I know that the future of companies is to be hiring people and constantly training people to be prepared for a job that has not been invented yet. If you, as a company, are not providing both the resources and the opportunity for lifelong learning, [you're sunk], because you simply cannot be a lifelong employee anymore unless you are a lifelong learner.

Companies have a responsibility to provide resources and opportunities for learning but people have a responsibility to learn how to learn lifelong. The mindset and skills that K-12 students need to learn in school and then in college are not the same as the mindset and skills needed to learn in the workplace, and these are not the mindset and skills needed post-employment. Lifelong learners move from teacher-centered learning to learner-centered learning over the course of a career. In the workplace and beyond, learning in the Knowledge Economy has to be self-directed. People must pull the learning they need, when and where they need it and faster than they ever have before. In this age, ability of individuals to learn fast and learn well is critical to organizational survival.



Reprise: Managing Minds, Winning Hearts

We are now in the "Knowledge Economy" which means that we must learn differently than we have in the past. As I wrote in a previous blog post titled, The Manager's Abridged History of Work and Learning

Today, work is more about having a keen mind than it is about having a strong back or skilled hands. This has profound implications for how we manage workers and how we facilitate learning in the workplace.

It no longer makes sense to use formal training as a solution to every performance problem nor to assume that workers will learn everything else they need to know on-the-job from the people around them. Brain-image-picture-clipart-4 Rather, employees need to know how to learn, how to get the knowledge they need when and where they need it, and be accountable for results, not for attending a training program. In a blog post that David Grebow and I wrote for ATD titled, Changing the Way We Manage Learning in the Knowledge Economy, we said:

In the 1920s, the average lifespan of leading U.S. companies was 67 years. By 2013, the average lifespan had dropped to 15 years. The new environment is increasingly aggressive, hypercompetitive, and constantly driven by surprises, innovation and technological changes. And it’s all happening at an unprecedented, increasingly faster pace. We have no choice. We need to stop managing hands and focus on managing minds. 

Human hands are being replaced by robotic hands. And managing robots is not a job that requires hands-on managers. This trend towards automation is not stopping. The book, Impact of Emerging Digital Technologies on Leadership in Global Business, reports that 47 percent of U.S. jobs are likely to be automated. This is will change the nature of work in all industries. Robot hands can now thread a needle. As the steel fingers of automation reach even further and grab more of the work once done by human hands, an almost unimaginable future begins to appear. 

This future is one in which humans no longer need to make things or fix things or sell things or provide basic services. It is a future in which workers will have to be smarter, more agile, and more innovative than ever. As automation and robotics improve, the demand for globalization increases, and communities become more diverse, any organization's competitive advantage will be in its collective knowledge and expertise. This means managing minds. The primary role of managers will be helping the people they supervise to become more competent, capable, and engaged in contributing to the success of the organization.



The Future of Work and the Workforce

In the latest issue of Deloitte Review, authors John Hagel, Jeff Schwartz, and Josh Bersin describe the forces, based on research and their own experience, that are shaping the future of work and the workforce. 2000 mind workers The forces they identify are technology (e.g., robotics, artificial intelligence, and sensors), demographic diversity, and customer empowerment. They believe that these forces will change every job and transform the workforce and that success in this new environment will depend on lifelong learning.

They write:

In the new landscape of work, personal success will largely depend on accelerating learning throughout one’s lifetime. As a lifelong learning imperative takes hold, we see individuals increasingly focusing on participation in small but diverse workgroups that can amplify learning. Workers will need to take action on their own to enhance their potential for success, but the impact of their efforts will be significantly influenced by the willingness and ability of the other two constituencies—businesses and public institutions— to evolve in ways aligned with the shifting nature of work.

David Grebow and I couldn’t agree more. Our book, Minds at Work: Managing for Success in the Knowledge Economy, due out later this year, describes what companies are doing to support lifelong and self-directed learning in the workplace. We believe that the key to success is involvement of leaders and managers in facilitating continuous learning by everyone. As the Deloitte Review authors suggest:

Organizations will need to cultivate new leadership and management approaches that can help build powerful learning cultures and motivate workers to go beyond their comfort zone. Indeed, leadership styles must shift from more authoritarian—appropriate for stable work environments shaped by routine, well-defined tasks and goals—to collaborative. In the future of work, we expect that the strongest leaders will be those who can frame the most inspiring and high-impact questions and motivate and manage teams.

Easier said than done. Organizations need to learn how to build a learning culture and individuals and teams need to learn how to learn continuously.

Our definition of a “learning culture” is a work environment that supports and encourages the continuous and collective discovery, sharing, and application of knowledge and skills at the individual, team, and whole organization levels in order to achieve the goals of the organization.  A learning culture is a culture of inquiry; an environment in which employees feel safe challenging the status quo and taking risks to enhance the quality of what they do for customers, themselves, shareholders and other stakeholders. A learning culture is an environment in which learning how to learn is valued and accepted. In a learning culture, the pursuit of learning is woven into the fabric of organizational life.

If this is the kind of culture necessary in “the new landscape of work” that Hagel, Schwartz, and Bersin argue for, then a huge gap exists between where companies are today and where they need to be in the future. Command-and-control leaders need to accept that they must change and then they need to commit to learning how to lead in a collaborative work environment. And managers need to learn how to help workers acquire new knowledge and apply new skills in this collaborative work environment. This transition will take time, patience and perseverance. We should not assume that people already have the understanding and abilities to make this change.



Hire Learners for the Knowledge Economy

Companies today need learners. In the Agricultural Economy, a strong back was enough. In the Industrial Economies Economy, a set of good hands was enough. But in the Knowledge Economy, companies need people who can develop their minds.

The Knowledge Economy needs people who are self-directed learners, who know how to get the information and skills they need when and where they need them, who can think critically in terms of evaluating the accuracy and usefulness of this information, and who can learn from both successes and failures.

Maybe some organizations can teach people how to learn fast, but most do not have this capability. They need to hire people who already can learn fast and learn well. They need to hire  people who are continuous learners and who can help others learn continuously. This is not simply about attending training programs or, as a manager, sending others to training programs. You want people who are always receptive to increasing their knowledge and developing new skills and competencies. You want people who seek out opportunities to grow. You want people who recognize the learning needs of others and can figure out ways to support their growth as part of the day-to-day work of the organization.

Edgar Wilson, in a post on e.Mile, writes that a “healthy” learning culture has four features:

  1. Humility – accepting that you don’t know everything, that you need to be continually learning new things, that you embrace change as an opportunity to develop new skills
  2. Curiosity – staying excited about learning and always looking for new and better ways to do things
  3. Collaboration – building teams that share work, share lessons, share advice, and share skills
  4. Appreciation – recognizing and rewarding the effort of others to learn and grow; not waiting for a major change

These features are a good guide for recruiting, selecting, and hiring employees. Look for people who have humility, are curious, are excited about collaboration with others, and who express appreciation for the effort and progress of others. Ask about specific examples of these behaviors in their previous work.

Recruit people with the ability to learn a job and adapt as the job changes, which it will. Tom Friedman in a column he wrote for the NYTimes titled How to Get a Job at Google, quoted Laszlo Bock, Google’s senior vice president of people operations, as saying,

For every job, though, the No. 1 thing we look for is general cognitive ability, and it’s not I.Q. It’s learning ability. It’s the ability to process on the fly. It’s the ability to pull together disparate bits of information. We assess that using structured behavioral interviews that we validate to make sure they’re predictive.

Bock is not looking primarily for programmers and search engine experts. He is looking for people who can apply both analysis and synthesis to solving problems and who can do this quickly in the course of their work. He is looking for creativity and ingenuity.

Liz Wiseman, author of Rookie Smarts: Why Learning Beats Knowing in the New Game of Work, says, “The speed with which we learn will be more critical than the extent of what we know.” She recommends hiring people who are intellectually curious, teachable, playful, and deliberate.

Fundamental to learning is having a growth mindset. According to Carol Dweck, some people believe that new competencies can be learned while others believe that talent is fixed and people can’t develop much beyond their current capabilities. This is the difference between a Growth Mindset and a Fixed Mindset. Dweck writes:

People who believe in the power of talent tend not to fulfill their potential because they’re to concerned with looking smart and not making mistakes. But people who believe that talent can be developed are the ones who really push, stretch, confront their own mistakes and learn from them.

Hire people who have a growth mindset. Otherwise they will have a psychological barrier to learning and to helping others learn.

Also, hire people who are not afraid to fail and to learn from failure. Taking risks, failing, and learning from that failure is an essential process of development in an organization. Kyle Zimmer, head of First Book talks about looking for the experience of failure in the people she hires. She says:

We want people who have tried things, and have failed, and have risen above it. Those indicators that you’re a builder are profoundly important. Because if you’re bright, and you’re a builder, and you’ve overcome the winds that blow against anybody trying to build anything, a lot of other things fall away, like defensiveness

And better yet, observe how employees learn and help others learn during a trial period in your company. How do they acquire the knowledge and skills to do their work? Do they seek out information and help from others or do they rely on themselves, only? Are they willing to admit that they don’t know something? Are they willing to admit that something didn’t go well and that they need help to fix the problem? Can they adapt to a culture in which collaborative learning is the norm. Menlo Innovations, a software development firm, has prospective employees do real work for several months before making a decisions as to whether they are a good fit or not.

Here are questions to get you started in conducting a job interview to identify learners. Ask them:

  • How do you learn something new? Take me through your steps. What if you were asked to become knowledgeable in an area of our business for which you are not familiar? How would you do that?
  • What if you were asked to become knowledgeable in an area of our business for which you are not familiar? How would you do that?
  • Tell me about a time when you failed at something. What did you do to contribute to that failure. What did you do after to recover from the experience?
  • In what areas do you need to improve? What goals do you have for your own growth?
  • What do you know about this company? How did you find out this information?
  • What do you believe about the ability of people to learn?  Who do you think can continue to learn and develop competencies in an organization like this?

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



Culture Eats Strategy

(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.]



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United Airlines Needs New Approach to Learning

Fly the friendly skies…unless they need your seat. The recent United Airlines debacle which resulted in 69-year-old Dr. David Dao being dragged off a plane to make room for United staff, could have been avoided if Unitedthe company saw its responsibility as “managing minds” instead of “managing hands.”

United, like many other airlines and many companies in other industries, has been stuck in the 20th Century’s industrial economy. This is a command-and-control, hierarchical, risk-avoidance way of working with people. In that world, it’s all about getting the job done, as in making something, fixing something, or moving something, and collecting money for it. In other words, managing hands.

In the current knowledge economy, organizations, especially those that are supposed to be about the comfort and safety of customers, need to focus on what employees think, how they can improve continuously, and what they can contribute to the success of the organization. Companies today need a high level of collaboration, communication, and cooperation. Employees need the freedom to make decisions and do the right thing for customers and for each other. No sense hiring smart employees and then telling them not to think.

United CEO Oscar Munoz’s initial response to the Dr. Dao situation was classic managing-hands. He blamed the customer and then he blamed individual employees. The focus was on following policies and procedures, not doing what’s best for customers. Fortunately for the company, Munoz seems to have come to his senses and now realizes that the culture of the organization is to blame. He has since taken responsibility and acknowledged that the incident was a result of how staff do their work. Washington Post reports:

In an interview with NBC’s Lester Holt, Munoz called the incident “a system failure across the board.” He said outdated policies and procedures, which focused more on operations and logistics than customers put all those involved in “impossible situations.”

This acknowledgement by Munoz of a systems failure is a major step in the right direction. An operational mindset had taken over common sense. Employees believe that they must follow the rules even when the rules are not appropriate or ethical in a particular situation. The airline has the small-print right to remove a passenger to make room for staff who must arrive in another destination by a certain time. However, employees must feel free to ask themselves in each situation if that is the right thing to do.

The ten, policy and procedure changes that United said it will enact over the next year should help. One of those changes should go a long way toward United becoming a more customer-focused company. As reported in USA Today, flight attendants and gate agents will be given much greater authority to address customer problems. USA Today quoted the company:

Rolling out later this year, United will launch a new "in the moment" app for our employees to handle customer issues. This will enable flight attendants (by July) and gate agents (later this year) to compensate customers proactively (with mileage, credit for future flights or other forms of compensation) when a disservice occurs.

This is all well and good but the most important change that needs to occur in United is to shift from managing hands to managing minds. This means developing every employee, creating a trusting and empowering work environment, facilitating collaboration, communication, and cooperation among employees and with other stakeholders, encouraging risk-taking and experimenting as a way to improve, and continuously learning for the betterment of individuals, teams, and the whole organization.

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

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Work Is Learning

This is an infographic by Arun Pradhan that explains why and how we need to stop separating learning from work. That might not have been a significant issue in the Industrial Economy, but it is a serious issue in our current Knowledge Economy




Reprise: The Self-Directed Learner

(This post first appeared on this blog on February 11, 2016.)

The most common way in which companies train employees today is basically the same as organizations have been training for the past hundred years (some would say thousands of years). Instructional designers, with input from managers and subject-matter-experts (SMEs) decide what employees should know and then “push” that content at the learners through formal training programs.

That model of training worked adequately in an industrial economy where jobs and equipment changed slowly and executives had relatively low expectations for productivity. Things are quite different now and, therefore, training needs to change. In the new knowledge economy, the pace of change is such that the push model of training can’t keep up with organizational needs and with the way employees learn best.

Now companies need self-directed learners who can “pull” the knowledge and skills required for their jobs, when and where they need it. To be successful today, learners and their managers must work together to ensure that employees acquire the competencies they need to help the organization succeed. They can no longer rely on a centralized training function for this. Managers and their direct reports must rely on each other.

In a learning culture, dependent on pull learning, the parallel roles of managers and learners look like this:



Develop a growth mindset

Develop a growth mindset

Hire for ability & motivation to learn

Be actively learning how to learn

Help learner identify strengths & weaknesses

Identify one’s own strengths & weaknesses

Encourage employee learning

Learn continuously

Make it safe to learn

Take risks; learn from risk-taking

Create opportunities for employees to learn individually & in groups

Take advantage of opportunities to learn as individuals & with/from others

Give feedback effectively

Receive feedback effectively

Co-create & co-curate information with learner

Co-create & co-curate information with manager

Convey high expectations for learning

Strive to do best; exceed expectations of manager

Recognize and reward learning

Use recognition and rewards to further one’s learning

The learning relationship starts with a “growth mindset”. Carol Dweck defines this as the belief that people can develop their talent. Without this belief, people will not be motivated to learn and improve. This belief needs to be shared by managers and their direct reports. You need to hire people who have this belief, are motivated to learn and to learn how to learn.

You want employees who make learning part of the way they work. You want employees who are constantly assessing their strengths and weaknesses and seeking out the knowledge and skills that will position themselves to be more successful. You want managers who encourage this and create a psychologically safe environment where employees feel they can be open about their strengths and weaknesses without being criticized, ridiculed, or judged less competent.

You want opportunities for employees to learn, to apply newly acquired knowledge and skills to important work on the job and to do this shortly after learning. Employees can arrange some opportunities for themselves but this requires managers giving permission, making time, and providing the resources to apply that learning.

You want managers to give performance feedback in a helpful and productive way to employees. You want employees to hear and understand that feedback and make use of it to learn and improve their performance. This must be more than an annual performance review. Performance feedback, positive and negative, should be given at every opportunity throughout the year.

Your managers and learners must co-create and co-curate knowledge. The amount of information that is available to employees today is massive. Anything learners want to know is at their fingertips…literally. However, some if it is accurate and useful and some is not. Managers and employees need to work together to make sense of this information, sort out what is accurate and useful, and apply it to their work.

Your managers should have high but realistic expectations for their direct reports. Employees should be clear about these expectations and how these expectations are linked to organizational performance. This gives learners a clear direction and path to performance improvement which motivates learning and application of learning.

Managers should recognize and reward the impact of employee learning on achieving the goals of the organization. This could include public statements about the learner’s success, a promotion, new responsibilities, or special compensation. Whatever it is, learners need to see clearly how their learning resulted in this expression of appreciation.



Becoming a Learning Culture: Competing in an Age of Disruption

(This article was initially posted on the Hospitality eResources blog on February 7, 2017.)

All industries are undergoing enormous change, mostly due to new technologies, globalization, and a very diverse workforce. For example, in the hospitality industry smartphones put scheduling and reservations HolidayInn at our fingertips, literally. Social media allows restaurants, hotels, airlines, and travel services to market
directly to us based on our personal interests. Apps give us car services and meals on-demand – no waiting. These services are competition for established companies and are changing the industry and guest expectations. Uber, Lyft, Airbnb, and Grubhub are just the beginning. The industry will continue to evolve dramatically.

Any company, faced with these kinds of disruptive forces must keep learning. Employees must learn how to use new computers and new apps, how to operate new, high tech machinery, how to be responsive to customer demands, how to create innovative products and services, how to manage a multi-cultural, multi-generational workforce, how to work effectively in cross-functional teams, and how to plan for a future that is constantly in flux.

The only thing holding companies back from learning at the speed of change is their organizational culture which, for many, is a barrier to learning. Most companies have a training culture, not a learning culture. This emphasis on formal training is a barrier to learning and change. In a training culture, responsibility for employee learning resides with instructors and training managers. In that kind of culture, trainers (under the direction of a CLO) drive learning.

Whereas in a learning culture, responsibility for learning resides with each employee, each team, and each manager. In that kind of culture, employees, with the help of their managers, seek out the knowledge and skills they need, when and where that knowledge and those skills are needed.

In a training culture, most important learning happens in events, such as workshops, courses, elearning programs, and conferences. In a learning culture, learning happens all the time, at events but also on-the-job, facilitated by coaches and mentors, from action-learning, via smartphones and tablets, in social groupings, and from experiments. Learning is just-in-time, on-demand.

In a training culture, the training and development function is centralized. The CLO, or HR, or a training department controls the resources for learning. When new competencies need to be developed, employees and their managers rely on this centralized function. In a learning culture, everyone is responsible for learning. The entire organization is engaged in facilitating and supporting learning, in the workplace and outside the workplace.

In a training culture, departmental units compete with each other for information. Each unit wants to know more and control more than the other units. This competition can result in short-term gains for those units and even for the organization as a whole (e.g., drug development in pharmaceutical companies). In a learning culture, knowledge and skills are shared freely among units. Everyone is working to help everyone else learn from the successes and failures across the organization. This creates a more sustainable and adaptable organization.

In a training culture, the learning and development function is evaluated on the basis of delivery of programs and materials. Typically, what matters to management is the courses that were offered and how many people attended. In a learning culture, what matters is the knowledge and skills acquired and applied in the workplace and impact on achieving the organization’s strategic goals. It’s less about output and more about impact and the difference that learning makes for individuals, teams, and the entire organization.

Managers play a pivotal role in creating and sustaining a learning culture. They do not have to be instructors nor do they have to be expert in the knowledge and skills needed by their direct reports. However, they do have to hold the belief that people can learn and change, what Carol Dweck calls the “growth mindset”. Managers must care about their own learning, and they must value the development of the people they supervise. If they have these beliefs and values, then managers can contribute significantly to learning in their organizations.

In our book, The 5As Framework, Sean Murray and I describe seven steps managers can take to facilitate and support learning of their direct reports:

  • STEP ONE: Discuss what the learner needs to learn in order to help your business unit achieve its objectives and the organization’s strategic goals.
  • STEP TWO: Agree on a set of learning objectives for the short-term and long-term.
  • STEP THREE: Agree on the indicators that will be used to determine progress toward those objectives and achievement of goals.
  • STEP FOUR: Describe how the learner can get the most out of the learning intervention.
  • STEP FIVE: Arrange for the learner to get whatever resources he/she needs to apply the learning to your business unit.
  • STEP SIX: Plan regular meetings (they may be brief) to discuss progress toward objectives and goals and any changes that would help the learner’s progress.
  • STEP SEVEN: Make modifications in the learning intervention as needed.

Essentially, managers should work with learners to set goals, clarify expectations, provide opportunities for application, and hold them accountable for making a difference. Learning professionals can certainly help managers with this, but managers are in the best position to facilitate the kind of day-to-day learning that is needed in high performance organizations today.

Managers are essential to employee development in our fast changing world. But the culture of the organization as a whole needs to be supportive of learning. Applying traditional notions of education (K-12 or post-secondary) to the workplace will limit the growth and competitiveness of any company. Learning must be woven into the very fabric of the organization.

As Arie de Geus said:

The ability to learn faster than your competitors may be your only sustainable competitive advantage.



Learning Ethical Behavior in the Workplace

“We’re no longer asking everybody to do the next thing right; but to do the next right thing.”                   -Dov Seidman

Ethical behavior in the workplace has never been more important, yet companies continue to act as if a workshop or elearning program during onboarding is all an employee needs in order to behave ethically. That Rightwrong might meet the requirements of a regulatory agency, but don’t expect your employees to learn “…to do the next right thing.” A training event, classroom or virtual, is no way to develop ethical behavior in a workforce.

BP’s oil spill. GM’s faulty ignition switches. Takata’s airbag ruptures. Volkswagen’s emissions fraud. Simplicity’s crib deaths. Samsung’s phone fires. Wells Fargo’s customer deception. In each of these cases, somebody knew about the ethical violations long before lives were affected significantly, but company culture at the time either discouraged those individuals from speaking up or motivated leaders to sell products even with the knowledge that the risk of failure and criminal negligence was high. They chose sales and profit over doing the right thing.

I’m sure all of those companies include ethics in their employee training programs and list ethical behavior among the values in their employee handbooks. The problem is not with training compliance; it’s with the way people learn about ethical behavior and the way that behavior is supported by the culture of their companies.

Companies that make ethics a priority, need to be managing minds, not hands. It’s not about getting the task done; it’s about doing the task with integrity. You don’t learn this in a training program, even a highly interactive and gamified program. This means that managers must become facilitators of that learning. People need to learn ethical behavior in the workplace, with all of its ambiguity, tension, pressures, and consequences. People need to be faced with an ethical dilemma and learn from working through that problem in a real life situation, and receive feedback from their managers during the process.

Doing “the next right thing” is also dependent on having a learning culture that supports development of an ethical employee. This is a culture in which managers have the support of corporate leaders who make ethics not only a marketing tag line but also model this value in everything that they do. If leaders are condoning behavior that crosses the line, whether explicitly stated or not, employees will interpret that as permission to behave badly. If the only measure of success is number and amount of sales at the end of the month, people will do whatever they can, ethical or not, to hit those targets. If employees see their male bosses treating women like second-class citizens, they are likely to do the same. We need managers to show employees that ethical behavior in what they say and do every day is an essential aspect of being a successful, respected, 21rst Century company.



The Future of Learning is Not Training

(This post was co-authored with David Grebow.) Crystal Ball

Instead of jumping off the January 1st starting line, we decided to wait and see what other people are predicting for corporate training and learning in 2017.  Here’s a partial list from our 2017 Crystal Ball Scorecard:

  • The New Year will bring a wider adoption of mLearning
  • All companies will be dong more microlearning
  • There will be much wider use of xAPI and Learning Records Stores (LRS)
  • Learning apps will become ubiquitous
  • Gamification will be for everything and everywhere!
  • Video learning will be on a smart device near you
  • Social learning is an idea whose time has come
  • Things are looking up for cloud-based delivery
  • Responsive Web Design (RWD) will be the buzzword for 2017
  • 2017 is the year of adaptive more personalized learning
  • Content curation for learning will lead to better learning
  • Look out Virtual Reality (VR) and Augmented Reality (AR) coming up fast 
  • Finally, training will focus on performance and not on smiles

Any of these predictions about technology and trends may come true. We won’t know until we reach the end of 2017. We just believe the prognosticators are doing what they always do -- looking at the future through the wrong end of the telescope.

Before we tried to see into the future, we studied the past. For over 100 years, during the first Industrial Economy, work meant using your hands to produce things. Training and learning were predicated on the need to manage all those hands. Business schools focused their management practices and principles on managing hands. Today, despite the desire some of us have to pile into The Wayback Time Machine, most of us produce work with our minds. We have been transported into the Knowledge Economy so rapidly that many of us are still not sure what happened. Even in the workplaces where hands are still making things, minds are hard at work using the digital technologies to work faster, better, and smarter.   

All this means we need to make an abrupt turn and change our whole approach to the way we manage people, training, and learning. We know from experience that change is hard. We tend to grab onto the past and use it to design the future. It’s is a profound failure of imagination. That’s why so many predictions on this year’s list feel so disappointingly similar to last year’s. They are based on a managing hands model that is well beyond its shelf life. It’s just pouring "new wine into an old wine skin".

The future is no longer about looking for continuity with the past and choosing shinier versions of existing technologies and trends. Sometimes there needs to be a disruptive idea that lights up the crystal ball and makes us look at the future in a new way. We believe that future starts with a simple prediction: We will transition training and learning from a managing hands world to one in which we are managing minds. And managers will be at the center.

Managers will think very differently. Training and learning are no longer the primary responsibility of someone else like the L&D Department. The primary role managers will have will be helping people continuously learn, equipping them with the tools and technology they need, empowering them to work together, constantly collaborating, openly communicating and figuring out what they need to know, and know how to do so quickly and effectively. Managing minds is now their responsibility and they will need to rethink and relearn what to do. Managers will need to look for people whose EQ is as high as their IQ. They will need to post on their walls and carry in their wallets what Arie de Geus said when he headed the Royal Dutch Shell’s Strategic Planning Group. “The ability to learn faster than your competitors may be the only sustainable competitive advantage.”[1]

Employees have their own work cut out in this new economy. They will need to learn to “pull” the information they need from a variety of resources rather than wait around for the information to be “pushed” to them. The artificial and archaic way we separated learning from work will be replaced by the idea that work is learning. If employees are not continuously learning, finding what they need when and where it’s needed, they aren’t improving, creating, innovating, competing, or keeping up with change. In this new managing minds world, they need to be able to rapidly curate the information coming at them from all sides, take risks applying that information to their work, and quickly deciding what is useful. They will need to be able to communicate in every way, reflect on actions and decisions, and learn from everyone’s experience.

The only certainty about the future from here on out is that it won’t resemble the past. We no longer have the luxury of time to define, design, develop, deliver, manage, and measure formal courses. Survival will require people who can navigate a rapidly-changing maze of policies and procedures, products and services at high speed. They need to find their own curriculum and courses, figure out an appropriate way to learn, and get on with it. It’s cliché to say it but employees will have to learn how to learn in this new environment. And management will need to support self-learning, not direct it.[2] We discovered it is already happening in companies around the world, an unknown yet powerful trend.

So our prediction for 2017: The future of learning is managing minds.

For a more in-depth look at what this all means to managers and employees look for our forthcoming book from ATD titled “Managing Minds, Winning Hearts”.






Using Your Head and Your Heart

Tom Friedman, in his recent New York Times column titled From Hands to Heads to Hearts, advises us that “the relentless march of technology” is making human-to-human connection in our work more important IMG_1327
than ever. Even high tech jobs need what Friedman calls “STEMpathy”, combining knowledge and skills in science, technology, engineering, and math with empathy, the ability to understand and have compassion for the experience of others, such as a boss, coworkers, suppliers, business partners, or customers.  

Quoting Dov Seidman, Friedman writes:

Economies get labeled according to the predominant way people create value, pointed out Seidman, also author of the book “How: Why How We Do Anything Means Everything.” So, the industrial economy, he noted, “was about hired hands. The knowledge economy was about hired heads. The technology revolution is thrusting us into ‘the human economy,’ which will be more about creating value with hired hearts — all the attributes that can’t be programmed into software, like passion, character and collaborative spirit.”

So the question for me is, “What is a manager’s role in the technology revolution? How can they manage people to get the most from their heads and hearts?” In a December 6, 2016 blog post titled “Managing Minds, Winning Hearts”, I wrote:

…workers will have to be smarter, more agile, and more innovative than ever. As automation and robotics improve, the demand for globalization increases, and communities become more diverse, any organization's competitive advantage will be in its collective knowledge and expertise. This means managing minds. The primary role of managers will be helping the people they supervise to become more competent, capable, and engaged in contributing to the success of the organization.

Friedman and Seidman remind us that the heart matters, too. In addition to increasing job competency, we need people who can develop the compassion and empathy and caring to collaborate, cooperate, and communicate with their teams, across their companies, and with partner organizations.  

But businesses cannot find and hire all of the sufficiently smart, compassionate people that they need. Managers have to develop these employees. Training programs are not the answer. In the knowledge economy, or, as Friedman calls it, the “human economy”, people need to learn continuously, on the job, in the flow of their work. And they need to be technologically and humanly proficient.  

As my co-author David Grebow has said, "The point being that successfully managing minds means being able to get the best from people - their talents, thoughts, creativity, ability and willingness to cooperate and collaborate, trust and more that we can’t anticipate as technology advances. This requires managing hearts as well as minds. In the industrial economy, you could hate your boss and your coworkers and your job and have a low EQ and still crank out work with your hands. Playing well in the sandbox was not a prerequisite. Try that in the knowledge economy, in a company that needs you to be producing with your mind in concert with others with whom you work, and you'll soon be out of a job.”



21rst Century Organizations Need a Learning Culture

Most companies today have a “training culture”. ATD’s 2016 State of the Industry report concludes:

…the traditional, instructor-led, face-to-face classroom continues to play a crucial role, and it was still the delivery mechanism for 51 percent of learning hours used in 2015.

The percentage would be considerably higher if the ATD study had included all push training, such as elearning programs and attendance at conferences. Which is to say that most learning in organizations is still delivered using formal, structured, leader-centered training methods.

In a podcast produced for ATD, I explain why organizations need to change from this “training culture” to a Podcast “learning culture”. And in the online workshop that I facilitate for ATD titled, Essentials of Developing an Organizational Learning Culture, we talk about what you can do to develop a learning culture in your organization.

This change requires, in part, engaging managers in helping to facilitate the learning of their direct reports. Managers have a key role to play in employee learning, but it means that managers must shift from “managing hands”, a twentieth century way of being a manager, to “managing minds”, a twenty-first century way of being a manager.

For more about managing minds, look for David Grebow and my forthcoming book to be published by ATD in the Spring of 2017, tentatively titled, Managing Minds, Winning Hearts.



Managing Minds, Winning Hearts

We are now in the "Knowledge Economy" which means that we must learn differently than we have in the past. As I wrote in a previous blog post titled, The Manager's Abridged History of Work and Learning

Today, work is more about having a keen mind than it is about having a strong back or skilled hands. This has profound implications for how we manage workers and how we facilitate learning in the workplace.

It no longer makes sense to use formal training as a solution to every performance problem nor to assume Brain-image-picture-clipart-4 that workers will learn everything else they need to know on-the-job from the people around them. Rather, employees need to know how to learn, how to get the knowledge they need when and where they need it, and be accountable for results, not for attending a training program. In a blog post that David Grebow and I wrote for ATD titled, Changing the Way We Manage Learning in the Knowledge Economy, we said:

In the 1920s, the average lifespan of leading U.S. companies was 67 years. By 2013, the average lifespan had dropped to 15 years. The new environment is increasingly aggressive, hypercompetitive, and constantly driven by surprises, innovation and technological changes. And it’s all happening at an unprecedented, increasingly faster pace. We have no choice. We need to stop managing hands and focus on managing minds. 

Human hands are being replaced by robotic hands. And managing robots is not a job that requires hands-on managers. This trend towards automation is not stopping. The book, Impact of Emerging Digital Technologies on Leadership in Global Business, reports that 47 percent of U.S. jobs are likely to be automated. This is will change the nature of work in all industries. Robot hands can now thread a needle. As the steel fingers of automation reach even further and grab more of the work once done by human hands, an almost unimaginable future begins to appear. 

This future is one in which humans no longer need to make things or fix things or sell things or provide basic services. It is a future in which workers will have to be smarter, more agile, and more innovative than ever. As automation and robotics improve, the demand for globalization increases, and communities become more diverse, any organization's competitive advantage will be in its collective knowledge and expertise. This means managing minds. The primary role of managers will be helping the people they supervise to become more competent, capable, and engaged in contributing to the success of the organization.

To learn more about "managing minds", attend our webcast, Managing Minds,Winning Hearts, on December 9, 2016, at 1:00 Eastern.


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Functional Stupidity at Work

We want smart phones, smart cars, and smart refrigerators, but we do not want smart employees. Or, to say it more accurately, our organizations are designed to ensure that smart employees act stupidly. This is what Andre Spicer and Mats Alvesson have concluded from their research on organizations. They write:

For the past two decades, management theorists have been convinced that organisations succeed or fail on the basis of their specialised knowledge. However, our close look at the corporate world showed Stupidity quite a different picture: many large corporations seemed over-run by stupidity. What’s more, this stupidity is not just the accidental result of a few corporate buffoons. It is often intentionally created. This is much more than taking advantage of the various inbuilt cognitive biases with which behavioural economists are so obsessed. Rather, it involved organisations purposefully creating a kind of collective mindlessness.

What they label “stupidity” is the tendency to follow unproductive rules and regulations without questioning their value, speaking in meaningless jargon to sound smart, and doing whatever everyone else is doing just because everyone else is doing it. In other words, being stupid about one’s work. Companies that Spicer and Alvesson studied, hired smart people but then these people, because of company culture, were discouraged from using their brains.

This is what Steve Jobs probably meant when he said, “it doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.” Maybe Apple allowed smart people to act smart, but most companies set up cultural barriers that prevent people from learning and applying that learning to improving organizational performance.

Chris Argyris referred to these “stupid” behaviors as “organizational defenses”. In his classic 1990 text, Overcoming Organizational Defenses: Facilitating Organizational Learning, Argyris made us aware of “defensive routines” in organizations that get in the way of learning. He writes:

…whenever human beings are faced with any issue that contains significant embarrassment or threat, they act in ways that bypass, as best they can, the embarrassment or threat. In order for the bypass to work, it must be covered up…Organizational defensive routines are actions or policies that prevent individuals or segments of the organization from experiencing embarrassment or threat. Simultaneously, they prevent people from identifying and getting rid of the causes of the potential embarrassment or threat. Organizational defensive routines are anti-learning, overprotective, and self-sealing. (p. 25)

In the past, maybe a company could survive without employees using what they know, by simply doing what they’re told. This is what David Grebow and I call “managing hands.” However, in this era of rapid technological change, automation, globalization, and a multi-generational workforce, organizations can’t afford a culture that makes organizations stupid. Rather, companies need smart employees who use their collective knowledge to make their companies smarter, encouraging continuous improvement, creativity, and innovation. This is what Grebow and I call "managing minds." In our forthcoming book for the Association for Talent Development (ATD), we explain this shift from "managing hands" to "managing minds."

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Workplace as Learning Lab

Every worker learns differently given the task, content, and circumstances. Yet, we continue to try to educate, train, and develop everyone in the same way. Maybe it’s time to turn our workplaces Innovation lab into learning labs. By experimenting with different methods of learning and evaluating the process and outcomes of these methods in the workplace, we might discover what methods are best for which workers under what circumstances.

Michael Noble, in his post for “Chief Learning Officer” titled, How to Build a Learning and Innovation Performance Lab, suggests that learning professionals should start looking for workplace opportunities to try out new ways of learning. Of course, he recognizes the obstacles. He writes:

The biggest challenges may not be cost, time or talent, but corporate preference for transactional rather than consultative support. With some initiative and determination, both leaders and learning practitioners can move from being learning producers/providers to strategic advisors.

Noble argues that the day-to-day activities of an organization provide opportunities for innovation in learning. The workplace can be a lab for experimenting with new methods of learning and performance improvement. The key is to be intentional about learning from these experiences, to be willing to try new methods and to evaluate what works and what doesn’t.

Saul Kaplan writes about the urgency to focus on learning from innovation in the workplace in his book, The Business Model Innovation Factory: How to Stay Relevant When the World is Changing. He writes:

The real trick is creating a business model innovation factory where technologies and capabilities can be remixed in new combinations to deliver value. The imperative is to do R&D for new business models. Not just concepts on a whiteboard or in a consulting deck, but R&D in the real world to explore the viability of a new business model in real market conditions. Not just tweaks of the current business model, but entirely new ways to create, deliver, and capture value. Organizations need a business model innovation factory to explore new business models unconstrained by the current one.

Substitute “learning model” for “business model” and you can see how you can make the workplace a learning lab. Kaplan recommends experimenting with innovation projects separate from the main business activities but close enough organizationally that effective changes can be easily and quickly adopted by the whole business, government agency, nonprofit, or educational institution. We need to do more of this with learning. That is, create experiments in the workplace to try out new ways of learning fast and learning well.

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The Manager’s Abridged History of Work and Learning

In a post that David Grebow and I wrote for the Association for Talent Development Management Blog, we present an abridged history of work and learning and how work and learning are, necessarily, much different in the 21rst century than they were in the past two centuries. Today, work is more about having a keen mind than it is about having a strong back or skilled hands. This has profound implications for how we manage workers and how we facilitate learning in the workplace.

We write:

We believe we are at an inflection point in the history of managing people, and managers sit at the center of the curve. To know where we’re going with managing people, we need to know where we’ve been. The global economy has undergone three major and notable economic paradigm shifts in the past 200 years, each with an attendant educational system that helped people learn how to do their jobs. 

In the 19th Century Agricultural EconomyWe Managed Backs.  1800 farming

In the 20th Century Industrial EconomyWe Managed Hands1900s factory workers

In the 21st Century Knowledge EconomyWe Need to Manage Minds2000 mind workers

The workplace doesn’t need backs or hands anymore. Automation, robots, and more efficient processes have seen to that. The 21rst century workplace needs minds that are smart, social, agile, and innovative. And, therefore, the workplace needs managers who can create the conditions in which people can learn continuously on their own and from each other and can apply this learning to helping their Knowledge Economy organizations be successful.



Megan Torrance Talks About Learning in Organizations

I’m always looking for examples of companies that put learning ahead of training. TorranceLearning is one of those companies. They design custom learning experiences for client organizations by starting with the intended results and related performance problems and then, and only then, do they provide employees with the tools, structures, and processes to learn what they need to know and do to be successful.  

I had the pleasure recently, along with my Learning to be Great™ business partner, James Stilwell, to interview the founder and CEO of TorranceLearning, Megan Torrance. She answered our questions about how her company helps clients create a learning culture and how she creates a learning culture within TorranceLearning. Lessons for all of us are in this video of the interview.



Of the many insights I gained from this interview, two stand out for me. One is the key role of managers in learning. As Megan says, “The single biggest impediment to applying something on the job tends to be managers.” We need to help managers learn how to support the learning and development of their direct reports and co-workers. The second insight is “collaborative learning”. According to Megan, this takes two people, one person willing to be vulnerable and open to feedback and another person willing to give help within a culture that isn’t punitive regarding mistakes, failures, and just not knowing. All good lessons.


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Culture Eats Strategy at Wells Fargo

"Culture eats strategy for breakfast," a quote famously attributed to Peter Drucker, is being played out dramatically in the crisis at Wells Fargo Bank. Apparently, the culture in the Wells Fargo workplace is not Stagecoach aligned with the espoused values of the company. This misalignment has tarnished the brand built on an image of trust and customer care, resulted in the dismissal of over 5,000 employees, poses a threat to the tenure of top executives, and resulted in a precipitous decline in the market value of the company.  

Wells Fargo CEO Stumpf has acknowledged that employees had opened bogus bank and credit card accounts for customers and then collected millions of dollars in illicit bank fees. In reporting on Stumpf’s testimony before the Senate Committee, Michael Corkery writes:

Mr. Stumpf disagreed with senators when they described the illicit sales as part of a deliberate scheme to increase the bank’s bottom line. He said the 5,300 employees who had been terminated over the issue — many of them earning $12 an hour — deserved to lose their jobs.

“The 5,300 were dishonest, and that is not part of our culture,” Mr. Stumpf said. “That is not scapegoating.”

This statement by Stumpf indicates that he does not realize that the dishonest behavior IS part of the Bank’s culture. It might not be what he hopes is the culture, but it surely is the normative actions of employees, recognized and supported by managers, and incentivized by the organization. The behavior is guided by the beliefs and assumptions of employees; it’s how they do their work, regardless of what it says in the company’s statement of values.

If you tell 12 dollar an hour employees that they can make more money by opening credit card accounts and “everyone is doing it” and maybe even, “Don’t worry about it, customers can always cancel”, then the company is rewarding unethical and, in some cases, possibly illegal behavior. And evidence suggests this has been going on for years. That’s culture trumping strategy!

Ethics training required of every employee seems to have had little impact on behavior. This is understandable given the culture of the organization. Whatever employees learned about integrity, honesty, and trust in the classroom was quickly forgotten under the pressure of cross-selling and making their numbers.

Wells Fargo is not alone in its failure to align workplace expectations and behavior with the strategic goals set by management. This disconnect can have very serious consequences for companies, as we are seeing at Wells Fargo. Every organization needs to periodically check to make sure that the actions being rewarded on-the-job are consistent with its espoused values and goals.

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