The Best Companies Out-Think Their Competition by Becoming Learning Machines

The best organizations are learning machines. By focusing on continuously getting better, they outthink and outpace their competition.

A core principle that I learned from over a decade as a Lean/Agile coach is that one of the best sources of learning is your recent past. However, most teams don't learn from this fountain of knowledge because they don't have a system in place for analyzing and processing results.

By reflecting on what you've accomplished and where you've failed, you can find key patterns and discover the sources of your outcomes. Once you can see these root causes, you can begin to make strategic changes to improve and get better results going forward. 

Once this is fully embraced and adopted, it creates a powerful strategic advantage. Reviewing results closely, finding insights and patterns, choosing key changes to make, and implementing them with commitment will fuel innovation and remove waste in a business.

Here are the six key steps to embrace a culture of continuous improvement and build a true learning organization.

1. Eliminate shame and judgment.

The biggest blocker to embracing a continuous improvement mindset is the tendency for people to look for problems and assign blame to individuals. The need to figure out who's at fault is a powerful human tendency.

if you really want to create a learning culture, you need to push that aside and focus on insights rather than judgment. Setting good ground rules will help keep things focused on learning, not witch-hunting.

2. Make it okay to talk about failure.

While I'm not a big advocate for failing per se, I am a big fan of learning from failures by openly talking about them and learning from them. First, you need to capture them and the surrounding data. Like the Federal Aviation Administration (FAA) after an airplane crash, you want to collect as much data as you can as quickly as possible. This will be important fodder for your analysis and insight development.

3. Get good at root cause analysis.

As an architect, I like to tell the story of my college professor saying, "If you see water in the basement, the first place to check is the flashing around the chimney." Why check the chimney? Well, just because you see water in the basement doesn't mean that's where it's coming from, and chimneys, which are often the core cause, are notoriously leaky.

Similarly, you need to dig beneath the surface of the presenting problems that you see at first glance. Ask "why" several times to uncover the underlying source of the problems you've identified. Once you've dug down, identify the areas that really need to be addressed to fix the problems at the source to create long-term, sustainable improvements.

4. Distinguish between decisions and outcomes.

One of the key skills I work on with executives is the ability to separate the evaluation of decisions from outcomes. All businesses have varying levels of uncertainty, which means that not all good decisions lead to good outcomes and not all bad decisions lead to bad outcomes. Luck and chance play a role. Just because you had a bad outcome, don't assume you made the wrong decision. And don't lull yourself into a false sense of security by assuming all good outcomes were the result of brilliant decisions on your part.

5. Commit to improvements and changes.

Once you identify areas that need improvement and changes you could make, focus your efforts on a limited and specific set of priorities. Don't spread yourself too thin. Better to get a few things done quickly and completely than to have a long list of partially completed projects.

It's also important to track and monitor changes being implemented. Have a plan of action, milestones, and follow-ups to make sure things are really being implemented, and that they are having the impact you intended. If need be, don't be afraid to take a step back and rethink your approach.

6. Make it a regular habit and commitment.

The most important thing you need to do to become a true learning-based organization is to make a habit of reflecting on results and finding insights into future changes. High-performance teams set aside time each and every week to run retrospectives and identify the improvements that they will commit to. Great leaders reflect on their habits and behaviors to find ways to improve. Great companies bake these activities into the regular rhythm of meetings and reviews.

These strategies will increase your company's learning velocity and ultimate ability to improve and innovate more quickly. If you're in a high-growth business and/or a quickly changing market, these skills are not just nice-to-have, they are critical to your survival. In fast-paced markets, the company that can learn the fastest will be the one to rise to the top and dominate its competitors.