The business industry is one of the areas where experience serves as the best teacher. Individuals and companies in different business fields learn from their successes and failures. They also learn from observing the failures and successes of other companies in the industry. Individuals and organizations should learn from their respective experiences in business; however, this is not always the case.
Some organizations fail to learn from their experiences, and they propagate recurrent failure in their business processes. This paper looks into the dynamics of learning and failure to learn for some with a close focus on the technical and social barriers that hinder learning.
How organizations learn or fail to learn
Organizations should learn from their past failures, and they should always apply the relevant measures to ensure that failure is eliminated from their business processes. Some companies apply lessons learned in the past to their future business strategies, but others fail to learn from their past experiences. Technical issues like business models, leadership approaches, and failure to respond to the prevailing business environment risks are the common causes of failure to learn (Cannon & Edmondson, 2005).
Most organizations like to try out the same business model over and again, hoping that it will harness success. They keep blaming other factors when they continually fail. The operations management team in such organizations and the leadership function are normally the instigators of failure because they fail to learn from past failures.
In the contemporary business settings, modernization has led to an increase in social barriers to learning in organizations. For instance, some organizations have acquired a high cultural diversity in their workforce, but they still fail to apply organizational changes to accommodate cultural diversity. In the same capacity, some organizations fail to eliminate bad leaders and managers, and they end up becoming bankrupt.
Enron is one of the organizations that serve as good examples of companies that have failed to learn. Enron went bankrupt when Jeffrey Skilling became the CEO of the company. The leader made poor business investment decisions over and again, and the company did not learn from his recurrent failure (Benston & Hartgraves, 2002). The company assumed an unethical business model that resulted in bankruptcy in 2001.
Organizations learn through experience. Companies make investments and decisions that attract business risks, and their failure or success in different projects should serve as lessons for future reference. Organizations must learn to make meaning from their failures, and they should be guided by factual information when developing business strategies.
Recurrent failure in business should be an indication that something is wrong with the organization, and it is always advisable to consult professionals before developing interventions. Companies that continue applying the same failing strategies over and again, never learn from their mistakes. It is also recommended that organizations should learn from the failure and success made by other companies in the same industry (Cannon & Edmondson, 2005).
Organizations learn through the development of experience in applying different business strategies. Companies with skilled leaders have a better chance of learning from their past failures and successes because the leaders can make wise decisions. Organizations fail to learn when they continue trying the same inefficient strategies even after recurrent failure. Organizations must always look into duplicating their successes, and eliminating failure by avoiding strategies that have brought failure in the past.
Benston, G. J., & Hartgraves, A. L. (2002). Enron: what happened and what we can learn from it. Journal of Accounting and Public Policy, 21(2), 105-127.
Cannon, M. D., & Edmondson, A. C. (2005). Failing to learn and learning to fail (intelligently): How great organizations put failure to work to innovate and improve. Long Range Planning, 38(3), 299-319.