Learning to Produce

Big-picture Goals Boost Company's Bottom Line

Derek Sankey
For the Calgary Herald
Saturday, January 19, 2008

Companies have embraced the notion of "learning organizations" in recent years by offering more learning and development opportunities in a tight labour market to boost productivity and enhance recruitment.

But if Canada's productivity gains are any indication, much of that investment in learning seems to be making little difference to the bottom line.

Canada's bleak record on labour productivity continues, despite efforts by businesses to invest in a wider range of training and development programs. Productivity growth in Canada was 2.5 per cent from 2001 to 2005, compared with 15.9 per cent in the U.S. It slowed to 0.1 per cent in 2004 and 1.1 per cent in 2006.

The "learning organization" became a buzz word when companies started to focus on complex "learning goals" to build the knowledge, skills and strategies that lead to increased performance.
Performance goals, meanwhile, focus on the end result and are most effective for simpler tasks.

Research over the past 30 years has shown learning goals are more effective at attaining objectives, but companies aren't embracing them enough because they're targeting the quarterly bottom line instead of the bigger picture, according to one researcher.

"Oftentimes in organizations, it is very tempting to be in performance mode all the time, not learning what is going on outside an organization," says Gerard Seijts, a professor at the Richard Ivey School of Business at London's University of Western Ontario.

He recently completed research that backs up previous findings showing learning goals lead to better performance, even if the process takes longer and is more complex.

Working with Masters of Business Administration and graduate students, he developed a simulated telecommunications company in a laboratory setting where students were asked to perform the complex task of increasing market share.

People in the learning goal condition took more time to access information and spent longer in the simulation, but at the end they had outperformed individuals that had a performance goal.
"With a performance goal, (students) often develop some kind of tunnel vision with results at all costs," says Seijts.

Piers Steel, a professor at the University of Calgary's Haskayne School of Business agrees the trick is finding the right balance between the two types of goals.

"If you completely focus on outcomes, what you're going to have is people covering their asses and refusing to take risks," says Steel.

Perhaps one of the reasons that U.S. industries have outperformed Canadian businesses in recent years may be related to the differing business and social cultures.

"Sometimes in the U.S., they set these outrageous goals and then they do a phenomenal job of attaining them," says Seijts.

Companies need to carefully evaluate how they are specifically building learning goals into the daily job functions of employees, as opposed to offering only professional development courses that may not be related to the corporation's objectives.

Coaching and mentoring programs are one way to enhance learning objectives because the concepts generally establish longer-term relationships and performance can be measured more accurately than via a quarterly sales chart.

A review of internal processes such as HR practices that reinforce learning goals, as well as an analysis of how a company's research and development budget aligns with those goals, might be necessary for business leaders to fully capture the gains that learning goals offer.

For employees, it means using every opportunity available to build on the knowledge and skills that enhance your productivity.

"You need to invest a bit of time in your learning . . . and you will rapidly outperform other individuals," says Seijts.

Steel says that when new employees are hired, it presents a good opportunity to adopt the learning organization philosophy right from the start.

"If somebody's new to a job, for example, you would get better results in the long run if you evaluate them and help them focus on how much they're learning over time," he says.
"Performance is just focusing on the easy gains and they're not willing to take any risks," says Steel. "Focusing on learning is focusing on what you can control."

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