By Kevin Meyer

Over the last several years I’ve become fascinated with learning systems inside organizations.  I’ve also found that the best leaders are generally those that voraciously seek out and consume knowledge, then distill, implement appropriate new concepts, and especially teach.  In fact, an effective “knowledge distillery” is now the number one characteristic I look for in leaders.  Far more important than direct experience in a field or function.

The Wall Street Journal touches on this in a recent article on how our education system is failing to teach an ability to process new knowledge. A key component of creating knowledge is leveraging failure.

In most high-school and college classes, failure is penalized. But without trial and error, there is no innovation.  “One of the most important things I have to teach my students is that when you fail, you are learning.” Students gain lasting self-confidence not by being protected from failure but by learning that they can survive it.

Unfortunately the tendency of society, and schools, is to protect people from failure.  Failure is seen as a negative instead of a potential positive.  Grade inflation or no grades at all, games with no winners and losers, science experiments designed with a range of positive outcomes instead of the potential to simply blow up.  Failure is important.  Teaching kids to learn from failure even more so.  Maybe you’re simply not cut out to be a dodge ball athlete.  Best if you learn that early.

Modern society generally moves in the same direction.  Instead of trying to just create equal opportunity, there is a tendency to want to create equal outcomes – to cushion or even eliminate the impact of difference, or even failure.  It seems like nearly every successful executive, passionate community activist, brilliant scientist or whatever has some key hardship story in their past.  Perhaps early on during their childhood or later in their professional career.  Those difficulties – not necessarily failures in the traditional sense – can be powerful teaching moments. 

Many, many years ago I was involved with a startup company that didn’t perform as expected (that’s being generous).  One of the best, and most important, experiences of my life – I learned about the criticality of sales and marketing, how cash flow is far more important than sales and even profits, and how people can be far more valuable than what you pay them.  Those lessons have stuck with me, and have radically changed my career.  Without that failure I would have been in a completely different place.  Thankfully I wasn’t protected from that failure.

What types of functions do you have in your organization?  Do you have someone that is specialized in materials science, or someone that has a materials science background but can leverage the thinking process to solve problems?  There is a difference, and our schools may skew candidates toward one side.

The university system today demands and rewards specialization. Professors earn tenure based on research in narrow academic fields, and students are required to declare a major in a subject area. Though expertise is important, Google’s director of talent, Judy Gilbert, told me that the most important thing educators can do to prepare students for work in companies like hers is to teach them that problems can never be understood or solved in the context of a single academic discipline.

A friend of mine, a guy who sometimes regretted getting his PhD in a narrow field, used to tell me how in his opinion the higher you went in advanced schooling, “you learn more and more about less and less.”  That’s stuck with me.  Yes knowing a lot is important to the progression of a field of knowledge, but it is also important to recognize that unless overtly challenged the prism through which knowledge is obtained and processed becomes narrower and narrower.

It’s not just a product of advanced knowledge, but sometimes a self-imposed perspective – a form of confirmation bias.  How many folks in the U.S. only receive news via U.S. outlets such as CNN or Fox?  How many politically-passionate folks, on the left and right, only read articles from journals and sources on their side of the spectrum?  How many of us really seek out opinions contrary to ours, and then truly think about them as opposed to simply discarding as “whacko”?

Steve Jobs (oh boy, here we go…) is considered by many to be a great innovator.  Some believe that, some don’t, but that’s not my point.  He considered the key to Apple’s innovations to be “design at the nexus of technology and liberal arts.”  Thinking not just about neato keen technology – as most tech companies do – but a much wider perspective of the application of technology to solve problems.  That requires people that can process a wide base of knowledge.

To do that requires a passion for knowledge.  To consume knowledge across a wide spectrum of topics.  The recognition that knowledge comes not just from words, but from experiences.  The ability to tie it all together.  The passion to do something with it, directly or indirectly.

So take another look at the folks in your organization, especially those in critical leadership roles or on the track for such positions.  Are they just good in function or experience?  Is that really enough to move forward and take your organization to new levels?  Who among them read everything in sight, from a wide range of business and non-business topics, and can tie disparate concepts together into new ideas?  How many distill a wide funnel of knowledge into important disruptors – that can become a competitive advantage?  How many can effectively implement such ideas – and learn when they don’t work out as planned?  And finally, how many can teach others?

Those will be your most important leaders.  How do you leverage them?  How do you create more of them?

By Kevin Meyer

Regular readers know that the "respect for people" pillar of lean is particularly important to me – in fact I consider it to be the most critical.  My organization often hears me say that 90% of problems are the result of poor processes, not people, and 9% of the remaining are probably due to poor leadership.

The FAA appears to agree.  A couple years ago I told you how the organization had created a nonpunitive reporting system for air traffic controllers to report incidents.  That led to a dramatic change, which might initially be seen as a scary negative but as most of us immediately realize is a huge positive:

New numbers released by the Federal Aviation Administration show reports of air-traffic errors have nearly doubled in three years. The number of reported incidents in 2007 was 1040, and that number rose to 1887 in 2010, an 81 percent increase.  This cultural change in safety reporting has produced a wealth of information to help the FAA identify potential risks in the system and take swift action to address them.

The FAA was apparently so impressed that they have now expanded the program to other functions.

Federal Aviation Administration officials announced that as part of a new "safety culture" at the agency, they would fully embrace nonpunitive reporting systems, in an effort to generate information that could expose bigger dangers.

The FAA took a half-step in that direction in 2008, creating a nonpunitive reporting system for air traffic controllers. On Wednesday, the FAA said it was expanding the program to employees who maintain radar installations and other systems.

"Make no mistake about it: We don't condone (errors)," said David Grizzle, the FAA's Chief Operating Officer. "However, we presume the good intent of our controllers and are more interested in the free flow of information than we are in punishing for errors."

The FAA's decision also points to a problem many organizations face as they improve – it's easy but very dangerous to rest on positive improvement.

In announcing the new reporting systems, the FAA cast itself as a victim of its success. FAA officials said they used to be able to measure risk by counting accidents. The fewer crashes, the better the agency was doing.

But with the commercial aviation accident rate at historically low levels — there has not been a fatal commercial crash in three years — the agency needs to look at other data to identify risky behaviors and incidents, and to address them.

It's analogous to a common misperception.  As a process becomes more stable, the tendency and desire is to measure less and move on to something else.  But in reality the black swans, the long tail events that hide in broad statistical analysis, are the most disruptive and dangerous.  Instead of measuring less frequently, you should measure more frequently to uncover and address the next layer of process variation.

The FAA seems to understand that – and the importance of enabling and ensuring people are part of the data collection process.  With rare exceptions the problems are in the processes, not the people.