Last week John Haley and John Brown penned an interesting piece in the Harvard Business Review titled Great Businesses Scale Their Learning, Not Just Their Operations.  They began with a bit of history on how scalable efficiency used to be a critical foundation for business, but that’s no longer the case today.

Scalable efficiency works best in stable environments that are not evolving rapidly. It also assumes that the constituencies served by these institutions will settle for standardized products and services that meet the lowest common denominator of need.

Today we live in a world that is increasingly shaped by exponentially improving digital technologies that are accelerating change, increasing uncertainty, and driving performance pressure on a global scale. Consumers are less and less willing to settle for the standardized offerings that drove the success of large institutions in the past.

Which is where scalable learning comes in.

We believe there still is a compelling rationale for large institutions, but it’s a very different one from scalable efficiency. It’s scalable learning. In a world that is more rapidly changing and where our needs are evolving at an accelerating rate, the institutions that are most likely to thrive will be those that provide an opportunity to learn faster together.

So what is “scalable learning?”

We’re not talking about sharing existing knowledge more effectively (although there’s certainly a lot of opportunity there). In a world of exponential change, existing knowledge depreciates at an accelerating rate. The most powerful learning in this kind of world involves creating new knowledge. This kind of learning does not occur in a training room; it occurs on the job, in the day-to-day work environment.

New knowledge being created at the gemba.  Unfortunately the authors don’t dive much deeper into the ramifications of that statement, specifically that it requires a focus on respect for people.  That new knowledge comes from the creativity, ideas, and experience – the brains – of the folks creating value on the manufacturing floor, in the ICU, the lab, the HR office, or, in the small handful of exceptional organizations, even the executive office.

Organizations must first recognize and truly embrace the potential value of their people, then go far beyond simply putting signs on walls saying “people are our most important asset” to really capture, enable, optimize, and leverage that potential.

What if we went further, redesigning our work environments (physical, virtual, and management systems) to help accelerate learning and performance improvement on the job? We have not been able to find a single company that has undertaken this in a systematic and holistic way.

Perhaps not to the extreme the authors would like to see, but I do know of several organizations that do a pretty good job.  Companies like Danaher and Toyota where people-driven kaizen generates several points of productivity improvement – and competitive advantage – each year.  Companies like Menlo Innovations where extreme transparency and teamwork optimizes group learning.  And companies like Aluminum Trailer Company where a focus on TWI – Training Within Industry – embeds new learning into standardized yet evolving processes.

Organizations large and small, in all industries, where the common denominator is an understanding of the true value of people and a commitment to leveraging and optimizing what they truly believe is their most important asset.