Becoming an agile, innovative organization depends on your ability to learn. Here’s how to build future-ready skills and competencies that will take you higher.
OCBC Bank in Singapore, like many other companies, realizes that the megatrends transforming the world require a no less radical transformation of the workforce. This is more than reskilling, as Aye Wee Yap, OCBC Group Head of Learning & Transformation, explains: “The enormity of the change means that, instead of just targeting specific job roles, which may have sufficed in the past, we must address challenges at an organizational level. Preemptive reskilling is strategically important, but the real goal is to create a learning organization.”
Indeed, learning has become a strategic imperative — not a nice-to-have but a got-to-have, as Edward Hess, professor emeritus at Darden, told IESE professor Evgeny Káganer in an interview on “Taking corporate learning to the next level.” Today, many companies declare that transformation is a priority for them. And when you look at what underlies transformation — agility, adaptability, innovation, resilience — you realize that fundamentally it is the ability to learn how to do new things. “I believe we’re in an era where every company is going to be in the business of learning, with the speed and quality of your individual and organizational learning becoming a strategic differentiator.”
Hess’s predicted future is now. In this report, we consider how to become a learning organization.
In this report, we consider how to become a learning organization
By this, we’re talking about more than simply getting organizational members to use their knowledge to perform their tasks better. Three decades ago, the Japanese scholar behind The Knowledge-Creating Company, Ikujiro Nonaka, noted the limits of that narrow approach to learning. For value creation and competitive advantage, he said you had to get the knowledge out of individuals’ heads and get them to share it, enacting new behaviors and new mental models that could be reassimilated back into the organization as collective new knowledge. Similarly, the management scholar Peter Senge regarded organizational interactions as key to the development of learning organizations — a term he popularized in his 1990 book, The Fifth Discipline. Yes, we need individual learning and personal mastery but, as a systems thinker, Senge emphasized the need to understand how it all interrelates and fits together as a whole, culminating in a shared vision of how to get things done. And that final piece — actually changing the way that things get done — is what the late Harvard Business School professor David Garvin considered to be the hallmark of a true learning organization. Successful companies learned from experience (both their own and others’) and then reflected that learning in subsequent decision-making and future business practice. And yet, many corporate Learning & Development (L&D) efforts remain focused on individual learning only.
Let’s look at some of the specific factors and activities that may encourage and support the development of learning in your organization, based on research insights from IESE professors and the experience of business practitioners.
Learning starts with leaders
Learning organizations do not happen by chance. To go from learning individuals to a learning organization, you need a common direction. This takes alignment between what individuals are interested in and want to learn, and what the organization aspires to become and the capabilities necessary for that.
That common direction is set from the top. This implies there is consensus among the company leadership — from the CEO on down — on the common purpose: what are we here for? This is beyond knowing the business strategy. It’s knowing what defines your identity as an organization and the unique way in which your organization will behave in pursuit of its strategy. It’s also knowing what can or cannot change as transformation begins to challenge the organizational identity.
Leaders who “manage by missions” do not use a command-and-control style of management but rather seek to empower others by casting an inspiring vision — “a shared picture of the future we seek to create,” in Senge’s words — which everyone in the organization can unite around and aspire to reach.
Leaders who “manage by missions” seek to empower others by casting an inspiring vision
“Management by missions” has three key features, according to IESE’s John Almandoz and Carlos Rey: a larger purpose (why are we learning and developing these new capabilities together), self-management (having people take ownership of and responsibility for their own learning and development) and unity (making sure each person’s learning is connected with the organizational purpose). The leader’s role is to foster a learning environment where the key drivers are commitment (both personal and corporate), cooperation (across departments and functional areas) and coaching (where those who have developed new capabilities pay it forward by helping others learn them, too).
To manage this way demands a special kind of leadership. “For me, leadership is key,” says Ewoma Oloye in an interview later in this report. “For an organization to be a learning organization, the leadership has to be learning leadership. The leadership has to understand that continuous learning and continuous improvement is the one thing that will set you apart.”
IESE professor Marta Elvira agrees. “From their personality and relational abilities to their values and what they stand for, leaders can foster an organizational culture that enhances fairness and trust — two essential pre-conditions for knowledge-building and knowledge-sharing.”
She gives the example of a firm with global operations wanting to acquire new knowledge such as multilingual capabilities to leverage global diversity. On the one hand, it can recruit people of different nationalities who speak different languages and also train employees in languages, building capabilities of cultural understanding. But more important is having the right leaders who model this understanding themselves.
“For diversity to become an organizational asset, leaders — and middle managers who often hold the key to organizational change — must be comfortable with diverse teams themselves. They must know how to integrate new knowledge capabilities, so they don’t atrophy or stay siloed, but are widely shared. Everyone’s accumulated learning must be diffused throughout the entire organization. And that requires entrepreneurial managers able to adjust their own practices and capabilities as the environment changes.”
- Do you give your people freedom to learn?
- Do you proactively foster the organizational conditions necessary for learning to take place? This could mean temporarily freeing employees from their day-to-day operational duties to experiment with new ways of working, with new product or service offerings, and with other ideas coming from competitors, best-in-class organizations and trendsetters in your industry.
- Do you acknowledge your own limitations with respect to knowledge, information or expertise, inviting input from others and seeking multiple points of view? And do you build teams with complementary expertise, especially in areas where you lack?
- Do you provide time, resources and venues for identifying problems, and for reflecting and improving on past performance?
- Do you establish alignment between individual learning and the organizational goals and mission?
- Finally, and importantly, are you measuring your learning? And how? We’ll come back to this point later.
What’s your learning stance?
Once leaders are clear about their learning goals, they need to define which new capabilities are needed for their organization to thrive in a new or changing environment. Some of these will be the foundational or meta-capabilities (often referred to as dynamic capabilities) that every organization needs to keep evolving with the times and stay agile (see below).
These are some example capabilities related specifically to digital transformation. Which ones resonate with your organizational learning needs?
Outside-in thinking Focusing on customer needs and contexts
Learning orientation Linking goals to new knowledge development
Agile execution Building in increments and iterations
Cross-silo collaboration Reaching across internal and external boundaries
Ecosystem partnering Fostering network relationships
Data enrichment Enhancing decisions and actions with data
Others will be specific to your company and/or industry as dictated by your strategy and business model. These so-called last-mile capabilities could be technical skills like those increasingly being demanded by companies, according to the Education for Jobs Initiative (as highlighted below). To distinguish these, you will need the support of top management.
What are companies looking for in people?
Knowledge Big data, digital marketing, foreign languages, environmental regulation & management, AI & robotics
Skills/competencies Capacity to learn, creativity & innovation, leadership, teamwork
Attitudes Ethical values, environmental sensitivity, sensitivity to social inclusion
Based on surveys of HR directors at large companies across multiple industries, both Spanish firms as well as the Spanish subsidiaries of multinationals. Part of the Education for Jobs Initiative by Maria Luisa Blazquez, Carmen Balmaseda and Jordi Canals, assessing how well young people are being prepared for what companies are demanding today.
As you decide what capabilities you want to develop, it is important to reflect on your organizational orientation — or stance — toward learning. IESE’s Manos Gkeredakis has researched “epistemic stance” in relation to how innovation happens. “Stances” are those taken-for-granted beliefs about what learning is and how learning happens in practice. They guide organizational members when engaging with, say, emerging digital technologies, and ultimately shape what they learn from such encounters.
Imagine a company where most of its members believe that learning is about gaining new information and evidence — filling in knowledge gaps — to make better decisions. Let’s call it a “decision-making stance.” When considering a new technology, like ChatGPT, those guided by this stance may start formulating hypotheses about generative AI’s impact on company productivity; they will do some research to test their hypotheses and determine the impact; and then they will decide whether to adopt the technology or not.
Now imagine another company where most of its members believe that learning is about exploring and making sense of unknown possibilities to create new ways of working and organizing. Let’s call it a “sensemaking stance.” Their approach to the same tech may be lots of hands-on experimentation without well-formulated objectives in mind. They will draw upon use cases to enrich or even break their current mental models and see opportunities for developing new capabilities — coming up with completely new practices for producing content.
Two companies exploring the same tech but learning and concluding very different things about what to do with it, in the light of their different stances.
Given this, Gkeredakis recommends diagnosing your organizational stance at the outset, “to make yourself aware of how you generally go about learning new things and the organizational conditions that are bound to make people converge on a stance.” But the goal of the exercise is not to adhere strictly to the activities that align with your implicit stance, but to engage in a deeper reflection:
- How did you learn or generate knowledge in the past? Did you place more emphasis on analytical tools or on experimentation and more user-driven approaches?
- What are the strengths and weaknesses of your usual stance toward learning?
- Are there different learning stances out there that might serve you better for the new capabilities you are looking to develop? And if you adopt a different stance, how might you need to reorganize things internally to capture new knowledge?
The important thing is not to get stuck in one particular learning style but to be open to others. Gkeredakis gives the example of choosing partners to expand your learning repertoire: “Many organizations think, ‘I don’t know a lot about X, so who can I partner with to help me learn faster?’ And because of their stance, they may discount the possibility of working with, say, a design consulting firm and go for a management consulting firm instead, because it converges with their own way of thinking and their usual approach to learning. But precisely because a design consulting firm has a different stance, it might be a better choice of partner in order for an organization to learn in a different way and thereby gain novel insights.”
“To put it another way, adhering to your implicit or instinctive learning stance may put up an inadvertent bias, depriving you of the possibility of observing a problem or situation through an alternative lens.”
Speaking of design consulting, the tool known as design thinking often runs counter to many companies’ action-oriented stance of jumping straight to solutions before taking time to fully explore the nature of the problem they are aiming to solve or even to question whether they are addressing the right problem to begin with. When it comes to transformation through user-led learning, Joaquim Vila, who runs Focused Programs on Design Thinking at IESE, believes that design thinking is a vital tool for the development of new mindsets and the detection of hidden learning opportunities. It is especially well suited to “wicked” learning environments, where what served you well in the past may not be a reliable guide for the future, requiring you to revise, ignore or update your stance for messier conditions.
Organizational learning is more than just the aggregation of individual learning. Individuals in an organization often perform different tasks and need to coordinate and collaborate with each other. This goes back to Senge’s claim about learning organizations: “Team learning is vital because teams, not individuals, are the fundamental learning unit in modern organizations. This is where ‘the rubber meets the road’; unless teams can learn, the organization cannot learn.”
Unless teams can learn, the organization cannot learn
Because of this, facilitating the social aspect of learning is key. When people work together over time, they develop shared beliefs and mindsets. This happens not only by learning from others but by learning with others. Feelings and emotions play a part in this process, as people discover they feel similarly about the same things. As such, it helps to leverage affective aspects in organizational learning. The goal is to reinforce and integrate newly learned behaviors and capabilities until they become assumed and self-reinforcing, arriving at a collective cognition that facilitates group problem-solving and cohesion.
This phenomenon — of shared practices and beliefs leading to the emergence of a new shared reality over time — is the subject of research by IESE’s Maya Rossignac-Milon, and is listed as one of the essential power skills for managers in 2023. “At a time when many people are working remotely or in hybrid environments where they are physically disconnected from each other, it’s more important than ever to figure out how we can learn together even as we work apart,” she says.
Especially if learning is distributed, creating workplace rituals and using shared physical and online spaces, such as Slack channels, can help to foster shared realities and social bonds, which are “the glue that holds organizations together.”
Having said that, simply foisting the latest team management tool onto employees, like scrum or other such practices, and expecting everyone to suddenly get better at shared learning “may cause more stress than innovation, more turnover than wellbeing,” warns Marta Elvira. For that reason, she recommends enlisting the help of human resources in your organizational learning efforts to make sure that employees are given agency and voice in building shared knowledge in ways that don’t add stress or detract from their wellbeing.
Writing on “Dynamizing human resources” with Paula Apascaritei in Human Resource Management Review, Elvira notes how many organizations traditionally start by looking at their internal resources, like staffing, and then focus on reconfiguring them in some way to improve shared performance. But she comes at it a different way. Start not with existing resources but with organizational purpose and intended outcomes. And by outcomes, she is not just talking about better financial performance but better employee wellbeing.
Start not with existing resources but with organizational purpose and employee wellbeing
“If employees’ wellbeing and their professional development are also desired outcomes of organizational learning, then that will change how you approach your pool of ‘resources’ — from how you select people, to your choice of training practices and systems, and how you implement them. Always being guided by the values and purpose sustaining the organization.”
If the individual learning goals are salient for the worker (vis-à-vis their own personal wellbeing and professional development), then this will likely make them more motivated to reach organizational learning goals, for the benefit of all.
Elvira cites an engineering firm whose HR managers were interested in seeing how well their learning capabilities were being integrated, not only within the organization’s own knowledge base, but more holistically, to the extent that they interviewed the employee’s family to assess the effect on them. This is an example of how work-life balance, employee wellbeing, mental health and employee voice were also being prioritized as part of the capability-building process.
Moreover, achieving the shared reality that Rossignac-Milon describes means paying close attention to the relational, social aspect of learning and capability development, which ultimately depends on human collaboration. “With today’s AI capabilities, a company can create a learning organization through robots, algorithms and computer programs. But we want more than learning machines. We want learning people,” says Elvira.
We want learning people, not just learning machines
This relates back to the quality of your leadership — making a conscious effort to reconfigure teams and projects in ways that enhance the social fabric and integrate capabilities. This is essentially a managerial challenge. “Take data-gathering,” says Elvira. “Unless leaders are sharing that data with the entire team and across units for everyone to collectively make sense of it and make intergroup decisions based on it, then they are not actually capitalizing on that knowledge resource. It requires a thoughtful combination of tech and teams, otherwise there is probably no learning taking place.”
In addition to reconfiguring internal processes for external impact, injecting outside thinking can help with internal transformation. There are various ways to do this. You can hire in new talent with the capabilities you seek, but that takes time and often costs more than reskilling your existing talent. Fortunately, there are ways of bringing the outside in, without turning your entire company inside out.
Open innovation and corporate venturing. This increasingly popular practice involves established companies collaborating with startups for some win-win purpose. A company might offer funding, office space or legal and market support (to name just a few examples) to help a fledgling venture get off the ground. Both parties gain: the startup receives vital resources to go to the next level, while the company learns from the entrepreneurial experience, fostering internal learning and a shift of culture.
As IESE professor M. Julia Prats explains, “Corporate venturing enables companies to quickly gain expertise in potentially disruptive innovations without building internal capabilities from scratch.” Prats, together with Josemaria Siota, has produced a series of studies on the practice in Latin America, Asia and Europe, and regularly holds conferences, bootcamps and other events, as part of the Open Innovation and Corporate Venturing Institute, to show the many different ways that companies can build their own innovative capabilities by creatively collaborating with startups.
Crowdsourcing. Another effective mechanism for outside-in learning is crowdsourcing, which draws upon large groups of people “out there” and pools their collective knowledge via online tools to enhance the organizational capacity for innovation. Manos Gkeredakis has done research on companies that have used crowdsourcing as a basis for learning, and he reiterates the importance of stance when actively pursuing new knowledge via these means. Which isn’t to say that stance should be used to prescribe a specific set of actions, but rather it will be the frame of reference for new learnings to be constructed. “Thus, a firm may remain committed to a deductive stance, for instance, even as it deliberately engages in digital experiments, decoupled from daily organizational routines, to enable ambidexterity in organizations.”
He cautions against launching into crowdsourcing without having done the internal prep work. “The problem with trying to shake things up by bringing in the outside is that you may be changing one component but the organizational structures remain unchanged.”
He cites the case of a company that took a very experimental, hands-on, user-driven approach (the sensemaking stance). “But then they failed to develop other capabilities, such as strong data science teams, which would have enabled them to take advantage of all that rich learning and make the whole experiment more sustainable. Listening to users is fine, but that alone is not going to change your entire approach to learning as an organization.”
Leaders must combine inside-out and outside-in approaches to learning. Unless the organization develops foundational learning capabilities, new knowledge from the outside-in initiatives will never become assimilated in core routines and practices.
How do you measure learning?
As you develop your learning journey, you will need to measure progress. So, what are the metrics for learning? “Valid measurement is one of the big challenges, if not the biggest,” says Marc Sosna, Executive Director of the Learning Innovation Unit at IESE. (See the interview with him and his colleague, Timo Kerzel, later in this report.)
Valid measurement is one of the big challenges, if not the biggest
He recalls an intense, year-long program that IESE ran annually for Enterprise Ireland. “These were top CEOs and management teams of already successful SMEs who wanted to go to the next level in terms of innovation, growth and internationalization,” he says. Five years after the first program, they brought in an independent agency to analyze the impact of this program on the leaders and firms of the first three cohorts. The measurements were partly quantitative (e.g., comparing previous vs. projected vs. real growth rates in revenues, profits, employees, etc.) as well as qualitative (obtained through surveys and personal interviews). “People were asked what they had learned and what impact this program had had, and many said the experience had been life-changing, both personally and for the organization.”
“But then what can happen?” Sosna asks rhetorically. “Brexit can happen. COVID can happen. A war can happen. You’re suddenly confronted with an entirely new situation. And that’s the challenge with trying to measure the results of any learning program: it might be measurable in some instances, but not in others. For some, the full impact might not be seen until years later. When to measure learning is as important as how to measure it. Even if revenues are lower than projected (as they are for many, because of the current geopolitical crises), one could argue that maybe the situation would be even worse (such as bankruptcy) if it weren’t for the learning acquired. The key point is, learning has to be a continuous habit, even if it can’t be perfectly measured (yet).”
Given this reality, Sosna emphasizes the importance of “transfer mechanisms” for learning. In the case of the Enterprise Ireland program, these took the form of Business Adviser Coaches who sat in with the CEOs during the program itself and then worked one-to-one with them and their senior leadership teams at their premises, to help them transfer and implement the knowledge acquired. These figures acted as accountability partners, to make sure the learning was embedded.
Sosna elaborates: “Too many organizations take an input approach to learning: how much knowledge has been put into our brains through workshops, classroom sessions, self-study and stretch assignments? Or they take an output approach: Have revenues increased? Have people progressed in their jobs? If someone learns code, then maybe measuring how many lines of code that person can write correctly in a specific time frame is an adequate metric. But for the kind of learning we’re talking about — for critical thinking and leadership and other meta competencies — it’s shortsighted. Maybe the benefit of something critical you learned today won’t become apparent until, say, five or 10 years from now, because it’s not yet the right time or place to be able to apply it.”
As such, Sosna believes we need to move away from an obsession with measuring an immediate output, and toward a logic of measuring impact in more pluralistic and holistic ways.
We need to move away from measuring an immediate output and toward measuring impact
The Japanese academic Ikujiro Nonaka illustrates this point with a dramatic example: the deadly tsunami that struck Japan on March 11, 2011. Writing in IESE Insight, he noted that, in one school district, only five of the 2,900 primary and middle school students died — and only because those five had gone home early that day. He credits years of drills, practicing what to do in the event of an emergency, for saving lives. “Strategic management has tended to overemphasize logical and analytical thinking, focusing almost exclusively on the acquisition, accumulation and utilization of existing knowledge, particularly at the top of the organization, while paying little or no attention to the process of new knowledge creation,” Nonaka said. Practicing dealing with new situations serves to embed the knowledge deep within us, so that it becomes internalized almost on a molecular level, enabling our minds and bodies to act on that knowledge in a more instinctive, less self-conscious way. That’s measurable impact. But its true worth wasn’t realized until March 11, 2011.
Instead of trying to quantify the immediate results of learning in terms of the top and bottom lines, try looking for measures that indicate the diffusion of new practices and behaviors among employees. OCBC’s Yap acknowledges that “learning for learning’s sake, which I think is where a lot of L&D teams currently are worldwide,” is not good enough. There has to be some justifiable measure. Tracking things like the number of people who completed a program, although not a measure of whether the program achieved its intended learning goal or not, is at least a relevant measure of access and opportunity, Yap points out. (See her interview later in this report for more on this topic.) Employee rotation or retention could be an indicator of leadership quality.
It takes time for learning to embed itself, so don’t make the common mistake of mindlessly carrying over KPIs from the world of operational performance. When people are learning, you can’t measure “results” the same way that you would measure the day-to-day running of your business. People in the process of learning can’t be held responsible for results right away. Doing so would undermine the development of new capabilities and hinder the very learning you are trying to achieve.
Step out to step up
Even though executives tend to think about transformation in terms of the “end state” (results), they must invest in developing new capabilities first. This learning mandate must go beyond individual learning to encompass the process of organizational learning. In sum, leaders need to start by setting the direction and modeling the learning behaviors they seek. Then, they must foster a learning environment, aligning individual learning objectives with organizational goals. And they need to leverage knowledge inside and outside the organization to facilitate shared learning experiences, which over time will lead to new shared beliefs, new behaviors and, ultimately, new organizational capabilities.
Don’t try to do too many things at once. As Yap advises, “Sometimes we need to take it a step at a time and be more patient. And when we give things time, we may find we get there faster in the long run.”
Her “end state” is this: “If I can lose the entire L&T department and the learning continues, that, I would say, is the proof that we have built a strong learning organization.”
“Unleashing the power of purpose” by John Almandoz et al. is published in IESE Insight 37 (Q2 2018).
“Dynamizing human resources: an integrative review of SHRM and dynamic capabilities research,” by Paula Apascaritei and Marta Elvira, is published in Human Resource Management Review (2022).
Manos Gkeredakis et al. has published “Framing innovation opportunities while staying committed to an organizational epistemic stance,” Information Systems Research (2016), “Data science as epistemic stance: advantages, risks and opportunities for the pursuit of knowledge,” Academy of Management Proceedings (2016), the case study “OpenIDEO (B)” (2020) and “Crisis as opportunity, disruption and exposure: exploring emergent responses to crisis through digital technology,” Information and Organization (2021).
The dossier “Transformation through design thinking,” featuring the article “From identifying needs to generating opportunities” by Joaquim Vila and Xavier Camps, is published in IESE Insight 37 (Q2 2018).
Maya Rossignac-Milon et al. has published “Merged minds: generalized shared reality in dyadic relationships,” Journal of Personality and Social Psychology (2021) and “Epistemic companions: shared reality development in close relationships,” Current Opinion in Psychology (2018). Find out more about her research here.
“How humility can outsmart the smart machines” by Edward D. Hess is published in IESE Insight 35 (Q4 2017).
“Creating new knowledge the Japanese way” by Ikujiro Nonaka is published in IESE Insight 14 (Q3 2012).
Aye Wee Yap is Group Head of Learning & Transformation at OCBC Bank in Singapore. Here, she reveals how OCBC is driving transformation by changing not only individual employees, but the system in which they operate.
Back in 2015, IESE Insight published an article on “omni-learning” — a term coined to describe a phenomenon of learning happening continuously and seamlessly across physical and digital contexts, and through workplace and social interactions. Corporate learning leaders were urged to “take the wheel and drive the transition to omni-learning (which) requires the courage to step away from the old ways of doing things and joining the exciting, if uncertain, journey of experimentation to reimagine learning for a (new) world.”
Fast-forward to 2023 and what was being theorized about a decade ago seems to be happening for real at OCBC in Singapore. Aye Wee Yap is an excellent example of a corporate learning leader who has taken the wheel and is driving transformation. Here she reveals lessons for others going down the same exciting path.
Tell us how OCBC started on its learning journey…
We always look at what’s happening in the environment to guide us as an organization. And when we look out, what do we see? We see a huge talent war. The world is becoming more closed and protectionist. And that wider, global context informs the goals of our organization: we cannot afford to be closed in our thinking; we must be open and transformational.
Of course, it takes a lot of courage to transform, but we know from history that if you wait until things get really bad before you change, then it’s already too late. Once you decide you want to make change happen, the question then becomes: what are the behaviors, values, mindsets and everyday activities that we would like to orientate our people toward? Not just looking at skill sets but at competencies like agility, and shifting the focus from the individual to the whole system.
Why the system?
I think the conversation on learning has focused too much on the individual: how to become a great leader. But in the wrong environment, strong leaders don’t necessarily thrive. In great environments, however, I’ve seen even mediocre leaders suddenly flourish because the organization enables it. While the individual is important, when we talk about transformation, the focus has to move outward to the system.
In other words, look at the water, not just the fish. Because the water is invisible, we tend to overlook it. But if the water is bad, the fish will die. This is why we collaborate with stakeholders from academia as well as with policymakers. We hope that by having close ties and conversations with these stakeholders, we can start to shape policy and the emerging dialogue around what transformation through learning actually means.
One of the things we’ve done is come up with a learning blueprint, which is our attempt to codify what we believe a learning organization should look like and how we might transform the way we do things, from our culture to our leadership, within that system. In other words, it articulates what we must do to get the water we want.
One of your guiding principles is giving people a sense of autonomy. How do you do that?
With our programs and activities, we deliberately flipped the design, making them open to everyone, not just high potentials. For our mentorship program, we don’t tap mentors on the shoulder and say, “Hey, you’re a senior vice president, go be a mentor.” We make it completely optional and voluntary for mentors to step up. And we don’t pair people by force. We give both the mentor and the mentee the option to choose who they want to work with. Six years in, we’re seeing the number of mentors and mentees growing and, more importantly, we’re seeing repeat mentors who keep coming back. Many of our mentees are now becoming mentors; because they feel they benefited so much, they want to pay it forward.
Another principle is a sense of community. How do you foster that?
A lot of senior leadership programs focus on the days spent in the modules. We deliberately design for the pauses or white spaces in between modules — the evenings, the off-classroom engagement. We also design across cohorts, bringing people together, from the most junior ranks to senior vice presidents, for social occasions where they can mingle and relate to one another in relaxed contexts.
“A lot of programs focus on the days spent in modules. We design for the white spaces in between”
For example, as part of one program, we invited some 300 employees to attend a special concert in the city, and IESE Prof. Yih-Teen Lee facilitated a short session with the conductor of the orchestra right before the start, and drew out reflections on leadership and directing teams. For people who have sometimes only ever related to others via email, this can be a powerful shared learning experience.
After you’ve made these horizontal connections, how do you keep the momentum going?
For every single cohort in our signature programs, we start WhatsApp group chats. It requires a passionate crew to keep these chats alive because there’s nothing sadder than a dead group chat. We also form alumni groups, and every time there is an interesting speaker or professor available, we invite our alumni back for a fireside chat or a luncheon with them. One time we invited leaders up to the top floor of our OCBC building at 5 p.m. with the promise of something special waiting for them, and we held a “sound bath,” which is a kind of immersive meditative experience. The more we offer activities like these, the more our people come to expect these sessions will be fun and a chance to connect with other people.
Some of these concepts, like autonomy and community, seem abstract. How do you make them real for people?
For us, the tangible equivalent of autonomy was introducing a norm of “available by default.” This means our OCBC campus doors are always open and unlocked, so if you need a breakout room to take a call, and the room is empty, you just go right in and use the room without asking permission. We’ve started to build social pantries on several floors to encourage interaction and people just bumping into each other. We’ve built mobile libraries where colleagues share book recommendations, which is a nice way of discovering what someone else’s favorite book is and maybe something you have in common or didn’t know about that person before.
How do these align with high-level organizational goals?
For OCBC Group, forging a collaborative “One Group” culture, with an emphasis on accelerating transformation, is our high-level goal. A transformational mindset requires people to be progressive and take more risks — which, being in an industry as highly regulated as banking, is a tough goal. Yet we have to think about how we can break boundaries, challenge the status quo and be entrepreneurial. I believe we cannot be creative or progressive as an organization if we aren’t collaborative to begin with. And what really supports collaboration is the way we work, the mindset and the values. So, the community-building or relational pieces of our learning blueprint are in direct response to this overarching organizational mission. All these goals are linked. Many innovations can be unlocked if we simply synergize.
How do your leaders generally respond?
When we started this process, it wasn’t so easy. We would ask, “How can we support your learning?” And they would say, “You tell me.” Eventually, we switched tack and said, “Think about three roles that are critical to your business and let’s unpack them.” And we would suggest some competencies that were right for those roles, and then drill down to the top activities related to those competencies, and a conversation would develop from there.
Now we have developed our own competency stack, which is a conceptual framework for thinking about skills. So far, it looks like this: The first layer comprises role-specific competencies, which are technical skills. On top of that, we have leadership competencies such as collaboration and strategic thinking. And at the very top is the crowning meta competency: learning agility, which, for me, is the one skill to rule them all. If you have no learning agility, you will never be able to master the other competencies, so if we don’t get that right, nothing else really matters. Learning agility has to do with mindsets: a growth mindset and a productive failure mindset, as well as muscles like resilience and reciprocity.
“Champions of learning are signs of a thriving learning organization”
As we roll out our learning agility programs throughout the organization, we don’t want our leaders to send one or two of their people to a workshop; we want the whole team there. This allows us to get a sense of where the organization is and where the challenges are. And we get some commitments from the team on one or two things that they want to put in place, which we follow up on afterward.
The good news is that the interest and buy-in is high. After several years of building this foundation of trust, when we go talk to leaders about role-based competency learning roadmaps or learning in general, the conversations are much smoother.
How do you measure the relationship between learning and the business side?
It’s hard to point directly to a specific learning program or activity. I would go back to what I said before about the environment — the water in which we swim.
We treat metrics as a funnel. At the opening of the funnel are things like access to our learning campus and online learning library, which needs to be as wide open as possible. And based on a simple annual engagement score, we see strong support from our entire base of employees worldwide that they feel the opportunities for learning are there and their growth is supported.
The second part of the funnel has to do with all the things that measure the intrinsic motivation to learn, such as the proportion of autonomous learning, as opposed to the high number of mandated, compliance-related training, which is the norm in our industry. We also measure program effectiveness, learning gains, and the percentage of employees on learning roadmaps.
As the funnel narrows, we track things that measure employee contribution: how is the learning being absorbed by employees and being translated into an organizational contribution? The typical way of measuring contribution is in terms of revenue or productivity. We measure it in terms of the number of mentors and returning mentors, and the number of internal trainers, whom we call “Campus Stars” and we recognize them at our annual Campus Star Awards. Employee-generated content, which is created and held in our cloud-based knowledge repository for use by other employees, is another measurement we look at.
In other words, good learning ambassadors, champions of learning, people who not only absorb learning but teach and share their knowledge with others (that community-building piece again) — these are signs of a thriving learning organization. Our job is to find ways to nurture this strong spirit of contribution, which further fuels learning in a virtuous circle.
Ewoma Oloye (IESE Global Executive MBA 2023) is Head of Corporate Services and former Group Head of Human Resources at Construction Kaiser Ltd. in Lagos, Nigeria. She shares how CKL took it upon itself to offer training that is now attracting thousands across Africa and beyond.
With her background in human resources, Ewoma Oloye detected there was something missing in the candidates she was interviewing for Construction Kaiser Ltd. (CKL). “I would have these exceptionally brilliant engineers who graduated top of their class, sitting right across the table from me, and they couldn’t even tell me what was in their head. Their presentation skills were poor. They didn’t know how to negotiate. Even within CKL, I noticed some employees found it difficult to negotiate with vendors — something they are expected to do. Generally, soft leadership skills like public speaking, presentation, negotiation and communication are sorely lacking within the construction space. It was a bit of a shock to me.”
Luckily, Oloye is “passionate about performance management — about seeing how the employees within an organization can learn and improve so they are able to deliver value.”
Recently, the Nobel Prize-winning economist, Sir Christopher Pissarides, speaking at an Industry Meeting at IESE Madrid, had this to say: “To transition the workforce from the old to the new, upskilling and reskilling are going to be necessary. The new skills are not difficult skills, they are skills people can acquire, but they won’t learn them by themselves; they need training. Companies, especially the big ones, need to provide the education and training for the skills that are needed.”
Oloye and CKL seem to have taken that idea to heart. You could say that learning and professional development are in the DNA of this Nigerian construction company, which, in its 30 years of existence, has gone from a small five-man operation to employing more than 200 people. In this interview, Oloye shares how CKL took it upon itself to offer training in soft skills. What started as an outreach to 50 students at the University of Lagos to help make them more job ready (potentially for jobs with CKL) has blossomed into biannual events attracting thousands across the African continent and beyond, based on a big-hearted philosophy of leveling up to create shared value for the betterment of all.
How common a problem is the skills deficit you observed?
It came to my attention during our recruitment campaigns to increase interest in STEM careers, both among secondary school students and those in university. But it’s not just the construction industry. It’s similar in medicine: Doctors have to engage with people, and there are pharmacists whose job requires them to sell, but do they have the right skills? You may find a lot of passive aggression. Speaking with colleagues in other companies and in other fields, I found it was a common problem. Even in the arts and humanities, the lack of soft skills might not be so evident, but it exists there, too. It’s like people are just expected to kind of pick up these skills over time, without any real training.
Around that time, I transitioned from Group Head of Human Resources to Head of Corporate Services, and became responsible for other areas, including the Kaiser Foundation for Social Development. This is CKL’s nonprofit arm, whose mission is to contribute to the educational and professional development of African youth.
So, we launched soft skills training in 2018 in collaboration with the University of Lagos, initially for their students in construction-related fields. The idea was to generate a pipeline of new talent with the skills that we needed. Internally, we also started having one-on-one engagements and offering small pockets of training on soft skills to those already in the organization.
Why did you opt to do this yourself and not just outsource this to an agency?
One of our core values is empowerment. We are very conscious of wanting to be the change we want to see in the world. Also, we had clear targets for our industry, so contracting this training would risk getting something generic or non-specific to our needs. It’s not a case of drawing up a curriculum and saying, “Now we’re going to learn about soft skills.” We invite experienced facilitators with a minimum of 15 years in their chosen field. They share their experience, so people can see a real-life representation of what they are being told. We want training by people who have been there, done that — including people who have made mistakes. Even better. If someone has made a mistake and learned from it, then we want them to come talk about it and tell us: What did you learn?
“One of our core values is empowerment. We want to be the change we want to see in the world”
You started this training in 2018. What happened during COVID-19?
That’s the exciting part. COVID was a turning point. We had to shut down our construction sites and there was a possibility of the business going bankrupt as a result. But we took a tough decision not to let anyone go. And we thought, what could we do in the interim while there was lockdown? We said, let’s prepare our people; let’s have some trainings on Zoom to talk about cost management, contract management, structural defects, and so on. We had a long list of topics to keep our people engaged. And we needed to stay in touch with everyone for mental health reasons. Thankfully, with all of the trainings that we gave everybody, by the time the lockdown was over, we had turned a profit in the year of COVID. That was amazing for us.
With regard to our other trainings at the University of Lagos with groups of 50 students in a classroom, that was another light-bulb moment. We figured if we could do trainings online for our over 200 employees during the lockdown, then why not replicate the same with the students and open it up to more students beyond those in engineering? So, we put out advertisements and in our first virtual session we had over 1,000 participants from across Nigeria. And it wasn’t just university students; we had people with up to five years’ experience join in. We were blown away.
The other thing we noticed was that we had two participants from outside Nigeria: one from Sierra Leone and another from Liberia. During the feedback session, they told us the problems we have in Nigeria were the same there. And there were no trainings where people could talk through the situations that other people had been through to learn how they had dealt with those same issues.
What happened when you opened up your trainings in 2021?
We had over 2,500 participants from around 10 African countries, including Rwanda, Zambia and Ghana. And the feedback from all of these other countries was the same: We have the same challenge here. The wonderful thing is we no longer restrict it to undergrads. We opened it up to professionals as well. We also opened up the profiles of our facilitators to have a more international lineup. The last soft skills training we had in December 2022 had over 5,000 registrants, and our next edition is scheduled for July 2023. We have had participants from 36 countries across four continents.
How do you keep the sessions interactive?
Because it is soft skills, we do not want to lose the essence of the training, which is, by definition, very interactive and personal, so people need to have the opportunity to interact with the facilitators. We use breakout rooms, Blackboard, polls. In 2022, Kandarp Mehta from IESE facilitated a session on negotiation skills using IESE’s virtual classroom. IESE’s Conor Neill also led a pre-training session with a small group of participants which fed into the main discussion on communication skills. We look for facilitators like these who can deliver a complete learning experience.
How do you measure whether there has been learning?
Initially, the metric was the number of potential employees we had coming through the pipeline. We could evaluate those who had been part of the soft skills training and who entered our internship pool. As we have expanded, it has become harder to evaluate on such a large scale. But I do get regular feedback from a core number of participants who keep coming back because they say their performance has gotten better since going through our training. For example, we had someone who couldn’t pass the KPMG interview, but after he attended our training, he attempted another interview and was able to get into KPMG.
“The leadership has to understand that continuous learning is the thing that will set you apart”
It seems like the learning you offer is raising the quality of candidates for the labor market in general.
Yes. We recently signed agreements with three other universities and have started conversations with partners in Rwanda, Kenya and Ghana to offer our trainings. We are also looking to sign up other companies because, like I said, this is a problem right across industries.
And you’re doing all this for free. None of the facilitators get paid. Why?
This is part of the social mission of the Kaiser Foundation for Social Development, which CKL set up for this purpose. It’s what we call the shared value model, which is impacting society while making profits. And because we have a shared value model, we are also very into collaboration as opposed to competition. We believe that the more businesses are able to collaborate to improve things that are common problems or challenges in society — the more we make an effort to grow people — it ultimately impacts and helps us all.
Do you see more women in the pipeline as a result?
Definitely. If you look at the profiles of our executive management team, we have more women than men. I would give a lot of credit to our CEO, Igbuan Okaisabor, who believes very strongly there isn’t anything that a woman cannot do just because she’s a woman. A major success was our last STEM summer camp where, for the first time, we had a participation ratio of more girls to boys: 60% female and 40% male, whereas it typically used to be 30% female and 70% male. If we continue to push in this direction, then we will have more girls looking to become mechanical engineers, electrical engineers, carpenters, iron benders, masons. Hopefully, the tide will turn.
What does being a learning organization mean to you?
That’s a beautiful question because it brings out all of the joy in me. For me, leadership is key. For an organization to be a learning organization, the leadership has to be learning leadership. The leadership has to understand that continuous learning and continuous improvement is the one thing that will set you apart.
In our soft skills trainings, we have different people come to talk about their experience in lifelong learning, where you see someone making a transition in their life or career. It starts from within, from saying, what is it that I do not know? I definitely do not know everything. What do I need to learn?
Another session we have in our organization every month is called Lessons Learned, where we have someone from any department come talk about something they faced and what they learned in the process. I am not a civil engineer, but through these sessions, where a civil engineer might tell me about different types of foundations or structural defects, I can end up having a very educated conversation to the point that my children believe I’m a civil engineer (laughs). We also talk about finance, HR, the environment, economics. Everyone sharing their knowledge with each other and learning together improves our work output, which has a direct impact on the performance of the organization.
Although this learning environment is created by the leadership, it also requires that you, as an individual, are open to learning, to saying, what am I going to learn today that I didn’t know before? The beauty of our sessions is that you may be the teacher today but the student tomorrow. Nobody has a monopoly on knowledge. Which is why we invite not only the most senior, experienced people but also the person lowest in the organizational hierarchy to share ideas and exchange knowledge. We purposely avoid the teaching only happening from people at the top. It’s an opportunity for everyone to improve and then use their newfound learning right now.
IESE’s Marc Sosna, Executive Director of the Learning Innovation Unit, and Timo Kerzel, Director of Lifelong Learning, discuss learning trends and the importance of staying human-centered.
Today, we have more access to knowledge than ever before in human history. But how do we make sense of it all? And how do we channel it into something that organizations can use to learn and develop new capabilities? As 2023 marks the 10th anniversary of IESE’s Learning Innovation Unit (LIU), Insight sat down with Marc Sosna and Timo Kerzel to discuss the latest.
Lifelong learning has been around since IESE’s inception. What’s different now?
TK: From a macro perspective, we see the half-life of competencies getting shorter and shorter. People are living longer, so the old setup of study/work/retire doesn’t cut it anymore. Instead, it’s a perpetual cycle of study/work/study/work over a longer career horizon.
This trend was apparent before the pandemic, but the pandemic certainly accelerated it, adding a more fluid way of working and learning in terms of remote and presential, as well as more personalized learning and more flexibility in terms of time and place.
In parallel, companies are having a harder time maintaining competitive advantage with their existing products and services, and must reinvent themselves in a much quicker fashion. They’re also less inclined to spend money on skills development and learning initiatives that aren’t 100% relevant for the jobs they have to do. They’re thinking in terms of “What do we have to do right now to take the next one or two steps forward?”
Executive learners are looking for personalized learning solutions and growth opportunities. And for that they need a better way of taking what they have today and connecting it to a learning solution or program relevant to their needs for tomorrow.
How will people learn in future?
TK: It depends on who you ask. Early in the pandemic, many thought the future would be predominantly online, but as time has gone on, we see people craving more social connection and more personal, human interaction. We believe there will always be a desire and need for presential learning. But we need to be smart about how we deliver learning, whether in a blended or hybrid way, in an academic or nonacademic context, and balanced with other aspects going on in the learner’s life.
How important is the social aspect of learning?
TK: The social or group aspect is vital for learning, but we need to expand what we mean by it, beyond just learning with people in your same team, company or industry, and think more in terms of learning communities. We need to find new common denominators that bring people together for a learning purpose. It could be a job to be done or a certain skill that you want to develop, which could put you in the same learning cohort as a peer, a superior or a subordinate, or with people from different departments and disciplines, or even different companies and industries. We need to leverage knowledge in terms of “who are the people on the same track as me, who also need to develop skills and competencies like me?”
MS: The company’s role is to facilitate the context for learning, and this could come from inside or outside the organization. Everybody talks about the importance of diversity, usually in terms of people. We also need diversity of ideas, but for that to be fruitful, everyone needs to be following the same North Star, so to speak. Especially if you are going to engage in open innovation, for example — bringing in learning or learners from outside your organization — you need to find a common denominator, to channel your learning and translate it into competitive advantage, whether by building a better product, offering a better service, or becoming faster or more agile at something.
“The company’s role is to facilitate the context for learning”
What’s the role of leadership in this?
MS: First, the CEO, together with the senior management team and board, needs to figure out the direction: what are our core competencies, what is our current skill set, and what are we able to achieve with that? Obviously, with 100, 1,000 or 10,000 employees, figuring that out is easier said than done, but you need some kind of instrument to detect, not just the skills you currently have, but which skills and roles are contributing the most to your competitive advantage today versus tomorrow.
TK: Then, you need to decide what new meta competencies you need to develop — like learning agility. In some cases, this could represent a massive shift from who you have been to who you want to become. This is where chief learning officers (CLOs) come in, trying to translate what the top wants, and where the organization wants to go, into actionable learning goals and programs, while keeping everyone together at the same time.
MS: In this regard, I think the HR function needs to step up. I sometimes hear from executives who are running market-/client-facing units that there is a gap between what the individual or the organization really needs and the generic learning they are being offered, which isn’t up to date or enabling them to be future-fit. While this is not an easy task, given the rapid speed of change, there is a lot of scope for CLOs and HR departments to improve their understanding of strategic, evolving needs and anticipating future ones. Those who are able to close that gap and implement an effective and adaptive learning system and context are those who will succeed.
What are some learning methods?
TK: Organizations typically resort to classroom learning, self-study and on-the-job learning. And while, since the pandemic, those haven’t disappeared entirely, we do see a new focus on developing new skills by being exposed to new projects and challenges, and more flexibility within organizations to allow individuals to pursue personal development goals beyond the job they have to get done.
MS: One idea I like to reflect on is the 4+1 setup, where you work four days and set one day aside for learning. This is similar to Google’s 20% rule of letting employees dedicate 20% of their work time to side projects, but different in the sense that the focus is on learning, rather than setting aside time for other work projects. Maybe it’s not one day a week; maybe it’s an hour a day or whatever fits your work context. The point is allowing time for exploration of new ideas and personal development, without the demand for there to be some direct business exploitation in order to justify it. Every company needs to think about how they enable their people to make space for learning.
TK: I would argue that it shouldn’t happen in isolation, though. So, not taking time off to learn but integrating it via a project or challenge, as mentioned.
MS: But maybe you also have to keep dedicated time for learning, specifically for learning new competencies that will make you future ready, versus learning that comes out of the current context.
Talk us through immersive or experiential learning…
MS: If you’re in your current context, your brain automatically maps onto something you already know. We’re strong believers that more learning happens by immersing people in different contexts. It could be a different business context, so taking people from, say, a heavy asset company that operates airplanes or ships and putting them in the context of a fast fashion business. Someone used to planning on a 20-year horizon can learn a lot about agile and rapid decision-making from being in a context where new product decisions have to be made every two to three weeks.
“Keeping human qualities and values at the center is absolutely vital”
Then there are nonbusiness contexts. There’s a lot you can learn about high-performance teams from the world of sports. Or about decision-making and deploying teams in crisis situations from Doctors Without Borders. These are very sticky learning experiences. People will never forget how it felt being in the locker room of Camp Nou and hearing a Champions League winner give his inside take on team dynamics, for instance. These are powerful analogies that stick more than a webinar.
It is for this reason that IESE programs take place in different locations around the world, from São Paulo to New York to Munich to Singapore, in addition to our campuses in Barcelona and Madrid. The physical immersion of learning in a different context is key to embedding the knowledge deeply within you.
This gets at what is called absorptive capacity — the ability of you and your organization to assimilate knowledge out there in the world, hold it within you, and apply it to improve your performance. Being exposed to external knowledge in different contexts is one aspect, but that by itself is not enough to learn; you also need to have a curious, open mind able to absorb it — as an individual and equally as an organization.
How do you encourage that?
MS: There needs to be an environment of psychological safety, where people feel they won’t be punished for sharing ideas or trying new things. The affective piece is key toward rewiring our brains and embedding learning as a memory that can be recalled. That’s why we don’t only want to think in terms of technology-based learning, because we believe something magical happens in human chemistry when people get together.
We also insist on protecting the learning context as much as possible, so we often have a “parking lot” for cell phones whenever they enter a learning space. We want people to have deep conversations without being distracted by their phones. At first, we get some strange looks when we take away people’s phones but by the end they are grateful for it.
What are the competencies of the future?
TK: Digital literacy, for sure. Also, the ability not just to change but to anticipate and adapt quicker to change, especially those changes that will have global business and social impact. And it’s not that you “acquire” a competency, like, “Now I’ve acquired digital literacy. Done.” You must keep learning, evolving and growing. It never ends.
MS: A term I like is antifragility as described by the author Nassim Nicholas Taleb. This is the idea that we get better, not break, under impact. It’s different from resilience or bouncing back. Rather, it’s how stressors make you stronger, like building muscle, so you learn to thrive and grow the more you are exposed to shocks.
TK: We also must not forget human values. The more that generative AI is able to pull from a whole world of knowledge and personalize it for us, the more the human part needs to be at the center, to know how best to apply a concept one way or another. That human perspective is good for the company, for an individual team and for society.
MS: Yes, keeping human qualities at the center is absolutely vital. The more businesses move toward technology and automation, the more we must keep asking what will our value and purpose be in this milieu? For every organization out there, these are important reflections.
By Evgeny Káganer & Sampsa Samila
The recent release of Open AI’s ChatGPT-4 has proved wildly popular but also sparked debate about the impact of generative AI on the economy and society, with much of the focus on potential job losses for white-collar workers. History, however, suggests that reports of the death of everyone’s jobs are greatly exaggerated.
Technology fosters productivity, contributing to economic growth and labor demand, and in the long run it creates more employment than it destroys. Spreadsheet software, for instance, replaced bookkeeping jobs but created many more jobs in financial analysis and auditing. A reasonable optimist would expect generative AI to repeat this pattern, but with caveats.
The difference with today’s technology is its staggering speed of diffusion, its seemingly unlimited range of applications, and its capacity to learn and develop with (or increasingly without) human intervention. Such characteristics will influence the upskilling of people and organizations in three distinct ways.
First, to upskill, your organization needs to envision future growth areas and identify which skills it wants to develop. The vast uses of generative AI make this task particularly challenging.
Most macro projections focus on tasks with the highest and lowest probabilities of automation. While this may help to pinpoint the current jobs most at risk, it offers little guidance to identify the occupations and skills of the future. For this, we need to focus on AI’s augmentation rather than its automation effects.
Augmentation effects, however, are more difficult to assess. One would expect a need to develop more conceptual, higher-order knowledge tasks, such as analysis, evaluation and the creation of new artifacts. Yet the research so far on sales reps using AI tools, for example, finds it is their ability to leverage AI across a bundle of salient tasks that matters most. Understanding the properties of the AI as well as the domain of its application, and finding the synergies between them, seems to be the key to success.
To appreciate how augmentation effects play out in specific domains, it is necessary to experiment with the technology, which more and more occupations are doing. One survey shows that more than half of schoolteachers are currently using ChatGPT for some aspect of their job. Organizations should support their employees with resources, time and training to allow experimentation.
“Organizations should support their employees with resources, time and training to allow experimentation”
Once your likely future growth areas are established, the next step is to develop the skills required for those areas. Here, the challenge is that the fast speed of AI adoption and development makes the prospect of “learning a new job” more overwhelming for adult learners.
The good news is that, unlike prior disruptive technologies, generative AI may offer part of the upskilling solution. You’re already probably familiar with the way large language models (LLMs) like ChatGPT can generate alternative explanations and examples for complex concepts. Now imagine using LLMs to create scalable personalized learning solutions embedded into your job and tailored to your learning objectives and preferences. It would be like having your own personal tutor accompanying you at each step of your learning journey and shaping your next step based on your prior performance.
Learning theorists have long known that adaptive learning promises much greater efficacy, but until now the need for one-to-one human feedback has made it impractical. Generative AI may well solve this scaling challenge. To accelerate the development of such personalized learning solutions, companies could partner with academic and research institutions in the relevant skill domains.
Finally, to build competitive advantage, companies will need to look beyond upskilling individual workers and think about developing organizational capabilities. In the past, organizational learning depended exclusively on humans. It was the organizational members who developed new skills and practices, adopting and assimilating new technologies, but the technology itself exhibited no meaningful capacity to learn. Today’s situation is much different: companies will need to orchestrate human and machine learning, where machines help humans learn and vice versa.
Companies seeking competitive advantage in specific industries will need to train domain-specific LLMs. Bloomberg, for example, has done so in finance. Bloomberg’s success isn’t just because it has a very large proprietary dataset at its disposal (although that helps). It is also thanks to the domain expertise of its employees. Humans training machines also has to be win-win, genuinely leading to upskilling rather than to automation and the replacement of workers.
In recent months, generative AI’s rapid advancement has provoked nervousness, anxiety and fear. As the saying goes, people tend to fear what they don’t understand, and anecdotal evidence suggests few companies in traditional industries have made serious efforts to try to understand AI’s impact on their talent and strategy. Rather than fear what you don’t know, it is better to carve out time and space to explore firsthand how generative AI will affect you.
Besides, from what we have seen so far, generative AI’s impact will not completely replace jobs (at the individual level) or business models (at the firm level) but rather usher in an architectural reconfiguration of the constituent skills and capabilities. Such reconfiguration requires broad integration of new and existing knowledge — a process that takes time and requires organizational members to fully engage and lend their diverse expertise. In short, for many firms, generative AI may prove to be the ultimate organizational learning challenge — but also a key opportunity.
Evgeny Káganer is a Professor in the Operations, Information & Technology Department at IESE, where he studies how digitalization and AI are reshaping business models and organizations.
Sampsa Samila is an Associate Professor of Strategic Management and Director of IESE’s Artificial Intelligence and the Future of Management Initiative.
This Report forms part of the magazine IESE Business School Insight 164. See the full Table of Contents.
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