To win, create a learning organization.

• Author: Citrin, James M.
• Position: Spencer Stuart Governance Letter

POPULARIZED OVER a decade ago by Peter Senge's classic book The Fifth Discipline, organizational learning has been a cornerstone of many organizations' strategies for some time now. Unfortunately, many executives have become the victim of one of the most common "learning" traps: the illusion of knowledge.

The learning organization is one that actively looks for insights in all its interactions with others -- and then acts on them. To win in the Next Economy, companies must capture the learning that takes place every day at companies around the world -- but they must also transmit that knowledge to the parts of the organization that need it most. The faster this can be done, the greater impact it can have on creating the best products and services a company has to offer.

Here are 10 ways to create a learning organization.

1. Shorten feedback cycles. George Bernard Shaw once suggested that "The only person who behaves sensibly is my tailor. He takes new measurements every time he sees me. All the rest go on with their old measurements." You need to be responsible to the business environment and those around you, not in three-year time spans, but constantly. Don't rely on one or two means of research, whether it is customer-, client-, or employee-centered. Break up your process into shorter iterative cycles.

2. Transfer knowledge. Without informal and formal teaching and mentoring, you will never have transfers of knowledge on the level you need within your organization. Look for opportunities or processes that will encourage learning. Create a culture of learning that pervades everything that you do.

3. Expand the company's "listening circles." Often, executives listen too infrequently, and when they do, they listen to the wrong people. At formal meetings, people tend to "posture"; it is unlikely that you will hear what is really going on. Walk the halls, engage those above and below you in informal ways. Stop by a colleague's office and ask him or her how things are going. If someone is working on a new project, ask if you can help (a great way to probe the progress of an initiative or the resource allocation). Sam Walton, the founder of the world's largest retail chain, Wal-Mart, once flew to Texas, flagged down a Wal-Mart truck, and rode for over 100 miles to "chat with the driver." Remember, there is no such thing as a small customer or an unimportant employee. Everyone matters and most people have ideas you should know about.

4. Focus on...