The failure of learning and development – its role in the economic crisis

Most commentators on the economic crisis that hit the world in 2008 have failed to identify a major factor in what went wrong in the financial sector. Gillian Tett (2009) gets close when she suggests that

‘…regulators, bankers, politicians, investors and journalists have all failed to employ truly holistic thought….a ‘silo’ mentality has come to rule inside banks….with shockingly little wider vision or oversight.’ (P. 298-299)

What she misses, though, is what needs doing about this. Structural change and more regulation will not deal with underlying causes. If these people were unable to think and work holistically then where does that come from? The answer seems to be that people learn to think and work in silos. It is not an inborn feature of humans.

The teams that developed the toxic loans had highly skilled and knowledgeable people in them. The continued emphasis on developing talented people with high degrees of competence has been part of the problem. Talent management is a manifest failure in many organizations (and not just the banks) as the processes pick out and develop people with similar qualities. In the case of the banks these people were highly analytical – and seen as extremely clever. Yet they made huge errors that have created misery for millions of people.

The start of this process is in schooling where academic brilliance in a narrow range of areas of learning is disproportionately rewarded compared with people who may possess the holistic thinking that Tett mentions. Subject learning divides the world into self-sealing compartments – but the world is not like that. Business problems do not respect subject boundaries as taught in universities and business schools.

Marcus du Sautoy, a distinguished professor of mathematics at Oxford University, took part in a discussion with an artist on the issue of the relationship of science and the arts. However he gave the game away when he said that he actually didn’t like science as it was too messy. Mathematics is different and that is what drew him to the subject. I reflected at the time on the mathematically skilled people who created the failed financial instruments. They were clearly not scientists, in the best sense of the term. They did not integrate theory and evidence. They made predictions about defaults on mortgages without the evidence. They were too enmeshed in their Gaussian copulas to see the wider picture. 

Researchers and scholars from Meredith Belbin (2001) to Scott Page (2007) have shown conclusively that the evidence is that difference in teams beats pure IQ. What teams need are people with different perspectives and different ways of looking at problems. The message for learning and development functions is that difference needs promoting not eradicating. Scott Page (2007) cites conclusive evidence that management teams that have individuals within them who have learned different things and in different ways outperform teams that have had more uniform experiences. Diversity trumps sameness - fact.

Some lessons

The first lesson, then, for learning and development professionals is to welcome diversity and difference – indeed to foster it. This means that uniform training programmes can be part of the problem. People need to be encouraged to learn different things in different ways. People need to be trusted to decide what they want to learn and how. This encourages diversity and difference.

A second lesson is about team building. To create teams that close in on themselves is also part of the problem. Team building, in this sense, is misguided. Social capital theory, and evidence, suggests that, in organisations, you need both bonding and bridging. This means that teams may need to bond – but they also need to bridge across to other teams to make the organisation productive. The banks clearly failed on the bridging dimension. Learning and development activity needs to promote bridging. This is not about shallow business meetings where people might get together but where real dialogue and mutual connection is missing. 

Cases 

At the end of a Self Managed Learning programme in an insurance company, groups presented back to the Directors of the company. One group, of people from disparate functions, commented (as most do) that they had really started to understand each others work and had broken down the silo thinking that they recognized that they had previously absorbed. Indeed they said that they had now become real friends (never having met each other before the programme started). The IT Director piped up with the view that becoming friends was not what learning should be about; that people needed to just get on with their work and treat the business as purely a place to do their jobs. Thankfully the group came back at him and refused to accept his view of organizational life. They made the case for bridging – and more.

In another case, a major retail company accepted the notion that:

a) everyone needed to continue their own development

b) such development would be different for each person

 and

c) the various functions needed to work together better.

A Self Managed Learning programme was designed to cater for a crucial group of managers, over 500 in total. Cohorts of 24 started at a time and they were divided into learning groups of six, each with a learning group adviser. The learning groups met for one day every five or six weeks for nine months. Each person negotiated a learning contract with their group around both what they needed to learn for their career and what was needed for the business. There was no fixed curriculum – participants had freedom to come up with whatever they wanted.

The programme was not optional. The option people had was when to start and what and how they would learn. A small minority (around 3%) wanted to carry on in their silos and did not want to change – and they left the organization. However most people welcomed the chance to take charge of their own learning and to work with a supportive and challenging peer group. 

At the end of the programme one of the sponsoring directors commented that the big payoff was not so much that people developed new knowledge and skills (which they did) but that there was a marked change in culture and working relationships. She also suggested that, in many cases, it wasn’t new skills that made the difference but people’s courage to tackle outstanding issues and their wisdom in seeing the big picture.

Directions for the future

The hoary old saying is that if you do what you’ve always done, you’ll get what you always got. It comes to mind in these times. It does not appear that the learning lessons have been identified let alone tackled. It is not apparent that many learning and development functions are jumping up and down demanding new ways of working. Yet if we don’t start to value difference, indeed encourage it, and focus more on holistic thinking and bridging across teams and functions the problems that manifest themselves in the banks will re-appear. 

References

BELBIN, R. M. (2001) Managing Without Power.  Oxford: Butterworth Heinemann.

PAGE, S. E. (2007) The Difference – how power of diversity creates better groups, firms, schools and societies. Princeton: University Press.

TETT, G. (2009) Fool’s Gold. London: Little, Brown.