Business Psychology - Latest Findings

Article No. 223
Business Practice Findings, by James Larsen, Ph.D.

Learning and Forgetting

A careful balance of learning and forgetting leads to improved performance.

Imagine a bottle full to the brim with a person trying to pour more water into it. Now let that bottle represent your brain, and let the water inside it represent the sum of your knowledge and memories. Let the water being poured in represent new knowledge and new memories that are quite important and need to be remembered. Unfortunately, a lot of the new stuff drains down the side of the bottle.

But mixed in with this new knowledge that isn't getting into your brain are memories of lesser importance which your mind discards (forgets), like a snake shedding its skin. This is necessary to make room for the new knowledge you really do need to remember, knowledge that does make it in.

This is a natural process which is necessary for survival, and according to Daniel Vekstein, from Ben-Gurion University in Israel, it's also necessary for organizations.

Organizations acquire shared knowledge in the form of routines, skills, technologies, and relationships, and yet they must also make progress. Organizations must learn new and better ways to do things, but just like the full bottle, in order to fit in new knowledge, organizations must discard knowledge, too. We must forget things as an organization.

Vekstein conducted a study of the automobile industry and carefully considered the relationships between learning, forgetting, and business performance. He demonstrated that learning and forgetting in a careful balance leads to sustained progress, sustained competitive advantage, and he offered his opinions of two crucial factors that help maintain a healthy balance.

The first factor is individualism, and the problem, he says, is that we have too much of it.

We stimulate individualism in a variety of ways. We champion the rugged individual, but in our firms, it retards our forgetting. Individuals guard their special knowledge and are reluctant to let go of it, even if it supports technologies that are outdated. This inhibits people from participating in collective learning, and causes resistance. Vekstein believes that this resistance to "forgetting" is the most important cause of organizational inertia.

The answer, Vekstein says, lies in promoting a group identity among employees and discouraging individualism. Abandoning, for example, employee-of-the-month recognition programs.

The second factor Vekstein describes is benchmarking. We don't have enough of it.

Benchmarking identifies ways competitors are better, faster, or cheaper and then expresses these improvements in terms of targets. Meeting these targets allows one's own firm to match and overtake the competitor. Vekstein cites this example of a benchmark from the automobile industry: if Toyota can manufacture an automobile engine that has an average life of 150,000 miles and costs $2,000, GM might set a target of its own to introduce a motor that survives 175,000 miles and costs $1,500.

Benchmarking harnesses innovation and group competition as a way of motivating and focusing employees' energies.

Your competitors represent a real threat. They would like to put you out of business. Benchmarking calls attention to this external threat, and it helps employees overcome resistance to forgetting and excessive individualism. Benchmarking focuses people onto the task of innovating and results in vigorous efforts to change. This, says Vekstein, creates a healthy balance between learning and forgetting.

Managers can take a lesson from Professor Vekstein. Find ways to stimulate group performance and focus benchmarking goals on attracting customers and presenting your goods and services in attractive ways.

Reference: Vekstein, Daniel (1998) Managing Knowledge and Corporate Performance: an Empirical Analysis of the World Automobile Industry. Omega, International Journal of Management Science, 26 (5), 551-568.

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