Organizational Learning in BP
Comments by John Browne, BP CEO

What kinds of learning are crucial? What are the challenges in maximizing them?

There are a variety of ways you can learn how to do something better. You can learn from your own experience. You can learn from your contractors, suppliers, partners, and customers. And you can learn from companies totally outside your business. All are crucial. No matter where the knowledge comes from, the key to reaping a big return is to leverage that knowledge by replicating it throughout the company so that each unit is not learning in isolation and reinventing the wheel again and again.

The conventional wisdom is that excelling in incremental learning is a science -- a matter of installing the right processes -- while excelling in breakthrough thinking is more of an art. I disagree about the latter: I think you can install processes that generate breakthrough thinking. We have.

Another conventional view is that it is harder to tap implicit knowledge, which is the experiential knowledge locked inside someone's head, than explicit knowledge, which can be captured in a data-base. But that hasn't been our experience. We have had great success in fostering the personal interactions you need to mine implicit knowledge.

Our challenge has been getting people to systematically capture the information the company needs in order to be able to use both explicit and implicit knowledge repeatedly. In the case of explicit knowledge, that means recording the actual data. In the case of implicit knowledge, it means keeping a record of the people who have the know-how to solve a problem so that others can find them when the need arises. The trouble is that both tasks are boring. So we've got to figure out how to make them exciting and enjoyable. We've made progress, but we have a long way to go.

What's the most important rule for building an effective learning organization?

A business has to have a clear purpose. If the purpose is not crystal clear, people in the business will not understand what kind of knowledge is critical and what they have to learn in order to improve performance. A clear purpose allows a company to focus its learning efforts in order to increase its competitive advantage.

What do we mean by purpose? Our purpose is who we are and what makes us distinctive. It's what we as a company exist to achieve, and what we're willing and not willing to do to achieve it. We are in only four components of the energy business: oil and gas exploration and production; refining and marketing; petrochemicals; and photovoltaics, or solar. We're a public company that has to compete for capital, which means we have to deliver a competitive return to shareholders. We're in a highly competitive global industry in which cost matters. We serve a global market that offers growth opportunities, and we want to grow. But in our pursuit of exceptional performance and sustained growth, there are certain financial boundaries we will not cross and values we will not violate. The values concern ethics; health, safety, and the environment; the way we treat employees; and external relations.

What part does strategic planning play in a learning organization?

Our strategic planning process is designed to keep ideas flowing and to stimulate thinking. We see strategy as applying a series of frameworks that help us constantly reexamine what we are doing relative to what the world can offer and what our competitors are doing. We start with our purpose. Who are we? What sorts of businesses are we in? What are the characteristics of those businesses? What are the limits -- in terms of our values and financial boundaries -- to the sorts of activities that we are prepared to undertake? What makes our company distinctive?

Using those frameworks to shape our dialogues with our people, we begin to create a strategy that lives because it is always changing as competitive dynamics change or as we understand them more clearly. You don't build a distinctive business by talking about it once a year or once every two years, and then writing a document and putting it in a drawer. You build it by having the company's leaders talk about it with the people in the business units -- both formally quarter by quarter and informally even more often. Then people from the top of the company down to the business unit are thinking about it all the time and adjusting what they do every day in light of reality. It's a tremendous way to get people to grasp what is really happening in every component of the company and to help them avoid falling into the trap of thinking of strategy as something fixed or as cash flow analyses, with one answer and one answer only.

Prokesch, Steven. 1997. Unleashing the Power of Learning: An Interview with British Petroleum's John Browne. Harvard Business Review 75, no. 5: 147-168.