Planning as Learning Harvard Business Review

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Some years ago, the planning group at Shell surveyed 30 companies that had heen in husiness for

more than 75 years. What impressed us most was

their ahihty to live in harmony with the husiness environment, to switch from a survival mode when

times were turhulent to a self-development mode

when the pace of change was slow. And this pattern

rang a familiar hell hecause Shell's history is similarly replete with switches from expansion to selfpreservation and hack again to growth.

Early in our history for example, there was a hurst

of prosperity in the Far East and we dominated the

market for kerosene in tins and "oil for the lamps of

China." Survival hecame the keynote, however,

when Rockefeller's Standard Oil snatched market

share hy cutting price. In fact, it was the survival instinct that led in 1907 to the joining of Royal Dutch

Petroleum and the Shell Transport and Trading

Company-separate husinesses until then and competitors in the Far East. This, in turn, paved the way

for Shell's expansion into the United States in 1911

with a new product, Sumatran gasoline-also a reaction to Standard Oil's activities.

Outcomes like these don't happen automatically

On the contrary, they depend on the ahihty of a company's senior managers to ahsorb what is going on in

the business environment and to act on that information with appropriate husiness moves. In other

words, they depend on leaming. Or, more precisely,

on institutional learning, which is the process

wherehy management teams change their shared

mental models of their company, their markets, and

their competitors. For this reason, we think of planning as leaming and of corporate plarming as institutional learning.

Institutional leaming is much more difficult than

individual learning. The high level of thinking

among individual managers in most companies is admirable. And yet, the level of thinking that goes on in

the management teams of most companies is considerably below the individual managers' capacities. In

institutional leaming situations, the leaming level of。。。。

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Planning as Learning Harvard Business Review
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