This article is part of THNK EVERGREENS. In the Evergreen series, we leverage seminal works on innovation management and works by influential thinkers, by extracting key implications and offering new insights to innovation practitioners. This article builds on Exploration and Exploitation in Organizational Learning by James G. March.
Most organizations face significant resistance against hiring external creative mavericks. The common fear is that attracting this external creative talent is the same as admitting defeat or, worse, dismissing internal expertise. However, a genuine interest and an openness to what the external world can bring in terms of new ideas is invaluable. While executive hiring/recruiting typically centers on adding a “safe pair of hands”, the opposite is needed for breakthrough innovation. When external talent is hired, the procedure is often for them to learn about the organization and its businesses before making any suggestions for change. We argue the contrary.
March observes that most firms experience two types of learning: that which is done through know-how and the insights it brings, and that which comes from learning through socialization within its members (i.e., adapting to the organizational norms, values, and knowledge – “the organizational code”).
Wanting to find the optimal balance between exploiting existing knowledge and identifying relevant new information, March examines how this mutual learning occurs. His research shows that optimal learning happens when organizations learn fast, and new employees learn slowly. In today’s turbulent business environment, organizations are doomed unless turnover is introduced, whereas new ideas keep the organization on a path of constant exploration.