What Were They Thinking?

C H A P T E R 5

How Companies Get Smarter

Taking Chances and Making Mistakes

COMPANIES ARE A LOT like children—none of them are born knowing all that they need to know, and relatively few are born really smart. Most acquire intelligence by learning basic tasks and skills, mastering them, and then moving on to learn more advanced skills that can be used on more difficult problems and tasks. It has become virtually axiomatic that to succeed over time, companies have to continuously innovate, learn, and improve how they do things. That’s why there has been so much emphasis on innovation and learning in the management literature. On Amazon.com there are almost 1,000 entries for “organizational learning” and 11,925 for “innovation.” Google has 802 ...