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  • How Important Is Experience?
  • Lack of experience is said to be a plus for innovation and change. A beginner's mind is often cited as an advantage, various sources downplay experience, and some academic research also refutes its value.

    But, this viewpoint may be too quick to ignore the benefits of experience. And, there is research that supports the value of experience. This raises the question of who really is instrumental in bringing about effective innovation and change. Those with experience? Or those without it?

    Fresh perspectives are valuable and should play a role in innovation and change. But, before dismissing the value of experience, it is important to understand rationales behind experience's naysayers, and to look closely at situations where experience is said to impede change. Then, research into experience should be more thoroughly evaluated in terms of what the research studied and how what was studied fits into the bigger picture.

    For example, the "Theory and Practice" column in the "Managing" section of the March 2 Wall Street Journal emphasized the dark side of experience. The column mentions professor Govindarajan of Dartmouth, who studied strategy failures, and quotes him saying companies "overestimate the value of experience. Experience can be a liability in times of change." He points out that the more experienced Sears missed what became a major opportunity for Wal-Mart.

    To effectively interpret the research, however, we need to ask what this type of study might really mean. In this case, studies of missed opportunities may be focusing primarily upon part one of what is really a two pronged problem. The two parts are: Part One: How do companies who have been in longer term complacency break free of it? Part Two: How do companies evolve, progress and grow (which happens when companies are not in complacency)?

    When assessing the value of experience, it is essential to distinguish between part one, where a jolt out of complacency is needed, versus part two, which focuses upon what to do once a company is on the move. Part one is crucial for the many companies that are entrenched in inertia, and seem stuck in complacency, unable to change to capitalize on new opportunities. Major questions for them: Why aren't they changing? What can be done to get them to change?

    Part two concentrates on completely different questions: How do companies that are successfully moving forward do it? What are the characteristics of companies when they are succeeding with new opportunities? Part two applies to companies that are already growing, evolving or progressing. It also applies to companies trying to do so, including those attempting to get moving once jolted from complacency.

    Many large corporations have needed extensive help with part one--getting unstuck, breaking out of complacency, overcoming the challenges of inertia, and being pushed to act upon the need for change. So consultants and academics often develop solutions oriented toward getting corporate behemoths moving. An important step in this process is jolting the inertia out of complacent companies that have highly experienced work forces. By potentially impacting this important step, thinking of experience as a liability during change may facilitate the process. But, this focuses primarily upon dealing with the conditions of complacency. It does not place emphasis on what to do succeed once a company is on the move.

    For example, the study finding that companies like Sears--which missed the Wal-Mart opportunity--had highly experienced, set-in-their-ways people merely identified a characteristic of the complacent. Yet, it apparently sees experience as a liability for change. But, it doesn't emphasize that Wal-Mart's success with change, which entailed achieving strong growth where others missed opportunities, was also backed by experience.

    Wal Mart's founder, Sam Walton, had experience working for J.C. Penney before he opened his own store. He owned and ran several Ben Franklin five and dime variety stores before launching Wal-Mart. Yet, Sam Walton's retail company was able to change and transformed itself from small town dime stores into the world's largest retailer. For Wal-Mart, experience was not a liability. It was the foundation upon which Wal-Mart's success was built--aided, of course, by the competition's complacency.

    According to my 20+ years researching business success and failure, this pattern of experience underlying successful business growth is quite common, even in times of change. It repeats itself so often, despite the fact that fresh perspective can have enormous value and that inertia can be a formidable obstacle. Furthermore, other sources and studies also appear to confirm these findings about the value of experience.

    Whether it's traditional, formal work experience or it comes in some other form, experience provides stepping stones to innovation, change, or transformation, just as it did for Wal-Mart. Thus, experience helps ensure that efforts toward change will be backed by the expertise required for success. Yes, if the experience perpetuates the status quo, or fosters strategically ill-fitting changes, a prosperous transformation is impeded. But, lack of experience easily breeds failure.

    That's why before treating experience as a liability, it is important to take a good, hard look at any situation slated for change and think about the degree to which inertia is involved. Seeing experience as a liability may help combat inertia. But, even when there is inertia, viewing experience as liability can damage attempts at successful change by failing to take full advantage of available expertise that may be required for success. And, since building upon prior knowledge is so important, potential for such damage is even more serious in situations where lack of inertia eliminates anti-inertia benefits.

    So, even in times of major change, the right experience is a big advantage. In fact, especially in times of great change, the right experience is crucial. The landscape of business failures is littered with numerous ill-fated attempts at growth that faltered because no one understood the market or because things weren't at all like what was expected. These kinds of disappointments are what the right experience can help prevent.

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