What is the most important variable for a company to perform well continuously, consistently over long time span?

Learning is arguably the answer.

To be the first in the industry, a company need to do many things right, if not all things. Innovation is at the top of this list. But to perform well, that is being reasonably profitable and sustainable, innovation can take place outside of the company. There is the benefit of being late in a game, where although the possibility of getting high margin profit from early adopters have passed, the risk of failure also lessens as the market already react to the new product. Letting other company to take the lead and invest massively in R & D is a conservative approach of a company that want to reduce the risk of failure.

When making decision, small mistakes are regrettable but not a show stopper. As long as we don’t make too many of those. That one big mistake is what kill a company. The big gambling that didn’t pay off like the ill-fated Iridium satellite phone system was one of those big mistakes. What makes a big gamble big is the size of what at stake. Most of the time it’s the amount of money at stake. Whether it be from investment, lost revenue, or legal issues. Benjamin Graham book, “Intelligent Investors”, offer 10% speculation of the 100% allocated for investment. While mentally, one must not speculate more than one is willing to loose. The message is clear that one should avoid that one big mistake, rather than pursue the next big thing at all cost. Err on the side of caution.

Learning is about knowing a new way. And when is the right time to walk down that way. And it is about doing so efficiently enough to turn in a profit. It is a mental discipline that constantly, vigilantly aware that the old way may not the best way anymore. It is a mental discipline that no one way shall be taken at all cost or too high a cost. That there’s always another way. Learning is knowing fast enough that you are wrong and correcting it, before it become a fatal mistake. Learning cannot be relegated to some computer program (not yet, at least) or being carried out by outsiders.

Be a learning organization, where individuals within it constantly learning to ensure the organization are taking the right course of direction and doing so efficiently.

[jbs]