Continuous improvement has been credited with helping companies in decreasing manufacturing costs, reducing inventory, compressing cycle time, improving quality, speeding distribution, and increasing customer satisfaction. But what is at the heart of continuous improvement? What allows a company to get better over time? Learning -- or more accurately, organizational learning. How effectively an organization learns can dictate whether it will improve, and how fast, or if it is destined to lose ground to competitors who can and do learn. Nowhere is organizational learning more critical than in new product development -- where one technological platform can lead to families of products, and learning must be transferred from one team to the next. Some companies excel at transporting knowledge between teams and then capitalizing on it, while others do not. Motorola built on its portable pager business to develop portable cellular telephones, Searle built on its technical core competency in drug research to develop NutraSweet, and Corning used its expertise in glass technology to develop optical fibers.1 Xerox, however, failed to apply its copier technology to the personal copier market until competitors were firmly entrenched, Firestone and Goodyear resisted the shift to radial tires, and Seagate waited to develop 3.5" computer disk-drives until other companies had secured an insurmountable lead. Why are some companies able to build competitive advantages by using their storehouse of organizational knowledge while others are not? What programs can companies institute that would enable them to create and profit from the knowledge that they have labored to acquire? How can organizations establish policies enabling their new product teams to draw on the firm's knowledge base augment it, and then develop the kind of technological breakthroughs that create entirely new industries? By studying a progression of new product projects that included the Apple II, IIe, III, Lisa, Mac and Mac ; the Hewlett Packard 85, 125, 150 and Vectra; and the IBM DataMaster, PC and PCjr., we learned how teams learn.3 The insights came after completing a total of 85 3/4 hours of interviews (80 hours on tape) with 70 team members: 19 IBM team members; 25 HP team members; and 26 Apple team members. Interviewees included senior company executives such as Apple's co-founder, Steve Wozniak; HP's Executive Vice President, Dick Hackborn; HP's Personal Computer Office Division General Manger, Bob Puette; and IBM's initial PC project leader, Bill Lowe in addition to managers and individual team members in manufacturing, marketing, planning and engineering (hardware, software and firmware)
