Unlearning is as important as learning

Source: De Tijd (13/02/2019); Author: Marion Debruyne (Dean of Vlerick Business School)

‘Why should we look at what the big Western players are doing when the challenges we face are unprecedented and they have never shown us how to do it?’ These are the words of Weiru Chen, Chief Strategy Officer at Alibaba Cainiao, the logistics arm of the Chinese retail giant Alibaba.

Weiru's job is to figure out how Alibaba can get about 100 million packages delivered daily within 24 hours, with peaks of 800 million. This is not only a technological challenge, it is also a challenge for the business model. Is it best to solve the problem by doing it yourself, or by creating a platform and getting others to do it for you? In other words, should you do it yourself by being a taxi company or by setting up an Uber-like technology platform? And who is the customer, who is going to pay?

“We cannot run and manage organisations which need to be ready for the 21st century using principles from the last century.”

There is a certain level of arrogance to Weiru's statement. The Chinese tech giants claim to have nothing to learn from their Western counterparts. They think their technology will make all the difference, as well as the way they handle things.
We cannot run and manage organisations which need to be ready for the 21st century using principles from the last century.

We believe that the challenge of the digital world is one of digital skills and technology. And that is certainly part of the story. General Motors needs to recruit 1000 ‘autonomous engineers’, even though that qualification doesn't even exist yet. At the same time, the American car giant is getting rid of 15% of its human capital. We hear the same story in our own country. Proximus has announced redundancies but simultaneously needs to attract new profiles. The CEO, Dominique Leroy, has talked about the challenge of encouraging people to learn and acquire new competences. We need more digital skills.

But that isn’t the whole story. It isn’t just the development of digital capital that makes the digital world turn: it also needs to adapt to a world where past laws no longer apply and old habits are a handicap. Unlearning is just as important as learning. In the words of the American management expert Peter Drucker: ‘The greatest danger in times of turbulence is not turbulence itself, but acting with yesterday's logic.’

Old logic

Digital platform companies defy old logic: they disprove the assumption that growth is linear and not exponential; that the user is also the customer; that geographical boundaries are also competitive boundaries. That the value of a company can be seen from its gross operating profit. That controlling an ecosystem is better than orchestrating it.

“Along with technological change, we need management change and a different kind of leadership."

Unlearning old mental models is more treacherous and difficult than learning new things. This pitfall is known as cognitive inertia. It is clearly illustrated in a statement by the former CEO of Polaroid: ‘Let me clarify one thing that not everyone understands. In photography, the money is in the consumables and the software. This always has been, and always will be, a fundamental truth.’ He said this shortly before Polaroid had to file for bankruptcy protection.
Along with technological change, we need management change and a different kind of leadership.

Most of the management principles which we apply today were actually invented 100 years ago, when Henry Ford launched the first mass production line for cars. To a great extent, we are still stuck in the basic ideas of that time. We cannot run and manage organisations which need to be ready for the 21st century using principles from the last century. Along with technological change, we need management change and a different kind of leadership.

They seem to have understood that at Alibaba. Weiru Chen was lured away from CEIBS, China's top management school, where he was a professor. His task is not only to reflect on the e-commerce logistics of the future, but also the management practices of the future. After all, digitisation is just as much a challenge for management and leadership as a technological challenge.