Fall 2000


Peruse some related material

Visit Peter Cappelli's Wharton homepage

Center for Human Resources at the Wharton School of the University of Pennsylvania

The New Deal at Work: Managing the Market-Driven Workforce. P.Cappelli. Harvard Business School Press, 1999.

Employment Practices and Business Strategies. P.Cappelli (ed). Oxford University Press, 1999.

Change at Work. P.Cappelli (ed.), et al. Oxford University Press, 1997.

A Market-Driven Approach to Retaining Talent P. Cappelli, Harvard Business Review, January 2000.

Career Jobs: A Debate , P.Cappelli, S.Jacoby, California Management Review, October 1999.

Publication Catalog of the National Center on the Educational Quality of the Workforce, including many papers such as: "The EQW Triangle,Ē P. Cappelli, P. Oedel, R. Zemsky, "The Educational Payoff," P. Cappelli, M. Iannozzi, "Rethinking the Skills Gap: Is It Craft or Character," P. Cappelli, M. Iannozzi


As the George W. Taylor Professor of Management at the Wharton School of Business, and Director of Whartonís Center for Human Resources, Peter Cappelli is deeply knowledgeable about how the world is changing for employers and employees alike. In his many well-received books and articles, Cappelli charges directly into the New Economy storm, and is one of the leading authorities alerting the rest of us to the conditions ahead.

LiNE Zine enjoyed a recent conversation with Cappelli, who shared his views of the new world of work, and what the intersection of technology and learning means for employers, employees and companies. A pragmatic, hard hitting, ďletís deal with the here and nowĒ approach infuses his work. In person, he is warm, intuitive, and the ultimate humanist. The combinations of his determined realism with his concern for the human experience make for an interesting perspective. Enjoy.†

LiNE Zine:† In your work you talk about what is going on in the business world that really requires us to learn a new way of working. What changes is learning, and particularly the intersection of technology and learning, bringing to the world of work?

Cappelli: The first thing that strikes me is that organization learning has developed a big constituency. Itís one of these wonderful topics that everybody agrees is really importantópartly because everyone has something really different in mind when they use the term! For example, the education community thinks that organization learning means the business community has discovered that education is important. The training industry thinks it means that everyone recognizes that traditional training is important. If you talk to the people who study organization learning, theyíre talking about how organizations learn from their decisions and their mistakes, and linking it to how CEOs think about strategy.

LiNE Zine:† What is the real meaning that most people are missing?

Cappelli: †I think it has nothing to do with employees getting more education and nothing to do with training. I think it has something to do with how organizations learn from each other and from their experiences. More importantly, itís about how people inside organizations learn how to do their work.

Whatís interesting, and what is not reported very much, is that implementing this requires fundamentally different ways of operating the organization. That is, it requires that the organizations themselves manage work in a different way so people can interact and share information and ideas. It requires that decisions get made in new ways. It really requires fundamental changes in the organization.

A lot of people, even those who are sophisticated about this, think there is something called organization learning that you can simply drop into a company. But that ďdrop inĒ program doesnít exist. All these things involve the way the organization manages its employees and the way it does business. That simply requires bigger, fundamental changes.

LiNE Zine:† So what has to happen inside organizations in order to make these fundamental changes?

Cappelli:†There are really two issues.† First, information has to get around the organization in a way that it does not right now. There may be multiple ways to do that, but it requires a different kind of social architecture so that people have more opportunities to talk informally and share information. For example, the British teatime created a social environment in organizations where people had to come and talk to each other and share information in a random way. Other companies build it into the organization formally with structured meetings or IT arrangements that move information around the organization.

The second issue is the organization learning paradigm is primarily about a different way of thinking about knowledge. Organization learning has been about experimenting, trying things, seeing what works. As a result, companies have to let people experiment more, and in particular, debrief their successes and their failures.

In a nutshell, companies have to

1. Distribute information around the organization,
2. Allow people to experiment more, and
3. Evaluate what happened.

These are relatively simple objectives. Yet they cut against the way a lot of organizations run. More typical is the organization thatís secretive about information, that doesnít empower people to make decisions, and that quickly covers up mistakes.

LiNE Zine: Your premise makes a strong argument for technology-delivered solutions to help extend the way we work and learn. If the issues are distributing the information, evaluating, and debriefing, then we can imagine software development people saying, ďThat means you need a better groupware system, a better email system, and a collaborative system built around some databases where people could get online and talk about what happened.Ē Do you agree?

Cappelli:†Iím a great believer that technology, per se, does nothing. Itís only if organizations find ways to engage people in the particular technology that youíre actually going to get anywhere. But you can easily imagine organizations without any technology at all finding ways to just share information.

There was a recent story1 in the Wall Street Journal about the very idiosyncratic science and art form of building an atomic bomb. The older generation of people who do it are retiring. The younger generation not only does not have the knowledge that the older guys have, but theyíre not testing many bombs now. So, somehow, they have to transfer this information into the hands of the younger folks. The story is about the debate over an effort to build all of this knowledge into software, versus the older people who believe thereís no way to do that. The older guys learned through apprenticeships and through hanging out with their elders.

If I had to bet right now, and it was between trying to embed this expertise in software versus hanging out with the older guys, Iíd bet on hanging out with the older guys. So there may be more than one way to do this.

LiNE Zine:†To play devilís advocate, it may be that learning and social style come into play here. Some people have an interest and proclivity toward social engagements, but other people may not particularly care to work within groups. They might prefer to have it embedded in software.

Cappelli:†Technology without some effort to engage people in the technology is not going to get you very far. Embedding knowledge in technology is useless unless you do other things along with it. It might be that doing the other things would mean that the embedded in software model might, in certain circumstances, work better than the English tea model. But if you have a bunch of geeky engineers who would rather just view their screen than sit and talk to anybody, you still have to create the right environment where they can read the software and respond to questions. It takes a lot of time to do it that way, and itís much more extensive that just a simple technological fix. When dealing with people you have to deal with social architecture too.

LiNE Zine: Do you think employers are recognizing that? If so, what are some successful ways theyíre bridging that gap?

Cappelli:†I think companies are having a hard time with this, and they arenít having much success. It fundamentally changes the way they have to operate, so they find it tough. I think companies are much happier with programs they can just drop in, parachute in, to what they are already doing, without having to deal with all the other messy issues and cultural changes required. Those drop in programs donít work very well, but itís much easier to do it that way.

One byproduct weíre beginning to see is the return of offsite meetings, which had largely disappeared for a while. Iím not so sure the resurgence is a consciously articulated strategy of pumping up organization learning, but companies are realizing it is important to get people to talk to each other and learn from each other. They can do this without having to change the culture and the work systems and many other elements.

I think there was a moment where internal benchmarking became quite important as a learning vehicle. Banc One was particularly good at forcing people to use the same internal accounting system, and disseminating information around about how individual banks were doing compared to the other banks. They then pushed the local banks to talk to the better performing banks and learn from them. That was one of the best organization I had seen in terms of internal learning because they had clear metrics so you could compare apples to apples.

The other manifestation Iím seeing that gives some evidence that companies are taking learning seriously, is they are getting much less willing to share information with competitors. I think thatís some indication that they understand their knowledge is competitive advantage.

LiNE Zine: You have an interesting perspective on how the nature of the relationship and expectations between employees and employers has changed. In the past, organizations have often come from two different perspectives. They either view the employees as loyal friends (believing these friends will always be around so thereís little need to share what they know) or they view employees as expendable resources who will soon leave. In the latter case, organizations tend to restrict employee access to information, a lack of access that may hinder how well they can do their job.

Cappelli:†Itís an interesting dichotomy between assuming that you own the human capital, the intellectual capital, and assuming that you donít at all. I think the more sophisticated employers are beginning to understand that reality falls somewhere in between. It's not that people are all independent cowboys you hire to do a job, and then expect them to move on. Nor is it the case that you own everything your people know. Thatís partly why we have an organization learning problem. If you assume the relationship is somewhere in between, which I think is probably right, then the issue is can you figure a way to share knowledge. Itís a challenge because the folks in the organization could share the knowledge if the environment was right, but they donít have to.

LiNE Zine: Do you have any suggestions for ways our readers or their employers or employees can look at where learning fits in with their relationship to their company?

Cappelli:††I think there is clearly a difference now in that employees are expecting something different of the relationship. They are expecting to learn things. They recognize that itís important to learn because if they donít, theyíre not going to be marketable, and arenít going to have jobs and make money. I think people understand that itís their own human capital that matters and theyíve got to keep it up to date. To some extent this is good news for organization learning because if employees are in an organization where theyíre not learning anything they feel like itís time to get out. So learning is both a retention device and a development device.

As long as the organization pays some attention to work systems that encourage organization learning (things like teamwork, mentoring, various arrangements that encourage people to make presentations, share knowledge) the employees themselves are happier. They learn more, they become more marketable, they stay longer, and the organization benefits. This is a nice coming together of these two interestsóthe employeeís interest in their own skills and employability, and the organizationís interest in trying to improve employee skills and productivity.

LiNE Zine:†In keeping with the theme of this edition, are there specific things you donít hear people talking about when it comes to employees, business success or learning, that you think should be hot topics?

Cappelli:†Iím surprised at the extent to which employers still donít pay very much attention to organization dynamics, to culture issues, to internal management issues, to issues associated with how people actually interact with each other and do the work.†

I think there are two reasons for that. One, this stuff is reasonably squishy and hard to get your hands around. Itís not like just dropping a program in place as I said before. Theyíd be much happier putting in a new accounting system than they would be trying to set up a new way for people to interact with each other because it doesnít fit the paradigm quite so neatly.

The second reason is for that most of the last 30 years this just didnít matter because we had periods of really slack labor markets, unemployment at 8% or so, and companies mainly worried about getting rid of people. You could get the employees to do more or less whatever you wanted them to do just by telling them to do it. They were all scared to death.†

The big change Iím seeing is that companies, particularly the senior executives, are still expecting these old patterns. Things are different and theyíre not sure what to do about it except get angry. There is an enormous amount of resentment targeted at employees who are leaving, and particularly at the new generation of employees who come in demanding different things. They demand things like opportunities to learn and performance management (which is really another learning device, a way of telling them how theyíre doing).

If companies can find a way to tackle the so-called squishy issues like culture and organization dynamics, and really helping people learn, the organizations will be much healthier, happier, and productive in the long run.

1 See Wall Street Journal, ďLos Alamos Lab Tries to Stem The Decline of Bomb Know-How,Ē John Fialka, Aug 2,2000. Viewing privileges by subscription only.

Peter Cappelli is the George W. Taylor Professor of Management at the Wharton School, University of Pennsylvania. He is the Director of the Center for Human Resources at Wharton and Co-Director of the U.S. Department of Education National Center on the Educational Quality of the Workforce. You can tap into his interesting insights and knowledge by contacting him atcappelli@wharton.upenn.edu
Beth Garlington Scofield is Managing Editor of LiNE Zine. She is always seeking new ways to make working life better for herself and others. Send your suggestions to beth@linezine.com .




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