Learning is valuable. It helps companies develop the strengths needed for business success.
But, learning takes time. And, if there are too many items to learn, success is deterred until enough is understood to make things work well.
Start-ups that tackle really big challenges can easily have this problem. Their success is generally blocked until adequate learning occurs.
Lately we’ve been hearing a lot about Tesla’s difficulties trying to get a large number of cars into production. Tesla’s faces challenges because the company has had a lot to learn about producing automobiles on a large scale. The July 12, 2018 Bloomberg Businessweek article “Hell for Elon Musk Is a Midsize Sedan” by Tom Randall, Josh Eidelson, Dana Hull, and John Lippert discussed Tesla’s challenges.
An item mentioned in this article sheds additional insights about the nature of Tesla’s challenges. As the article points out, Tesla is making all of its component parts internally, rather than buying them from suppliers. “Musk has long argued that the traditional supplier model led to cost overruns and mediocrity. Starting in 2015, he told employees that he wanted to make even the thorniest parts of his supply chain in-house.”
As I see it, yes, it’s true that doing all this in-house conceivably could give Tesla the opportunity to strengthen its differentiation from other autos. However, attempting to do this comes with a huge price. It requires a great deal of learning, and if adequate learning does not take place, success can be blocked. Tesla has a great deal to learn in order to produce automobiles on a large scale. By making so many parts in house, Tesla not only has to learn how to produce autos at scale, but also must also learn how to produce a large number of parts. As a result, the learning required for Tesla to succeed is amplified and the company’s journey down the path to potential success is lengthened. Success is far more likely when a company keeps its need to learn a bit more manageable.
Furthermore, this parallels what was said in my previous blog post, which discusses restricting how many new products are launched so that adequate learning occurs.
So, remember that learning is valuable. And, use it to solidify company strengths. But, be careful about getting into situations where so much learning is required that the process of having to do the extensive learning interferes with success.