Royal Dutch/Shell applied a benchmarking process in 1983 with Arie de Gues as the coordinator of planning which lead to the discovery that the average life span of companies was at that time 40 years among other interesting data. Reviewing the data Lo van Wachem, the company’s most senior board member, asked for benchmarking on companies in the same age, revenue and reputation category as Shell, and they found only 40 such firms around the world. Then, they used the TQM’s ancestor tool which means that they called in the experts to make a research on the reasons of longevity and the common factor among these 40 companies.
The results of that research were four common characteristics:
– sensitivity to their environment
– cohesion and a strong sense of identity
– decentralization and tolerance on the margins
– conservative financing
As de Gues who provides these archives in his book the Living Company (1997) points out, ROI was not at all a priority, profitability was only the “symptom of corporate health” and figures were considered only as the description of the past from where to learn for the future” as well as that industry, product line or country of origin were not linked to longevity.
Royal Dutch/Shell this time went to the experts and a small club started researching on Organizational Learning at the MIT Sloan School of Management. In 1991 the club evolved to the Center for Organizational Learning as a sponsored research center to further explore the ideal of the learning organisation that was pointed out by the previous years of study. In 1997 the findings were released to the public through the evolution of the internal research centre to the Society for Organizational Learning (Clanon, 1999).
de Geus, A. (1997) The Living Company: Habits for Survival in a Turbulent Business Environment. Boston: Harvard Business School Press.
Clanon, J. (1999) Organizational Transformation from Inside Out; Reinventing the MIT Center for Organizational Learning, The Learning Organization Journal, 6 (4), September, MCB University Press.