It did not work? Unlearn and try again—Unlearning success and failure beliefs in changing environments

Research Summary When organizational environments change, experience, and organizational beliefs are often devalued and may become an obstacle to organizational adaptation. The literature on unlearning suggests organizations can overcome this problem by unlearning. However, prior work focuses mostly on unlearning of what has worked in the past (success beliefs) and neglects unlearning of what did not work (failure beliefs). We examine the differences in unlearning these two types of beliefs and their implications for learning and adaptation under environmental change. Using a simulation model, we find that (a) the implications of unlearning success and failure beliefs exhibit fundamentally different temporal dynamics because their underlying mechanisms are different, (b) organizations can often gain more from unlearning failure beliefs, and (c) unlearning failure beliefs is the more robust strategy. Managerial Summary In our study, we investigate the implications of unlearning for an organization's ability to adapt to a (more or less) changing environment. We show that organizations should unlearn selectively because unlearning success beliefs (i.e., beliefs about what has worked in the past) have different implications from unlearning of failure beliefs (i.e., beliefs what has not worked in the past). Most importantly, our study suggests that organizations should focus on unlearning failure rather than success beliefs, in particular, given the difficulties of unlearning old (success) beliefs and the problems associated with knowing when old beliefs turned obsolete by environmental changes. In focusing on unlearning failure beliefs, organizations also pursue a less risky strategy than with unlearning success beliefs.