Taking Stock of the Ability to Change: The Effect of Prior Experience

Abstract

In aiming to understand why teams differ in their ability to adapt to new contexts, I explore the extent to which prior experience with a previous practice impacts the ability to properly execute a new organizational practice. I generate predictions by integrating the organizational learning and path dependency literatures. To test my predictions, I use internal data from 294 stores of a large retail chain that implemented a new restocking process in its stores. Initial findings show that, on average, stores dramatically improve execution performance over time, and employee experience with the prior practice moderates the effect. Stores where employees have greater exposure to the old practice perform significantly worse than other stores at the outset—consistent with the notion of “competency traps.” However, these stores also learn more quickly, which I suggest may be the result of increased efficiency in their coordination and communication when learning the new process.