Advance Readings in Management

Q. What is a Learning Organization? Is this

approach to strategic management better

than the more traditional top-down approach?

Part 1:-
 What is a Learning Organization?

"The essence of organizational learning is the organization's ability to use the amazing mental
capacity of all its members to create the kind of processes that will improve its own" (Nancy
Dixon 1994)

“A learning organization is one that seeks to create its own future; that assumes learning is an
ongoing and creative process for its members; and one that develops, adapts, and transforms
itself in response to the needs and aspirations of people, both inside and outside itself” ( Navran
Associates Newsletter 1993)

"A Learning Company is an organization that facilitates the learning of all its members and
continually transforms itself" (M. Pedler, J. Burgoyne and Tom Boydell, 1991)

"Organizations where people continually expand their capacity to create the results they truly
desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is
set free, and where people are continually learning to learn together" (Peter Senge, 1990)

Learning organizations are those that have in place systems, mechanisms and processes,
that are used to continually enhance their capabilities and those who work with it or for it,
to achieve sustainable objectives - for themselves and the communities in which they
participate.

The important points to note about this definition are that learning organizations:

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• Are adaptive to their external environment

• Continually enhance their capability to change/adapt
• Develop collective as well as individual learning
• Use the results of learning to achieve better results

 Why the Interest in 'Learning Organizations'?

Basically, it's the search for the (unattainable). Companies are seeking to improve existing
products and services (continuous improvement), and innovation (breakthrough strategies). This
has resulted in a plethora of initiatives such as TQM (Total Quality Management) and BPR
(Business Process Reengineering). But companies are finding that such programmes succeed or
fail depending on human factors, such as skills, attitudes and organizational culture. It also
appears that many implementations are geared to highly specified processes, defined for
anticipated situations. The current interest in the learning organization stems from the
recognition that these initiatives, by themselves, often do not work. Something more is needed
to:
• Cope with rapid and unexpected changes where existing 'programmed' responses are
inadequate
• Provide flexibility to cope with dynamically changing situations
• Allow front-line staff to respond with initiative based on customer needs vs. being
constrained by business processes established for different circumstances

With the pace of change ever quickening, the need to develop mechanisms for continuous
learning and innovation is greater than ever.

 Types of Learning
A learning organization is not about 'more training'. While training does help develop certain
types of skill, a learning organization involves the development of higher levels of knowledge
and skill. We have developed a 4-level model:
Level 1: Learning facts, knowledge, processes and procedures applies to known situations
where changes are minor.

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Level 2: Learning new job skills that are transferable to other situations applies to new
situations where existing responses need to be changed. Bringing in outside expertise is a useful
tool here.

Level 3: Learning to adapt applies to more dynamic situations where the solutions need
developing. Experimentation and deriving lessons from success and failure is the mode of
learning here.

Level 4: Learning to learn is about innovation and creativity; designing the future rather than
merely adapting to it. This is where assumptions are challenged and knowledge is reframed.
Furthermore this model (or adaptation of it) can be applied at three levels - to the learning of
individuals, of teams and of organizations.

Organizations that achieve learning to Level 4 will "reinvent not just their organization but
their industry" (Hamel and Prahaled in Competing for the Future)

 Characteristics of a Learning Organization

Observation and research identifies four types of factor:
• Learning Culture is an organizational climate that nurtures learning. There is a strong
similarity with those characteristics associated with innovation.
• Processes - processes that encourage interaction across boundaries. These are
infrastructure, development and management processes, as opposed to business
operational processes (the typical focus of many BPR initiatives).
• Tools and Techniques are methods that aid individual and group learning, such as
creativity and problem solving techniques.
• Skills and Motivation is to learn and adapt.
 A Learning Culture
• Future, external orientation these organizations develop understanding of their
environment; senior teams take time out to think about the future. Widespread use of
external sources and advisors e.g. customers on planning teams.

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• Free exchange and flow of information - systems are in place to ensure that expertise is
available where it is needed; individuals network extensively, crossing organizational
boundaries to develop their knowledge and expertise.
• Commitment to learning, personal development - support from top management;
people at all levels encouraged to learn regularly; learning is rewarded. Time to think and
learn (understanding, exploring, reflecting, developing)
• Valuing people - ideas, creativity and "imaginative capabilities" are stimulated, made use
of and developed. Diversity is recognized as strength. Views can be challenged.
• Climate of openness and trust - individuals are encouraged to develop ideas, to speak
out, to challenge actions.
• Learning from experience - learning from mistakes is often more powerful than learning
from success. Failure is tolerated, provided lessons are learnt ("learning from fast failure"
- Peters).

 How to Achieve the Principles of a Learning Organization

The first step is to create a timeline to initiate the types of changes that are necessary to achieve
the principles of a learning organization.

 Timeline: In Order of Appearance

• Stage one is to create a communications system to facilitate the exchange of information,
the basis on which any learning organization is built (Gephart 1996, 40). The use of
technology has and will continue to alter the workplace by enabling information to flow
freely and to "provide universal access to business and strategic information"(Gephart
1996, 41). It is also important in clarifying the more complex concepts into more precise
language that is understandable across departments (Kaplan 1996,24).
• Stage two is to organize a 'readiness questionnaire': a tool that assesses the distance
between where an organization is and where it would like to be, in terms of the following
seven dimensions. "Providing continuous learning, providing strategic leadership,
promoting inquiry and dialogue, encouraging collaboration and team learning, creating
embedded structures for capturing and sharing learning, empowering people toward a
shared vision, and making systems connections" (Gephart 1996,43). This is administered
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to all employees or a sample of them, and will develop an assessment profile, used to
design the learning organization initiative (Gephart 1996, 43).
• Stage three is to commit to developing, maintaining, and facilitating an atmosphere that
garners learning.
• Stage four: with the help of all employees, create a vision of the organization and write a
mission statement (Gephart 1996, 44).
• Stage five is through training and awareness programs, try to expand employees'
behaviours to develop skills and understanding attitudes needed to reach the goals of the
mission statement, including the ability to work well with others, become more verbal,
and network with people across all departments within the organization (Navran 1993).
• Stage six is to "communicate a change in the company's culture by integrating human and
technical systems" (Gephart 1996, 44).
• Stage seven is to initiate the new practices by emphasizing team learning and
contributions because they will become more interested in self-regulation and
management, and be more prepared to meet the challenges of an ever-changing
workplace (Gephart 1996, 44).
• Stage eight is to allow employees to question key business practices and assumptions.
• Stage nine is to develop workable expectations for future actions (Navran 1993).
• Stage ten is to remember that becoming a learning organization is a long process and that
small setbacks should be expected. It is the journey that is the most important thing
because it brings everyone together to work as one large team. In addition, it has inherent
financial benefits by turning the workplace into a well-run and interesting place to work;
a place which truly values its employees.

Part 2:-
 Is this approach to strategic management better than the more
traditional top-down approach?
Yes, this approach is better than the traditional top-down approach because Traditional
organizations change by reacting to events. Their “reference points “are external and often based
in the past or on the competition. They are often change-averse. Learning organizations, by

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contrast, are vision-led and creative. Their reference points are internal and anchored in the
future they intend to create. They embrace change rather than merely react to it.

Traditional organizations sort people into “thinkers” and “doers.” Essentially, the doers are
prohibited from thinking. Learning organizations truly engage everyone. Their fundamental
challenge is seen as tapping the intellectual capacity of people at all levels, both as individuals
and as groups

Strategy is an integral part of the learning process for a learning organization because it focuses
on the organization’s development of core competencies, both in the present and in the future. It
also focuses the learning process on the desired future position that the organization would like
to be in. Rather than focusing on only one aspect of organizational change, the company should
try to develop a dynamic and iterative process aimed at providing the organization with a built–in
capacity to change and redesign (itself) continually as the circumstances demand’. This has
involved transformational change of the organizational structure, human resource practices, and
technology. This means that at all levels of the organization, employees have been, and are,
involved in the processes of transformation improvement.

Comparison between Learning Organization and Traditional Organization is as follows:

Element Traditional Organization Learning Organization

Shared Values Efficiency Excellence
Effectiveness Organizational Renewal
Management Style Control Facilitator Coach
Strategy/ Action Plan Top-down approach Everyone is consulted
Road map Learning map
Structure Hierarchy Flat structure
Dynamic networks

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Staff Characteristics People who know (experts) Knowledge is power

People who learn Mistakes tolerated as part of
learning

Distinctive Staff Skills Adaptive learning Generative learning

Measurement System Financial measures Both financial and non-
financial manners
Teams Working groups Cross functional teams
Departmental boundaries

References
• http://www.skyrme.com/insights/3lrnorg.htm
• http://www.moyak.com/papers/learning-organization.html
• http://www.hrfolks.com/knowledgebank/mgmt%20concepts/learning
%20organizations.pdf
• http://www.google.com.pk/url?sa=t&source=web&cd=3&ved=0CDEQFjAC&url=http
%3A%2F%2Fworld.std.com%2F~lo%2FWhyLO.html&rct=j&q=traditional approach vs
learningorganization&ei=kfKyTYKyO8ak8QOR1pGWDA&usg=AFQjCNEZtwb_oIg8I
vkFqEAvi7lQQVtx9A&cad=rja
• Argyris, Chris. (May/June 1991). Teaching smart people how to learn. Harvard Business
Review vol. 69, no. 3: 99-109.

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• Garvin, David. (Jan. 1994). Building a learning organization. Business Credit, vol. 96,
no. 1: 19-28.
• Gephart, Martha A., Victoria J. Marsick, Mark E. Van Buren, and Michelle S. Spiro.
(Dec. 1996). Learning organizations come alive. Training & Development vol. 50, no.
12: 35-45.
• Johnson, Kenneth W. 1993. The learning organization: what is it? why become one?
Navran Associates' Newsletter.
• Kaplan, Robert S., and David P. Norton. (Sept./Oct. 1996). Strategic planning and the
balanced scorecard. Strategy & Leadership vol. 24, no. 5: 18-24.
• Karash, Richard. 1995. Why a Learning Organization? Rheem, Helen. (Mar./Apr. 1995).
The learning organization. Harvard Business Review vol. 73, no. 2: 10.
• Senge, Peter. 1990. The Fifth Discipline: the Art and Practice of the Learning
Organization. New York: Doubleday.
• Senge, Peter. (Dec. 1996). Leading Learning Organizations. Training & Development
vol. 50, no. 12: 36-4.