CHAPTR 16 THE LEARNING ORGANISATION

An organisation is a structure that formalises a connection between individuals; the boundary within
which people complete tasks to reach an end goal. The organisation as the whole is the sum of the
individuals. The learning of an organisation is determined by the learning of the individuals.
Organisations need to continue to learn and retain that learning, their skills and abilities, to sustain
their position in the dynamic marketplace.
Learning organisations can be described by their skills, which have to be developed. Garvin lists
these as skills in systematic problem solving, experimentation, learning from past experience
and best practices of others and transferring this knowledge quickly across the organisation
(Burgelman, Christensen, Wheelwright, 2004). The individual learning leads to organisational
learning and there is a need to ensure this contributes to sustainable competitiveness.
The learning organisation or learning needs of the organisation can start to evolve and be driven
from the early stages of strategic analysis. When the opportunities in the SWOT model are identified
it highlights areas where new knowledge, intelligence or insight has to be created or combined in
order to take hold of these opportunities. Threats indicate what knowledge areas the organisation is
leaving itself open to and learning can help to reduce the threats.
Threats are events or activities that occur in the macro and microenvironments. Competitors,
consumer changes, and economic trends are examples of sources of these threats to the
organisation. Identifying threats at an early stage places the organisation in a knowledgeable
position to counteract, minimise or convert the threats. Weaknesses identified in the SWOT can be
viewed and handled similarly.

STRATEGIC AND OPERATIONAL LEARNING

In exploring organisational learning a strategic and operational view is taken. At the strategic level,
the identification of the strategic organisational goals as drivers for learning have to be aligned with
those of the individual to ensure value to both, as the individual will tend to learn faster if there is
benefit to them as well as benefit to the organisation. Learning within the organisation helps to
expand the ability of the organisation to maximise its opportunities.
The initial questions, for any organisation exploring where they are in becoming a learning
organisation, are:
 What do individuals learn in the organisation?
 What determines how they learn?
 Which mechanisms are used to help learning?
 Which individuals are going to do the learning and how is this learning facilitated?

In addition, who will influence all of these factors – for example, will the owners dictate what is to be
learned, the internal leaders or managers, the group or team structure. The strategy of the
organisation should be the driver of the learning and through goal alignment will guide this learning.
At the strategic level the leadership perspective on learning is to influence not interfere. Leaders
should establish the environments, culture and facilities for creative learning without interfering with
the learning processes. Transformational type leaders, as considered under change management
classifications, are the ones that tend to be able to create a learning organisation. These types of
leaders are suitable for this as they are leaders who are there at a time of change, when the highest
level of learning is required.
At the operational level, time and effort has to be put in to network development. Network
development is the identification and facilitation of social networks in the organisation. This should
result in the creation of networks of people and an understanding of how people really communicate
and share knowledge within the various areas of the organisation. Methods should then be
identified as to how these networks can crossover, integrate and share each network’s knowledge.
For the networks to perform – ie for the individuals in the various groups or social networks to be
able to learn – problem-solving activities, learning events and integrated systems are required.
These activities or learning processes help to incorporate the knowledge into the social networks
and embed it in the organisation.

MANAGING LEARNING
For learning to be effective, the learning process and its outcome can be perceived as a capability
or resource. As with any capability or resource it needs to be managed. To optimise this learning we
can categorise the issues to manage as soft and hard issues. The hard includes policy and process;
the soft includes mainly people and social networking.
These hard issues that require management start with the use of the analytical tools, mechanisms
and facilities through which learning can occur.
The first tool to use is a stakeholder analysis, such as Mendelow’s matrix or classifying stakeholders
as internal, connected or external. From this we can identify who has the most significant
influence on the thinking of individuals and can influence them to think differently, an essential part
of the learning process – for example, learning from the customer via customer feedback, the
manager learning via performance management and the board from their strategic success and
failures.
Feedback is the most freely available, continuous source of efficient and effective learning that
exists in organisations, when used positively and productively. Some feedback mechanisms are:
appraisal systems – for example, 360-degree employee appraisals, performance metrics, such as
using the balance scorecard, e-marketing (for example, social websites, virtual communities and
forums). Feedback and its effect on organisational behaviour needs to be considered when
implementing any feedback method as it can be used as contribution to the no-blame culture or the
opposite that would create an insecure environment.
At the operational level, meetings and technology are the general practical methods employed to
allow people to get work done. The issue with these types of methods are their level of formality or
(in)flexibility and the other issue is the level of system integration that exists. If the systems are not
integrated – ie they are silo systems – there is no platform for learning or sharing. For example, at
the level of reporting, the integrated reporting systems, by design, ensures that various sources of
information from across the enterprise and the people within it are connected and the information
then shared.
Systems need to be built to capture, store, categorise and disseminate information and knowledge.
The systems also need to detect anomalies. With that the organisation needs to ensure availability
of systems analysis expertise, to review what goes wrong, learn from it and feed that learning back
into the system.
Another hard element to be analysed for its contribution to facilitate learning is the organisational
structure. These are the structures within which people work and that defines their roles, in a
somewhat limiting manner. These can be redrawn as social network diagrams that facilitate a way
to allow people interact, which might then design and assign members to various cross-functional
teams.
Some formal tools and techniques that are helpful to drive learning are as follows:
 reverse scenario building (which is a method of identifying the opportunity the organisation
wishes to pursue and then build the scenario backwards from that optimum position, in order to
establish what has to be implemented, to maximise this opportunity)
 a mass media channel – for example, a company newsletter to spark new ideas and which is
open to suggestions and which can inform of what is happening in other areas.

Another method is that of action learning, hands-on complex problem solving and problem-solving
methodologies sharing within groups sessions.
It is one thing for learning to occur but there is also a need to disperse that learning, which is the
connection between these hard and the soft elements. The hard issue can facilitate the learning; the
soft issues will diffuse and embed the learning.
The soft issues to manage, for learning to occur, require the identification and understanding of the
needs of the individuals, their groups and their tasks at hand, to develop a balance between those
demands. Organisations have to look at how people perceive where they fit within the structures in
order to determine how they learn – for example, how they see their contribution in their department,
group or team. These structures tend to contain or retain their learning internally. A learning
organisation works on shared knowledge.
Another soft issue is that of the feeling of security or trust. People tend to offer more ideas and tend
to be more creative in a no-blame culture. Security, or the perception of both job security and
knowing the accepting reaction of others before offering up ideas, will significantly alter the
willingness of people to think, develop and share. Security as a feeling in the work environment can
be created through an analysis of the organisation culture, using the cultural web model, and
through human resource policies on training and contracts that allow time for employees to
construct reflect and think. Communication mechanisms and mediums will also determine how,
where and what is shared and discussed; communication for learning needs to be free of formality,
such as having less formal reports and more managed online forums.
The main soft issue that requires the greatest management effort is the individuals. Individuals have
mental models that they develop based on experience. In order to facilitate learning in general these
mental models have to change. Change to these mental models according to Labiaca, Gray and
Bass occurs in four phases:
1. Motivation to change – a want to learn has to exist driven by the organisation or the group or
business need
2. New model generation – where the new information is drawn into the collective knowledge,
3. Comparison phase – where old knowledge is compared to the new and decisions made as to
which is best suited and
4. Where the new mental model just developed becomes embedded in the organisation (Hannah,
Lester, 2009).

The approaches that can create ways for new mental models to evolve are as follows:
 Question the taken for granted and develop innovative new ways.
 Articulate a collective vision to gain support for innovative changes.
 Encourage and facilitate the acquisition of skills needed for collective learning.
 Support values and openness to new knowledge, so as to create a learning culture.
 Help people understand cause-effect relationships and the determinants of performance for the
team or organisation.
 Help people recognise when learning has occurred.
 Gain external support and financing for the acquisition or application of new knowledge (for
example, acquisitions or joint ventures).
 Encourage experiments to gain more knowledge.
 Encourage teams to conduct after-activity reviews.
 Create decentralised subunits with authority to pursue learning and entrepreneurial activities in
a responsible way.
 Develop support programmes that will encourage and reward discovery of new knowledge and
its diffusion (Yukl, 2009).
ENTERPRISE AND NETWORKS

Enlarge the organisation chart

The concept of an organisation has given way to the concept of an enterprise. An organisation gives
the perception of a top-down, very structured and somewhat bureaucratic administrative structure.
The enterprise concept tends to give a more integrated flattened approach in which learning can be
better facilitated via greater sharing, greater access, integration of knowledge, ideas, innovation and
communications. More importantly, enterprise leads to the integration of people, away from the
functional departmental roles to develop a more collective team.
Learning, therefore, can be embedded more successfully in an organisation taking the enterprise
perspective based around integration and the establishment of an appropriate culture, rather than
the more traditional bureaucratic structure. For example, in the more traditional top-down
bureaucratic structure, leaders tend to determine what should be done and how it should be done;
with the enterprise approach, the outcome tends to determine what should be done and how it
should be done via the combination of people, processes, systems and structures. These should be
aligned again with the overall business strategy to ensure that the appropriate learning occurs.
Learning as a process needs to be a continuous evolving process and needs to be championed
from the top. Leaders should influence, not interfere, and embed it by ensuring processes and
systems are integrated – therefore integrating ideas and communication across the social networks
and, therefore, the enterprise.
The establishment of an enterprise culture – by considering the elements of the cultural web –
should create an environment that is open to learning both by sharing, innovating and drawing from
external influences via networks. Network creation starts with the selection of the right people when
employing them, the identification of those that are already learners, and the identification or
appointment of gatekeepers. Gatekeepers are those individuals who can link the social networks
inside the organisation together or use their outside links to learn from external stakeholders and
external knowledge sources.
Learning is reliant on people collaborating via these social networks. The networks need to be fluid
and flexible network structures. This is in opposition to the older concepts of department boundaries
defining jobs. The network structure allows for the creation of new groups of people to come
together quickly for problem solving or creative development, depending on their skill. It is similar to
small agile project teams being established within the enterprise, combining various degrees of
people, processes and systems in an evolutionary way, but driven by the need for knowledge.

SUSTAINABLE LEARNING
Organisations as enterprises need sustainability across multiple areas. Sustainable learning leads
to increased competitiveness, better resource usage, increased innovation and a sustainable
position in the marketplace, and an ability to survive in the dynamic markets and chaotic macro and
microenvironments in which business has to operate.
Enterprise learning is ultimately totally reliant on the people that are in the organisation; the
organisation itself cannot learn. The people inside the organisation, and their capacity, facilitate
organisational learning. There is a significant risk in an organisation that does not form a learning
culture and environment that does not establish learning systems and processes. The risk of not
being a learning organisation is stagnation or elimination. Organisations risk losing the right people,
which results in a drain on the learning and knowledge on which the organisation currently relies. A
learning organisation is a sustainable enterprise.
Fearghal McHugh lectures on ACCA Qualification Papers P3 and P1

References
 Boyle, E, (2002), A critical appraisal of the performance of Royal Ditch Shell as a learning
organisation in the 1990s
 Hannah, ST, Lester, PB, (2009), A multilevel approach to building and leading learning
organisations
 Yukl, G, (2008), Leading organisational learning: Reflections on theory and research

Bibliography
 Durst, S, Leyer, M, (2014), How can SMEs assess the risk of organisational knowledge
 Scarbrough, H, (2008), The evolution of business knowledge, chapter 4
Burgelman, R, Christensen, C, Wheelwright, S, (2004), Strategic Management of Technology
and Innovation, Reading V-1
 Garvin, D, Building a learning organisation
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 Cannon, M, Edmondson, A, (2005), Failing to Learn and Learning to Fail (Intelligently): How
Great Organisations Put Failure to Work to Innovate and Improve
Last updated: 2 Feb 2018