The call for learning organizations

Miroslav Chodak explains redesigning training organizations in the 21st century

Noah's principle: one survives not by predicting rain but by building arks

  Let's face it: the world is not as it used to be. Once calm and peaceful business environments are becoming increasingly uncertain and turbulent. Swirling gusts of technological, competitive, political, and marketplace changes are sweeping across the global business landscape. The region of Central and Eastern Europe is no different, perhaps it is even more unstable.

  The increasing pressure is characterized by volatile markets; little economic stability and predictability; continual explosion of new technologies, products and services; sudden changes in government policy; intensified competition from many sources; shorter time cycles; increasing emphasis on quality; more powerful and demanding customers. Each of these areas contains a big question mark as to when the change will occur, how big it will be and what consequences it will have for our actions.

  "If I only knew what the future holds!" you may think. But even if we could predict the "rain," it would not ensure that our training organization, department or activities will successfully make it to the future and survive. What we have to do is to react to the changing situation and "build arks" which will safely help us across the sea of change.

Defining the ark

  Another question you may ask is "How can I find the time to think about the future, when even today my organization must work with fewer people, do more tasks, cope with ever changing processes, produce in shorter time cycles, and use increasingly sophisticated technologies?" Well, this is a tough question, but your competitors, too, are working hard to find the answer. The only way to sustain your competitive advantage is to ensure that your organization is learning faster than your competition. This is the only way! Working harder makes no difference. It is learning which ensures better results in the future. Without learning, your training courses may still be the best ones on the market, but sooner or later someone will come up with a better product. What are your options, then?

  Think of it as of a car race. The faster you learn, the faster your car. If you are faster than your rivals, you have good chances to win the race. Likewise, if you learn slower than your competitors, you see them passing by and leaving you in the dust. Therefore, your performance of today is the fruit of yesterday's learning. Your performance of tomorrow is the fruit of today's learning.

  Under the present conditions of uncertainty, many leading firms, both inside and outside the training business, are constructing arks comprising their collective capacity to learn, not just as individuals, but as entire organizations. In other words, they are striving to become learning organizations.

  In such organizations the learning process is defined as figuring out what works and what doesn't faster than your competitors. Also, if there is no application of acquired knowledge, there is no learning. The role of individuals in learning organizations is to contribute to the strategic knowledge of their organization, otherwise there is no need for them. Learning is made part of their job description and is regularly evaluated. Let us now examine the prerequisites and components of a learning organization. With this end in view, the book Strategic Readiness by John C. Redding and Ralph F. Catalanello (reviewed in this newsletter on page 10) merits closer examination. Its exhaustive analysis of the learning organization and its striking relevance to the special case of Eastern Europe calls for direct quotations. Therefore, here are some excerpts from the first part of the book.

Learning to change

  Every day in every organization, people are learning. They acquire new knowledge as they deal with their job environments. They gather expertise as they repeat and fine-tune their capabilities in the trial-and-error process of making things happen. And they create new knowledge and expertise as they confront problems and situations never seen before.

  If learning is an integral part of everyday experience, how does it happen? A simple model offers a three-phase process: develop a plan; implement the plan; reflect on the plan and adjust the course. Over several iterations of the learning cycle, the plan becomes increasingly refined and the performance improves.

  Just as everyday people learn from their experience, so do organizations. This three-phase strategic learning cycle is used to implement conscious learning (see Figure 1):

FIGURE 1: Strategic learning

Continuous Planning

  Traditionally, organizations have relied upon formal, written, detailed programs and procedures to communicate what needs to be changed. In contrast, in learning organizations, fixed plans are displaced by flexible, open strategic directions which are fully embraced and shared by people involved in making them happen. Furthermore, planning is a continuous, evolving process, with plans being questioned, refined, and modified based upon the most current information as well as through insights gained from implementation efforts. As a result, in learning organizations, revision may be more important than vision. Planning is seen as an open process, involving the participation of people throughout the organizations as well as key stakeholders from outside the firms.

Improvised Implementation

  Once plans are developed, they need to be executed. In learning organizations, the act of implementation differs greatly form the way it works in traditional organizations, which rely on formal, written, detailed procedures. Instead, in learning organizations, individuals and teams act in creative, autonomous, and spontaneous ways to interpret the strategic direction and make the plans happen. Most successful change efforts start through the proliferation of a large number of modest experiments and grass-roots innovations, the most successful of which are promoted throughout the entire organization. Doing so reduces the risks and resistance inherent in broad-scale strategic change. Through this process, people discover for themselves over time that change is in their best interests and that the benefits outweigh the risks.

Deep Reflection

  In learning organizations, learning is not something that just happens. It is made to happen. Learning begins when those involved in an activity stop and examine how things are being done. Learning organizations do not wait for problems or crises to compel reevaluation. Reflection becomes part of "the way we do things around here" and is built into the implementation of strategic change. The aim is to maximize the speed and effectiveness of strategic change by incorporating reflection into all change efforts and not wait for the next annual planning cycle or for a crisis to demand reevaluation. Each iteration of the learning process starts with the act of reflection, stepping back and asking, "To what degree are we accomplishing not just what we set out to do but what we need to accomplish given what we know today?" The next step is to examine roadblocks by questioning original assumptions and developing deep, systemic solutions to newly emerging problems. Insights gained through this process are then used to modify the original plans.

Accelerating learning

  Central to the concept of learning organizations is the notion of iteration. Looking closely at each iteration of the learning cycle, it is possible to delineate three separate factors that determine the effectiveness of strategic learning:

The speed of learning

  Learning organizations seek to increase the speed at which learning happens by reducing the cycle time of learning iterations. Each iteration is an opportunity for learning. Each time that the organization develops a plan, implements the plan, and then stops to reflect on what has worked and what has not worked, there is an opportunity for learning. If an organization can get around the circle faster, it will have increased its chances to learn (see Figure 2).

FIGURE 2: Speed of strategic learning

The depth of learning

  The depth of learning is the degree to which organizations are able to learn at the end of each iteration of the cycle by questioning underlying assumptions. Only, fast cycle does not guarantee learning. To increase the depth of learning, organizations must encourage and value questioning. Moreover, learning organizations attempt to build an environment in which it is safe, both psychologically and politically, to question the rules of the game, even when the rules seem to work.

The breadth of learning

  The third dimension of strategic learning is the breath of learning. At the conclusion of each iteration of the strategic learning cycle, certain insights are derived that may have application to other issues and to other parts of the organization. The breath of learning is the degree to which organizations are able to transfer the new insights and knowledge derived from each iteration to other issues and parts of the organization. The transfer and dissemination of knowledge across a highly differentiated and often conflict-ridden organization challenges firms to learn by extrapolation and collaboration. Learning can be broaden by promoting open and collaborative exchanges of ideas between individuals, teams, and divisions, and even with suppliers, customers, and competitors. Applying our knowledge to a broader, more diverse range of problems helps organizations to learn by leveraging old knowledge into new undertakings.

Strategic Readiness: Preparing to Learn

  What does it take for organizations to learn in deep and fundamental ways? It is the state of strategic readiness. To a large degree, individuals cannot learn until they are ready to learn. The same is true for organizations. The degree to which readiness is present at any given moment in an organization's history will significantly determine how well it learns from its own experience and adapts in anticipation of or in response to challenges.

  Do you know the boiled-frog story? Place a frog in a pan of room temperature water, and it will sit there. Put the pan on a stove, and gradually raise the temperature of the water. The frog will still stay put, slowly adapting to the rising temperature. In fact, even as the temperature rises high enough to boil it to death, the frog will remain in the water, continuously adapting to the gradual increases in temperature. As long as the adjustments happen slowly enough, the frog will fail to react.

  Many organizations today are boiling frogs. They are not complacent, nor are they stagnant. They are highly skilled at slow and incremental learning and adaptation. However, by the time that the changes in their environments have an impact, it is too late to jump out of the pot. The water is already boiling. They failed to recognize the potential effects of the shifts in their environments and to modify their fundamental understandings of the situation.

  Learning organizations engage in extensive activities to prepare the organization as a whole to learn. Building strategic readiness is not a one-time event designed to prepare the organization for a specific change. Instead, the organization needs to be equipped to deal with anything and must be ready to reevaluate old assumptions and adjust its plans for the future.

Unfreezing the Organization

  The answer to the question of why some organizations change successfully while others do not, lays in the way organizations undergo a process of organizational change which is characterized by a three-phase process of unfreezing-changing-refreezing.

  Frozen stage. Organizations function for prolonged periods of time in relatively frozen states in which fundamental norms, structures, processes, and systems are left unquestioned and unaltered. During these periods, organizational changes are within the frame, restricted to improvements targeted at doing what the organization already does, but doing it more efficiently and effectively.

  Unfrozen stage. Fundamental, frame-breaking change occurs only during relatively brief transitional periods when basic ways of doing business are modified and elemental questions are being asked about the soundness of organizational purposes, processes, procedures, structures, and systems.

  Refrozen stage. Once these brief episodes of change have terminated and new, more successful organizational patterns have been discovered, organizations then refreeze again into a new equilibrium.

  For strategic change to occur, old mind-sets must be broken. But how does this normally occur? What causes organizations to ask deep, core questions about the nature of the business? Usually, it is a crisis, especially a crisis that has the potential to threaten the health and survival of the organization. The frog, when immediately placed in boiling water, will jump out. Likewise, organizations learn how to rapidly change when their future viability is felt to be at stake. But, in actuality, it is not the existence of an emergency that unfreezes organizations. It is the broad-based acceptance of the need to change and the ability to act based on that perception.

Becoming Permanently Unfrozen

  Learning organizations question the traditional notion that fundamental change occurs only when companies are facing challenges to their immediate survival. Rather than waiting for crises, learning organizations attempt to stay permanently unfrozen by sustaining and intensifying states of heightened strategic readiness. They recognize that environmental uncertainty is a permanent condition. They accept that change would be ongoing, not just something they do once and then stop. They also acknowledge that it would not always be possible to plan in advance for specific type of change, since environments are often inherently unpredictable.

Making Learning a Way of Life

  In learning organizations, work and learning are inseparably united. Each person is both teacher and student. Knowledge is the primary product. And learning is the pivotal process. On the individual level, work and learning are synthesized, not transferred to off-the-job training and educational activities. On the team level, groups continually increase their capacity to learn together. On the organizational level, a climate is created that nurtures continuous learning as a core competence. In addition, systems are established to allow the organization to tap the full range of its available knowledge, to bring that knowledge to bear on specific issues, and to apply the learning that occurs in unit or the organization to problems in others.

Becoming Self-Organizing

  Finally, there is a need for flexible, continuously shifting organizational structures designed to resemble continuously evolving living systems more than efficiently stable machines. By becoming self-organizing systems, learning organizations create the potential to act in creative, novel ways. Examined individually, many of these readiness activities might not appear to be anything new. What is different is their intent, their intensity, and their impact on learning and strategic flexibility.