A presentation on how to develop a flexible/ learning organisation as a pre-requisite to innovation. Delivered to CMI Eastern Region in Cambridge on 29th June 2015

1. Developing a flexible, learning
organisation
Some strategic thoughts and some practical advice
29th June 2015
© Re-Formation Associates Ltd 2000-15 all rights reserved

3. Purpose
• Stimulate thought and discussion about:
– How flexible/ agile is your organisation
– The benefits of creating a flexible/ learning organisation
• Provide you with a simple method to audit your flexibility
and learning capability
• Provide you with some ideas that you can take away to
create your own road-map for change.
Why What How

4. Why?
Innovation
LearningFlexibility

5. Flexibility
1. Temporal – the rate at which an organisation can adapt to environmental
changes.
2. Range – the degree to which an organisation is able to respond to both
foreseen and unforeseen environmental change.
3. Intention – the degree to which an organisation's stance towards flexibility is
reactive/defensive or proactive/offensive.
4. Focus – whether the flexibility applies to factors internal to the organisation
(e.g. human resource policies) and/or external factors (e.g. alliances).
– Golden and Powell (2000)
“Flexibility is treated as the capacity to respond to changing
environmental conditions…such flexibility is a necessary condition for
enhancing, or even just maintaining, organisational performance.
Hence, the importance of flexibility is commonly cited in association
with concepts such as “competitive advantage” and “innovation”.”
Dunford R et al (2013) "“Flexibility” as the rationale for organizational change: a discourse perspective“
Journal of Organizational Change Management, Vol. 26

7. “…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 see the
whole together”.
Senge, P (1990) The Fifth Discipline
Learning
“The ability to learn faster than your
competitors may be the only sustainable
source of competitive advantage.”
Slater and Narver, Journal of Marketing July, 1995

8. Learning
“Recent research suggests that success rates could improve if
firms incorporated organisational unlearning into the management
of their innovation processes”
Becker, 2008, 2010
“The lack of an organisation-wide commitment to unlearning has
been established as a clear competitive weakness of many firms”
Akgün et al.,2006, 2007; Hedberg, 1981

9. Why?
Innovation
LearningFlexibility
Creative culture

10. Why culture is key
• “There is no statistically significant relationship between financial
performance and innovation spending”. 1
– Apple (ranked the most innovative company) and P&G (8th) spend less
than 3% of sales on R&D
However………
• “Companies with both highly aligned cultures and highly aligned
innovation strategies have 30% higher enterprise value growth and
17% higher profit growth than companies with low degrees of
alignment”. The two most important cultural attributes are;
– Strong identification with the customer and an overall orientation towards
the customer experience
1. The Global Innovation 1,000 PWC/ Booz & Co Issue 65 Winter 2011
http://www.strategyand.pwc.com/innovation1000
http://www.boozallen.com/consulting/strategic-innovation
2. Payne, A & Frow, P “The role of multi-channel integration in Customer Relationship Management” Industrial Marketing Management 33 (2004) p 529
“The provision of a ‘seamless and consistent’
customer experience at every juncture will engender
trust, which in turn will reinforce the relationship” 2

11. Why culture is key
• “There is no statistically significant relationship between financial
performance and innovation spending”. 1
– Apple (ranked the most innovative company) and P&G (8th) spend less
than 3% of sales on R&D
However………
• “Companies with both highly aligned cultures and highly aligned
innovation strategies have 30% higher enterprise value growth and
17% higher profit growth than companies with low degrees of
alignment”. The two most important cultural attributes are;
– Strong identification with the customer and an overall orientation towards
the customer experience
– Passion for and pride in the products and services offered 1
1. The Global Innovation 1,000 PWC/ Booz & Co Issue 65 Winter 2011
http://www.strategyand.pwc.com/innovation1000
http://www.boozallen.com/consulting/strategic-innovation

12. McKinsey

13. Structure
What
• The removal of road blocks
– Perceptual, Cultural,
Environmental, Emotional,
Intellectual
• The office space
– Open plan
– Break out areas
– Glass or solid?
How
• Re-draw the org chart

14. Empowered
employees
Supportive
SMT

15. The role of structure
Co-creation
not
Competition

16. Structure
What
• The removal of road blocks
– Perceptual, Cultural,
Environmental, Emotional,
Intellectual
• The office space
– Open plan
– Break out areas
– Glass or solid?
How
• Re-draw the org chart
• Move to project focus from
functional focus
• Mix up the departments
• When the strategy changes,
change the structure to fit
• Does the structure smooth the
customer journey or get in the
way?
Win Deliver Bill Retain

17. Systems and processes
What
• The removal of road blocks
– Perceptual, Cultural,
Environmental, Emotional,
Intellectual
• Combined with organisational
initiatives that enhance:
– Closeness to customers
– Cross-functional communication
– Multi-functional teamwork
• The removal of conflict
– Task and Process
• Right first time, every time
• Ensure information flow is
moving fast enough, in the
right direction with right content
How
• Deploy Yammer
• Deploy Padlet
• Deploy Dropbox
• Deploy Slideshare
• Get customers to address away-
days
• Map the customer journey looking
for “moments of truth”
• Introduce TQM
• Engage customers in NPD
• Actively seek out and manage
tacit and explicit knowledge
• Turn knowledge into intelligence
Hooley et al, 2012 pp 347-348 Isaksen & Ekval, 2007 Mumford et al, 2002 Gibson, V. and Luck, R. 2006

18. Win Deliver Bill Retain
Customer intelligence that is only listened to and acted upon by
a flexible, learning organisation

19. Systems and processes
What
• The removal of road blocks
– Perceptual, Cultural,
Environmental, Emotional,
Intellectual
• Combined with organisational
initiatives that enhance:
– Closeness to customers
– Cross-functional communication
– Multi-functional teamwork
• The removal of conflict
– Task and Process
• Right first time, every time
• Ensure information flow is
moving fast enough, in the
right direction with right content
How
• Deploy Yammer
• Deploy Padlet
• Deploy dropbox
• Deploy slideshare
• Get customers to address away-days
• Map the customer journey looking for “moments of
truth”
• Introduce TQM
• Engage customers in NPD
• Actively seek out and manage tacit and explicit
knowledge
• Turn knowledge into intelligence
• TNA relevant to future objectives
• Map the flow of information in and
out/ up and down – is it helping?
• Activate environmental scanning
• What’s on the agenda?
– Communication
– Reflection and improvement
Hooley et al, 2012 pp 347-348 Isaksen & Ekval, 2007 Mumford et al, 2002 Gibson, V. and Luck, R. 2006

20. Action
What did we do?
Outcome
What impact did it
have?
Interpretation
Why did it have that
impact?
Change
What could we do
differently?
Bain & Co (Rob Markey and Fred Reicheld) Loyalty Insights “The Keys to Effective Learning”
How we
learn as:
Individuals
Team
Organisation

21. Staff and skills
What
• The removal of relationship
conflict
• Creation of a positive
organisational culture based
on:
– Challenge/ involvement
– Freedom
– Trust/ openness
– Idea time
– Playfulness/ humour
– Minimised conflict
– Idea support
– Debate
How
• Give up the right to be right
• Belbin team roles
• Training in double /triple loop thinking
• Set challenging tasks then support
• Get rid of job titles
• Balance enquiry/ advocacy
• Fabulous failures
• Engage staff in developing shared
vision and values
• Support for self development (CQ)
• Employment policies
– Check hiring and promotion decisions –
more PLU?
– “Flexible working”
– Use of temps/ contractors/ interims/
consultants
– Reward mechanisms
– Job rotation
– Empowerment
Isaksen & Ekval, 2007 and Mumford et al, 2002 and Brence, 2010 and Schein, E 2010

22. CQ: Cultural Intelligence
IQ EQ CQ
Middleton, J Cultural Intelligence. Common Purpose 2014
Prerequisites of a leader with CQ
• A deep interest in other people
• A determination to understand why s/he feels so superior or inferior at
different times, in different situations
• Stamina and resilience to undertake the journey
• (p.s. there is no end destination)
• Willingness to stand up to cultural intolerance

23. No-one said it would be easy!
© Re-Formation Associates Ltd 2000-15 all rights reserved
Measurement
Predictability
Routine
Repeatability
Formality
Safer?
Values
Unpredictability
Highly variable
Ad hoc
Informality
Riskier?

24. Discussion

25. Thank you
E: malcolm@reformationassociates.com
M: +44 (0)7767 754022

26. Resources and extra slides with references
• http://www.nao.org.uk/wp-content/uploads/2009/02/n0809129_Literature_review.pdf
• http://www.scie.org.uk/publications/learningorgs/know/know2.asp
• http://www.flexibiliteitsaudit.nl/downloads/theorie/LRP%20Building%20Flexible%20Organisations
%20for%20Fastmoving%20Markets.pdf
• http://agile.org.uk/what-is-agile-working/
• http://www.ikmagazine.com/xq/asp/sid.0/articleid.3FD08B70-6013-465C-A84C-
CB04C6F2776D/eTitle.Building_a_corporate_KM_community/qx/display.htm
• http://www.amazon.co.uk/Harvard-Business-Review-Knowledge-
Management/dp/0875848818#reader_0875848818
• http://www.innovation-portal.info/
• http://www.mckinsey.com/insights/operations/bringing_out_the_best_in_people
• http://www.bain.com/publications/articles/the-journey-north-business-standard.aspx
• http://assets.cambridge.org/97805215/37179/frontmatter/9780521537179_frontmatter.pdf

27. Benchmarking your own organisation’s learning ability
Clarity of mission and vision
• The degree to which employees have a clear understanding of vision/mission
of the organisation and understand how they can contribute to its success
and achievement.
Leadership
• The role of leaders in the organisation with respect to helping employees
learn and elicit behaviours that are consistent with an experimenting and
changing culture.
Experimentation
• The degree of freedom employees enjoy in the pursuit of new ways of
getting the job done and freedom to take risks.
Transfer of knowledge
• The systems that enable employees to learn from others, from past failures
and from other organisations.
Teamwork and group problem-solving
• The degree of teamwork possible in the organisation to solve problems and
generate new and innovative ideas.
Benchmarking the learning capability of organizations Goh, S and Richards, G European Management Journal Vo115 No 5 October 1997

28. Clarity of Purpose and Mission
1. There is widespread support and acceptance of the organization's mission statement.
2. I do not understand how the mission of the organization is to be achieved (r).
3. The organization's mission statement identifies values to which all employees must conform.
4. We have opportunities for self assessment with respect to goal attainment.
Leadership Commitment and Empowerment
5. Senior managers in this organization resist change and are afraid of new ideas (r).
6. Senior managers and employees in this organization share a common vision of what our work should accomplish.
7. Managers in this organization can accept criticism without becoming overly defensive.
8. Managers in this organization often provide useful feedback that helps to identify potential problems and opportunities.
9. Managers in this organization frequently involve employees in important decisions
Experimentation
10. I can often bring new ideas into the organization.
I1. From my experience, people who are new in this organization are encouraged to question the way things are done.
12. Managers in this organization encourage team members to experiment in order to improve work processes.
13. Innovative ideas that work are often rewarded by management.
I4. In my experience, new ideas from employees are not treated seriously by management (r).
Transfer of Knowledge
15. I often have an opportunity to talk to other staff about successful programs or work activities in order to understand why
they succeed.
16. Failures are seldom constructively discussed in our organization (r).
17. New work processes that may be useful to the organization as a whole are usually shared with all employees.
18. We have a system that allows us to learn successful practices from other organizations.
Teamwork and Group-Problem Solving
I9. Current organizational practice encourages employees to solve problems together before discussing them with a
manager.
20. We cannot usually form informal groups to solve organizational problems (r).
21. Most problem solving groups in this organization feature employees from a variety of functional areas.
Use a Likert scale and remember to reverse the scoring on the questions marked (r)
Benchmarking the learning capability of organizations Goh, S and Richards, G European Management Journal Vo115 No 5 October 1997

29. Focus The concept of organisational learning Practices
Individual
learning
“Organisational learning occurs when individuals within an
organisation experience a problematic situation and inquire
into it on the organisational behalf” (Argyris & Schon, 1996 p.
16)
Staff training & development
Process or
system
Organisational learning is the process whereby organisations
understand and manage their experiences (Glynn et al 1992)
Enhancement of information processing
and problem solving capability
Culture or
metaphor
“A learning organisation should be viewed as a metaphor
rather than a distinct type of structure, whose employees learn
conscious communal processes for continually generating,
retaining and leveraging individual and collective learning to
improve performance of the organisational system in ways
important to all stakeholders and by monitoring and improving
performance” (Drew & Smith, 1995)
Creation and maintenance of learning
culture: collaborative team working,
employee empowerment and
involvement, etc.
Knowledge
management
Organisational learning involves knowledge acquisition,
dissemination, refinement, creation and implementation: the
ability to acquire diverse information and to share common
understanding so that this knowledge can be exploited (Fiol,
1994)
Facilitation of interaction and
strengthening of knowledge base
Continuous
improvement
“A learning organisation should consciously and intentionally
devote to the facilitation of individual learning in order to
continuously transform the entire organisation and its context
(Pedler et al 1991)
The adoption of TQM practices
Innovation and
creativity
In the hyperdynamic business context, organisation learning is
the process by which the organisation constantly questions
existing product, process and system, identify strategic
position, apply various modes of learning, and achieve
sustained competitive advantage
Facilitation of triple-loop learning and
knowledge creation; focus on creative
quality and value innovation
Summary of organisational learning concepts and practices
A Review of the Concept of Organisational Learning
Catherine L Wang & Pervaiz K Ahmed
Working Paper Series 2002

30. • Avoiding “dualism” and the “quick-fix”
• Seeing conflict as providing opportunities for learning
• Transforming “industrial relations” into “learning relations”
• Developmental work and learning – prerequisites for organisational learning
• high degree of task complexity – variety and control regarding the
“actions” being undertaken;
• high degree of task-relevant knowledge required – offering possibilities
for personal development;
• opportunities for feedback, evaluation and reflection on work undertaken
that requires deliberation and choice;
• possibilities for employee participation in shaping the design of the work
environment and bottom-up collective learning, as distinct from more
formalistic top-down and standardised approaches;
• formal participation in problem handling and developmental activities.
• Importance of a supportive learning environment
• Informal learning
• Who leads the learning organisation?
• Balancing the needs of the company with wider societal needs
Barry Nyhan Peter Cressey Massimo Tomassini Michael Kelleher Rob Poell, (2004),
"European perspectives on the learning organisation", Journal of European Industrial Training, Vol. 28 Iss 1 pp. 67 - 92
Key principles to ensure that organisational
learning can take place

31. 10 Pre-requisites for a learning culture
1. Top management’s commitment
2. Aligning learning culture to business needs
3. Setting clear objectives
4. Personalising learning
5. Create the right environment for learning
6. Developing contract for learning
7. Removing barriers in learning
8. Building learning culture
9. Encourage experimental mindset
10.Listen to the feedback
Senge, P; The Fifth Discipline: The art and practice of the learning organization from 1990 (new edition 2006).

32. Schein’s 10 dimensions of the
learning culture
1. Proactivity
2. Commitment to learning to learn
3. Positive assumptions about human nature (Theory Y)
4. Belief that environment can be managed
5. Commitment to truth through pragmatism and inquiry
6. Positive orientation toward the future
7. Commitment to full an open task-relevant communication
8. Commitment to cultural diversity
9. Commitment to system thinking
10. Belief that cultural analysis is a valid set of lenses for understanding
and improving the world

33. 10 Steps to a learning organization
1. Assess your learning culture
2. Promote the positive
3. Make the workplace safe for thinking
4. Reward risk-taking
5. Help people to become resources for
each other
6. Put learning power to work
7. Map out the vision
8. Bring the vision to life
9. Connect the systems
10.Get the show on the road
Kline, P and Saunders, B 2010

34. Barry Nyhan Peter Cressey Massimo Tomassini Michael Kelleher Rob Poell, (2004),"European
perspectives on the learning organisation", Journal of European Industrial Training, Vol. 28 Iss 1 pp. 67 - 92

35. Category Ideal component of a flexible firm
Internal flexibility factors
Structure Flat organisational structure
Access to right information at right time
Management Setting of clear vision and goals
Rapid decision making and execution (few decision-makers)
Empowerment of employees
Accountability
Management attitude receptive to change
Flexible working
Culture A high performance culture
A positive atmosphere
Continual process improvements via organisational learning
External flexibility factors
Technology Introduction of new ITC technology
Introduction of other forms of new technology
Product Introduction of new products / services/ positions /business models
Market Focus on customer needs and relationship management
Constantly scanning the external environment
Attempt to conquer new customer groups
Adapted from:
Gjerding et al (1997) cited in Casey, B, Keep, E, Mayhew, K (1999), Flexibility, quality and competitiveness, National Institute Economic Review
Economist Intelligence Unit (2009) “Organisational Agility: How Business can survive and thrive in turbulent times.”
Denison, D. R (1990) Corporate culture and organizational effectiveness.