Leadership Functions And Organizational Learning In Tecnalia Javier Ruiz


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Leadership Functions And Organizational Learning In Tecnalia Javier Ruiz

  1. 1. Organizational learning and leadership styles in RTOs: A multilevel perspective in Tecnalia Javier Ruiz Tecnalia Innovation Systems, Parque Tecnológico de Bizkaia Ed. 700 48160, Derio, Spain. E-mail: jruiz@labein.es Abstract: Complexity leadership theory has been used to understand organizational learning processes (exploration and exploitation and 4I model) in complex multidisciplinary R&D projects in RTOs merging in Tecnalia. Qualitative research and propositions are discussed in the case study. Mechanisms and context in which adaptive, enabling and administrative leadership functions at operational and strategic level are identified and described. Keywords: organizational learning processes, complexity leadership functions, multidisciplinary R&D projects, merging RTO Tecnalia. 1 Organizational learning and leadership in a complexity context Organizational learning is generally defined in terms of such distinct processes as “individual change” and “sustainable competitive advantage” (De Geus, 1988; Senge, 1990). Though early work tends to separate individual and organizational learning, recently integration of learning formulation at different levels of analysis has been done (e.g. Bontis, Crossan, & Hulland, 2002; Matusik & Heeley, 2005). The specification of learning processes at different levels of analysis provides an opportunity to uncover a detailed picture of the role of leaders in facilitating organizational learning. However, limited systematic research directly linking leadership and learning has been published. A few such studies have used learning variables as outcomes to common measures of leadership, such as transformational leadership (e.g., Amitay, Popper, & Lipshitz, 2005), or examined leadership roles in learning in certain settings. By contrast, recent theoretical work by Vera & Crossan (2004) and by Jansen, Vera & Crossan, (2009) systematically linked strategic leadership and organizational learning. Transformational leaders usually inspire learning that challenges the status quo (exploratory innovation), and transactional leaders facilitate learning that reinforces existing practices (exploitative innovation). In this paper, we explore multiple approaches to learning and leadership in two levels of analysis: strategic (top executives in a merger process of six Research and Technology Organizations RTO) and operational (EDEN & ATN complex R&D project level). After analysing standarization (Ruiz, 1996), leadership (Ruiz, 2003) and knowledge management (Ruiz, 2005) in R&D activities, now we are using the framework provided
  2. 2. by Berson et al. (2006) who organize the relevant literature to forming connections between organizational learning and leadership. Classic distinction between exploration and exploitation (e.g. March, 1991) and the 4I framework (Crossan et al., 1999) were used as taxonomies to describe learning processes. A tension exists between exploration and exploitation as they compete for organizational resources and require different organizational contexts for support (Gibson & Birkinshaw, 2004). While exploration includes search, variation, risk taking, experimentation, play, flexibility, discovery, innovation; exploitation includes refinement, choice, production, efficiency, selection, implementation or execution. Exploration is variance-seeking and encompasses the constructs of creativity and innovation, whereas exploitation is reliability-seeking and incorporates learning of standard routines, transfering knowledge, and incremental adaptation (March, 1991). The view of organizational learning as a process of change in thought and action both individual and shared – embedded in and affected by the institutions of the organization (Vera & -Crossan, 2004, p.224) is consistent with the strategic renewal perspective. They suggest four processes: intuiting, interpreting, integrating, and institutionalizing through which learning occurs at three levels of analysis: individual, group and organization. Learning begins with individuals at the intuiting stage as a subconscious process and later becomes conscious at the interpreting stage, where it is often shared with other group members. Group members’ input gets integrated at the group and organization level, where information is institutionalized and imbedded in systems, structure or routines. Learning transfers among these four processes (4Is) are closely related to exploration and exploitation. Exploration starts with the processes of entrepreneurial intuition and interpretation of new ideas, while exploitation starts with the transfer of institutionalized organizational learning. Integration ties the two types of learning together; it facilitates the institutionalization of the results of exploration and the interpretation by individuals and groups of institutionalized learning. Leadership is a process of influencing and teaching others to understand why and how certain activities and goals need to be accomplished (Jukl, 2006). As such, it constitutes a process of facilitating individual and collective efforts to learn and accomplish shared goals in organizations. But differences exist between leading and leadership. Hannah & Lester (2009) define leading as an influence process where individual leaders behave in ways that set the proper conditions for individuals, groups, networks and systems to enact emergent behaviors that promote learning and adaptation. These individual leader actions then serve to either promote or deter effective leadership and its development, which can be defined as the collective capacity of organizational members to engage effectively in formal and informal leadership roles that promote learning and knowledge diffusion. However, leadership research has explored the implementation of top-down organizational forms by drilling deeper into human relations models (aimed at alignment and control (Gronn, 1999; Huxham & Vangen, 2000). There seems to be e contradiction between the needs of the Knowledge Era and the reality of centralized power. “The dominant paradigms in organizational theory are based on stability seeking and uncertainty avoidance through organizational structure and processes. But those paradigms are inadequate for global, hyper-competitive environments, although their replacements are not clear yet” (Ilinitch, D’Aveni, & Lewin, 1996, p. 217). In this context, we are using the Complexity Leadership Theory (Uhl-Bien, Marion, & McKelvey, 2007) to explore its constructs in the case study observations.
  3. 3. Complexity Leadership Theory is a framework for leadership that “enables the learning, creative, and adaptive capacity of complex adaptive systems (CAS) in knowledge-producing organizations or organizational units. This framework seeks to foster CAS dynamics while at the same time enabling control structures appropriate for coordinating formal organizations and producing outcomes appropriate to the vision and mission of the organization. It seeks to integrate complexity dynamics and bureaucracy, enabling and coordinating, exploration and exploitation, CAS and hierarchy, and informal emergence and top-down control” (M. Uhl-Bien et al.,2007, p. 304; Uhl-Bien & Marion,. 2009, p 632 ). Below we are exploring how adaptive and enabling functions operate at individual and group level in complex multidisciplinary R&D projects. In addition, how administrative function operates at the strategic level of merging 6 R&D organizations is discussed. 2 Research method and case study of Tecnalia as RTO Research method Two levels of observation were adopted: The strategic level of the merger process and the operational level of two multidisciplinary R&D projects described above. Data were collected and analyzed by a team of four researchers who, over fourteen months period, participated in meetings, taking extensive field notes and discussed these in post hoc research meetings. In addition, twenty people were selected to be interviewed in such a way as to obtain information on different perceptions, funcions (technology, market, management) and activities at the operational (EDEN and ATN) and strategic level of the merger process. A semi-structured questionnairei was used after being tested following a first round of five interviews. The information gathered was recorded, transcribed, analyzed and coded for emergent issues, using inductive qualitative methods appropriate for exploratory research (Corbin & Strauss, 1993; Miles & Huberman, 1994). At the same time, individual case studies of multidisciplinary projects (EDEN & ATN) and merger process were developed and compared in order to identify emergent routines and practices being transferred across projects (Yin, 1984). All this data were analysed for the presence of drivers and interaction patterns within the organization as a whole, eventually developing a single map that identified the double level perspective discussed. Strategic level: The merger process of Tecnalia After signed up a merged protocol last June 24th 2009, the six research and technology organizations Cidemco, Esi, Fatronik, Inasmet, Labein and Robotiker, are progressing into their merger process. The new RTO named “Tecnalia Research and Innovation” is starting operations in January 2011 with 1300 staff and more than 110 millions € of turnover. Tecnalia, resulted from a strategic alliance founded on July 2001, promoted by the directors of the above mentioned RTOs. Azti and Neiker joined afterwards, and remain in it, but not being involved in the current merger process. Additionally, Euve and Leia, RTOs located in the province of Alava have applied to be part of Tecnalia. Since 2001 up to now, Tecnalia has deployed an organization splitted in “sectoral business units”, where technology competences are allocated with a market orientation.
  4. 4. Rationalizing specialization and competence building involved also the creation of some “Polycentric Units”. Such polycentic business units are the combination of groups of researchers located in different centres of Tecnalia. Its purpose is to create synergies and to reach critical mass. These units usually share the same or close fields of activity, segments of clients and knowledge. According to the source of incomes, Table 1 shows the structure of the RTO involved in the merger process of Tecnalia. . Table 1 Structure of turnover by type of contracts Type of contracts Percentage of Turnover Contract Research and Services 45-55 R&D Projects 35-42 Innovation Services, Testing and Calibration 3-15 Competitive R&D Programmes (EU, national and regional) 30-40 Non Competitive R&D Fundings 8-15 Source: Adapted from corporative statistics The short term key milestones are determined by legal and structural issues, such as creating one accountant and control system (ERP), legal change of the staff from six to one RTO, or restructuring support services. The Figure 1 shows the structure created to lead and coordinate the process. Ten working groups were created in October 2009 to design and execute 102 projects with specific objectives, milestones and deadlines to perform the merging succesfully. Figure 1 Structure for decision making during the integration. Structure Integration Commitee Integration Office Management Director of the Commitee Merging Process External Consulting Working Groups Quality & R&D Testing&Cal. Marketing & Serv.Grles y Innovation & People (HR) Market Technology Eco-Fin Information Programmes Laboratories Communication Legal / Fiscal IPR Systems Working Groups linked to support processes Working Groups linked to business processes (source: adapted from Integration Office) The operational level of the projects ATN and EDE In the context of organizational design adopted at Tecnalia, based on sectoral business units, the need to seek cross-cutting actions or projects has taken on relevance at strategic
  5. 5. level. The objective with this is to create a dynamic of generating (exploring and exploiting) knowledge in order to benefit from opportunities in the interfaces between disciplines and sectors. Thus emerges a “mitigation strategy” for limiting the organizational dynamics prevailing in the knowledge silos of the sectoral units. It is in this context that an approach is being made to the design of two cross-cutting projects oriented towards promoting the development of knowledge and technology in areas of strategic opportunity requiring the contribution of various research groups. Case study ATN. Transversal Action in Nanomaterials is a multidisciplinary R&D project, the objective of which is to increase competences in research and development of nanotechnology, from the construction unit to new applications in the environmental and iron-steel domains. Four working packages have been constituted for this , including n- TiO2 photocatalytic activity modification (WP1), obtaining nanostructured steel (WP2), evaluating the impact of nanoparticles on health (WP3) and study of nanoparticles for treating soil contaminated sites (WP4). This project was selected for being at the initial stage of its lifecycle (2009-2011), with an estimated budget of €2.4M and the participation of researchers from the Construction, Environment and Iron-Steel units. The dynamic of knowledge generation implied by the ATN project highlights the dimension of exploring new knowledge through the development of additional competences in the study and development of nanotechnology in the said research groups based on knowledge accumulated by the group of nanomaterials in construction, currently consisting of 20 researchers. The results exploitation model is based on the management of IPR and spin-offs in the medium- and long-term. Case study EDEN. Multidisciplinary R&D project to take up the challenge of providing comprehensive solutions for both construction and energy sectors. The EDEN project aims to provide sustainability strategies that help both sectors by focusing on energy saving and efficiency. To this end, the EDEN project is developing new energy products for buildings, new concept design of energy efficient buildings and neighbourhoods, multifunctional industrialised solutions for building and energy certification of buildings. The EDEN project was chosen due to being a project for the period 2008-2010, with a budget of €3.8M plus investments of €1.8M, involving people from two units (Construction & Territorial Development and Energy) located in four out of the eight of the RTOs making up Tecnalia at the date of study. The implied dynamic of knowledge generation emphasizes the dimension of exploitation, through the integration of competences (materials engineering, systems for converting and storing energy and smart networks, industrialization of the construction process and its standardization) and the development of new products in the areas described. The multidisciplinary team addressing the developments will evolve the project format into that of a “laboratory for exploiting the results generated” backed by a testing, experimentation and development infrastructure (Kubik Building Laboratory). 3 Leadership functions and organizational learning processes: development of propositions and conceptual framework The complexity leadership functions were connected with the organizational learning processes discussed above, in order to explain interactions and knowledge creation in the case study, were three propositions are formulated. Figure 2 represents a single map with conceptual framework and propositions in the multilevel case study.
  6. 6. Fig 2. Leadership functions and organizational learning processes in the context of observation Contexts of Observation Learning Processes Leadership Functions Multidisciplinary R&D Projects Intuition P1 OPERATIONAL P1 Interpretation Adaptive Leadership Design ATN EXPLORATION EDEN Development Feed-forward P2 P2 Exploitation Integration Enabling Entanglement Leadership CAS context EXPLOITATION Merging Process STRATEGIC Feed-back • Structures for decision making P3 • Working groups Institutionalization P3 Administrative • Documents analysis Leadership • Interviews & meeting attendance How Adaptive Leadership Function (ALF) influence knowledge exploration? Complex Adaptive Systems can be used to describe the context in which EDEN and ATN case study operates as multidisciplinary R&D projects in a RTO as Tecnalia. Adaptive leadership is an emergent, interactive dynamic that produces outcomes in a social system. It is a collaborative change movement that emerges nonlinearly from interactive exchanges, or more specifically, from the “spaces between” agents. We thus state the following proposition, summarising observations of the case study in Table 2: Proposition 1. Adaptive Leadership Function (ALF) dominates in knowledge exploration of complex multidisciplinary R&D projects, where intuition and interpretation are key learning processes How Enabling Leadership Function (ELF) influence knowledge exploitation? The role of enabling leadership is to foster the conditions that catalyze adaptive leadership and allow for emergence. ELF also helps to disseminate innovative products of adaptive leadership through the formal managerial system. This is a function of integration and entanglement between CAS dynamics and formal administrative systems and structures. Is the character of integration as a gate for further exploitation via formalizing knowledge into organizational procedures what is being explored in the case study. We thus state the following proposition, summarising observations in Table 3: Proposition 2. Enabling Leadership Function (ELF) articulates knowledge integration for exploitation of complex multidisciplinary R&D projects
  7. 7. Table 2 Findings related to proposition 1 in case study at operational level Project Support Gathered information (summary) ATN Supported “Intense dialogue among disciplines to understand one another, contexts and different ways of application of knowledge” as project designer reported. Participative leadership was underlined, “…we as researchers want to participate in the early design of the project” (ALF) An inspiration & strategy board provided the early design of the project goals and competence needed. “Facilitating true dialogue, managing diversity and conflict solving was my main job”, as a manager said. (ELF) EDEN Partially supported “Fluid, easy, communication within and across teams/actors was the right context”…“Effective and frequent meetings and team working, avoiding islands, no rigid formal meetings altogether”, team members mentioned. Leaders provide a context of trust, open communication and commitment with results. (ALF) “Clarity in objectives, working plans and responsabilities, to adequate resource allocation”. “Visionary leaders, with technical knowledge are needed from the very beginning”, as researchers mentioned (BLF) Table 3 Findings related to proposition 2 in case study at operational level Project Support Gathered information (summary) ATN Partially “Flexible & adaptive decision making during project development were supported important”, as various researchers said. Distributed leadership sinchronizing continuous resource re-allocation. (ALF) “We adapted a cross-management system to have general figures as the project evolves, but avoiding duplicating economic control in the different organizational groups”, financial director reported (ELF). Fostering simple project management and concise reporting documents. Mentoring and coaching function to empower transversal leaders facing problems (ELF). Creating tension between market latent needs and technology developments, to formalize technical solutions. “We have to bring the problems and challenges of the industry to the researchers…” as a Supported marketing engineer said. (ELF) EDEN “Clarifying results and impacts from the beginning” was asked by a researcher, looking for exploitation. “We have to learn how to better negotiate with partners”, as a manager reported (BLF). How Administrative Leadership Function (BLF) influence institutionalization in a merger process? Administrative Leadership Function (BLF) refers to the actions of individuals in formal managerial roles who plan and coordinate organizational activities (e.g. bureaucratic function). Institutionalizing sets learning apart from individuals, and hence, manifests itself in routines, structures, and practices of the organization (Crossan et al., 1999). A process of merging 6 RTOs exceeds the area of exploiting knowledge, and it entails a strategic reconfiguration of the conditions in which organizations operate in the market. The purpose is to analyze the style of leadership predominating in the merger, where
  8. 8. institutionalization is a key process in organizational learning. We thus state the following proposition, discussed in Table 4: Proposition 3. Administrative Leadership Function (BLF) dominates the merger process of six RTOs, where institutionalization is a key organizational learning process Table 4 Learning processes and leadership styles proposition 3 in case study at strategic level Gathered information (summary) Case Study Support Merger Supported Hierarchy driven structures for decision making during the merger process process, reinforced by legal requirements and processes (see Fig. 1). (strategic Negotiation processes for power re-distribution (BLF) level, where Top-down process of defining and creating working groups to perform institutionali merging tasks, with external consultancy support for legal, zation is a organizational design and strategy. (BLF) key process) Documents and meetings reflect simple direction flow of communication (top-down information distribution and bottom-up data gathering). Deadlines and risk management oriented activities. (BLF) Formulated a common top-down strategy for knowledge exploitation enhancing IPR management and spin-offs creation (BLF). Discussion and implications Observations support proposition 1 in the context of the ATN project, where the exploration of new knowledge prevails. The CAS dynamic functions in laborious, slow conversational processes. Asymmetries in language and applications create the emergence of new solutions through nanomaterials. Nevertheless, the CAS dynamic shows itself to be fragmented in the project subgroups of each RTO in EDEN (exploitation domain), reflecting the merger process. In this project, the space for ALF appears to be confined to the external network and to the technical level. Authority asymmetries occurred between group leaders of each RTO in the assigning of resources. Asymmetries in technological preferences between subgroups determined the types of solutions adopted. Accredited node mechanism on glass photovoltaic solutions for buildings succeed. Resonance mechanism was observed during the creation of the KUBIK laboratory. The Proposition 2 was partially supported in the operational context of the ATN and EDEN projects. The “entanglement” between adaptive and administrative functions appears to be particularly complex, showing itself to be more difficult in EDEN than in ATN. The profile of middle managers determines the space for CAS, facilitating the prevalence of ALF or BLF. It is necessary to make a more detailed study and in more cases of mechanisms for converting interaction into interdependence, and of how to identify and analyze the principal creators of tension. In EDEN, some of these tensions were the adoption of procedures and contracts to exploit results integrating the innovating products to the corporate structure. In ATN the language asymmetries and knowledge and applications domains were tensions created from the ELF.
  9. 9. The observations support proposition 3 in the strategic context of the merger between 6 RTOs. Even in the operational domain of the projects greater agility is requested in the taking of decisions and clarity of responsibilities, so much so that mechanisms of transmitting organizational culture instituted around BLF operate on the operational level of the projects. It is therefore no exaggeration to affirm that governance of the merger between 6 RTOs is done from a clear-cut prevalence of BLF, in a top-down process. 4 Conclusions, limitations and further research Complexity leadership construct has been used to understand organizational learning processes in complex multidisciplinary R&D projects in RTOs in process of merging in Tecnalia. Administrative leadership function dominates at strategic level in the merger process, where reinforcing institutionalized learning moving from organization to groups and individuals is a key process. Context and mechanisms have been identified for adaptive leadership function operating in exploration activities (feed-forward from intuition and interpretation to integration), which dominates at operational level (ATN project). Also the observations permitted to identify mechanisms for enabling leadership function operating in exploitation activities (feed-back from institutionalization to integration) at operational level (EDEN project). However, the spaces for the enabling function to operate were determined by the middle managers’ style, underlining administrative or adaptive functions. The main limitation of this study is its sample size of six companies, being similar type of contract R&D organizations. There are always limitations to the generalizability of case study research, particularly with a relatively small number of cases. Further research is needed to deeper understand and extend the findings. Complexity leadership theory needs experimental research with field surveys and comparative studies in R&D and other organizations, in order to verify the mechanisms and contexts in which complexity leadership operates. If leadership is not merely the influential act of an individual or individuals but rather is embedded in a complex interplay of numerous interacting forces, new research strategies should be tested to study this form of leadership, connecting it with how learning processes operate at micro (individual), meso (group) and macro level (organization). Integrating network analysis (Hannah & Lester, 2009) is also a promising approach to understand how do leaders interact with knowledge networks to facilitate learning. References and Notes Amitay, M., Popper, M., & Lipshitz, R. (2005). Leadership styles and organizational learning in community clinics. The Learning Organization, 12 (1), 57−70. Bontis, N., Crossan, M., & Hulland, J. (2002). Managing an organizational learning system by aligning stocks and flows. Journal of Management Studies, 39, 437−469. Corbin J.M., & Strauss A.L. (1993). The articulation of work through interaction. Sociological Quaterly, 34, 1, 71-83 Crossan, M. M., Lane, H. W., & White, R. E. (1999). An organizational learning framework: From intuition to institution. Academy of Management Review, 24, 522−537. De Geus, A. (1988). Planning as learning. Harvard Business Review, 66(2).
  10. 10. Gibson, C. B., & Birkinshaw, J. (2004). The antecedents, consequences, and mediating role of organizational ambidexterity. Academy of Management Journal, 47, 209−226. Gronn, P. (1999). A realist view of leadership. ELO-AusAsia On-line Conference. Hannah, S. & Lester P. (2009). A multilevel approach to building and leading learning organizations. The Leadership Quaterly 20, 34-48 Huxham, C., & Vangen, S. (2000). Leadership in the shaping and implementation of collaboration agendas. Academy of Management Journal, 43(6), 1159−1175. Ilinitch, A.Y., D'Aveni, R.A., Lewin, A. (1996). New organizational forms and strategies for managing in hypercompetitive environments. Organization Science, 7, 211−220. Jansen, J.J.P., Vera, D. & Crossan M. (2009), Strategic leadership for exploration and exploitation: The moderating role of environmental dynamism The Leadership Quarterly 20, 5–18 March, J. G. (1991). Exploration and exploitation in organizational learning. Organization Science, 2, 71−87. Matusik, S. F., & Heeley, M. B. (2005). Absorptive capacity in the software industry: Identifying dimensions that affect knowledge and knowledge creation activities. Journal of Management, 35, 549−572. Miles M.B. & Huberman A.M. (1994). Qualitative data analysis. Thousand Oaks, California, Sage. Ruiz, J.R. (1996). La Qualita della recerca e sviluppo, De Qualitate (ISSN 1123-3249), Dicembre, Anno V, 11, 4-11. Ruiz, J.R. (2003). Management Of Internal And External Knowledge In Research And Technology Organizations; EARTO EUROLAB International Conference, The Hague. Ruiz, J.R., Linares, A.; Longo, A. (2005). Paths to be RTO as a learning organization: The case of Labein. ISPIM Conference, Porto. ISBN 952-214-059-7 Senge, P. M. (1990). The fifth discipline: The art and practice of the learning organization. In J. S. Ott (Ed.), 1996 ed. Classic Readings in Organizational Behavior, Vol. 44 (pp. 506−513). Belmont: Wadsworth Pub. Co. Uhl-Bien,M., Marion, R., &McKelvey, B. (2007). Complexity leadership theory: Shifting leadership fromthe industrial age to the knowledge era. The LeadershipQuarterly, 18(4), 298–318. Uhl-Bien M, Marion R. 2009. Complexity leadership in bureaucratic forms of organizing: A meso model. The Leadership Quarterly, 20, 631–650 Vera, D., & Crossan, M. (2004). Strategic leadership and organizational learning. Academy of Management Review, 29, 222−240. Yin R. (1984). Case study research: Design and methods. California, Sage Publications. Yukl, G. A. (2006). Leadership in organizations. Upper Saddle River, N.J. Prentice Hall. i For the multidisciplinay R&D projects the semi-structured questionnaire had the blocs: What went well? What went badly? What have we learned from the EdEn/ATN project? What would we improve next time when working on projects like EdEn/ATN? Where do you think backing is required for this kind of project. The script established made it possible to extract information from the interviewees on the Project stages, the Team (creation, motivation, teamwork dynamics), the Organizational context (centres, units, fields of application), Technology/knowledge (harnessing, collaborations...) and Exploitation /commercialization.