Building a Learning Organisation Group Members: Name of the Student Roll No Nishad Banodkar P1006 Kinnar Majithia P1026 Charusheela Khandale P1024
Learning Organisation Gravin Defines the learning organisation as follows: Learning organisation is skilled at five main activities such as 1. Systematic Problem Solving 2. Experimentation with new approaches 3. Learning from past experiences 4. Learning from best practices from others 5. Transferring knowledge quickly and efficiently 3 M’s of framework for Learning organisation: 1. Meaning 2. Management 3. Measurement No learning organisation is built overnight. Success comes from carefully cultivated attitudes, commitments, management processes that accrue slowly and steadily.
Role of learning for improvement Its not possible for any organisation to improve without learning first. It’s a first step in order to produce large result set for the desired output. Continuous improvement requires a commitment to learning is the basic truth of improvement. Basic functionality of organisation involves 1. Solving a problem 2. Introducing a product 3. Reengineering a process These all processes require a new way of learning, seeing the world with a new light and acting accordingly. In absences of above, generally companies are found to repeat the old practices. Thus the change that is proposed remains cosmetic and improvement thus become fortuitous or short lived.
Analysis of 3 Ms… Scholars are always found talking about various things regarding learning. Their discussion of learning organisations have often been reverential and utopian, filled with near mystical terminologies. e.g. Peter Senge with his book “The fifth Discipline” describes, “where people continually expand their capacity to create the result the truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free and where people are continually learning how to learn together”. Senge thus suggested use of 5 component technologies: 1. Systems Thinking 2. Personal Mastery 3. Mental models 4. Shared Vision 5. Team Learning According to him, these 5 components play very important part in learning organisations, pursuing the goal with these 5 polished components takes the organisation to the new heights of achievements.
Analysis of 3 Ms…Continued... Nonaka characterised knowledge creating companies as place where “Inventing new knowledge is not a specialised activity…it is a way of behaving, indeed, a way of being, in which everyone is a knowledge worker.” All these examples are very idyllic and desirable. No doubt. But at the same time, they do not provide a framework for action. The recommendations are far too abstract and too many questions remained unanswered. e.g. managers cant answer the question like, when exactly company has become learning organisation? Or what concrete behavioural changes required in organisation? Or what policies must be there in place? Etc. Most discussions of learning organisations finesse these issues. Their focus is high philosophy and grand themes. Sweeping metaphors rather than the gritty details of practice, three critical issues are left unresolved, yet each is essential for effective implementation.
Analysis of 3 Ms…Continued... First is the question of Meaning. We need a plausible, well-grounded definition of learning oraganisation; it must be actionable and easy to apply. Second is the question of Management. We need clearer guidelines for practice, filled with operational advice rather than high aspirations. Third is the question of Measurement. We need better tools for assessing an organisation’s rate and level of learning to ensure that gains have in fact been made. Once these 3 Ms are addressed, managers will have a firmer foundation for launching learning organisations. Without this ground work, progress is unlikely, and for the simplest of reasons. For learning to become a meaningful corporate goal, it must be first understood.
What is a Learning Organisation? Surprisingly, a clear definition of learning organisation has proved to be elusive over the years. Organisational theorists have studied learning for a long time; the accompanying quotations suggest that there is still considerable disagreement. Most scholar view organisational learning as a process that unfolds over time and link it knowledge acquisition and improved performance. Some, for example, believe that behavioural change is required for learning; others on other hand insists that new ways of thinking are enough, nothing extra is requires to do. Some cite information processing as the mechanism through which learning takes place; others proposed shared insights, organisational routines, and even sometimes memory. And some think that organisational learning is common, while others believed that flawed, self-serving interpretations are the norms. Due to all above conflicts in producing a single unique view on learning organisation, scholars have first considered a basic definition.
What is a Learning Organisation? Continued… Definition: A learning organisation is an organisation skilled at creating, acquiring and transferring knowledge and at modifying its behaviour to reflect new knowledge and insights. This begins with simple truth: New ideas are essential if learning is to take place. Some times they are created through flashes of insight or creativity; at other times they arrive from outside the organisation or are communicated by knowledge insiders. Whatever be the sources, these ideas are the trigger for organisational improvement. But they can not themselves create a learning organisation. It has been found that all institutes, companies have been effective in creating new knowledge or acquiring the same, but all of them have one common thing, i.e. they are notable less successful in applying the knowledge to their own activities.
What is a Learning Organisation? Continued… Total quantity management, for example, is now taught at many business schools, yet the number using it to guide their own decision making is very small. Organisational consultant advise clients on social dynamics and small group behaviour but are notorious for their own infighting and factionalism. And GM with a few exceptions (like saturn and Nummy), has had little success in revamping its manufacturing practices, even though its managers are experts on lean manufacturing, JIT production and requirement for improved quality of work life. Organisations that do pass the definitional test- Honda, Corning and general Electric come quickly to mind-have by contrast become adept at translating ne w knowledge into new ways of behaving. These companies actively manage the learning process to ensure that it occurs by design rather than by chance. Distinctive policies and practices are responsible for their success, they form the building blocks of learning organisation.
Building Blocks Learning Organisations are skilled at five main activities: 1. Systematic Problem Solving 2. Experimentation with new approaches 3. Learning from past experiences 4. Learning from best practices from others 5. Transferring knowledge quickly and efficiently Each of these is accompanied by a distinctive mind-set, tool kit, pattern behaviour. Many companies practice these activities as learning organisations. But only few of them are consistently successful because they rely largely on happenstances and isolated examples. Systems and processes that support these activities are created and integrated them into a whole system to support daily operations.
Systematic Problem Solving This is the first activity. It hugely relies on philosophy and methods of quality movement. This idea is broken down into various parts which in turn make this idea a huge success. 1. Relying on scientific method rather than guess work for diagnosing problems. It helps in understanding the root cause and thus improves efficiency of problem solving. (what Deming calls the “plan, do, check, act” cycle is applicable over here). 2. Insisting on data rather than assumptions. Having a concrete data helps to analyse the situation in better way. It also helps in decision making considerably as decisions made based on factual data are always far efficient and accurate than those which are made based on assumptions (Fact based management). 3. Use of simple statistical tools like histogram, pareto charts, regression, correlation, cause and effect diagrams etc.
Systematic Problem on problem solving techniques using standard day Most training programs focuses Solving continued… to day life examples which helps to understand the concept in much simpler way. These tools are very effective and also relatively straight forward and thus are easily communicated. Accuracy and precision are essential for learning. Employees must therefore become more disciplined in their thinking and more attentive to details. 5 Wh type questions are always useful in this kind of approach. They are Who, What, Why, Where, When and How Thus answers to all these questions effectively produce good results for this technique.
Systematic Problem Solving -made use of problem solving Lets analyse famous Xerox machine case which Xerox Machine process. Step by step approach Step to be taken Identify & select problem Question to be answered What do we want to change? Expansion/divergence Lots of problems for consideration Contraction/Convergence One problem statement. One “Desired state” agreed upon What’s next? Identify the gap.
Systematic Problem Solving - Xerox Machinecontinued… 2nd step in Xerox machine progress is as follows: Step by step approach Step to be taken Analyse Problem Question to be answered What’s preventing us from reaching the “Desired State”? Expansion/divergence Lots of potential causes identified. Contraction/Convergence Key causes to be identified and verified What’s next? Key causes documented and ranked.
Systematic Problem Solving - Xerox Machinecontinued… 3rd step in Xerox machine progress deals with solution generation. This is most important step as solutions generated in this step will only be considered while making selection for the final solution: Step by step approach Step to be taken Generate Potential Solution Question to be answered How could we make the changes? Expansion/divergence Lots of ideas on how to solve the problem. Contraction/Convergence Potential solutions clarified. What’s next? Solution List
Systematic Problem Solving - Xerox Machinecontinued… 4th step: selecting the most appropriate solution amongst the various solutions: Step by step approach Step to be taken Select and plan the solution Question to be answered What is the best way to do it? Expansion/divergence Lots of criteria for evaluating potential solution. Lots of ideas on how to implement and evaluate the selected solution. Contraction/Convergence Criteria to use for evaluating the solutions is agreed up on. Implement and evaluate plans agreed upon. What’s next? Monitor the change. Evaluate solution effectiveness
Systematic Problem Solving - Xerox Machinecontinued… 5th step: Implementing the solution selected: Step by step approach Step to be taken Implement the solution Question to be answered Are we following the plan? Expansion/divergence Contraction/Convergence Implementation of agreed-on contingency plan. What’s next? Solution in place
Systematic Problem Solving - Xerox Machinecontinued… 6th step: Evaluate the Solution: Step by step approach Step to be taken Evaluate the solution. Question to be answered How well did it work? Expansion/divergence Contraction/Convergence Effectiveness of solution agreed upon. Continuing problems if any. What’s next? Verification if problem is solved or not. Agreement to address continuing problems.
Experimentation This activity involves the systematic searching for and testing of new knowledge. Use of scientific method is essential. It takes 2 main forms: 1. On going programs 2. One-of-a-kind demonstration projects Ongoing programs are series of experiments designed to produce incremental gain of knowledge. They are mainstay of most continuous improvement programs and are especially common to the shop floor. For example, corning, with diverse raw material and new formulation to increase the yield and provide better grades of glass. Successful ongoing programs share various common characters: 1. They work hard to ensure steady flow of several ideas 2. Requires incentive system that favors risk taking. 3. Ongoing programs need managers and employees who are skilled and well trained to perform the execution of the task.
Experimentation Continued… Demonstration Projects These are usually larger and more complex than ongoing programs. These include holistic, systematic, system wide changes introduced on single site and often undertaken with the goal of developing new organisational capabilities. These projects share number of distinctive characteristics: 1. These are usually first project to adopt changes and implement the same for which organisation hoping to see new effects and implement the changes in new system. Involve “Learning by doing” considerably. 2. Establish policy guidelines and decision rules for later projects of the organisation. 3. Often encounter severe tests of commitment from employees who wish to see whether the changed rules have been implemented. 4. They are normally developed by several strong multi-functioning teams reporting directly to the senior management. 5. They tend to have only limited impact on the rest of the organisational behaviour if they are not accomplished by explicit strategies for transferring learning.
3. Learning from Past Experience This is the 3rd of the five main activities at which Learning Organizations are skilled. Companies must review their successes and failures , assess them systematically, and record the lessons in a form that employees find open and accessible. One expert has called this process the “Santayana Review”, citing the famous philosopher George Santayana, who coined the phrase “Those who cannot remember the past are condemned to repeat it.” Regrettably, too many managers today are indifferent, even hostile, to the past, and by failing to reflect on it, they let valuable knowledge escape.
IBM 360 Computer Series A study of more than 150 new products concluded that “the knowledge gained from failures is often instrumental in achieving subsequent success.” This can be simplified by summarizing that “Failure is the Ultimate Teacher.” For example: IBM’s 360 computer series which was one of the most popular and profitable ones was based on the technology of the failed Stretch computer that preceded it. In this case, as in many others, learning occurred by chance rather than by careful planning.
BOEING However, a few companies have established processes that need their managers to periodically think about the past and learn from their mistakes. For example: Boeing 737 and 747 – Both planes were introduced with much fanfare and with serious problems. Project Homework, a high-level employee group, was commissioned by senior managers to ensure that the problems were not repeated. Project Homework compared the development processes of the 737 and 747 with those of the 707 and 727 which were the company’s two most profitable planes. After working for 3 years, they produced hundreds of recommendations and an inch- thick booklet; several members of the team were then transferred to the 757 and 767 start-ups, and guided by experience they produced the most successful, error-free launches in Boeing’s history.
XEROX Similar retrospective approach adopted by other companies like Xerox, which, like Boeing, studied its product development process, examining 3 troubled products in an effort to understand – Why the company’s new business initiatives failed so often? Senior management invited ADL(Arthur D. Little – consulting company which focused on its past successes) consultants from around the world to a 2-day “jamboree”, featuring booths and presentations documenting a wide range of the company’s most successful practices, publications and techniques.
British Petroleum BP established a post-project appraisal unit to review major investment projects, write-up case studies and derive lessons for planners that were incorporated into revisions of the company’s planning guidelines. For this, a 5-person unit reported to the board of directors and reviewed 6 projects annually. The bulk of the time was spent in the field interviewing managers and such type of review is conducted regularly at project level. These approaches highlight the recognition of the companies towards productive failure as contrasted with unproductive success. Productive Failure – Leads to insight, understanding, and thus, an addition to the commonly held wisdom of the organization. Unproductive Success – Occurs when something goes well but nobody knows why.
Case-studies and post-project reviews can be performed with little cost other than manager’s time. Companies can take the help of faculty and students at the local colleges or universities as they bring fresh perspective and view internships and case studies as opportunities to gain experience and learning. Computerized Data Banks – Established by a few companies to speed up learning process. Paul revere Life Insurance – Management requires all problem-solving teams to complete short registration forms describing their proposed projects if they hope to qualify for the company’s award program. The company then enters these forms into its computer system and can immediately retrieve a listing of other groups of people who have worked or are working on the topic, along with a contact person. They can then call up the person with the required relevant experience.
4. Learning from Others Apart from the learning through reflection and self-analysis, sometimes, the most powerful insights come from looking outside one’s immediate environment to gain a new perspective. It is also referred to as SIS – Stealing Ideas Shamefully. Even companies in completely different businesses can be fertile sources of ideas and catalysts for creative thinking.
Benchmarking Benchmarking helps in understanding practices rather than observing results. It is a disciplined process which: Begins with a thorough search to identify best-practice organizations Continues with careful study of one’s own practices and performance Progresses through systematic site visits and interviews Concludes with an analysis of results, development of recommendations, and implementation• It may be time-consuming, but it may not be terribly expensive.
Customers It is yet another fertile source of ideas; conversations with customers invariably stimulate learning. Customers can provide: Up-to-date product information Competitive comparisons Insights into changing preferences Immediate feedbacks about service and patterns of use. Companies need these insights at all levels, from executive suite to shop floor. At Motorola, members of Operating and Policy committee, including the CEO, meet personally, on a regular basis with the customers.
Customers (contd..) Customers can’t always articulate their needs or remember the most recent problems they have had with a product or service. For that, the managers must observe them in action. Example: Xerox employs a number of anthropologists at its Palo Alto Research Center to observe users of new document products in their offices. Digital Equipment has developed “contextual inquiry” – an interactive process that is used by software engineers to observe users of new technologies as they go about their work. Milliken created “first-delivery teams” that accompany the first shipment of all products; team members follow the product through the customer’s production process to see how it is used and then develop ideas for further improvement. Learning can occur only in a receptive environment. Learning Organizations cultivate the art of open attentive listening.
5. Transferring Knowledge Ideas carry maximum impact when they are shared broadly rather than being held in a few hands. Knowledge transfer can take place through mechanisms like: o Written, Oral and Visual reports o Site visits and tours o Personnel rotation programs o Education and training programs o Standardization programs
Reports Purposes served: o Summarize findings o Provide checklists of dos and don’ts o Describe important processes and events Reports cover a multitude of topics from: o Benchmarking studies o Accounting conventions o Newly discovered marketing techniques Now, written reports are often supplemented by Videotapes which offer greater immediacy and fidelity.
Tours Tours are a popular means of knowledge transfer, especially for large, multidivisional organizations with multiple sites. To introduce to its managers to the distinctive manufacturing practices of New United Motor Manufacturing Inc. (NUMMI), its joint venture with Toyota, General Motors developed a series of specialized tours; some were geared to upper and middle managers, while the others were aimed at lower ranks. Each tour described the policies, practices and systems that were most relevant to that level of management. Reports and Tours are cumbersome ways of knowledge transfer. The gritty details that lie behind complex management concepts are difficult to communicate secondhand.
Personnel Rotation Program In many organizations, expertise is held locally: in a skilled computer technician, or a savvy global brand manager or maybe in a division head. Those in daily contact with these experts benefit enormously from their skills. Their field of influence is narrow and transferring them to different parts of the organization helps in sharing their knowledge. Transfers maybe across different levels. Example: A supervisor experienced in just-in-time production might move to another factory to apply the methods there. A successful division manager might move to a lagging division to invigorate it with already proven ideas.
PPG in Chehalis This instance from PPG demonstrates Line to Staff transfer. PPG constructed a new float-glass plant in Chehalis, Washington and employed radically new technology as well as innovations in HR management. All workers were organized into small, self-managing teams with responsibility for work-assignments, scheduling problem solving and improvement, and peer review. After several years running the factory, the plant manager was promoted to Director of HR for the entire glass group. Drawing on his experiences at Chehalis, he developed a training program geared toward first-level supervisors that taught the behaviors needed to manage employees in a participative, self-managing environment. This example suggests that education and training programs are powerful tools for transferring knowledge but for maximum effectiveness they must be linked explicitly to implementation.
Xerox and GTE Xerox exemplifies the implementation of learning. When Xerox introduced problem-solving techniques to its employees in the 1980s, everyone from top to bottom was taught in small departmental or divisional groups led by their immediate superior. After an introduction to concepts and techniques, each group applied what they learned to a real-life work problem. GTE’s Quality: The Competitive Edge program: At the beginning of the 3-day course, each team received a request from company officer to prepare a complete quality plan for their unit, based on the course concepts, within 60 days. Discussion periods of 2 to 3 hours were set aside during the program so that teams could begin working their plans. When the reports submitted by the employees were implemented, GTE produced dramatic quality improvement.
AT&T’s CQA CQA – Chairman’s Quality Award, is an internal quality competition with a twist. The twist is that the awards are given not only for absolute performance but also for improvements in scoring from the previous year. On 1000-points, Gold, Silver and Bronze Improvement Awards are given to units that have improved their scores 200,150 and 100 points respectively, thus providing the incentive for change. An accompanying Pockets of Excellence program simplifies knowledge transfer. Every year, it identifies every unit within the company that has contributed at least 60% of the possible points in each award category and then publicizes the names of these units using written reports and e-mail.
Measuringmaxim – “If you can’t measure it, you can’t manage it.” A well-known Learning Traditionally, the solution has been “Learning Curves” and “Manufacturing Progress Functions.” Both concepts date back to the discovery, during the 1920s and 1930s, that the cost of air-frame manufacturing fell predictably with increases in cumulative volume. These increases were viewed as proxies for greater manufacturing knowledge, and most early studies examined their impact on the costs of direct labor. Later studies expanded the focus, looking at total manufacturing costs and the impact of experience in other industries including shipbuilding, oil refining and consumer electronics. Typically, learning rates were in the 80% to 85% range (meaning that with a doubling of cumulative production, costs fell to 80% - 85% of their previous level), although there was wide variation.
BCG – on the logic of Learning Curves, firms like Boston Consulting Group argued Drawing Experience Curves that industries as a whole faced “Experience Curves”, costs and prices that fell by predictable amounts as industries grew and their total production increased. With this observation, consultants suggested, came an iron law of competition. To enjoy the benefits of experience, companies would have to rapidly increase their production ahead of competitors to lower prices and gain market share.
Learningcurves areExperience Curves aerospace, defense, and Both these and still widely used, especially in the electronics industries. BOEING has established learning curves for every workstation in its assembly plant; they assist in monitoring productivity, determining work flows and staffing levels, and setting prices and profit margins on new airplanes. Experience curves are common in semiconductors and consumer electronics, where they are used to forecast industry cost and prices.
A For companies hoping to become Learning Organizations, these measures are few Concerns.. incomplete. They focus on only a single measure of output (cost or price) and ignore learning that affects other competitive variables like quality, delivery or new product introductions. They suggest only one possible learning driver (total production volumes) and ignore both the possibility of learning in mature industries, where output is flat, and the possibility that learning might be driven by other sources, such as new technology or the challenge posed by competing products. Perhaps, most important they tell us little about the sources of learning or the levers of change.
Half-Life Curve to the discussed concerns, was developed by Analog Half-Life Curve, in response Devices, a leading semiconductor manufacturer, as a way of comparing internal improvement rates. A half-life curve measures the time it takes to achieve a 50% improvement in a specified performance measure. When represented graphically, the performance measure (defect-rates, on-time delivery, time to market) is plotted on the vertical axis and the time scale (days, months, years) is plotted on the horizontal axis. Steeper slopes then represent faster learning.
Half-Life Curve (contd..)are graphed for 7 divisions. Here monthly data on consumer service Division C is clear winner: even though it started a high proportion of late deliveries, its rapid learning rate led eventually to the best absolute performance. Divisions D, E, G have been far less successful.
Half-Lifestraightforward – Companies, divisions or departments that take less The logic is Curve (contd..) time to improve must be learning faster than their peers, which will translate into superior performance in the long run. The target of 50% is a measure of convenience; it was derived empirically from studies of successful improvement processes at a wide range of companies. Unlike learning and experience curves, they work on any output measure, not confined to cost or price and are easy to operationalize, they provide a simple measuring stick and allow ready comparison among groups.
Half-Life Curve - Weaknesses They focus only on results. Some types of knowledge take years to digest, with a few visible changes in performance for longer periods. Creating a total quality culture, for instance, or developing new approaches to product development are difficult systemic changes. Because of their long gestation periods, half-life curves or any other measures focused solely on results are unlikely to capture any short-run learning that has occurred. A more comprehensive framework is needed to track progress.
Organizational Learning Stages Organizational learning can be traced through 3 overlapping stages:1. Cognitive – Members of the organization are exposed to new ideas, expand their knowledge, and begin to think differently.2. Behavioral – Employees begin to internalize new insights and alter their behavior.3. Performance Improvement – With changes in behavior leading to measurable improvements in results: superior quality, better delivery, increased market share, or tangible gains. Because cognitive and behavioral changes typically precede improvements in performance, a complete learning audit must include all 3.
Surveys, questionnaires and interviews are useful for this purpose.Organizational Learning Stages (contd..) At cognitive level, they would focus on attitudes and depth of understanding. At PPG, a team of HR experts periodically audits every manufacturing plant, including extensive interviews with shop-floor employees to ensure that concepts are well-understood. To assess Behavioral changes, surveys and questionnaires must be supplemented with direct observation. Eg: Domino’s Pizza uses “mystery shoppers” to assess managers’ commitment to customer service at its individual stores. Other companies invite outside consultants to visit, attend meetings, observe employees in action, and report what they have learned. A comprehensive learning audit also measures performance.
First Steps to becoming Learning Organization Learning organizations are not built overnight. Most successful examples are the products of carefully cultivated attitudes, commitments, and managerial processes that have accrued slowly and steadily over time. To become learning organization: Foster an environment that is conducive to learning. There must be time for reflection and analysis, to think of strategies and invent new products. Training in brainstorming, problem solving, evaluating experiments and other core learning skills are therefore essential.
Steps (contd..) is to open up boundaries and simulate the exchange of ideas. Another powerful lever General Electric CEO Jack Welch considers this such a powerful stimulant of change that he has made “boundarylessness” a cornerstone of the company’s strategy for the 1990s. Managers can create Learning Forums which foster learning by requiring employees to wrestle with new knowledge and consider its implications. Coupled with a better understanding of the “three Ms,” the meaning, management and measurement of learning, this shift provides a solid foundation for building learning organizations.
Definitionslearning means the process of improving actions though better Organizational of Organizational Learning knowledge and understanding. An entity learns if, through its processing of information, the range of its potential behaviors is changed. Organizations are seen as encoding inferences from history into routines that guide behavior. Organizational learning is a process of detecting and correcting error. Organizational learning occurs through shared insights, knowledge and mental models… and builds on past knowledge and experience – that is, on memory.
Stages of prototypes (what is a good product?)1. Recognizing Knowledge2. Recognizing attributes within prototypes (ability to define some conditions under which process gives good output).3. Discriminating among attributes (which attributes are important? Experts may differ about relevance of patterns; new operators are often trained through apprenticeships).4. Measuring attributes (some key attributes are measured; measures may be qualitative and relative).5. Locally controlling attributes (repeatable performance; process designed by expert, but technicians can perform it).
Stages of Knowledge (contd..)5. Locally controlling attributes (repeatable performance; process designed by expert, but technicians can perform it).6. Recognizing and discriminating between contingencies (production process can be mechanized and monitored manually).7. Controlling contingencies (process can be automated).8. Understanding procedures and controlling contingencies (process is compeletely understood).