This document describes the transformation of LABEIN, a research and technology organization in Spain, into a learning organization. It began as a competence management project led by human resources but evolved into a process of organizational change to accelerate internal and external learning. A key aspect was creating high-performing teams within units through improving conversational skills, group dynamics, and leadership coaching. The case outlines factors that influence how RTOs learn and cultural challenges they face in their transformation.

1. PATHS TO BE A RTO1
AS LEARNING
ORGANIZATION: THE CASE OF LABEIN
Javier Ruiz
LABEIN Technological Centre jruiz@labein.es
Alfonso Longo
LABEIN Technological Centre longo@labein.es
Antonio Linares
EVOCALIA alinares@evocalia.com
1
RTO: Research and Technology Organization
Description of the case of a research and technology centre during its
transformation as a learning organisation. What was originally known as
competence management project by the human resources service becomes a
process of “alteration” in the life of the organisation in order to accelerate
internal and external learning with strategic customers and partners. The
reasons for the project set out the chronology of a number of significant events
within the process. One core feature to create, share and use knowledge is the
“construction of high-performance teams” within the organisational units. To
this end contexts are created to improve conversational skills, set out the
perspectives of group dynamics, and enhance individual leadership qualities
through coaching. The case described sets out a number of factors determining
the way in which research organisations learn, the difficulties they face, and
some of the cultural archetypes.
Keywords
Knowledge creation and sharing in research and technology organizations, learning and leadership,
technology enabling knowledge, case study LABEIN.
1. INTRODUCTION
1.1 Management trends in RTOs
Research and technology organisations in Europe form a heterogeneous set of
centres from the point of view of their origin, evolution and funding. However, they
all operate in the so-called "Research, development and innovation System". These
systems, in constant transformation, evolve into a new distribution of responsibilities
in the generation and transfer of scientific and technological knowledge.

2. A Symphony of Innovation: Leveraging Complexity to Create Knowledge and Confidence
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SOL Global Forum, Vienna, Austria, 13th
– 16th
September, 2005
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Some of the features and trends that occur in the external setting include
globalisation of R&D and intensification of competition. To respond to this,
alliances, mergers and takeovers of RTOs are now a reality (2). Particularly,
changes introduced by the new instruments of the VI Framework Programme,
geared towards the creation of the European Research Area (ERA). Therefore,
acceleration of technological cycles, dominated by large multinational companies.
Finally, coordination vs competition of regional, national and European public
efforts in Research(i).
From the point of view of the internal response of research and technology
organisations, mention must be made of two concepts of interest, or management
models which have been present in them over the last few decades. Firstly,
technology management as a strategic paradigm has been a basic reference factor for
RTOs for more than two decades now(ii). Secondly, quality management was a
movement of mobilisation and transformation in the 90s. Standardisation processes
according to quality management standards such as ISO 9000, ISO 17025 and others
are very internal resource hungry and boost the existence of a common language,
trust and transparency in dealings with the world of industry(iii,iv). The EFQM
management excellence model is a reference used when RTOs seek to benchmark
themselves for best practices in management (v). However, nowadays neither of the
above concepts enjoy the power of mobilisation and transformation that "knowledge
management" has. This emerging approach seeks to be an internal response to
external change that takes place in the migration of the industrial society to
knowledge-based society.
1.2 Context of LABEIN as RTO
LABEIN is a Technological Research Centre, created in 1955 in Bilbao. Its legal
status is a non-profit private Foundation, composed by local and regional authorities
as well as enterprises from different sectors. Labein’s mission is to support
enterprises (specially SME’s) and Administration bodies in their technological needs
and in the adoption of innovative technologies and management systems to improve
their competitiveness. Typical services of Labein are RTD projects, Technology
Transfer & Innovation projects, Technological Assessments & Plans, Technical
Assistance, Innovative Management Systems and Training and Dissemination
activities. Technological areas and markets covered by LABEIN are: Structures and
Materials for sustainable construction, Mechanics for automotive and steel industry,
Distributed Power Generation, Information Society for Regional Development.
Total turnover for 2004 was approximately 16.8 million EURO. LABEIN’s total
permanent staff is 300 employees, 253 of them with University degree and 30 of
them are doctors.
The creation of TECNALIA corporation in 2002 as a strategic alliance involving
the centres AZTI, INASMET, LABEIN, ROBOTIKER and ESI, located in the
Basque Country, has been an important milestone in our evolution.
2 DEKKER J.;"RTO Perspectives on Internationalisation"; EARTO Conference;Graz, April 19th 2002

3. Paths to be a learning organization: the case of labein 3
1.3 Change management waves in LABEIN
During the early 90s, the strategic context of the centre was set by the changes to
ensure greater market orientation and adaptation, compared to a technological
orientation that had set the tone of the previous decade. Adopting a quality
management system for the RTO activities was another of the process that
determined the changes in the internal management systems. However, at the end of
that decade, the centre of gravity in change management became people-focused and
on the way in which they were acquiring competences. The first initiatives to adopt
management by competences can be traced back to that period and are described
below. Following a initial project that can barely be called successful, there was a
change in approach and we became more focused on conversational competences as
a basic and more far-reaching instrument to tackle change and learning processes.
The 2003-2006 Strategic Plan set the basis for an ambitious approach in terms of
change management, looking to disturb the social system and introducing systemic
and complexity management concepts.
2. BUILDING KNOWLEDGE BASED MANAGEMENT IN
LABEIN TECNALIA
2.1. From management by competences to reflective conversations.
Competence management project in LABEIN: 1998-2000
The 1998-2002 Strategic Plan addressed the main challenge of having management
and researchers "commit to business results ". This challenge took the form of a
series of priorities that were rolled out via what we call a "Competence Model"vi
(Figure 1).
AWARENESS-RAISING
AND
TRAINING
DEFINITION OF
THE COMPETENCE
CATALOGUE
DEFINITION OF
THE ROLE
INVENTORY
COMPETENCE
ANALYSIS
(DIAGNOSIS)
ANALYSIS OF
RESULTS (GAP) AND DESIGN
OF ACTION PLANS
INTEGRATION IN
HUMAN RESOURCE
SYSTEMS
PERFECTED COMPETENCE CATALOGUE
PERFECTED ROLE INVENTORY
Figure 1. Competence model

4. A Symphony of Innovation: Leveraging Complexity to Create Knowledge and Confidence
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SOL Global Forum, Vienna, Austria, 13th
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September, 2005
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The management by competences project was abandoned in 2000. Firstly by
the directors and then by the business units that were trying to apply the
management by competences to the technological sphere of the researchers. Among
the reasons for abandoning the project, special mention should be made of the high
complexity of the process to define the competences, which was also highly
dependent on the group that was carrying it out. Even though the definition process
was enriching in terms of developing a shared vision in this group (management
committee) regarding the aspects that we should develop as persons, there were very
few subsequent uses. Furthermore, the designing of the process in two stages,
definition of the competences and deployment, did not encourage the transformation
or development of the people. When the deployment was being considered,
legitimate questions were raised by parties that had not been involved in preparing
it, while the majority of the efforts were being consumed by “procedural” aspects, in
order to assess the competences in the most “objective” way, without that resulting
in personal development, but rather in justifying more “training” as the key to the
development of the people. On the other hand, the management by competences
model was introduced by the external consultants rather than its development being
custom designed or from the company. It was therefore complex to apply and
required a great deal of effort. It was a centralised planning model that lost
supporters on the management board given the great deal of effort required in its
application and the poor progress or benefit achieved.
2001-2002 development of conversational skills
During 2001 and 2002, under the aegis of the managing director, who started the
process with a 200-hour individual course over one year, the emphasis was placed
on developing conversational skills3
,vii
. Therefore, once the managing director had
completed the training process, a course was held for the management board, which
included the use of conversational skills in the work of the managers, with the help
of the instructors. Two seminars were later organised and were attended by a group
of 40 people, who were the heads of the technological lines in the business units.
The aim of these actions was to establish basic common distinctions in the use of
language in our conversations. The focus was on learning to converse better, from
the humility of listening. If over the last four years, we have invested a great deal of
effort on “strategic sale” seminars, where great emphasis is placed on wanting to
listening to the customer, discovering his problems, needs, wishes…., before
resorting to our catalogue of solutions. We were now putting forward an additional
hypothesis: “it is going to be difficult to listen to the customer properly, if we do not
listen to each other properly, if we do not learn to converse better”.
3 The grounds and reasons for this approach is more fully described in the works of Humberto Maturana,
Francisco Varela or Rafael Echeverria. Their contributions based on cognitive biology stress the
importance of language in action generation and not only as a means of express and communication. We
live in language, a state that allows a type of highly sophisticated coordination. Conversation would be a
value creation paradigm in the knowledge-based society and would replace the “production chain” of the
industrial era.

5. Paths to be a learning organization: the case of labein 5
2.2. A systemic approach to organizational learning: Disturbing our social
system. SAREA and PERLA projects in 2003-2005.
The 2003-2006 Strategic Plan was written in 2002. It defines several strategic
projects that will afford continuity to the aforementioned competence-based
management project carried out in the previous period. The process of "Knowledge
Acquisition and Generation" was formulated as one of the most important, with four
lines of action: Intelligence of the projects, prospective, R&D portfolio, and setting
up alliances. This lines of action were based on two parallel and coordinated
projects: SAREA and PERLA.
SAREA (Networked Knowledge). Project started in 2003, leaded by the deputy
managing director and involving the centre’s activity heads (4), which was aimed at
formulating knowledge-based management in LABEIN. The emphasis was on
triggering initiatives aimed at transforming the way of working in the centre to make
knowledge and customer relations as the focal point of day-to-day management.
During one year, the whole group comprising 32 people were involved in ten
workshops, with support from external consultants and coordinated by the deputy
managing director. During this period, they defined the mission of the activity
manager in LABEIN, and identified twelve priority projects to deploy that mission
in the organisational units. Priority was given to the projects aimed at freeing time.
In 2004, the projects were implemented and structured around development
committees being set up in the business units. Every unit management board
dedicated time to reflective conversations about their relationship with main
customers, strategic priorities and regarding their way of working as a team, in and
outside the centre. The setting up of portals, corporate and for each organisational
unit, by means of a multi-disciplinary group of different units and services, was also
raised.
PERLA (PERsons of LAbein). Project carried out by the management board
during 2003, whose goal was to define a simple common competence outline (list
and short descriptions) to be used as a reference for reflective conversations by the
people in the centre, which would act as the basis to redesign the human resources
management processes, which cover selecting, training, assessing, promoting and
paying the employees. In 2004, the project evolved towards implementing
“development conversations”, aimed at the professional and human development, to
be held between three people (interested party, enabler and observer). Three
training workshops for managers and researchers involving 45 people were
organised.
4 In each business unit, the activity heads are senior researchers acting as technical leaders that oversee
the work lines and prepare proposals for customers based on their good knowledge of the needs and
priorities. They coordinate and back the researchers in the project teams to meet the commitments
undertaken with the customers. They therefore are technical leaders and play a key role in the customer
relations, having a fundamental role for the organisation. Each unit director works closely with them and
they make up the team (6-8 activity heads),that are the driving force behind the work in each unit (40-60
researchers).

6. A Symphony of Innovation: Leveraging Complexity to Create Knowledge and Confidence
The 2nd
SOL Global Forum, Vienna, Austria, 13th
– 16th
September, 2005
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The management board played a secondary role in this part of the process in
2004. It was as if its evolution as a team had been put on hold. In October of that
year, an internal conference entitled “SAREA&PERLA. Punto y seguido”
(“SAREA&PERLA. Full Stop”) was held for the 70 people involved during 2003
and 2004, and was aimed at sharing the projects that had been carried out,
celebrating the achievements and planning future initiatives. Its highly participative
and interactive dynamics was a new form of expression and meeting, and was very
different from the previous meeting habits. An internal newspaper about this event
was produced and was distributed to the whole workforce.
We will now look at three short storytelling that reflect different observations of
the process underway, which have been briefly outline in previous paragraphs of
section 1.4. The first one is the perspective of the deputy managing director, who
has been the driving force behind the process, interpreting the needs of the centre
and setting up framework for the intervention of the external consultants and
different groups in the centre. The second story deals with the point of view of an
external consultant who acted as an observer and “injected” feedback based on his
interpretations of what he had seen in the centre. Finally, the third story describes
the perspective of the director of one of the centre’s organisational units, and he is
therefore a “hinge” player, involved in both spheres of the life of the centre (e.g. the
management board and research teams).
The perspective of the interpreter of the system
Create and Conserve
People in communities first cry and complain, but then laughing (Confucius).
Ten years ago, despite having grown considerably, we were worried about
surviving. We were excessively dependent on public funds. The market was our
main challenge. Our growth had also forced us to professionalize our management.
We are not a mercantile company as such, but neither are we are institute purely
involved in knowledge generation.
Under a new General Manager, the Strategic Planning, the Marketing Plans, the
Technological Plans, Short-term Planning and Management Control were prepared
for Labein, with the Quality Policy being the backbone of the project. We were one
of the first Research and Development under contract organisations (RTO) to be
awarded the ISO 9000 certificate in Europe.
When we began to prepare our third Strategic Plan in 2002, we considered that the
stage that we had christened “Business Orientation” had been surpassed. Surpassed?
We were intuitively focusing our strategy on a target position with respect to the
market, and on developing the necessary organisational competences. We put these
figures, which had been our benchmark in previous plans, on a secondary level. We
therefore defined a series of projects to develop competences. We were mainly
looking at knowledge and people. We also planned the project, but immediately,

7. Paths to be a learning organization: the case of labein 7
when they were being deployed, we began to feel that there was something new that
we were able to completely grasp.
On the one hand, we were setting off towards the unknown and were trying to do so
along known and safe paths: a rather worrying paradox. Furthermore, our luggage
was beginning to prove to be heavy and rather useless. That business orientation
that had so helped was still there, but its main girders, systematic management and
quality, were turning out to be excessively rigid to say the least
The bottom line became immediately clear when we began to deploy development
teams in different areas. We could see the horizon clearly to a point, but as
managers we could not do much more than place the people looking out across the
wide planes and seas, and sometimes high mountains, that separated us from it, and
where, between all of us, we had to find, and sometimes construct, the way across.
Then the key question began to emerge: What is the method? What procedure are
we to follow? What is the theoretical base of what we are doing? The logic of a
technological centre, populated with scientific minds, was strictly linked to the
inheritance of our commitment to quality. We had to consider the method, the
system, the phases, the tasks that would take us where we wanted to go. The same
paradox: we wanted the plans of the device that had still not been designed, the
maps of territory that had never been visited.
At the end of a period of comings and goings, complaints about lack of direction
and, a new paradox, of manipulating, and after many hours working in different
teams, the scientific explanation that we so needed emerged: this was a non-linear
process. The apparent chaos hid a beautiful internal order, an implicit but complex
structure. We could begin to sleep at night and more people gradually joined in the
process. Someone must have thought, without daring to say it out loud: But… and
where is the control centre of all this?
In the future, we may be able to understand that management systems based on
procedures, on models, are necessary and conserve what has occurred once, twice or
three times… and has to continue to occur in the same way. But if we want to create
something new, we have to challenge them, we have to distance ourselves by
focusing on the only possible creative tool: ourselves.
The point of view of someone observing the system
My perspective as a Labein observer changes and will change as the result of the
interpretation of life, my progressive discovery of people and myself and my
progressive formulating of a theory of what it is about. If I do not change, I am not
helping.
In Labein, I feel simultaneously an insider and outsider, near and far; I tackle the
transformation from paradoxes and contradictions; I try to understand the
implication of the “systemic tempo” that constantly dominates the conversations, I
go from interpretation to interpretation, and new projects therefore emerge. I have
no written script, but I do have a script in my imagination. All the challenges that I
set for Labein, are challenges for myself, for the process:

8. A Symphony of Innovation: Leveraging Complexity to Create Knowledge and Confidence
The 2nd
SOL Global Forum, Vienna, Austria, 13th
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September, 2005
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• A 21st
-century “technological centre” (RTO) has to question the myth of being
“centre” and “technological”. “If I am central, the market has to come to me”
and “if I am technological, I cannot imagine a research world into intangibles”
underlie this paradox.; the relations, emotions, fears and suffering are
asphyxiating and if we are asphyxiated inside, we are unable to see them
outside.
• The more training (knowledge) that certain Labein employees seek, the more
development (relations) they have to be given. We are facing significant
imbalance between the relational and technical competence, as some
professionals believe that we can be successful in the 21st
century using the
paradigms of the 20th
century.
• The work to develop people has to be done from the tasks or missions linked to
their business. This paradox made me think that professionals will accept
certain development processes for themselves if they know that they will apply
to others; for example, they will end up changing if we talk to them about how
they can be involved in the change process for third parties (“ I accept it if I do
it for someone else”).
• One way of helping Labein involves helping my partners and myself or, in other
words, the more we help the system to change, the greater the risk of being
swallowed up by it. We have to distance ourselves and we have to get closer.
The perspective of a director of the system
My position as a director of the centre involves a certain “hinge” role, as on the one
hand, I am part of the management board (with fortnightly meetings) and, on the
other hand, of the regional development organisational unit, involving 45
researchers, and I therefore have to answer for its results (contracting, income and
expenditure). My role in the SAREA project was to be the driving force behind its
deployment in our unit in 2004, which balancing its evolution within the centre. The
non-linear nature of the change process soon became clear, with uneven advances
and setbacks in the different spheres of the centre.
When the SAREA was implemented in actions carried out in the organisational
units in 2004, it was perceived as an opportunity to “build a team” between the
activity heads of the regional development unit. The presence of an “observer” in
some meetings provided additional keys to understand “from where” everyone was
intervening and “how” he was participating. As he “injected” small doses of
feedback on our “interpreted” conduct, his presence initially filled me with a feeling
of uneasiness, of a certain vertigo when I observed the complexity from additional
keys, but this was followed by a perspective of the change and greater understanding
of our defence mechanisms, jammed as a team, and of our ways to compensate
external changes “so that nothing changes”. I identified specific aspects where I
could and had to change my behaviour to boost change in our organisational unit as
a social “microsystem” within the wider system that is the whole organisation.
The emotionality that was soon established with the observer was trust (partly
due to personal chemistry, and not to the same extent for everyone in the

9. Paths to be a learning organization: the case of labein 9
organisation), when the great potential (lever effect) could be felt that his presence
had to boost change in the performance and maturity of the teams. We modified the
original work plan as we went along, from the perspective of “finding the points of
the system on which we had to focus” in order to encourage the changes sought, as
if we were laying “drains”, which could be used to free negative tension from the
system. Some of the drainage would be:
• Increase the presence of the observer, by training internal “observers” who
could perform similar duties in more teams.
• Change in personal behaviour, to focus on “inquiry” rather than “advocacy” in
my conversations with the project team researchers, so that my interventions
would activate the teams and their capacities, rather than inhibit their autonomy
and lead to follow the leader.
• Revive the role of the centre’s management committee as a team that has to be
more involved and proactive in the SAREA project.
2.3. Reflections on theory and practice.
Even if we have managed to alter the organisation’s social system, there are people
who are reluctant and wish to return to the initial situation. They criticise the
initiatives and methods used in the PERLA and SAREA projects. They have a
negative view of its cost-benefit analysis. We have to make the “I-the company”,
“I.-the culture”, “I-the conditions” duality disappear. The possibility of oneself has
to be brought into the equation, along the lines of the world will not change if I do
not change. We need a more active professional who sets off towards the future
with positive, and less reactive emotions. We need to continue with the focuses
adopted to increase the degree of autonomy of the researchers, but we also need to
understand the criticism in order to design new actions that will be better understood
and encourage “coalitions for change”. As the driving force behind the projects, we
directors do not hold the truth, only legitimate yet partial views, which have to be
completed and enriched with other perspectives.
In this context of change and uncertainty, the emotional perspective has a
determining importance. It is necessary to provide affection to compensate the
anguish due to the uncertainty and the loss of sense that is experienced at any given
moment, and which goes hand in hand with the grieving process for lost security.
However, the interpretation and action cannot be exclusively emotional or
exclusively rational. There cannot even be a defined separation between both points
of views. The changes in the system are clearer through the conscious and
subconscious manifestations of the people and the team than by using objective
measurements. The effectiveness of the changes has to also be seen in tangible
results in the medium term.
From a systemic perspective of the change process, the emphasis is more on
applying natural therapies than antibiotics, more vaccines than chemotherapy. We
are looking to provide feedback to the system so that it opens up more, so that
greater confidence is generated: to understand people’s behaviour in group, interpret

10. A Symphony of Innovation: Leveraging Complexity to Create Knowledge and Confidence
The 2nd
SOL Global Forum, Vienna, Austria, 13th
– 16th
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situations from the least apparent, create processes to then make them disappear, and
re-inject cultural anchors for un-jam them.
The best way of killing innovation is to systematise it. The focus therefore has
to be on freeing the procedure while using them as basic platforms for new changes.
The procedure may become visible symbols that categorically express the vision
regarding what we want to become, more than recordings of actions that have to be
programmed in the minds and behaviour of people. The programme, the procedure,
as an opposite and complementary medium for strategic creation.
We need to understand and accept the paradoxes and dilemmas that occur in the
organisation in order to alter the dominating system and active change processes.
We should mention in our case:
- Dealing with the simultaneous accusations of “lack of direction” and
“manipulating”: the way to access meaning and to the autonomy of each
“knowledge worker” is not easy for the management, who has to be ready to
accept new power distributions.
- Personal Development versus Training.
- Interpreter and observer functions.
- “Activate processes” versus looking for “a solution for the problem”.
- Group dynamics and development of the individual.
- The role of time: past, present and future: understanding the “systemic tempo”.
Finally, attention has to be paid to the cultural anchors and characteristics. By
questioning the myth of the “Technological Centre”. The myth, as a cultural anchor,
integrates people and makes the organisation more cohesive, but it also
depersonalises and paralyses when the focus is on exploring. Changes have to feed
new “myths”, such as providing value to the customer or offering intangibles, which
in turn have to also be able to evolve without becoming enslaved to themselves.
i
LAREDO P.;"The future of European science and technology policy:which road to take?"; FP6
Conference workshop: "The future of European science and technology policy in Europe" Brussels,
Heysel, 12 November 2002
ii
LITTLE A.D.;"The Strategic Management of Technology";Ed. Arthur D. Little, Cambridge,
Massachusetts, 1981
iii
RUIZ J.;" Quality assurance in research and development:the European way";EUROLAB Symposium,
Berlin, June 1996
iv
RUIZ J.,VILLATE J.M.;"A Customer-Oriented Quality Assurance System at a Technological Research
Centre";48th Annual Quality Congress, ASQC, Las Vegas, May 1994, pp. 91-101
v
RUIZ J.and others;"Twelve Fresh Views on TQM";European Foundation for Quality Management
(EFQM), 1995-96. Doctoral Thesis Award

11. Paths to be a learning organization: the case of labein 11
vi
RUIZ J., “Management Of Internal And External Knowledge In Research And Technology
Organizations”; EARTO EUROLAB International Conference, The Hague, March 2003
vii
ECHEVERRIA R.;"La ontología del lenguaje";Ed. Dolmen, 1994