Strategic Leadership Executive Summary Session 11 Building A learning Organization

Continuous improvement programs are sprouting up all over as organizations strive to better themselves and gain an edge. The topic list is long and varied, and sometimes it seems as though a program a month is needed just to keep up. Unfortunately, failed programs far outnumber successes, and improvement rates remain distressingly low. Why? Because most companies have failed to grasp a basic truth. Continuous improvement requires a commitment to learning. How, after all, can an organization improve without first learning something new? Solving a problem, introducing a product, and reengineering a process all require seeing the world in a new light and acting accordingly. In the absence of learning, companiesand individualssimply repeat old practices. Change remains cosmetic, and improvements are either fortuitous or short-lived. A few farsighted executivesRay Stata of Analog Devices, Gordon Forward of Chaparral Steel, Paul Allaire of Xeroxhave recognized the link between learning and continuous improvement and have begun to refocus their companies around it. Scholars too have jumped on the bandwagon, beating the drum for learning organizations and knowledge-creating companies. In rapidly changing businesses like semiconductors and consumer electronics, these ideas are fast taking hold. Yet despite the encouraging signs, the topic in large part remains murky, confused, and difficult to penetrate. Meaning, Management, and Measurement Scholars are partly to blame. Their discussions of learning organizations have often been reverential and utopian, filled with near mystical terminology. Paradise, they would have you believe, is just around the corner. Peter Senge, who popularized learning organizations in his book The Fifth Discipline, described them as places where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn together.1 To achieve these ends, Senge suggested the use of five component technologies: systems thinking, personal mastery, mental models, shared vision, and team learning. In a similar spirit, Ikujiro Nonaka characterized knowledge-creating companies as places where inventing new knowledge is not a specialized activity...it is a way of behaving, indeed, a way of being, in which everyone is a knowledge worker.2 Nonaka suggested that companies use metaphors and organizational redundancy to focus thinking, encourage dialogue, and make tacit, instinctively understood ideas explicit. Sound idyllic? Absolutely. Desirable? Without question. But does it provide a framework for action? Hardly. The recommendations are far too abstract, and too many questions remain unanswered. How, for example, will managers know when their

companies have become learning organizations? What concrete changes in behavior are required? What policies and programs must be in place? How do you get from here to there? Most discussions of learning organizations 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. First is the question of meaning. We need a plausible, well-grounded definition of learning organizations; 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. And third is the question of measurement. We need better tools for assessing an organizations rate and level of learning to ensure that gains have in fact been made. Once these three Ms are addressed, managers will have a firmer foundation for launching learning organizations. Without this groundwork, progress is unlikely, and for the simplest of reasons. For learning to become a meaningful corporate goal, it must first be understood. What Is a Learning Organization? Surprisingly, a clear definition of learning has proved to be elusive over the years. Organizational theorists have studied learning for a long time; the accompanying quotations suggest that there is still considerable disagreement (see the insert Definitions of Organizational Learning). Most scholars view organizational learning as a process that unfolds over time and link it with knowledge acquisition and improved performance. But they differ on other important matters.

Strategic Leadership Executive Summary Session 11 Is Yours Learning Organization?

Leaders may think that getting their organizations to learn is only a matter of articulating a clear vision, giving employees the right incentives, and providing lots of training. This assumption is not merely flawedits risky in the face of intensifying competition, advances in technology, and shifts in customer preferences. Organizations need to learn more than ever as they confront these mounting forces. Each company must become a learning organization. The concept is not a new one. It flourished in the 1990s, stimulated by Peter M. Senges The Fifth Discipline and countless other publications, workshops, and websites. The result was a compelling vision of an organization made up of employees skilled at creating, acquiring, and transferring knowledge. These people could help their firms cultivate tolerance, foster open discussion, and think holistically and systemically. Such learning organizations would be able to adapt to the unpredictable more quickly than their competitors could. Unpredictability is very much still with us. However, the ideal of the learning organization has not yet been realized. Three factors have impeded progress. First, many of the early discussions about learning organizations were paeans to a better world rather than concrete prescriptions. They overemphasized the forest and paid little attention to the trees. As a result, the associated recommendations proved difficult to implement managers could not identify the sequence of steps necessary for moving forward. Second, the concept was aimed at CEOs and senior executives rather than at managers of smaller departments and units where critical organizational work is done. Those managers had no way of assessing how their teams learning was contributing to the organization as a whole. Third, standards and tools for assessment were lacking. Without these, companies could declare victory prematurely or claim progress without delving into the particulars or comparing themselves accurately with others. In this article, we address these deficiencies by presenting a comprehensive, concrete survey instrument for assessing learning within an organization. Built from the ground up, our tool measures the learning that occurs in a department, office, project, or divisionan organizational unit of any size that has meaningful shared or overlapping work activities. Our instrument enables your company to compare itself against benchmark scores gathered from other firms; to make assessments across areas within the organization (how, for, example, do different groups learn relative to one another?); and to look deeply within individual units. In each case, the power is in the comparisons, not in the absolute scores. You may find that an area your organization thought was a strength is actually less robust than at other organizations. In effect, the tool gives you a broader, more grounded view of how well your company learns and how adeptly it refines its strategies and processes. Each organization, and each unit within it, needs that breadth of perspective to accurately measure its learning against that of its peers.

Building Blocks of the Learning Organization Organizational research over the past two decades has revealed three broad factors that are essential for organizational learning and adaptability: a supportive learning environment, concrete learning processes and practices, and leadership behavior that provides reinforcement. We refer to these as the building blocks of the learning organization. Each block and its discrete subcomponents, though vital to the whole, are independent and can be measured separately. This degree of granular analysis has not been previously available. Our tool is structured around the three building blocks and allows companies to measure their learning proficiencies in great detail. As you shall see, organizations do not perform consistently across the three blocks, nor across the various subcategories and subcomponents. That fact suggests that different mechanisms are at work in each buildingblock area and that improving performance in each is likely to require distinct supporting activities. Companies, and units within them, will need to address their particular strengths and weaknesses to equip themselves for long-term learning. Because all three building blocks are generic enough for managers and firms of all types to assess, our tool permits organizations and units to slice and dice the data in ways that are uniquely useful to them. They can develop profiles of their distinctive approaches to learning and then compare themselves with a benchmark group of respondents. To reveal the value of all these comparisons, lets look in depth at each of the building blocks of a learning organization. Building Block 1: A supportive learning environment. An environment that supports learning has four distinguishing characteristics. Psychological safety. To learn, employees cannot fear being belittled or marginalized when they disagree with peers or authority figures, ask naive questions, own up to mistakes, or present a minority viewpoint. Instead, they must be comfortable expressing their thoughts about the work at hand.

Strategic Leadership Executive Summary Session 11 The Leaderss New Work : Building Learning Organization
This article focuses on the kind of leadership needed to build learning organizations -it describes their new roles, skills and tools. But it also addresses the main concepts behind Senge's conceptualization of the learning organization. For example, it makes a distinction between adaptive learning and generative learning, and it highlights the importance of systems thinking. It also captures the main thrust behind two of the other four disciplines: mental models and shared vision. Team learning is found implicit in the systems perspective. Personal mastery, however, is not addressed. Some additional reasons for reading this article are: description of the creative tension principle; section on systems thinking which includes a distinction between "events," "patterns of behavior" and "systemic structure;" distinction between "detail" and "dynamic" complexity; leverage principle; and an introduction to seven systems archetypes which includes a visual word-and-arrow diagram showing "feedback-loops;" an illustration of the "left-hand column" exercise; and an introduction to the importance of learning laboratories or micro-worlds. Senge begins the article with a suggestion that human beings are born learners (in the learning organization sense of the term), but that the social and organizational structure in which we are brought up and socialized into the workplace shifts our "natural" generative learning abilities into adaptive learning "skills." However, ironically, by focusing on performing for someone else's approval, corporations create the very conditions that predestine them to mediocre performance. He argues that in a increasingly dynamic, interdependent, and unpredictable world, it is simply no longer possible for anyone to "figure it all out at the top." The old model, "the top thinks and the local acts," must now give way to integrating thinking and acting at all levels. Interestingly, the key to organizational longevity appears to be the ability to run "experiments in the margin," to continually explore new business and organizational opportunities that create potential new sources of growth. ADAPTIVE LEARNING AND GENERATIVE LEARNING. According to Fortune magazine, "the most successful corporation ... will be something called a learning organization, a consummately adaptive enterprise." [emphasis added] But Senge argues that increasing adaptiveness is only the first stage in moving toward learning organizations. The impulse to learn in children goes deeper than desires to respond and adapt more effectively to environmental change. The impulse to learn, at its heart, is an impulse to be generative, to expand our capability. This is why leading corporations are focusing on generative learning, which is about creating, as well as adaptive learning, which is about coping. But generative learning, unlike adaptive learning, requires new ways of looking at the world. Generative learning requires seeing the systems that control events. When we fail to grasp the systemic source of problems, we are left to "push on" symptoms rather

than eliminate underlying causes. Without systemic thinking, the best we can ever do is adaptive learning. THE LEADER'S NEW WORK. Our traditional view of leaders --as special people who set the direction, make the key decisions, and energize the troops-- is deeply rooted in an individualistic and non-systemic world-view. In a learning organization, leaders' role differ dramatically from that of the charismatic decision maker. Leaders are designers, teachers, and stewards. These roles require new skills: the ability to build shared vision, to bring to the surface and challenge prevailing mental models, and to foster more systemic patterns of thinking. In short, leaders in learning organizations are responsible for building organizations where people are continually expanding their capabilities to shape their future --that is, leaders are responsible for learning. CREATIVE TENSION: THE INTEGRATING PRINCIPLE. The natural energy for changing reality comes from holding a picture of what might be that is more important to people than what is. The principle of creative tension teaches that an accurate picture of current reality is just as important as a guiding picture of a desired future, because the difference between the two is the force driving change. NEW ROLES LEADER AS DESIGNER. According to Senge, it is fruitless to be the leader in an organization that is poorly designed. The first task of organization design concerns designing the governing ideas of purpose, vision, and core values by which people will live. Few acts of leadership have more enduring impact on an organization than building a foundation of purpose and core values. The second design task involves the policies, strategies, and structures that translate guiding ideas into business decisions. Behind appropriate policies, strategies, and structures are effective learning processes; their creation is the third key design responsibility in learning organizations. LEADER AS TEACHER. Leader as teaches does not mean leader as authoritarian expert whose job is to teach people the "correct" view of reality. Rather, it is about helping everyone in the organization, oneself included, to gain more insightful views of current reality. The role of leader as teacher starts with bringing to the surface people's mental models of important issues. These mental pictures of how the world works have a significant influence on how we perceive problems and opportunities, identify courses of action, and make choices. In learning organizations, this teaching role is developed further by virtue of explicit attention to people's mental models and by the influence of the systems perspective. Leaders as teachers help people restructure their views of reality to see beyond the superficial conditions and events into the underlying causes of problems --and therefore to see new possibilities for shaping the future. Specifically, leaders can influence people to view reality at three distinct levels: events, patterns of behavior, and systemic structure. According to Senge, contemporary society focuses predominantly on events, less so in patterns of behavior, and very rarely on systemic structure. Leaders in learning

organizations must reverse this trend, and focus their organization's attention on systemic structure. This is because event explanations --who did what to whom-- doom their holders to a reactive stance toward change; pattern-of-behavior explanations are limited to identifying long-term trends and assessing their implications --they suggest how, over time, we can respond to shifting conditions (adaptive learning); structural explanations are the most powerful --only they address the underlying causes of behavior at a level such that patterns of behavior can be changed (generative learning). LEADER AS STEWARD. "The servant leader is servant first ... it begins with the natural feeling that one wants to serve first. This conscious choice brings one to aspire to lead. That person is sharply different from one who is leader first, perhaps because of the need to assuage an unusual power drive or to acquire material possessions." Leaders' sense of stewardship operates at two levels: stewardship for the people they lead and stewardship for the larger purpose or mission that underlies the enterprise. Leaders engaged in building learning organizations naturally feel part of a larger purpose that goes beyond their organization. They are part of changing the way businesses operate, not from a vague philanthropic urge, but from a conviction that their efforts will produce more productive organizations, capable of achieving higher levels of organizational success and personal satisfaction than more traditional organizations. NEW SKILLS BUILDING SHARED VISION. The concept of creative tension previously discussed introduced the importance of visioning. When more people come to share a vision, the vision becomes more real in the sense of a mental reality that people can truly imagine achieving. They now have partners, co-creators; the vision no longer rests on their shoulders alone. Some of the ideas involved in building shared vision are: encouraging personal vision, since shared visions emerge from personal visions communicating and asking for support -leaders must be willing to continually share their own vision, rather than being the official representative of the corporate vision; they also must be prepared to ask, "Is my vision worthy of your commitment?" building visioning is an on-going, never-ending process extrinsic visions focus on achieving something relative to an outsider, such as a competitor; intrinsic visions focus on creating a new type of product, taking an established product to a new level, etc., i.e., they call forth a new level of creativity and innovation; intrinsic and extrinsic visions need to coexist --a vision solely predicated on defeating an adversary will eventually weaken an organization two fundamental sources of energy can motivate organizations: fear and aspiration --fear, the energy source behind negative visions, can produce extraordinary changes in short periods, but aspiration, the energy source behind positive visions, endures as a continuing source of learning and growth. SURFACING AND TESTING MENTAL MODELS. The leadership task of challenging assumptions without invoking defensiveness requires reflection and inquiry skills possessed by few leaders in controlling organizations, such as: seeing leaps of abstraction --thus, avoiding over-generalizing from data balancing inquiry and advocacy --to explain the

reasoning and data that led to a point-of-view; to encourage others to challenge that pointof-view; to encourage others to provide other points-of-view; to actively seek to understand other points-of-view (instead of simply rejecting them); make attributions explicitly and to the point; and, in case of impasse, search for alternative data or logic which might resolve the impasse, or run an experiment distinguishing espoused theory from theory in use -recognizing gaps between what we say we believe (espoused theory) and what our actions reflect about our beliefs (theory in use) recognizing and defusing defensive routines -entrenched habits used to protect ourselves from the embarrassment and threat that come with exposing our thinking-- in order to expose our personal mental models. SYSTEMS THINKING. Successful leaders often are "systems thinkers" to a considerable extent. They focus less on day-to-day events and more on underlying trends and forces of change. But they do this almost completely intuitively. One of the significant developments in management science is the gradual coalescence of systems thinking as a field of study and practice. This field suggests some skills: seeing interrelationships, not things, and processes, not snapshots moving beyond blame --systems thinking shows us that there is no outside, that you and the cause of your problems are part of a single system, and that poorly designed systems, not incompetent or unmotivated individuals, cause most organizational problems distinguishing detail complexity from dynamic complexity --detail complexity arises when there are many variables; dynamic complexity arises when cause and effect are distant in time and space, and when the consequences over time of interventions are subtle and not obvious to many participants in the system focusing on areas of high leverage --where a change, with minimum effort, leads to lasting, significant improvement avoiding symptomatic solutions which do not address underlying causes -sometimes the most difficult leadership acts are to refrain from intervening through popular quick fixes and to keep the pressure on everyone to identify more enduring solutions. Many talented leaders have rich, highly systemic intuitions but cannot explain those intuitions to others. Ironically, they often end up being authoritarian leaders, even if they don't want to, because only they see the decisions that need to be made. They are unable to conceptualize their strategic insights so that these can become public knowledge, open to challenge and further improvement. According to Senge, these skills can only be developed through lifelong commitment. Moreover, it is not enough for one or two individuals to develop them. They must be distributed widely throughout the organization. (In The Fifth Discipline, Senge addresses two additional areas of skills which are not treated here: personal mastery and team learning.)

Strategic Leadership Executive Summary Session 11 Martket Orientation And The Learning Organization
Effective organizations are configurations of management practices that facilitate the development of the knowledge that becomes the basis for competitive advantage. A market orientation, complemented by an entrepreneurial drive, provides the cultural foundation for organizational learning. However, as important as market orientation and entrepreneurship are, they must be complemented by an appropriate climate to produce a "learning organization." The authors describe the processes through which organizations develop and use new knowledge to improve performance. They propose a set of organizational elements that comprise the learning organization and conclude with recommendations for research to contribute to the understanding of learning organizations. Types of Organizational Learning - Adaptive learning, the most basic form of learning, occurs within a set of recognized and unrecognized constraints that reflect the organizations assumptions about its environment and it self - Generative learning, occurs when the organization is willing to question long-held assumptions about its mission, customers, capabilities, or strategy. Processes of Organizational Learning Organizational Learning and Competitive Advantage

Culture and Climate in The learning Organization Marketing Orientation, the principal cultural foundation of the learning organization, to define it as the culture that : 1. Place the highest priority on the profitable creation and maintenance of superior customer value while considering the interests of other key stakegolder 2. Provide norms for behavior regarding the organizational development of and esponsiveness to market orientation