Learning Organizations

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A learning organization has both the drive and the capabilities to modify or transform itself and improve its performance continuously. It learns from past experiences, it learns from customers, it learns from various parts of the company, and it learns from the other companies. In learning organizations, successful innovation and change aren't events with clear-cut beginnings and endings. Rather they are never-ending processes that have become part of the daily routine. Innovation and change are not infrequent and special--they are simply a way of organizational life. As one manager observed. this way of life helps a learning organization avoid organizational stupidity.

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When an organization's environment is unstable, learning may require a lot of exploration. Failures may be frequent, but so are unexpected achievements. When an organization's environment is more stable. learning is more likely to occur through a systematic process of testing alternative approaches. In either situation, however, learning organizations change at a rate at least as fast as--or even faster than--the rate of change in their environments. Moreover, the learning process is managed systematically and professionally--it does not occur randomly. Though continuous innovation and change, a learning organization creates a sustainable competitive advantage in its industry. Five distinctive features of learning organizations are as follows:

• shared leadership,
• culture of innovation,
• customer-focused strategy,
• organic organization design, and
• intensive use of information

Shared Leadership
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In learning organizations, responsibility for making decisions, directing operations, and achieving organizational goals is shared among all employees. These leadership tasks aren't the responsibility of top-level managers alone. Everyone is encouraged to find ways to improve the organization and its products.Empowerment provides a way to integrate tasks and allow employees to buy into the organization's goals. The participatory leadership style encourages to employees to learn by allowing them to make their own mistakes. When peopl discuss better ways of doing their jobs, they see that their efforts do make a difference. That discovery in turn strengthens their involvement in making a better product and improving customer satisfaction.
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Culture of Innovation
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Shared leadership goes hand in hand with a culture of innovation. For learning organizations, successful innovation is a never-ending process that becomes part of daily routine. Instead of being an infrequent and special event that takes people's attention away from the central work of the organization, it is the central work of the organization.

Community: Learning organization nurtures a sense of community and trust. Everyone works together, respecting each other and being able to communicate openly and honestly. Problems can't be avoided or handled by just passing them along to another department or up the hierarchy. Conflict and debate are accepted as responsible forms of communication. People willingly share the information and knowledge they have, so others can benefit from it.

A sense of community also gives employees the feeling that they are important and are being treated fairly. Employees cooperate because they want to, not because they have to. When people feel they are part of community, they are more willing to make the extra effort needed to find and fix the problems. They also are more likely to share their solutions with the coworkers.

Continuous learning: A learning organization cannot succeed without employees who are willing to learn and change. Hence learning organizations encourage individual learning in numerous ways. One of the most successful ways is through empowerment, which places responsibility on employees for problem finding and problem solving. Empowerment requires more involvement and learning thean does simply having someone else make all the decisions.  For managers, in particular, continuous learning is essential to develop the competencies needed by generalists who are knowledgeable in several areas, as opposed to specialists who understand only finance, production, marketing, or some other function.

Customer-Focused Strategy

Learning organizations add value for customers by identifying needs--in some instances, even before customers have done so--and then developing ways to satisfy those needs. Customer-focused strategies reflect a clear understanding of how important customers are to the organization's long-term success and serve as the basis for aligning all of its major activities. At a time when many organizations and shareholders look no further than the next quarterly financial report, acceptance of the need for a long-term perspective is crucial for a learning organization.
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Organic Organization Design
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The design of learning organizations often reflects their emphasis on organic rather than mechanistic systems. In particular, they emphasis the use of teams, strategic alliances, and boundaryless networks.
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Teams: In learning organizations, employees with dissimilar expertise form multidisciplinary teams. To encourage the free flow of ideas, these teams may be formed only as needed, on project-by-project basis. "Bosses" are particularly nonexistent. Team members have considerable autonomy to make key decisions and can take action without waiting for requests to crawl through a bureaucratic decision-making process. Compared to functional structures, team based structures are more flexible and fluid. Knowledge flows more easily among members of the organization, which contributes to learning and creates opportunities for innovation.
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Strategic Alliances: In addition to experimenting on their own, may learning organizations use strategic alliance with suppliers, customers, and even competitors as a method of learning.
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Boundaryless Networks: Network structures maximize the linkages among organizations. Such linkages in turn provide learning opportunities and generate innovation in goods and services. Network structures seem to work in part because they create a sense of community among a large pool of people who share their diverse knowledge and expertise, using it to find creative solutions to difficult problems.
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Intensive Use of Information
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Information is the lifeblood of learning organizations. To be effective they must undertake extensive scanning, be measurement oriented, and foster shared problem and solutions.
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Scanning the Environment: In learning organizations, managers strive to be creators of change. Staying attuned to emerging trends in their passion. To ensure that they don't miss an important trend or change, learning organization aggressively scan both the external and internal environments for information. As a result, large amounts of information are obtained from external environment about how customers are reacting to current goods and services, how customers compare them to those of competitors, and whether new competitors may be on horizon. Such information is essential to judgments concerning the need to create to new products to meet customer demand. information obtained from internal environment indicates how employees feel about the organization, whether their attention is focused on customers, whether they feel energized to solve difficult problems, and whether key employees are likely to defect to competitors.
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Measurement Oriented: Organizations learn in order to improve. To judge improvement, an organization needs to know where it was before and where it is now. Systematic measurement makes assessing improvement possible. In learning organizations, employees have access to data about customer satisfaction, profit, loss, market share, employee commitment, and competitors' strategies, among other things. Data gathered, monitored, disseminated, and use throughout the organization.

Pharmaceutical companies are good examples of learning organizations, because without continuous learning they would have no new products to offer the public. Furthermore, the process of developing new products and bringing to market take about eight years, on the average. Throughout this time, pharmaceutical companies typically measure their learning progress in a variety of ways. For example, they keep track of the expertise of their scientists and engineers, the number of scientific papers published  by their scientists, patent applications, and FDA drug approvals, among many other things. By monitoring measures such as these, pharmaceutical firms can better predict in advance how many new products they are likely to be able to introduce in future years.
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Communication: Numerical data (measurement) aren't the only type of information considered important in learning organizations. "Soft" information--sometimes referred to as tacit knowledge or gossip--is valued too. Employees who serve customers day in and day out may not need to read the results of monthly customer satisfaction surveys to know where the problems lie. The anecdotal evidence they gather through dozens of service encounters may be enough to begin seeing a pattern of prices that all seem to fit together, make sense, and suggest needed improvement.

Source: Management: A Competency-Based Approach, tenth edition by Hellriegel, Jackson, Slocum