Howard Once Again You Have a Tremendous Grasp of the Obvious
The Thought in Brief
Every bit we all know, to stay alee of competitors, companies must constantly enhance the fashion they do business. Simply more than performance-improvement programs neglect than succeed. That'south because many managers don't realize that sustainable comeback requires a delivery to learning.
After all, how can organizations respond creatively to new challenges (shifts in client preferences, market downturns) without starting time discovering something new—and then altering the way they operate to reflect new insights? Without learning, companies repeat old practices, make corrective changes, and produce brusk-lived improvements.
To transform your company into a learning organization, Garvin recommends mastering five activities:
- Solving problems systematically
- Experimenting with new approaches to work
- Learning from past experience
- Learning from other companies and from customers
- Transferring knowledge throughout your organization
Woven into the fabric of your visitor's daily operations, these activities help your organization brand enduring improvements that interpret directly into measurable gains—including superior quality, better delivery, and increased market share.
The Thought in Practise
Garvin offers these suggestions for mastering v organizational learning practices:
Solving Problems Systematically
Don't endeavour to solve problems by relying on gut instinct or assumptions. Instead, generate hypotheses, assemble data to examination your hypotheses, and employ statistical tools (such every bit cause-and-effect diagrams) to organize data and describe inferences.
Experimenting
Systematically search for and test new knowledge. Employ small experiments to produce incremental gains in knowledge. For case, specialty glass manufacturer Corning experiments continually with diverse raw materials and new formulations to increase yields and provide improve grades of glass.
Use demonstration projects to produce knowledge you lot can employ for systemwide changes. Full general Foods experimented with self-managing teams at its Topeka plant with the aim of adopting this arroyo beyond the company after.
Learning from Past Experience
Review your successes and failures, identify lessons learned, and record those lessons in accessible forms. Example:
Boeing compared the development processes of its 737 and 747 planes (models that had serious technical issues) to those of its 707 and 727 (ii profitable programs). It so compiled a booklet of lessons learned. Several members of the learning team were later transferred to ii start-upwards programs—the 757 and 767. They produced the most successful, error-costless launches in Boeing's history.
Learning from Others
Look outside your firsthand environment to gain new perspectives. Consider these sources:
- Other companies. Identify best-practice organizations (fifty-fifty in other industries), utilise site visits and interviews to study how they become work done, and generate ideas for improving your own practices.
- Your customers. Meet regularly with customers to gather knowledge about products, competitors, consumers' preferences, and the quality of your service. Also discover customers using your products, to identify problems and generate ideas for comeback.
Transferring Knowledge
New knowledge carries maximum impact when information technology's shared broadly. To transfer knowledge quickly and efficiently throughout your system, motion experts to unlike parts of the company—across divisions, departments, and facilities—and then they can share the wealth. Example:
Time Life's CEO shifted the president of the visitor's music division (who had orchestrated years of rapid growth and loftier profits through innovative marketing) to the book division, where profits were flat because of continued reliance on traditional marketing concepts.
Continuous improvement programs are sprouting up all over as organizations strive to meliorate themselves and gain an edge. The topic listing is long and varied, and sometimes it seems as though a program a month is needed simply to keep up. Unfortunately, failed programs far outnumber successes, and comeback rates remain distressingly low. Why? Because virtually companies take failed to grasp a basic truth. Continuous improvement requires a delivery to learning.
How, afterwards all, tin an organization meliorate without first learning something new? Solving a trouble, introducing a production, and reengineering a process all require seeing the world in a new calorie-free and interim accordingly. In the absence of learning, companies—and individuals—simply repeat old practices. Alter remains cosmetic, and improvements are either fortuitous or short-lived.
A few farsighted executives—Ray Stata of Analog Devices, Gordon Frontward of Chaparral Steel, Paul Allaire of Xerox—take recognized the link betwixt learning and continuous improvement and accept 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 speedily irresolute businesses similar semiconductors and consumer electronics, these ideas are fast taking hold. Yet despite the encouraging signs, the topic in large role remains murky, confused, and difficult to penetrate.
Meaning, Direction, and Measurement
Scholars are partly to arraign. Their discussions of learning organizations have often been reverential and utopian, filled with near mystical terminology. Paradise, they would accept you believe, is merely around the corner. Peter Senge, who popularized learning organizations in his volume The Fifth Subject, described them as places "where people continually expand their chapters to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is ready 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 non a specialized activity…it is a manner of behaving, indeed, a way of being, in which everyone is a knowledge worker."2 Nonaka suggested that companies use metaphors and organizational back-up to focus thinking, encourage dialogue, and make tacit, instinctively understood ideas explicit.
Sound idyllic? Absolutely. Desirable? Without question. But does information technology 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 accept become learning organizations? What concrete changes in behavior are required? What policies and programs must be in place? How do you lot get from here to in that location?
Nearly 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 problems are left unresolved; yet each is essential for effective implementation. Outset is the question of meaning. We demand a plausible, well-grounded definition of learning organizations; it must be actionable and like shooting fish in a barrel to utilize. 2d is the question of direction. We need clearer guidelines for practise, filled with operational advice rather than high aspirations. And 3rd is the question of measurement. We need better tools for assessing an organization's 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 go a meaningful corporate goal, it must first be understood.
What Is a Learning Arrangement?
Surprisingly, a articulate definition of learning has proved to be elusive over the years. Organizational theorists take studied learning for a long time; the accompanying quotations suggest that there is still considerable disagreement (see the insert "Definitions of Organizational Learning"). Well-nigh scholars view organizational learning as a process that unfolds over time and link it with knowledge conquering and improved functioning. Just they differ on other of import matters.
Some, for example, believe that behavioral alter is required for learning; others insist that new ways of thinking are enough. Some cite information processing as the machinery through which learning takes identify; others propose shared insights, organizational routines, even memory. And some recall that organizational learning is common, while others believe that flawed, cocky-serving interpretations are the norm.
How tin we discern among this cacophony of voices yet build on earlier insights? As a first pace, consider the following definition:
A learning arrangement is an organization skilled at creating, acquiring, and transferring noesis, and at modifying its beliefs to reflect new cognition and insights.
This definition begins with a simple truth: new ideas are essential if learning is to take place. Sometimes they are created de novo, through flashes of insight or creativity; at other times they arrive from exterior the organisation or are communicated by knowledgeable insiders. Whatever their source, these ideas are the trigger for organizational improvement. But they cannot by themselves create a learning system. Without accompanying changes in the way that work gets washed, only the potential for improvement exists.
This is a surprisingly stringent test for it rules out a number of obvious candidates for learning organizations. Many universities fail to authorize, every bit do many consulting firms. Even General Motors, despite its recent efforts to improve performance, is found wanting. All of these organizations take been constructive at creating or acquiring new knowledge but notably less successful in applying that knowledge to their own activities. Total quality direction, for example, is now taught at many concern schools, still the number using it to guide their ain decision making is very modest. Organizational consultants suggest clients on social dynamics and small-group behavior just are notorious for their own infighting and factionalism. And GM, with a few exceptions (like Saturn and NUMMI), has had little success in revamping its manufacturing practices, even though its managers are experts on lean manufacturing, JIT product, and the requirements for improved quality of work life.
Organizations that do pass the definitional test—Honda, Corning, and Full general Electrical come rapidly to mind—accept, past contrast, become adept at translating new cognition into new means of behaving. These companies actively manage the learning process to ensure that information technology occurs by design rather than by chance. Distinctive policies and practices are responsible for their success; they form the building blocks of learning organizations.
Building Blocks
Learning organizations are skilled at v main activities: systematic problem solving, experimentation with new approaches, learning from their ain experience and past history, learning from the experiences and best practices of others, and transferring knowledge quickly and efficiently throughout the organization. Each is accompanied past a distinctive mind-set, tool kit, and pattern of beliefs. Many companies practise these activities to some degree. Merely few are consistently successful considering they rely largely on happenstance and isolated examples. Past creating systems and processes that support these activities and integrate them into the fabric of daily operations, companies tin manage their learning more effectively.
i. Systematic problem solving
This commencement activity rests heavily on the philosophy and methods of the quality movement. Its underlying ideas, now widely accepted, include:
- Relying on the scientific method, rather than guesswork, for diagnosing bug (what Deming calls the "Plan, Do, Check, Human action" wheel, and others refer to as "hypothesis-generating, hypothesis-testing" techniques).
- Insisting on data, rather than assumptions, every bit groundwork for conclusion making (what quality practitioners call "fact-based direction").
- Using simple statistical tools (histograms, Pareto charts, correlations, cause-and-outcome diagrams) to organize data and draw inferences.
Most training programs focus primarily on trouble-solving techniques, using exercises and practical examples. These tools are relatively straightforward and easily communicated; the necessary listen-set, all the same, is more than hard to establish. Accuracy and precision are essential for learning. Employees must therefore become more disciplined in their thinking and more attentive to details. They must continually ask, "How do we know that's true?", recognizing that close enough is non good enough if real learning is to accept place. They must push beyond obvious symptoms to assess underlying causes, frequently collecting evidence when conventional wisdom says information technology is unnecessary. Otherwise, the organisation will remain a prisoner of "gut facts" and sloppy reasoning, and learning will be stifled.
Xerox has mastered this approach on a visitor-wide calibration. In 1983, senior managers launched the company'due south Leadership Through Quality initiative; since then, all employees have been trained in small-grouping activities and problem-solving techniques. Today a six-pace procedure is used for virtually all decisions (run into the insert "Xerox's Problem-Solving Procedure"). Employees are provided with tools in four areas: generating ideas and collecting data (brainstorming, interviewing, surveying); reaching consensus (list reduction, rating forms, weighted voting); analyzing and displaying data (crusade-and-event diagrams, force-field analysis); and planning actions (flow charts, Gantt charts). They then practice these tools during training sessions that terminal several days. Training is presented in "family unit groups," members of the same department or business-unit team, and the tools are applied to existent problems facing the group. The outcome of this process has been a common vocabulary and a consistent, companywide approach to problem solving. Once employees have been trained, they are expected to use the techniques at all meetings, and no topic is off-limits. When a high-level grouping was formed to review Xerox's organizational structure and propose alternatives, it employed the very same procedure and tools.3
Xerox'due south Trouble-Solving Procedure
2. Experimentation
This action involves the systematic searching for and testing of new knowledge. Using the scientific method is essential, and there are obvious parallels to systematic problem solving. But unlike problem solving, experimentation is usually motivated past opportunity and expanding horizons, non by electric current difficulties. It takes ii main forms: ongoing programs and one-of-a-kind demonstration projects.
Ongoing programs commonly involve a standing series of small experiments, designed to produce incremental gains in knowledge. They are the mainstay of nigh continuous improvement programs and are specially common on the shop floor. Corning, for case, experiments continually with diverse raw materials and new formulations to increase yields and provide better grades of glass. Allegheny Ludlum, a specialty steelmaker, regularly examines new rolling methods and improved technologies to raise productivity and reduce costs.
Opportunity motivates experimentation. Corning, for instance, continually strives to increase yields and provide meliorate grades of glass.
Successful ongoing programs share several characteristics. First, they piece of work hard to ensure a steady menstruation of new ideas, fifty-fifty if they must be imported from exterior the arrangement. Chaparral Steel sends its first-line supervisors on sabbaticals around the globe, where they visit bookish and industry leaders, develop an understanding of new work practices and technologies, then bring what they've learned back to the company and apply it to daily operations. In large function as a result of these initiatives, Chaparral is one of the 5 everyman cost steel plants in the globe. GE's Bear upon Plan originally sent manufacturing managers to Japan to study factory innovations, such equally quality circles and kanban cards, and then apply them in their own organizations; today Europe is the destination, and productivity improvement practices the target. The programme is one reason GE has recorded productivity gains averaging virtually five% over the last four years.
Successful ongoing programs also crave an incentive organisation that favors risk taking. Employees must experience that the benefits of experimentation exceed the costs; otherwise, they will not participate. This creates a difficult challenge for managers, who are trapped between 2 perilous extremes. They must maintain accountability and control over experiments without stifling creativity by unduly penalizing employees for failures. Allegheny Ludlum has perfected this juggling act: it keeps expensive, high-impact experiments off the scorecard used to evaluate managers but requires prior approvals from four senior vice presidents. The result has been a history of productivity improvements annually averaging 7% to viii%.
Successful programs require an incentive organization that favors risk taking.
Finally, ongoing programs need managers and employees who are trained in the skills required to perform and evaluate experiments. These skills are seldom intuitive and must usually be learned. They cover a broad sweep: statistical methods, similar blueprint of experiments, that efficiently compare a large number of alternatives; graphical techniques, similar process analysis, that are essential for redesigning work flows; and inventiveness techniques, similar storyboarding and role playing, that go along novel ideas flowing. The most effective preparation programs are tightly focused and feature a small gear up of techniques tailored to employees' needs. Training in design of experiments, for example, is useful for manufacturing engineers, while inventiveness techniques are well suited to development groups.
Sit-in projects are commonly larger and more complex than ongoing experiments. They involve holistic, systemwide changes, introduced at a single site, and are often undertaken with the goal of developing new organizational capabilities. Because these projects represent a sharp break from the past, they are usually designed from scratch, using a "make clean slate" approach. Full general Foods's Topeka found, i of the showtime high-commitment work systems in this state, was a pioneering sit-in project initiated to introduce the idea of cocky-managing teams and loftier levels of worker autonomy; a more recent example, designed to rethink pocket-size-auto development, manufacturing, and sales, is GM's Saturn Division.
Sit-in projects share a number of distinctive characteristics:
- They are usually the first projects to embody principles and approaches that the organization hopes to adopt afterward on a larger scale. For this reason, they are more than transitional efforts than endpoints and involve considerable "learning by doing." Mid-course corrections are mutual.
- They implicitly found policy guidelines and decision rules for later projects. Managers must therefore be sensitive to the precedents they are setting and must send strong signals if they expect to constitute new norms.
- They often encounter severe tests of commitment from employees who wish to run across whether the rules have, in fact, changed.
- They are unremarkably developed by strong multi-functional teams reporting directly to senior management. (For projects targeting employee involvement or quality of piece of work life, teams should exist multilevel equally well.)
- They tend to have only limited affect on the remainder of the arrangement if they are not accompanied by explicit strategies for transferring learning.
All of these characteristics appeared in a demonstration project launched by Copeland Corporation, a highly successful compressor manufacturer, in the mid-1970s. Matt Diggs, then the new CEO, wanted to transform the company's approach to manufacturing. Previously, Copeland had machined and assembled all products in a single facility. Costs were high, and quality was marginal. The problem, Diggs felt, was besides much complexity.
At the outset, Diggs assigned a small, multifunctional team the task of designing a "focused factory" dedicated to a narrow, newly adult product line. The squad reported directly to Diggs and took three years to complete its piece of work. Initially, the projection budget was $ten one thousand thousand to $12 million; that effigy was repeatedly revised as the team found, through feel and with Diggs'due south prodding, that it could achieve dramatic improvements. The last investment, a total of $xxx meg, yielded unanticipated breakthroughs in reliability testing, automatic tool aligning, and programmable command. All were achieved through learning past doing.
The team ready additional precedents during the institute's start-up and early on operations. To dramatize the importance of quality, for case, the quality managing director was appointed second-in-command, a meaning move upwards. The same reporting relationship was used at all subsequent plants. In add-on, Diggs urged the establish manager to ramp upwardly slowly to full production and resist all efforts to proliferate products. These instructions were unusual at Copeland, where the marketing section ordinarily ruled. Both directives were quickly tested; direction held house, and the implications were felt throughout the organization. Manufacturing's stature improved, and the company as a whole recognized its competitive contribution. I observer commented, "Marketing had always run the company, so they couldn't believe information technology. The change was visible at the highest levels, and information technology went downwards hard."
One time the first focused mill was running smoothly—it seized 25% of the market in two years and held its edge in reliability for over a decade—Copeland congenital four more than factories in quick succession. Diggs assigned members of the initial projection to each factory'southward design team to ensure that early learnings were non lost; these people after rotated into operating assignments. Today focused factories remain the cornerstone of Copeland's manufacturing strategy and a standing source of its cost and quality advantages.
Whether they are demonstration projects like Copeland's or ongoing programs like Allegheny Ludlum'south, all forms of experimentation seek the aforementioned end: moving from superficial cognition to deep understanding. At its simplest, the distinction is betwixt knowing how things are done and knowing why they occur. Knowing how is partial knowledge; it is rooted in norms of behavior, standards of exercise, and settings of equipment. Knowing why is more than key: information technology captures underlying cause-and-outcome relationships and accommodates exceptions, adaptations, and unforeseen events. The power to control temperatures and pressures to marshal grains of silicon and form silicon steel is an example of knowing how; understanding the chemic and physical process that produces the alignment is knowing why.
Farther distinctions are possible, equally the insert "Stages of Noesis" suggests. Operating knowledge can be arrayed in a hierarchy, moving from limited understanding and the ability to make few distinctions to more complete understanding in which all contingencies are predictable and controlled. In this context, experimentation and problem solving foster learning by pushing organizations up the hierarchy, from lower to higher stages of knowledge.
three. Learning from by experience
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 call up the past are condemned to repeat it." Unfortunately, too many managers today are indifferent, even hostile, to the past, and by declining to reflect on information technology, they let valuable noesis escape.
A written report of more than 150 new products ended that "the knowledge gained from failures [is] often instrumental in achieving subsequent successes… In the simplest terms, failure is the ultimate instructor."iv IBM'south 360 computer series, for example, one of the most popular and assisting e'er built, was based on the engineering of the failed Stretch computer that preceded it. In this example, equally in many others, learning occurred past risk rather than by careful planning. A few companies, all the same, accept established processes that require their managers to periodically recollect about the past and learn from their mistakes.
Boeing did so immediately subsequently its difficulties with the 737 and 747 plane programs. Both planes were introduced with much fanfare and also with serious problems. To ensure that the problems were not repeated, senior managers commissioned a high-level employee grouping, called Projection Homework, to compare the development processes of the 737 and 747 with those of the 707 and 727, ii of the company's most profitable planes. The group was asked to develop a set of "lessons learned" that could be used on future projects. Afterwards working for three years, they produced hundreds of recommendations and an inch-thick booklet. Several members of the squad were then transferred to the 757 and 767 start-ups, and guided by experience, they produced the near successful, error-gratuitous launches in Boeing's history.
Boeing used lessons from earlier model development to help produce the 757 and 767—the most successful, error-free launches in its history.
Other companies have used a similar retrospective approach. Like Boeing, Xerox studied its product evolution process, examining three troubled products in an endeavor to understand why the visitor'due south new business organisation initiatives failed so oft. Arthur D. Petty, the consulting company, focused on its by successes. Senior management invited ADL consultants from around the earth to a two-day "jamboree," featuring booths and presentations documenting a wide range of the visitor'due south most successful practices, publications, and techniques. British Petroleum went fifty-fifty farther and established the post-projection appraisement unit to review major investment projects, write up case studies, and derive lessons for planners that were then incorporated into revisions of the company's planning guidelines. A five-person unit of measurement reported to the lath of directors and reviewed vi projects annually. The bulk of the fourth dimension was spent in the field interviewing managers.5 This type of review is now conducted regularly at the projection level.
At the centre of this approach, 1 expert has observed, "is a mind-set that…enables companies to recognize the value of productive failure equally contrasted with unproductive success. A productive failure is 1 that leads to insight, understanding, and thus an addition to the normally held wisdom of the organization. An unproductive success occurs when something goes well, simply nobody knows how or why."6 IBM'southward legendary founder, Thomas Watson, Sr., apparently understood the distinction well. Company lore has it that a young managing director, after losing $10 million in a risky venture, was chosen into Watson'due south part. The fellow, thoroughly intimidated, began by saying, "I guess you want my resignation." Watson replied, "You lot can't be serious. We just spent $10 million educating you lot."
Fortunately, the learning procedure need not exist so expensive. Example studies and post-project reviews similar those of Xerox and British Petroleum tin can be performed with petty cost other than managers' fourth dimension. Companies tin too enlist the assistance of kinesthesia and students at local colleges or universities; they bring fresh perspectives and view internships and case studies as opportunities to gain experience and increase their own learning. A few companies have established computerized information banks to speed upwards the learning process. At Paul Revere Life Insurance, management requires all problem-solving teams to complete brusk registration forms describing their proposed projects if they hope to qualify for the company'due south award program. The company so enters the forms into its computer arrangement and tin can immediately retrieve a list of other groups of people who have worked or are working on the topic, along with a contact person. Relevant experience is then but a telephone phone call away.
iv. Learning from others
Of course, not all learning comes from reflection and self-analysis. Sometimes the well-nigh powerful insights come from looking exterior one's immediate environment to gain a new perspective. Enlightened managers know that fifty-fifty companies in completely different businesses tin can be fertile sources of ideas and catalysts for creative thinking. At these organizations, enthusiastic borrowing is replacing the "non invented hither" syndrome. Milliken calls the process Sister, for "Steal Ideas Shamelessly"; the broader term for information technology is benchmarking.
Enthusiastic borrowing is replacing the "not invented hither" syndrome.
According to one expert, "benchmarking is an ongoing investigation and learning experience that ensures that best industry practices are uncovered, analyzed, adopted, and implemented."vii The greatest benefits come from studying practices, the way that piece of work gets done, rather than results, and from involving line managers in the process. Almost annihilation can be benchmarked. Xerox, the concept's creator, has applied it to billing, warehousing, and automated manufacturing. Milliken has been even more artistic: in an inspired moment, it benchmarked Xerox's arroyo to benchmarking.
Unfortunately, in that location is still considerable confusion about the requirements for successful benchmarking. Benchmarking is non "industrial tourism," a series of ad hoc visits to companies that have received favorable publicity or won quality awards. Rather, it is a disciplined process that begins with a thorough search to place best-practise organizations, continues with careful study of ane's own practices and operation, progresses through systematic site visits and interviews, and concludes with an assay of results, development of recommendations, and implementation. While time-consuming, the process demand not be terribly expensive. AT&T'due south Benchmarking Grouping estimates that a moderate-sized project takes four to six months and incurs out-of-pocket costs of $20,000 (when personnel costs are included, the figure is three to iv times higher).
Benchmarking is one way of gaining an outside perspective; another, equally fertile source of ideas is customers. Conversations with customers invariably stimulate learning; they are, after all, experts in what they do. Customers can provide upwardly-to-date product information, competitive comparisons, insights into irresolute preferences, and firsthand feedback nearly service and patterns of use. And companies need these insights at all levels, from the executive suite to the shop floor. At Motorola, members of the Operating and Policy Committee, including the CEO, meet personally and on a regular basis with customers. At Worthington Steel, all machine operators brand periodic, unescorted trips to customers' factories to discuss their needs.
Customers can provide competitive comparisons and immediate feedback about service. And companies need these insights at all levels, from the executive suite to the shop floor.
Sometimes customers can't articulate their needs or remember even the most contempo issues they take had with a product or service. If that's the instance, managers must observe them in action. Xerox employs a number of anthropologists at its Palo Alto Research Centre to observe users of new document products in their offices. Digital Equipment has developed an interactive process called "contextual enquiry" that is used past software engineers to detect users of new technologies as they go well-nigh their work. Milliken has created "first-delivery teams" that accompany the showtime shipment of all products; team members follow the product through the client's production process to see how it is used and then develop ideas for further improvement.
Learning organizations cultivate the art of open up, attentive listening. Managers must be open to criticism.
Whatever the source of exterior ideas, learning volition but occur in a receptive environs. Managers tin can't exist defensive and must be open to criticism or bad news. This is a difficult challenge, merely information technology is essential for success. Companies that approach customers bold that "we must be right, they take to be incorrect" or visit other organizations certain that "they can't teach united states anything" seldom larn very much. Learning organizations, by contrast, cultivate the fine art of open, attentive listening.
5. Transferring knowledge
For learning to be more than a local affair, knowledge must spread quickly and efficiently throughout the organization. Ideas carry maximum impact when they are shared broadly rather than held in a few hands. A diversity of mechanisms spur this procedure, including written, oral, and visual reports, site visits and tours, personnel rotation programs, instruction and training programs, and standardization programs. Each has distinctive strengths and weaknesses.
Reports and tours are by far the most popular mediums. Reports serve many purposes: they summarize findings, provide checklists of dos and don'ts, and depict of import processes and events. They comprehend a multitude of topics, from benchmarking studies to accounting conventions to newly discovered marketing techniques. Today written reports are ofttimes supplemented by videotapes, which offering greater immediacy and fidelity.
Tours are an equally popular means of transferring knowledge, peculiarly for large, multidivisional organizations with multiple sites. The nigh constructive tours are tailored to different audiences and needs. To introduce 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 others were aimed at lower ranks. Each bout described the policies, practices, and systems that were almost relevant to that level of management.
Despite their popularity, reports and tours are relatively cumbersome ways of transferring knowledge. The gritty details that prevarication behind complex direction concepts are difficult to communicate secondhand. Absorbing facts by reading them or seeing them demonstrated is one thing; experiencing them personally is quite some other. As a leading cerebral scientist has observed, "It is very hard to become knowledgeable in a passive way. Actively experiencing something is considerably more than valuable than having it described."8 For this reason, personnel rotation programs are 1 of the most powerful methods of transferring knowledge.
In many organizations, expertise is held locally: in a peculiarly skilled estimator technician, perhaps, a savvy global brand director, or a division head with a track record of successful joint ventures. Those in daily contact with these experts benefit enormously from their skills, simply their field of influence is relatively narrow. Transferring them to different parts of the organization helps share the wealth. Transfers may be from division to division, department to department, or facility to facility; they may involve senior, centre, or commencement-level managers. A supervisor experienced in just-in-time production, for example, might move to some other manufactory to use the methods in that location, or a successful division manager might transfer to a lagging partition to invigorate it with already proven ideas. The CEO of Time Life used the latter arroyo when he shifted the president of the visitor'southward music division, who had orchestrated several years of rapid growth and loftier profits through innovative marketing, to the presidency of the book division, where profits were apartment because of continued reliance on traditional marketing concepts.
Line to staff transfers are another selection. These are most effective when they allow experienced managers to distill what they have learned and diffuse it across the visitor in the form of new standards, policies, or grooming programs. Consider how PPG used only such a transfer to advance its human being resources practices around the concept of high-commitment work systems. In 1986, PPG constructed a new float-glass constitute in Chehalis, Washington; information technology employed a radically new engineering science as well as innovations in human resource management that were developed by the institute manager and his staff. All workers were organized into minor, self-managing teams with responsibility for work assignments, scheduling, trouble solving and improvement, and peer review. After several years running the mill, the plant director was promoted to managing director of human resource for the entire glass group. Drawing on his experiences at Chehalis, he developed a preparation plan geared toward offset-level supervisors that taught the behaviors needed to manage employees in a participative, cocky-managing environment.
As the PPG example suggests, education and training programs are powerful tools for transferring knowledge. But for maximum effectiveness, they must exist linked explicitly to implementation. All too often, trainers assume that new noesis volition be applied without taking concrete steps to ensure that trainees actually follow through. Seldom practise trainers provide opportunities for practice, and few programs consciously promote the application of their teachings after employees accept returned to their jobs.
Xerox and GTE are exceptions. As noted earlier, when Xerox introduced problem-solving techniques to its employees in the 1980s, anybody, from the summit to the bottom of the organisation, 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 piece of work problem. In a similar spirit, GTE's Quality: The Competitive Edge program was offered to teams of business concern-unit presidents and the managers reporting to them. At the beginning of the 3-solar day class, each team received a asking from a company officer to set up a consummate quality plan for their unit, based on the course concepts, within 60 days. Discussion periods of ii to 3 hours were set aside during the program and so that teams could begin working on their plans. Later the teams submitted their reports, the company officers studied them, and so the teams implemented them. This GTE plan produced dramatic improvements in quality, including a recent semifinalist spot in the Baldrige Awards.
GTE proved knowledge is more likely to be transferred effectively when the right incentives are in place.
The GTE example suggests another important guideline: knowledge is more than probable to be transferred effectively when the correct incentives are in place. If employees know that their plans will be evaluated and implemented—in other words, that their learning will be practical—progress is far more likely. At most companies, the status quo is well entrenched; only if managers and employees see new ideas equally existence in their own all-time interest will they accept them gracefully. AT&T has developed a artistic arroyo that combines potent incentives with data sharing. Called the Chairman's Quality Award (CQA), information technology is an internal quality competition modeled on the Baldrige prize merely with an important twist: awards are given not only for absolute performance (using the same 1,000-point scoring system as Baldrige) but also for improvements in scoring from the previous yr. Aureate, silverish, and bronze Improvement Awards are given to units that have improved their scores 200, 150, and 100 points, respectively. These awards provide the incentive for modify. An accompanying Pockets of Excellence program simplifies cognition transfer. Every twelvemonth, it identifies every unit within the company that has scored at least threescore% of the possible points in each award category so publicizes the names of these units using written reports and electronic mail.
Measuring Learning
Managers have long known that "if y'all tin't measure out it, you can't manage it." This proverb is every bit truthful of learning equally information technology is of any other corporate objective. Traditionally, the solution has been "learning curves" and "manufacturing progress functions." Both concepts engagement dorsum to the discovery, during the 1920s and 1930s, that the costs of airframe manufacturing fell predictably with increases in cumulative volume. These increases were viewed as proxies for greater manufacturing cognition, and near early studies examined their affect on the costs of direct labor. Later studies expanded the focus, looking at total manufacturing costs and the bear upon of experience in other industries, including shipbuilding, oil refining, and consumer electronics. Typically, learning rates were in the lxxx% to 85% range (meaning that with a doubling of cumulative production, costs fell to lxxx% to 85% of their previous level), although there was wide variation.
Firms like the Boston Consulting Group raised these ideas to a higher level in the 1970s. Drawing on the logic of learning curves, they argued that industries equally a whole faced "experience curves," costs and prices that fell by predictable amounts equally industries grew and their total production increased. With this observation, consultants suggested, came an iron police of contest. To bask the benefits of experience, companies would have to rapidly increase their production ahead of competitors to lower prices and gain market share.
Both learning and experience curves are still widely used, especially in the aerospace, defense, and electronics industries. Boeing, for instance, has established learning curves for every work station in its associates found; 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 manufacture costs and prices.
For companies hoping to become learning organizations, however, these measures are 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 i possible learning driver (full production volumes) and ignore both the possibility of learning in mature industries, where output is flat, and the possibility that learning might exist driven by other sources, such as new technology or the claiming posed by competing products. Peradventure about important, they tell us little well-nigh the sources of learning or the levers of modify.
Another measure has emerged in response to these concerns. Called the "half-life" curve, information technology was originally adult by Analog Devices, a leading semiconductor manufacturer, as a way of comparing internal comeback rates. A half-life curve measures the time it takes to attain a 50% improvement in a specified functioning measure. When represented graphically, the performance measure (defect rates, on-time commitment, time to marketplace) is plotted on the vertical axis, using a logarithmic scale, and the fourth dimension scale (days, months, years) is plotted horizontally. Steeper slopes then stand for faster learning (see the insert "The Half-Life Bend" for an illustration).
The Half-Life Curve Analog Devices has used half-life curves to compare the operation of its divisions. Hither monthly data on client service are graphed for 7 divisions. Division C is the clear winner: fifty-fifty though it started with a high proportion of late deliveries, its rapid learning rate led eventually to the best absolute operation. Divisions D, East, and G accept been far less successful, with footling or no comeback in on-time service over the flow. Source: Ray Stata, "Organizational Learning—The Key to Management Innovation," Sloan Management Review, Spring 1989, p. 72.
The logic is straightforward. Companies, divisions, or departments that take less time to improve must be learning faster than their peers. In the long run, their short learning cycles will translate into superior performance. The fifty% target is a measure of convenience; information technology was derived empirically from studies of successful improvement processes at a broad range of companies. Half-life curves are too flexible. Different learning and experience curves, they work on whatsoever output measure, and they are not confined to costs or prices. In addition, they are piece of cake to operationalize, they provide a simple measuring stick, and they permit for ready comparing amid groups.
Yet fifty-fifty half-life curves have an important weakness: they focus solely on results. Some types of knowledge have years to digest, with few visible changes in performance for long periods. Creating a full quality civilisation, for example, or developing new approaches to product evolution 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 whatever brusque-run learning that has occurred. A more comprehensive framework is needed to rail progress.
Organizational learning can usually be traced through three overlapping stages. The first footstep is cognitive. Members of the arrangement are exposed to new ideas, expand their knowledge, and begin to remember differently. The second pace is behavioral. Employees begin to internalize new insights and modify their beliefs. And the third pace is performance improvement, with changes in behavior leading to measurable improvements in results: superior quality, better delivery, increased market share, or other tangible gains. Because cognitive and behavioral changes typically precede improvements in functioning, a complete learning audit must include all 3.
Surveys, questionnaires, and interviews are useful for this purpose. At the cerebral level, they would focus on attitudes and depth of understanding. Have employees truly understood the meaning of cocky-direction and teamwork, or are the terms nevertheless unclear? At PPG, a squad of homo resource experts periodically audits every manufacturing plant, including extensive interviews with store-floor employees, to ensure that the concepts are well understood. Have new approaches to customer service been fully accepted? At its 1989 Worldwide Marketing Managers' Meeting, Ford presented participants with a series of hypothetical situations in which customer complaints were in conflict with brusque-term dealer or company profit goals and asked how they would respond. Surveys similar these are the first step toward identifying changed attitudes and new ways of thinking.
To assess behavioral changes, surveys and questionnaires must be supplemented by straight ascertainment. Hither the proof is in the doing, and at that place is no substitute for seeing employees in action. Domino's Pizza uses "mystery shoppers" to assess managers' commitment to customer service at its individual stores; 50.L. Edible bean places telephone orders with its own operators to assess service levels. Other companies invite outside consultants to visit, attend meetings, observe employees in action, and then report what they have learned. In many ways, this approach mirrors that of examiners for the Baldrige Award, who brand several-day site visits to semifinalists to see whether the companies' deeds match the words on their applications.
Finally, a comprehensive learning audit also measures performance. Half-life curves or other operation measures are essential for ensuring that cognitive and behavioral changes have actually produced results. Without them, companies would lack a rationale for investing in learning and the balls that learning was serving the organization'south ends.
First Steps
Learning organizations are not built overnight. Almost successful examples are the products of carefully cultivated attitudes, commitments, and management processes that accept accrued slowly and steadily over time. Still, some changes can be fabricated immediately. Any visitor that wishes to become a learning system can begin past taking a few simple steps.
The first pace is to foster an environs that is conducive to learning. There must exist fourth dimension for reflection and analysis, to think virtually strategic plans, dissect customer needs, assess current work systems, and invent new products. Learning is difficult when employees are harried or rushed; information technology tends to be driven out by the pressures of the moment. But if top management explicitly frees up employees' fourth dimension for the purpose does learning occur with any frequency. That time will exist doubly productive if employees possess the skills to employ information technology wisely. Preparation in brainstorming, trouble solving, evaluating experiments, and other core learning skills is therefore essential.
Another powerful lever is to open up up boundaries and stimulate the exchange of ideas. Boundaries inhibit the catamenia of information; they continue individuals and groups isolated and reinforce preconceptions. Opening upwardly boundaries, with conferences, meetings, and project teams, which either cross organizational levels or link the company and its customers and suppliers, ensures a fresh flow of ideas and the risk to consider competing perspectives. General Electric CEO Jack Welch considers this to exist such a powerful stimulant of change that he has made "boundarylessness" a cornerstone of the company'southward strategy for the 1990s.
Once managers accept established a more supportive, open surroundings, they can create learning forums. These are programs or events designed with explicit learning goals in mind, and they tin can take a variety of forms: strategic reviews, which examine the irresolute competitive surround and the visitor'southward production portfolio, technology, and marketplace positioning; systems audits, which review the health of large, cross-functional processes and delivery systems; internal benchmarking reports, which identify and compare best-in-class activities within the arrangement; study missions, which are dispatched to leading organizations around the world to ameliorate sympathize their performance and distinctive skills; and jamborees or symposiums, which bring together customers, suppliers, outside experts, or internal groups to share ideas and learn from one some other. Each of these activities fosters learning by requiring employees to wrestle with new noesis and consider its implications. Each can also be tailored to business needs. A consumer goods visitor, for example, might sponsor a report mission to Europe to acquire more well-nigh distribution methods within the newly unified Common Market place, while a loftier-technology visitor might launch a systems inspect to review its new production development process.
Together these efforts assist to eliminate barriers that impede learning and brainstorm to move learning higher on the organizational agenda. They too suggest a subtle shift in focus, away from continuous comeback and toward a delivery to learning. 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.
References
1. Peter M. Senge, The Fifth Discipline (New York: Doubleday, 1990), p. 1.
two. Ikujiro Nonaka, "The Knowledge-Creating Company," Harvard Business Review, November–Dec 1991, p. 97.
iii. Robert Howard, "The CEO as Organizational Architect: An Interview with Xerox's Paul Allaire," Harvard Business Review, September–October 1992, p. 106.
4. Modesto A. Maidique and Billie Jo Zirger, "The New Product Learning Cycle," Research Policy, Vol. xiv, No. half dozen (1985), pp. 299, 309.
5. Frank R. Gulliver, "Post-Project Appraisals Pay," Harvard Business concern Review, March–Apr 1987, p. 128.
6. David Nadler, "Even Failures Can Exist Productive," New York Times, April 23, 1989, Sec. 3, p. 3.
7. Robert C. Camp, Benchmarking: The Search for Industry Best Practices that Lead to Superior Operation (Milwaukee: ASQC Quality Press, 1989), p. 12.
viii. Roger Schank, with Peter Childers, The Creative Attitude (New York: Macmillan, 1988), p. nine.
9. Ramchandran Jaikumar and Roger Bohn, "The Development of Intelligent Systems for Industrial Utilize: A Conceptual Framework," Research on Technological Innovation, Management and Policy, Vol. 3 (1986), pp. 182–188.
A version of this article appeared in the July–August 1993 issue of Harvard Business organization Review.
Source: https://hbr.org/1993/07/building-a-learning-organization
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