Insight No. 3

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The Learning Organization  
No. 3








An updated version of this Insight is available at

The 'learning organization' has its origins in companies like Shell, where Arie de Geus described learning as the only sustainable competitive advantage. The Learning Organization is seen as a response to an increasingly unpredictable and dynamic business environment. Here are some definitions by key writers:

"The essence of organisational learning is the organization's ability to use the amazing mental capacity of all its members to create the kind of processes that will improve its own" (Nancy Dixon 1994)
"A Learning Company is an organiaation that facilitates the learning of all its members and continually transforms itself" (M. Pedler, J. Burgoyne and Tom Boydell, 1991)
"Organizations 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 to learn together" (Peter Senge, 1990)

We have drawn on these and more to develop a definition to help guide managers wanting to develop LO capabilities:

Learning organizations are those that have in place systems, mechanisms and processes, that are used to continually enhance their capabilities and those who work with it or for it, to achieve sustainable objectives - for themselves and the communities in which they participate.

The important points to note about this definition are that learning organizations:

  • Are adaptive to their external environment
  • Continually enhance their capability to change/adapt
  • Develop collective as well as individual learning
  • Use the results of learning to achieve better results

Why the Interest in 'Learning Organizations'?

Basically, it's the search for the (unattainable) Holy Grail. Companies are seeking to improve existing products and services (continuous improvement), and innovation (breakthrough strategies). This has resulted in a plethora of initiatives such as TQM (Total Quality Management) and BPR (Business Process Reengineering). But companies are finding that such programmes succeed or fail depending on human factors, such as skills, attitudes and organisational culture. It also appears that many implementations are geared to highly specified processes, defined for anticipated situations. The current interest in the 'learning organisation' stems from the recognition that these initiatives, by themselves, often do not work. Something more is needed to:

  • Cope with rapid and unexpected changes where existing 'programmed' responses are inadequate
  • Provide flexibility to cope with dynamically changing situations
  • Allow front-line staff to respond with initiative based on customer needs vs. being constrained by business processes established for different circumstances

As various management writers put it:

"Organisations must develop a capacity for fast-paced innovation.. learn to love change" (Peters)
"As the competitive environment becomes more complex and variegate, the need for greater genetic variety - a broader range of managerial beliefs, and a greater repertoire of managerial actions - grows apace" (Hamel and Prahaled).
"Top companies seem to organise around people ..honouring these needs - feeling of control, something to believe in, challenge, lifelong learning, recognition" (Waterman)

With the pace of change ever quickening, the need to develop mechanisms for continuous learning and innovation is greater than ever.

Types of Learning

A learning organization is not about 'more training'. While training does help develop certain types of skill, a learning organisation involves the development of higher levels of knowledge and skill. We have developed a 4-level model:

Level 1.- Learning facts, knowledge, processes and procedures. Applies to known situations where changes are minor.

Level 2.- Learning new job skills that are transferable to other situations. Applies to new situations where existing responses need to be changed. Bringing in outside expertise is a useful tool here.

Level 3 - Learning to adapt. Applies to more dynamic situations where the solutions need developing. Experimentation, and deriving lessons from success and failure is the mode of learning here.

Level 4 - Learning to learn. Is about innovation and creativity; designing the future rather than merely adapting to it. This is where assumptions are challenged and knowledge is reframed.

Furthermore this model (or adaptation of it) can be applied at three levels - to the learning of individuals, of teams and of organisations. Organizations that achieve learning to Level 4 will "reinvent not just their organization but their industry" (Hamel and Prahaled in Competing for the Future)

Characteristics of a Learning Organisation

Observation and research identifies four types of factor:

Learning Culture - an organizational climate that nurtures learning. There is a strong similarity with those characteristics associated with innovation.

Processes - processes that encourage interaction across boundaries. These are infrastructure, development and management processes, as opposed to business operational processes (the typical focus of many BPR initiatives).

Tools and Techniques - methods that aid individual and group learning, such as creativity and problem solving techniques.

Skills and Motivation - to learn and adapt.

Here are some additional points on the first three of these.

A Learning Culture
  • Future, external orientation these organisations develop understanding of their environment; senior teams take time out to think about the future. Widespread use of external sources and advisors e.g. customers on planning teams.
  • Free exchange and flow of information - systems are in place to ensure that expertise is available where it is needed; individuals network extensively, crossing organisational boundaries to develop their knowledge and expertise.
  • Commitment to learning, personal development - support from top management; people at all levels encouraged to learn regularly; learning is rewarded. Time to think and learn (understanding, exploring, reflecting, developing)
  • Valuing people - ideas, creativity and "imaginative capabilities" are stimulated, made use of and developed. Diversity is recognised as a strength. Views can be challenged.
  • Climate of openness and trust - individuals are encouraged to develop ideas, to speak out, to challenge actions.
  • Learning from experience - learning from mistakes is often more powerful than learning from success. Failure is tolerated, provided lessons are learnt ("learning from fast failure" - Peters).

Key Management Processes
  • Strategic and Scenario Planning - approaches to planning that go beyond the numbers, encourage challenging assumptions, thinking 'outside of the box'. They also allocate a proportion of resources for experimentation.
  • Competitor Analysis - as part of a process of continuous monitoring and analysis of all key factor in the external environment, including technology and political factors. A coherent competitor analysis process that gathers information from multiple sources, sifts, analyses, refines, adds value and redistributes is evidence that the appropriate mechanisms are in place.
  • Information and Knowledge Management - using techniques to identify, audit, value (cost/benefit), develop and exploit information as a resource (known as IRM - information resources management); use of collaboration processes and groupware e.g. Lotus Notes, First Class to categorise and share expertise.
  • Capability Planning - profiling both qualitatively and quantitatively the competencies of the organisation. Profiling these on a matrix can be helpful to planning adjustment:
  • Team and Organisation development - the use of facilitators to help groups with work, job and organisation design and team development - reinforcing values, developing vision, cohesiveness and a climate of stretching goals, sharing and support
  • Performance Measurement - finding appropriate measures and indicators of performance; ones that provide a 'balanced scorecard' and encourage investment in learning (see, for example, Measuring Intellectual Capital).
  • Reward and Recognition Systems - processes and systems that recognize acquisition of new skills, team-work as well as individual effort, celebrate successes and accomplishments, and encourages continuous personal development.

Tools and Techniques

Too numerous to cover in detail, but include a wide range of learning and creativity skills in the following groups:

  • Inquiry - interviewing, seeking information
  • Creativity - brainstorming, associating ideas
  • Making sense of situations - organising information and thoughts
  • Making choices - deciding courses of action
  • Observing outcomes - recording, observation
  • Reframing knowledge - embedding new knowledge into mental models, memorizing

Collective (i.e. team and organizational) learning require skills for sharing information and knowledge, particularly implicit knowledge, assumptions and beliefs that are traditionally "beneath the surface". Key skills here are:

  • Communication, especially across organisational boundaries
  • Listening and observing
  • Mentoring and supporting colleagues
  • Taking a holistic perspective - seeing the team and organisation as a whole
  • Coping with challenge and uncertainty

Many (but not all) of these will be found described in The Fifth Discipline Fieldbook by Peter Senge et. al. The five disciplines are Personal Mastery, Systems Thinking, Team Learning, Shared Vision, Mental Models. Another useful source is Techniques for Structured Problem Solving by Arthur B. van Gundy.

Inhibitors to becoming a Learning Organization

These are some of the most common obstacles to becoming a learning organization:

  • operational/fire fighting preoccupation - not creating time to sit back and think strategically
  • too focused on systems and process (e.g. ISO9000) to exclusion of other factors (bureaucratic vs. thinking)
  • reluctance to train (or invest in training), other than for obvious immediate needs
  • too many hidden personal agendas
  • too top-down driven, overtight supervision = lack of real empowerment

Getting Started

As with many 'interventions', there are many good places to start, depending on the specific context. Some ones often recommended are:

  • Start at the top - helpful to give an impetus

  • Start with a chronic problem - always a good place to get the thinking caps on

  • Initiate a Task Force - a common response, but they will need drive and vision

  • Start with an Organizational Diagnosis - the HR consultants favour this one!

  • Link to an existing process or initiative - go where there is existing energy

  • Review existing systems and processes - an audit to identify a 'capability' gap

  • New Product Development

We particularly favour the latter. It is tangible, is an opportunity to be innovative, and needs a lot of 'boundary crossing' to succeed. It draws on many of the processes, tools and techniques to become effective at learning.

The Role of Systems

It is our belief that many learning organization initiatives are high-jacked by the HR function or outside specialists. This should not be the case. Developing a learning organization is about doing it from within and taking a holistic systems perspective. MIS departments and IS professionals have a major contribution to make.

  • they have a systems approach and mind-set: a strong background in logical methods and process and are generally capable of developing creative solutions and holistic views.
  • they often provide some of the best project managers within an organisation, capable of co-ordinating multiple activities across several functions and involving significant change in work processes.
  • an information infrastructure that enables information flows, including networked connections between internal systems and access to external networks and databases
  • likely to be "early adopters" of important learning enabling technologies, such as groupware, computer conferencing, videoconferencing, Internet exploration, multimedia
  • have systems integration knowledge, essential aspect of making efficient connections between information, and more importantly knowledge

In conjunction with library Information services function they play a key part in the management of information and knowledge resources Providing the systems and processes for the management of knowledge and flow of information is, we believe, a crucial and underrated aspect of the learning organisation, , using techniques such as IRM - Information Resources Management.

The Management Challenge

The challenge facing managers today is to make the effort needed to learn some of the new skill and techniques, and to put in processes that engage their workforce in programmes of continuous capability development. Learning should be integrated into the doing, as part and parcel of everyday work. It should also be energising, stimulating and fun. Getting the best out of everybody, including yourself to meet the challenges ahead.

David Skyrme, October 1995.

© Copyright. John Farago and David J. Skyrme. 1995. This material may be copied or distributed subject to the terms of our copyright conditions (no commercial gain; complete page copying etc.)


The concepts of the Learning Organization and Knowledge Management are increasingly seen as two sides of the same coin - as you learn you gain knowledge which you apply and learn more (see also our article E-learning: Which Side of the Coin?). Organizational learning programmes such as those at Anglian Water and Glaxo Wellcome have over time evolved into knowledge management programmes. More on the links between the Learning Organization and Knowledge Management can be found in Chapter 6 of Creating the Knowledge-based Business.


The Organizational Learning Cycle, Nancy Dixon McGraw-Hill (1994). More Details.

The Learning Organisation, Bob Garratt, Harper-Collins, (1994). More Details.

The Learning Company: a Strategy for Sustainable Development, Mike Pedler, John Burgoyne & Tom Boydell, McGraw-Hill (1991). More Details.

The Fifth Discipline Fieldbook: Strategies and Tools for Building a Learning Organization, Peter M.Senge, C. Roberts, R.B. Ross, B.J. Smith, A. Kleiner, Nicholas Brierley (1994). More Details.

Techniques for Structured Problem Solving, Arthur B. van Gundy, Van Nostrand Rheinhold (1989). More Details.

Stanford Learning Organization Network

Related Insights on these pages include No. 1 The Networked Organisation, No. 2 The Virtual Corporation, No. 4 Teleworking for Enterprise or see full list.

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Management Insights are publications of David Skyrme Associates, who offers strategic consulting, presentations and workshops on many of these topics.

Additional coverage of these topics can be found in our free monthly briefing I3 UPDATE/ENTOVATION International News, various articles, publications and presentations.

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