“The ability to learn faster than your competitors may be only sustainable competitive advantage.” – de
Ever since the Fifth Discipline: The Art & Practice of the Learning Organization was published back in 1990, business leaders have talked about the need to transform their companies into learning organizations. And although the concept of organizational learning and its connection to competitive success is logical, there seems to be significant differences in what people think the term learning organization means. As a result, in the 25 years since Peter wrote the book, it seems that very few companies have successfully implemented the concept and truly become learning organizations.
Learning and Performance
The first point to clarify about organizational learning is that knowledge means nothing if it doesn’t eventually result in improving performance in some way. The value of knowledge is in the ability to use it to improve quality, cost, safety, revenues, or some other aspect important to the organization’s success. It should be noted that the value of knowledge could also be indirect - e.g., by coaching others to improve performance.
Secondly, it's important to understand that there is a difference between individual and organizational learning. Although there is obviously a relationship between the two, competitive success will occur on a much more consistent basis when people improve their ability to learn as a team. If we think of success as resulting from a continual cycle of learning and applying, the faster an organization is able to move around the cycle, the more success it is likely to achieve.
Making Learning a Habit
Creating a learning organization requires establishing the culture, methods, and systems that support learning and make it become a part of the work people do every day. Leaders can talk about the importance of learning, but without a method that institutionalizes it in some way, it will never become a part of the organization's DNA. Besides enabling is to occur on a consistent basis, effectively standardizing an approach can make learning an expectation of everyone in the organization.
This is where many people fail to understand the significance of the PLAN-DO-STUDY-ACT (PDSA) cycle. Often thought of as only a tool to address problems, the PDSA cycle is a method to drive individual and organizational learning.
Based on scientific method, the PDSA cycle drives learning through a conscious understanding that every action is based on a hypothesis that a specific outcome will occur and, when the outcome does not occur as expected, the hypothesis needs adjustment. It is in the failure and subsequent adjustment of the hypothesis where learning occurs.
As an example, the current design of a process is a hypothesis that it will enable work to be consistently produced in the right quantity and at the right quality and cost when needed. Whenever this doesn't occur - e.g., defect, delay, cost overrun, etc. - the hypothesis is proven wrong and something about the process needs to improve. Team learning occurs through the understanding of the root cause(s) of the problem, and in experimenting with countermeasures to address them.
Learning driven by the PDSA cycle can be applied across the organization from the leadership team to the shop floor. Selecting where and how to set up a new factory, deciding whether or not to enter new markets, or choosing where to focus capital investment in the coming year are all hypotheses that can drive learning. The key is to consciously understand that the hypothesis, to study outcomes closely to know whether or not results met expectations, and to discover how to close the gap between the two.
The Classroom is Where the Work Occurs
For years we've been taught that learning takes place in a classroom where experts convey knowledge to students. When looking at the value of classroom learning in terms of improving performance and competitiveness, though, it becomes evident that the connection is weak, at best. And although there are some benefits to conferences, seminars, and in-house training classes, they are not the type of activities that drive team learning.
Establishing PDSA-thinking throughout the organization is a significant change for most companies, but the results in terms of advancing team learning and improving performance make it well worth the effort.