Part 2: Organisation Learning for Innovation, Change and Survival

This is Part 2 of a five part series:

• Part 1 – Background on Organisational Learning
• Part 2 – Organisational Learning for Innovation, Change and Survival
• Part 3 – Organisational Learning and Ethical Considerations
• Part 4 – Organisational Learning for System Integration
• Part 5 –  Conclusion and References

“In the long run, the  organization’s ability to learn faster than the competitors
serves as the only sustainable source of competitive advantage.” – Peter Senge

1. Learning for Change and Survival

There are several factors in the rapidly changing environment that has created the need for improved organizational learning. Field and Ford (1995) identifies such factors as

• the international marketplace
• the need for integrated approaches
• reduced time frames
• knowledge becoming the primary resource
• more fuzzy, permeable boundaries.

Organizational learning is important for organizations to be able not only to survive, but to compete and grow as well.

The international marketplace have become more competitive and uncertain with sophisticated customers. The organization needs to constantly reflect on the changing marketplace while learning how to better deploy and mange their existing resources in response to it:

• There has been a demand for better quality of services and products and a more intimate relationship between the organization’s resources with the customers’ needs.
• The job market has also become more demanding and uncertain, becoming more tight than ever with the increasing polarization of the workforce. It’s also been characterized by an increase in knowledge workers.
• Congruently, knowledge has become more and more a primary resource for organizations thus requiring greater capabilities of learning for the organization especially in assimilating information and managing their intellectual capital.
• The increasing pace of change and technological developments also requires the organization to learn quickly.

Rate of learning must be greater than the rate of change

Revans suggest that the rate of learning must be greater than the rate of change in the environment. This is in congruence with the organismic/ecological metaphor of organizations wherein organizations evolve by survival of the fittest (Morgan, 1985). Revans, statement implies that learning organizations are the ones able to survive the process of natural selection. This maybe attributed to the fact that organizational learning develops quick reflexes to external changes, the anticipation of such, and the appropriate responses.

Learning has also  recently taken center stage in strategic management and organizational development as key to survival and development for the companies of today. It goes beyond the ‘quick fix’ mentality that have dominated the field of organization management and strategies in the past especially the three-letter acronyms (e.g. MBO, TQM,BPR, SMT). Whereas these techniques and models for change failed to sustain initiatives for development, organizational learning promises sustainability.

Change through learning organizations is enduring

As Dewey puts it ‘Habits of thought outlive habit of overt action’  (Goldstein, 1981:58).  Instituting change via a learning organization has an enduring quality that other intervention attempts have failed at.  Organizational learning involves the continuous development of new skills and capabilities, awareness and sensibilities, attitudes and beliefs which eventually manifests themselves in the continuous change in organizational architecture.[1] Accordingly, Senge (1994) points out that in the long run, the  organization’s ability to learn faster than the competitors serves as the only sustainable source of competitive advantage.

2. Learning as Imperative for Innovation

Another significance of organizational learning is its impact on innovation. As Morgan (1986) points out, ‘innovative organizations must be designed as learning systems that place primary emphasis on being open to inquiry and self-criticism… unless an organization is able to change itself to accommodate the ideas it produces and values, it is likely eventually to block its own innovations.” (p. 105)

Companies must institute a questioning attitude

Similarly,  Markides (1998) believes that for strategic innovation to take place, companies must institute a questioning attitude. He believes that strategic innovators who shake up the system and lead the industry, from the established organizations like Kmart, Intel, CNN to the relatively new entrants in the market like The Body Shop and IKEA, are able to overcome barriers to innovation through their willingness to reconceptualize their business.

Double-loop learning overcomes blocks to innovation

The reason for the rare number of strategically innovative companies can be attributed to the failure to engage in double-loop learning. It is more the norm for organizations to detect and rectify errors in reference to established norms and assumptions or their implicit theories of business. However, the organizations that successfully innovate are able to reflect and even change those points of reference themselves. An organization that constantly engages itself in inquiry and self-reflexive behavior with the willingness to change triggered by such organizational learning would be able to overcome the blocks to innovation.[2]

A learning culture that fosters innovation has

• organizational structure that allows the cross-pollination of ideas across functions and levels (e.g. flat structures, holographic structures, and autonomous business units)
• internal variety by encouraging experimentation and taking risks
• reward and recognition systems and socialization process (e.g. managing rituals, symbols and communication) (Fombrum, 1994) that value creativity and allows the free flow of communication and energy.