Learning Organizations Essay

1. 1 Executive summary/ L. O! In times of uncertainty and change, organizations need new and effective managerial tools in order to cope with the rising competitiveness of markets. In this context, the concept of organizational learning is receiving growing attention among both managerial and academic surroundings in the last two decades. Among many possible definitions of a Learning Organization, David A. Garvin, a leading scholar in this field, suggests the following: â€Å"an organization made up of employees skilled at creating, acquiring, and transferring knowledge. These people could help their firms cultivate tolerance, foster open discussion, and think holistically and systemically. Such learning organizations would be able to adapt to the unpredictable more quickly than their competitors could. †. A learning organization is aimed at increasing the flexibility and effectiveness of a company, making it react faster to changes in a competitive environment. This is achieved in cultures who constantly foster knowledge inside their organizations. Although this general idea of organizational learning may appear rather simplistic at first glance, it’s practical integration into day-to-day operations proves to require a more refined, systematic approach: â€Å"Generative learning cannot be sustained in an organization where event thinking predominates. It requires a conceptual framework of â€Å"structural† or systematical thinking, the ability to discover structural causes of behaviorâ€Å". This paper provides a deeper insight into the implementation and performance assessment of learning organizations (L. O. ’s), mainly using the Three Building Blocks Model outlined by Garvin, Edmondson & Gino. To better understand this concept, the work will rely on Xerox as an example to highlight how L. O. ’s can provide competitive advantages to corporations. In the last section, the paper will also breakdown the effect that learning organizations have on major stakeholders (leaders, employees and organization itself). 1. 2. Introduction: Background to Xerox Xerox is a US-based multinational, founded in 1906, which produces and sales printers and photocopiers and provides related services. Throughout it’s history, Xerox has faced several crisis periods which ended up pushing the company to become a Learning Organization. Around 1980, the company was hit hard by the emergence of new japanese players on the market and lost its almost 100% market share. As a response Xerox introduced the â€Å"leadership through quality initiative† with the objective of training every employee in tools for generating ideas and collecting information, solving problems in a systematical way, reaching consensus etc. â€Å"Xerox became a case study — the first American group to win back market share from the Japanese†. More recently, in the year of 2000, with the announcement of Anne M. Mulcahy as CEO of the company, XEROX’s was able to overcome another serious crisis. Mulcahy’s leadership style, which mirrors many of the strategies suggested by the LO literature, managed to turn around this †sinking ship†, which had 19 billion in debt, a falling stock and double-digit negative growth. In 5 years time, Xerox would be profitable again. Ursula Burns has continued Mulcahy’s work, since becoming the new CEO in 2009, even acquiring new companies such as the 2010 $6. 4 bln. takeover of ACS. Xerox continues to stay on the list of companies frequently cited as learning organizations. The 3 Building Blocks of a Learning Organization The concept of the three building blocks of a learning organizations is introduced by David A. Garvin, Amy C. Edmondson, and Francesca Gino as an assessment tool to determine areas where organizations need to improve their learning methodologies. Below we provide a deeper explanation of each of the three building blocks and how Xerox fits each one of them. Building Block 1: XEROX, a supportive learning organization? There are four distinct characteristics of an organization that determine whether it is or not a Supportive Learning Organization. Firstly, how psychologically safe its employees feel. This is common in organizations where employees don’t feel pressured or marginalized when presenting their own ideas even if these go against what the majority of the organization thinks. Similarly, subordinates at this organization are encouraged to disagree with their coworkers and superiors and present new and bold opinions, meaning that this organization is opened to new ideas. In a supportive learning organization, employees also become aware of the different inputs and opinions each member of a team brings to the table and learns how to accommodate and value those differences. Lastly, a supportive learning organization needs to provide its employees with some time for reflexion, when they will to go over the company’s procedures and analyse past performances in order to assess what can be changed and/or improved. Tolerance and diversity at Xerox Xerox’s openness to new ideas can be partly linked to its high diversity of employee backgrounds, which ultimately reinforces the acceptance and inclusion of different solutions, making employees feel more comfortable in taking risks. This diversity has also enabled Ursula Burns, the current CEO, to climb up the ranks of Xerox and become the first female black CEO of a Fortune 500 company. Besides being â€Å"a proof† to other employees that effort at Xerox pays back, Burns herself stresses this idea of a supportive learning organization when she mentions that she â€Å"wants [XEROX’s] 130,000 employees to get over the past, take more initiative, become more fearless and be more frank and impatient with one another to ratchet up performance†. Burns refers to the all Xerox community as the â€Å"XEROX family†- â€Å"When we’re in the family, you don’t have to be as nice as when you’re outside of the family,(†¦ ) I want us to stay civil and kind, but we have to be frank — and the reason we can be frank is because we are all in the same family. † Building Block 2: Does Xerox implement concrete learning processes and practices? Because â€Å"a learning organization is not cultivated effortlessly†, organizational entities must put explicit processes in place to ensure that knowledge is constantly generated and collected inside the organization. The information must then be interpreted and infused into the organization to be always accessible in a way that will support problem-solving tasks and benefit its constant transformational processes. Moreover, this will also help to develop new products or services, as well as closely monitor competitors, clients and technological developments, using benchmarking techniques. Lastly, the company has to invest in training measures for its employees. MAIN Education and problem-solving at Xerox: The Six Sigma Method In the case of Xerox, measures to implement LO practices started as early as 1983 when executive management inaugurated Xerox’s â€Å" leadership through quality initiative†. The initiatives goal was â€Å"improving business processes to create higher levels of customer satisfaction, quality and productivity† by providing workshops to Xerox employees. These workshops were refined in the late 90’s, reorienting around the Six Sigma method, which had previously been successfully applied in other companies. Although these efforts proved successful in improving productivity, they were only limited to a local supply chain level and were not conducted regularly. In 2002 the management of Xerox then decided to implement the Six Sigma strategy across the whole organization, an effort which Xerox is continuing today. This is shown by the fact that the method has become part of the everyday communication process inside the company. The Six Sigma strategy is a tool, which empowers employees to become more efficient and proactive in daily problem-solving situations, for example by using the DMAIC (Define, Measure, Analyze, Improve, Control) approach. Six Sigma also requires the employees to closely monitor market trends and to apply benchmarking appropriately. Xerox particularly emphasizes the fact that they see the efforts to implement the Six Sigma method (see attachment 1) as a long-term project. This idea is aligned with the academic literature on LO’s stating that â€Å"becoming a LO is a long process and small setbacks should be expected†. This is because employees and the management have to â€Å"unlearn† old modes of thinking. Information distribution at Xerox Xerox provides employees with access to a large intranet consisting of e. g. reference knowledge, material on best practices, and answers to frequently asked questions. This helps the stakeholders inside the company to share information. It also supports the efforts to keep employees informed on what the priorities are for the overall company. Building Block 3: Are Xerox leaders reinforcing learning? Leaders in a L. O. promote constant learning by raising difficult questions and listening to the answers and concerns of their employees. While doing so, leaders also communicate openness to these new ideas and take them into consideration in their actions. Additionally, leaders have to encourage employees to invest their time in reflecting on both how to solve current problems and what can be learned from past performance. The ultimate goal is for leaders to motivate employees to question the underlying assumptions of current modes of thinking, and therefore initiate efficiency and innovation inside company processes. Promoting Initiative at Xerox For the past two decades, Xerox has engaged their employees to participate in the Earth Awards Program. The goal of this yearly event is to come up with solutions for saving company resources by increasing its efficiency, therefore making it a â€Å"greener† company. With this challenging program, Xerox motivates their employees to generate new ideas that, for instance, in 2010, resulted in company savings of $10. 2 Million. In that year, thirteen winners were announced, corporate wide and among different teams. This is an example of how leaders take their employees’ input seriously and how the generation of new initiatives at Xerox arises from both top and bottom levels of hierarchies. Encouraging employees to invest their time in reflecting by example Senior management at Xerox demonstrates the behaviors, which they in turn expect from employees. A clear example of this â€Å"policy† was when, in 1993, the executive management put together the Presidential Review process. The objective of this process was to review the overall progress of the company collectively through Presidential Review process in 1993. Interviews were organized with more than 30 senior managers answering questions like â€Å"What has changed? Where are the largest gaps between what was intended and what is currently true? If you were to outline barriers that need to be dealt with, what comes to mind? What would you have done differently? †. After the interviews, 45 seniors got together for one day meeting to identify trouble spots and develop recommendations. Action plan was the result . 3. The Effect on Leaders, â€Å"Followers† and Organizations Becoming a successful learning organization can provide a company with significant competitive advantages in the long-run, as it also can largely benefit its major stakeholders (employees and leaders). However, it also requires some behavioral changes from them. In order to achieve the goal of a L. O. (foster knowledge creation and sharing to gain competitive advantage), it is important that leaders infuse a common goal inside the organization. This implies, that leaders should have an effective communication in delivering the company ethos to their subordinates. Once employees identify with the company and its goal, people on all levels of the company would naturally start thinking and discussing promising new ways to achieve these goals. On the other hand, learning processes require time among other resources, and eventually leaders will have to find efficient ways to maximize the time of their employees. It is crucial to determine a balance between time spent going over problem-solvings tasks and past performance analysis (required for learning processes) with regular work. Additionally, leaders will have to define the line between â€Å"acceptable mistakes†- those that arrive from risk taking attitudes, and â€Å"unacceptable mistakes† – those originated by irresponsibility and lack of accountability. This is not always clear and, therefore, leaders might face some obstacles in implementing a learning culture as their workers’ â€Å"fear of punishment† can result in the limitation of creativity. Probably the most effective tool to boost innovation is to empower workers. But if the empowerment process provides employees the feeling that they are contributing and helping to define the company processes, then a new attitude is also required from them. Employees will have to remember that they are expected to show initiative, propose new ideas and act. And they should not always expect directions to do so. This can be particularly hard for workers who are risk-averse and who need clear instructions about their work role. Learning organizations can bring significant benefits to employees. Being part of the company processes transformation and being aligned with its goals are expected to make employees more motivated and dynamic. In this way, many of the aspects of the L. O. raise the levels of enjoying the work process. The job satisfaction in turn is expected to raise productivity levels. Also, because employees are more exposed to those in higher positions in the company, new career opportunities might arise together with monetary rewards. RISKS FOR COMPANY â€Å"No learning organization is built overnight. Success comes from carefully cultivated attitudes, commitments, and management processes that accrue slowly and steadily. The first step is to foster an environment conducive to learning. Analog Devices, Chaparral Steel, Xerox, GE, and other companies provide enlightened examples. † (http://w3. ualg. pt/~mzacaria/gic/HBR-Building-a-Leaning-Organization. pdf) 2. Organizations should be careful in applying new principles ensuring buy-in from most influential employees and checking progress not to fall into the trap of unfeasable change which could seriously hurt current business (see http://knowledge. wharton. upenn. edu/article. cfm? articleid=268) 4. Final considerations: As illustrated by the above analysis, as well by its overall economic performance in the last 11 years, it has become clear that XEROX has largely succeeded in becoming a LO. Arguably, Xerox has become so successful in it’s LO efforts that this has resulted in providing learning services to other companies through subsidiary spin offs, such as Xerox Learning Services. Concerning the evaluation of the theory proposed by Garvin, Gino and Edmondson, it has to be noted that the building blocks have to be seen as interdependent. Without effective leadership and learning environment, the learning process implementation will likely fail. Therefore, each of the above building blocks needs to be tackled by taylormade strategies, not least because companies do not perform consistently in each department. Similarly, organizations have to pay especial attention to comparing the extent of the learning process with other organizations, since only then you will have a solid benchmarking (in contrast to looking only at individual company performance over time). Attachment 1 ——————————————– [ 1 ]. O’Keeffe, T. 2002. Organizational Learning: a new perspective. Journal of European Industrial Training, 26 (2), pp. 130-141. [ 2 ]. Peter Senge (1990), â€Å"The Fifth Discipline† [ 3 ]. â€Å"Is yours a learning organization? † [ 4 ]. One good source on Xerox crisis times http://knowledge. wharton. upenn. edu/article. cfm? articleid=268 [ 5 ]. Building a L. O. [ 6 ]. http://www. economist. com/node/387740 [ 7 ]. http://www. economist. com/node/387740 [ 8 ]. http://mitleadership. mit. edu/r-mulcahy. php [ 9 ]. The following work will assume that the stance of the management towards encouraging the LO inside Xerox has remained constant. Since Mulcahy had been working with Burns for more than 9 years, Burns is expected to â€Å"put her own stamp on the company in a way that was deferential to the work of Ms. Mulcahy, who remains chairwoman. † See: http://www. nytimes. com/2010/02/21/business/21xerox. html? pagewanted=all&_r=1& [ 10 ]. http://www. freepatentsonline. com/article/SAM-Advanced-Management-Journal/20982068. html [ 11 ]. http://www. businesswire. com/news/home/20041027005036/en/Diversity-Practices-Organization-Recognizes-Xerox-Diversity-Leadership [ 12 ]. Farmer, Paula (August). â€Å"The First African American To Head A Fortune 500 Company, Franklin D. Raines Takes Over Fannie Mae†. The Black Collegian. Retrieved November 7, 2008. [ 13 ]. Bryant, A. (February 20, 2010) Xerox’s New Chief Tries to Redefine Its Culture, The New York Times [ 14 ]. Bryant, A. (February 20, 2010) Xerox’s New Chief Tries to Redefine Its Culture, The New York Times [ 15 ]. Garvin, Edmondson & Gino (2008), p. 4 [ 16 ]. Page 11: http://www. xerox. com/downloads/usa/en/n/nr_SixSigmaForumMag_2004_Aug. pdf It could be argued that these efforts were a spillover-effect from Xerox ground-breaking benchmarking efforts in its production process areas in billing, warehousing, and automated manufacturing. [ 17 ]. Page 13: http://www. xerox. com/downloads/usa/en/n/nr_SixSigmaForumMag_2004_Aug. pdf [ 18 ]. Slide 68:http://www. moyak. com/papers/learning-organization-presentation. pdf [ 19 ]. Easterby-Smith, M. , Crossan, M. , and Nicolini, D. 2000. Organizational learning: debates past, present and future. Journal of Management Studies. 37 (6) pp 783-796. See also Senge’s definition of â€Å"mental models†, which refer to how workers need to time to overcome old modes of thinking: Senge, P. M. 1990. The Fifth Discipline. London: Century Business. [ 20 ]. http://www. xerox. com/downloads/usa/en/n/nr_SixSigmaForumMag_2004_Aug. pdf [ 21 ]. Kaye, L. (November 15, 2010) Xerox’s Green Ideas Save Company $10. 2 Million, http://www. triplepundit. com/ [ 22 ]. Garvin, D. A. (2000), Learning in Action: a guide to putting the learning organization to work, Library of Congress Cataloging-in-Publication Data – p. 105 [ 23 ]. Garvin, D. A. (2000), Learning in Action: a guide to putting the learning organization to work, Library of Congress Cataloging-in-Publication Data – p. 105 [ 24 ]. Emerald Group Publishing Limited. : ImageXerox lean six sigma framework. Figure 3Xerox lean six sigma framework. emeraldinsight. com http://www. emeraldinsight. com/journals. htm? articleid=1628232&show=html.