Learning organisations – learn to be proactive

How to operationalise learning organisations in practice? How does a traditional organisation transform into a learning organisation?

In1998 Proctor and Gamble (P&G) launched Organisation 2005 (O 2005), its most ambitious corporate transformation ever in spite of making profits in 1997. Organisation 2005 began with a simple question: "Are we achieving all that we should be, given the calibre of our organisation?" The answer was clearly "No!" P&G's sales growth over the past few years has averaged only about 4% - against their targeted goal. This prompted them to examine the reasons for their poor performance.

A study, chartered by P&G's senior leaders focused on global trends external to P&G, P&G's internal strengths and improvement areas. Several benchmarking and learning measures including visits to other companies, educational and research institutes as well as interviews with P&G employees at all levels. Company’s senior executives visited other global companies - such as Hewlett Packard, General Electric, Coca-Cola and 3M - to understand how they operate and how they enable their employees to perform at their best. Thus they embarked on the project of converting their organisation into a LEARNING ORGANISATION (stretching Innovation-www.iiml.ac.in).

The change to learning organisation has impacted almost all of its 100,000 employees. In keeping with the changing business paradigm P&G shifted the responsibility of managing brands globally to a newly set up business unit.  Overall, they expecting the Organisation 2005 programme to increase long-term sales by 6-8% and accelerate core net earnings per share growth by 13-15% in the next five years. They also expect to generate annual after-tax earnings of approximately $900 million by Fiscal 2004. (Www.P&G.com). They were able to achieve an after tax savings earning of $385 millions in 1999 (www.equitymaster.com) 

Learning organisations are organisations that learn from the external stimuli and alter their internal framework to suit the opportunities available. They re-evaluate their goals and at times even change their work culture and organisational structure to avail opportunities. There are two stages of evolution in learning organisations.                    
The first being the single loop or adaptive learning organisations, where the organisations assimilate new techniques to achieve their goals effectively and efficiently. The second being the double loop or generative learning organisations where the organisations re-evaluate their goals and objectives to suit the external opportunities. This type of learning essentially facilitates a change in the organisational culture.

Adaptive learning organisation is the first stage in a learning organisation. This effects the organisation’s basic assumptions, cultural values and organisational structure. In generative learning organisations a total reframing of the organisation is carried on. It involves creativity and innovation. It is being proactive and not reactive. 

How do these organisations evolve? Change in an organisation is triggered by the presence of creative tension, which arises due to the discrepancy between reality and vision results in continuous questioning and challenging of the status quo of the organisation. It acts as a motivator of change. It forces the organisation to embark on a culture change. It requires teamwork, empowerment and empathy. The management should provide a proper reward system, which recognises a shared vision, a holistic view and keeps all windows open, thus facilitating the evolution of a learning organisation. This approach also requires a rethinking about the organisation’s leadership styles. 

There are different categories of learning organisations: 

• The knowing organisation is the oldest model. They are successful when the markets are mature and static.
• The understanding and thinking organisations are mid range learning organisations. They change within, their cultural values and organisations structures limits.
• The learning organisations understand change is a part of their culture.  They are harbingers of change within their industry.

This helps them gain an edge over others, as they are ready for action while others are still trying to adjust. A proactive organisation is the early bird that catches the worm first. The opposition to change from within the organisation is also minimal because it is a part of the culture and the employees internalise it.

Related reading: “The characteristics techniques and measures of learning organisations” in Going beyond total quality by Michael J Rubach and Paul Marsnik.