Tuesday, September 22, 2009

Making An Organization Learn

Suddenly, Learning Organizations are back in the agenda. Or, is it?



Someone reminded me that training budgets were the first to go in recession, and obviously that does not mean the organizations are serious about learning. I do think that it is that straightforward, and current budget cuts may indeed have been prompted by real difficulties in the market place, but it gives out the wrong signal.



The point is, okay, that the organizations NEED to get more serious about learning. Because the world is changing again - from the way business is done, to the buyer-seller composition. New ideas and challenges will emerge now, as it always does in the aftermath of a bruising economic crisis. Deep recessions like this always keep claiming their victims long after they have lost prime time presence, possibly because of the panic button reactions sometimes stop organizations from learning and moving forward.



It will be interesting to study how successful organizations deal with deep recession. We have already got some literature on how the successful organizations dealt with the previous recessions of 1930s and 1970s. We also have some emerging research on the organizational response of the dotcom bust, and we are just about starting to get the perspective on who survived and who didn't. In all recessions, we have stories like Cisco and Sun, two star companies who were both hit, but follows two different paths thereafter. And Sony and Apple, I could have added, but they started at different points during the post-dotcom era. But, while we wait, we know the general strands - some put their head down, do their job and look for opportunities; others hit the panic button and freeze, which never helps.



So, training budget cuts are not necessarily bad - this may just be a realistic response to whatever is happening to the company - but taking the eye off the ball is. And every entrepreneur knows what is what, and when one is cutting the flab and when it is hitting the bone. The difference is fundamental - do you think learning is a core part of the activity or not? It starts there and everything else follows.



May be, there is an even deeper source. I remember asking a business leader, rather casually, why he is in his particular business. He thought it was a dumb question - for making money, of course. I tried to explain to him while making money may be his end objective, my question really was why he chose that particular line of business. I figured, after a few minutes, that he did not have any other purpose and he did not really care what business he is in, as long as it makes money. In cases like this, the business does not have a purpose and solely exist for making money. These are businesses which end up cutting to the bone when times turn bad, freeze and finally collapse during a recession.



However, a large majority of entrepreneurs do indeed have a deeper purpose. For them, playing golf is only incidental and not the objective of the business. My own theory is that there are two kinds of businesses - rent-seeking businesses and profit-seeking businesses - and this kind is less concerned about earning rent by cashing on an opportunity, and focused on earning a profit by creating value. These businesses are usually carried out of recession by the strength of their purpose. Well, partly that, and partly because, recessions are all about the disappearance of economic rent and economic adjustments which discourage rent-seeking behaviour, thereby decimating organizations which were built solely for the purpose of making money.



So, indeed, whether an organization learns or not, and whether it is able to move forward in a recession or freeze, really depends on what the organization is for. I have looked up various definitions of a Learning Organization and find most of espouse a very idealistic notion of how organizations operate. For example:



Mike Pedler et al: An organization which facilitates the learning of all its members and continually transform itself.



Andrew Mayo and Elizabeth Lank: A learning organization harnesses the full brain power, knowledge and experience available to it, in order to evolve continually for the benefit of all its stakeholders.



Nancy Dixon: A learning organization is one which intentionally uses learning processes at the individual, group and system level to continuously transform the organization in a direction that is increasingly satisfying to its stakeholders.



Peter Senge: An organization which is continually expanding its capacity to create its own future.



I have borrowed these definitions from Andrew Forrest's Fifty Ways Towards A Learning Organization. Mr. Forrest added one more: he likened it to the organizational effort to merge the individual's learning initiatives with the organization's learning initiatives, and recommended that the organiztions build up steam to get enough initiatives at both ends to get started.



But, then, I can see that they are all process views and do not start with the centrality of purpose. And, yet, I think this could be quite illuminating, as organizations show their sense of purpose quite clearly. It only takes a walk around the shop floor or a casual chatter around the office water cooler to figure out whether the organization has a sense of purpose or not. My measure of it will be based on what people talk about, are they really excited about their work and think that they are really making a difference to the wider world, or is it more shop talk, trivialities, politics and inward looking behaviour. But my take is that this sense of purpose is central to whether the organization can at all be made to learn and move forward. In a way, the sense of deeper purpose is key whether the organizations will survive economic cycles, which it must invariably face.



So, I shall not lose sleep on whether the training budget is being cut or not, as long as I know that the organization has a deeper, shared purpose. I think the role of the leadership team is to define that purpose and communicate it clearly, and then step back and facilitate the individuals who want to take charge. The ups and downs on the marketplace will invariably happen, and one needs to have the sense of perspectives to deal with it. All one needs when this big freeze comes is a sense of direction, and some level of trust, both of which can not come without a clearly stated purpose.

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