Ideas on Formerly Completing Annual Review With Graphs and Everything Captured During the Year
The Thought in Cursory
As we all know, to stay alee of competitors, companies must constantly enhance the way they do business concern. Only more than functioning-improvement programs fail than succeed. That's because many managers don't realize that sustainable improvement requires a commitment to learning.
Afterward all, how can organizations answer creatively to new challenges (shifts in customer preferences, market downturns) without first discovering something new—then altering the way they operate to reflect new insights? Without learning, companies repeat sometime practices, make cosmetic changes, and produce brusk-lived improvements.
To transform your visitor into a learning arrangement, Garvin recommends mastering v activities:
- Solving problems systematically
- Experimenting with new approaches to work
- Learning from past experience
- Learning from other companies and from customers
- Transferring knowledge throughout your arrangement
Woven into the fabric of your company'southward daily operations, these activities help your system make indelible improvements that interpret directly into measurable gains—including superior quality, improve delivery, and increased marketplace share.
The Thought in Do
Garvin offers these suggestions for mastering five organizational learning practices:
Solving Bug Systematically
Don't try to solve problems by relying on gut instinct or assumptions. Instead, generate hypotheses, gather information to examination your hypotheses, and use statistical tools (such every bit cause-and-result diagrams) to organize data and draw inferences.
Experimenting
Systematically search for and test new knowledge. Apply small experiments to produce incremental gains in cognition. For instance, specialty glass manufacturer Corning experiments continually with diverse raw materials and new formulations to increment yields and provide ameliorate grades of glass.
Employ demonstration projects to produce noesis yous tin use for systemwide changes. General Foods experimented with self-managing teams at its Topeka constitute with the aim of adopting this approach across the company later.
Learning from Past Experience
Review your successes and failures, identify lessons learned, and tape those lessons in accessible forms. Case:
Boeing compared the development processes of its 737 and 747 planes (models that had serious technical issues) to those of its 707 and 727 (2 profitable programs). It then compiled a booklet of lessons learned. Several members of the learning team were later transferred to 2 start-upwardly programs—the 757 and 767. They produced the well-nigh successful, error-complimentary launches in Boeing'southward history.
Learning from Others
Look outside your immediate environment to gain new perspectives. Consider these sources:
- Other companies. Identify all-time-practice organizations (even in other industries), use site visits and interviews to study how they go work done, and generate ideas for improving your own practices.
- Your customers. Run into regularly with customers to get together knowledge about products, competitors, consumers' preferences, and the quality of your service. Also detect customers using your products, to identify problems and generate ideas for improvement.
Transferring Knowledge
New knowledge carries maximum impact when it'southward shared broadly. To transfer knowledge apace and efficiently throughout your arrangement, move experts to unlike parts of the company—across divisions, departments, and facilities—so they can share the wealth. Example:
Fourth dimension Life's CEO shifted the president of the company'southward music sectionalisation (who had orchestrated years of rapid growth and high profits through innovative marketing) to the book division, where profits were flat because of continued reliance on traditional marketing concepts.
Continuous improvement programs are sprouting up all over as organizations strive to better themselves and gain an edge. The topic listing is long and varied, and sometimes information technology seems as though a programme a month is needed just to keep up. Unfortunately, failed programs far outnumber successes, and improvement rates remain distressingly depression. Why? Because most companies have failed to grasp a basic truth. Continuous comeback requires a commitment to learning.
How, after all, tin an organisation better without commencement learning something new? Solving a problem, introducing a product, and reengineering a procedure all require seeing the world in a new light and acting accordingly. In the absence of learning, companies—and individuals—just echo old practices. Alter remains cosmetic, and improvements are either fortuitous or short-lived.
A few farsighted executives—Ray Stata of Analog Devices, Gordon Frontward of Chaparral Steel, Paul Allaire of Xerox—take recognized the link between learning and continuous improvement and have begun to refocus their companies effectually it. Scholars too have jumped on the bandwagon, beating the drum for "learning organizations" and "noesis-creating companies." In quickly changing businesses similar semiconductors and consumer electronics, these ideas are fast taking hold. Yet despite the encouraging signs, the topic in big part remains murky, confused, and difficult to penetrate.
Meaning, Management, and Measurement
Scholars are partly to blame. Their discussions of learning organizations take often been reverential and utopian, filled with virtually mystical terminology. Paradise, they would have you lot believe, is merely around the corner. Peter Senge, who popularized learning organizations in his book The Fifth Discipline, described them as places "where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where commonage aspiration is fix free, and where people are continually learning how to learn together."1 To achieve these ends, Senge suggested the use of 5 "component technologies": systems thinking, personal mastery, mental models, shared vision, and team learning. In a similar spirit, Ikujiro Nonaka characterized knowledge-creating companies as places where "inventing new cognition is not a specialized activeness…it is a style of behaving, indeed, a mode of being, in which everyone is a noesis worker."2 Nonaka suggested that companies employ metaphors and organizational redundancy to focus thinking, encourage dialogue, and brand tacit, instinctively understood ideas explicit.
Sound idyllic? Absolutely. Desirable? Without question. But does it provide a framework for activity? Hardly. The recommendations are far too abstract, and besides many questions remain unanswered. How, for instance, volition managers know when their companies accept become learning organizations? What concrete changes in behavior are required? What policies and programs must be in place? How do you get from hither to there?
Most discussions of learning organizations finesse these issues. Their focus is high philosophy and grand themes, sweeping metaphors rather than the gritty details of practise. Three critical problems are left unresolved; withal each is essential for effective implementation. First is the question of pregnant. We need a plausible, well-grounded definition of learning organizations; it must exist actionable and easy to apply. Second is the question of management. We need clearer guidelines for do, filled with operational advice rather than high aspirations. And third is the question of measurement. Nosotros need amend tools for assessing an organization'southward rate and level of learning to ensure that gains have in fact been made.
Once these "three Ms" are addressed, managers volition have a firmer foundation for launching learning organizations. Without this groundwork, progress is unlikely, and for the simplest of reasons. For learning to become a meaningful corporate goal, information technology must first be understood.
What Is a Learning System?
Surprisingly, a articulate definition of learning has proved to be elusive over the years. Organizational theorists accept studied learning for a long time; the accompanying quotations advise that there is still considerable disagreement (see the insert "Definitions of Organizational Learning"). Most scholars view organizational learning as a process that unfolds over fourth dimension and link it with knowledge acquisition and improved performance. But they differ on other important matters.
Some, for example, believe that behavioral alter is required for learning; others insist that new ways of thinking are plenty. Some cite data processing equally the mechanism through which learning takes identify; others propose shared insights, organizational routines, even retention. And some remember that organizational learning is common, while others believe that flawed, cocky-serving interpretations are the norm.
How can nosotros discern among this cacophony of voices yet build on earlier insights? Every bit a showtime pace, consider the post-obit definition:
A learning organization is an organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights.
This definition begins with a simple truth: new ideas are essential if learning is to take identify. Sometimes they are created de novo, through flashes of insight or creativity; at other times they arrive from outside the organization or are communicated by knowledgeable insiders. Whatever their source, these ideas are the trigger for organizational improvement. But they cannot past themselves create a learning organisation. Without accompanying changes in the mode that piece of work gets done, just the potential for improvement exists.
This is a surprisingly stringent test for it rules out a number of obvious candidates for learning organizations. Many universities neglect to authorize, every bit exercise many consulting firms. Even Full general Motors, despite its contempo efforts to improve performance, is found wanting. All of these organizations have been effective at creating or acquiring new knowledge but notably less successful in applying that knowledge to their own activities. Full quality management, for instance, is now taught at many business schools, notwithstanding the number using information technology to guide their ain determination making is very pocket-sized. Organizational consultants suggest clients on social dynamics and modest-group behavior but are notorious for their own infighting and factionalism. And GM, with a few exceptions (like Saturn and NUMMI), has had piffling success in revamping its manufacturing practices, even though its managers are experts on lean manufacturing, JIT production, and the requirements for improved quality of work life.
Organizations that do pass the definitional test—Honda, Corning, and General Electrical come quickly to listen—have, by dissimilarity, become adept at translating new knowledge into new ways of behaving. These companies actively manage the learning process to ensure that it occurs by design rather than past chance. Distinctive policies and practices are responsible for their success; they form the edifice blocks of learning organizations.
Building Blocks
Learning organizations are skilled at 5 main activities: systematic problem solving, experimentation with new approaches, learning from their own experience and past history, learning from the experiences and best practices of others, and transferring knowledge rapidly and efficiently throughout the organization. Each is accompanied by a distinctive heed-set, tool kit, and pattern of behavior. Many companies practice these activities to some degree. But few are consistently successful considering they rely largely on happenstance and isolated examples. By creating systems and processes that support these activities and integrate them into the fabric of daily operations, companies can manage their learning more than finer.
1. Systematic problem solving
This first activeness rests heavily on the philosophy and methods of the quality movement. Its underlying ideas, now widely accepted, include:
- Relying on the scientific method, rather than guesswork, for diagnosing bug (what Deming calls the "Plan, Do, Check, Human activity" wheel, and others refer to every bit "hypothesis-generating, hypothesis-testing" techniques).
- Insisting on data, rather than assumptions, every bit background for conclusion making (what quality practitioners call "fact-based management").
- Using simple statistical tools (histograms, Pareto charts, correlations, cause-and-effect diagrams) to organize data and draw inferences.
Near grooming programs focus primarily on problem-solving techniques, using exercises and practical examples. These tools are relatively straightforward and easily communicated; the necessary mind-set, notwithstanding, is more difficult to plant. Accuracy and precision are essential for learning. Employees must therefore become more disciplined in their thinking and more than circumspect to details. They must continually ask, "How practise we know that'south true?", recognizing that close enough is not skillful plenty if existent learning is to accept place. They must push beyond obvious symptoms to assess underlying causes, frequently collecting testify when conventional wisdom says information technology is unnecessary. Otherwise, the organization will remain a prisoner of "gut facts" and sloppy reasoning, and learning volition be stifled.
Xerox has mastered this approach on a visitor-wide scale. In 1983, senior managers launched the company's Leadership Through Quality initiative; since and so, all employees have been trained in pocket-size-grouping activities and problem-solving techniques. Today a six-step process is used for virtually all decisions (come across the insert "Xerox's Problem-Solving Process"). Employees are provided with tools in four areas: generating ideas and collecting information (brainstorming, interviewing, surveying); reaching consensus (list reduction, rating forms, weighted voting); analyzing and displaying information (cause-and-effect diagrams, strength-field analysis); and planning actions (flow charts, Gantt charts). They then practice these tools during grooming sessions that last several days. Grooming is presented in "family unit groups," members of the same section or business-unit of measurement team, and the tools are applied to existent problems facing the group. The result of this process has been a common vocabulary and a consequent, companywide arroyo to trouble solving. One time employees have been trained, they are expected to apply the techniques at all meetings, and no topic is off-limits. When a high-level group was formed to review Xerox'due south organizational structure and suggest alternatives, information technology employed the very aforementioned process and tools.3
Xerox's Problem-Solving Procedure
ii. Experimentation
This activity involves the systematic searching for and testing of new knowledge. Using the scientific method is essential, and there are obvious parallels to systematic trouble solving. But unlike problem solving, experimentation is usually motivated past opportunity and expanding horizons, not by current difficulties. It takes 2 primary forms: ongoing programs and ane-of-a-kind sit-in projects.
Ongoing programs normally involve a continuing series of minor experiments, designed to produce incremental gains in knowledge. They are the mainstay of most continuous improvement programs and are especially common on the shop flooring. Corning, for instance, experiments continually with various raw materials and new formulations to increase yields and provide better grades of glass. Allegheny Ludlum, a specialty steelmaker, regularly examines new rolling methods and improved technologies to raise productivity and reduce costs.
Opportunity motivates experimentation. Corning, for example, continually strives to increase yields and provide better grades of glass.
Successful ongoing programs share several characteristics. First, they piece of work hard to ensure a steady flow of new ideas, even if they must be imported from outside the organisation. Chaparral Steel sends its first-line supervisors on sabbaticals around the globe, where they visit academic and industry leaders, develop an understanding of new work practices and technologies, then bring what they've learned dorsum to the company and apply it to daily operations. In large office every bit a consequence of these initiatives, Chaparral is 1 of the v lowest cost steel plants in the world. GE's Bear upon Program originally sent manufacturing managers to Japan to report manufacturing plant innovations, such as quality circles and kanban cards, and so apply them in their own organizations; today Europe is the destination, and productivity improvement practices the target. The plan is one reason GE has recorded productivity gains averaging nigh 5% over the concluding 4 years.
Successful ongoing programs also require an incentive system that favors gamble taking. Employees must experience that the benefits of experimentation exceed the costs; otherwise, they will non participate. This creates a hard challenge for managers, who are trapped betwixt two perilous extremes. They must maintain accountability and control over experiments without stifling creativity by unduly penalizing employees for failures. Allegheny Ludlum has perfected this juggling human activity: it keeps expensive, high-impact experiments off the scorecard used to evaluate managers but requires prior approvals from iv senior vice presidents. The issue has been a history of productivity improvements annually averaging 7% to 8%.
Successful programs require an incentive system that favors chance taking.
Finally, ongoing programs need managers and employees who are trained in the skills required to perform and evaluate experiments. These skills are seldom intuitive and must usually be learned. They cover a broad sweep: statistical methods, like design of experiments, that efficiently compare a big number of alternatives; graphical techniques, like procedure assay, that are essential for redesigning work flows; and creativity techniques, like storyboarding and role playing, that keep novel ideas flowing. The most effective grooming programs are tightly focused and characteristic a small-scale set of techniques tailored to employees' needs. Training in design of experiments, for instance, is useful for manufacturing engineers, while inventiveness techniques are well suited to development groups.
Demonstration projects are usually larger and more circuitous than ongoing experiments. They involve holistic, systemwide changes, introduced at a single site, and are often undertaken with the goal of developing new organizational capabilities. Because these projects represent a abrupt pause from the past, they are unremarkably designed from scratch, using a "clean slate" arroyo. General Foods's Topeka found, one of the get-go high-commitment work systems in this country, was a pioneering sit-in project initiated to introduce the thought of self-managing teams and high levels of worker autonomy; a more recent instance, designed to rethink minor-car development, manufacturing, and sales, is GM'due south Saturn Division.
Demonstration projects share a number of distinctive characteristics:
- They are commonly the first projects to embody principles and approaches that the organization hopes to prefer subsequently a larger scale. For this reason, they are more transitional efforts than endpoints and involve considerable "learning past doing." Mid-class corrections are mutual.
- They implicitly establish policy guidelines and decision rules for later projects. Managers must therefore be sensitive to the precedents they are setting and must ship strong signals if they wait to establish new norms.
- They oftentimes run into severe tests of delivery from employees who wish to meet whether the rules have, in fact, changed.
- They are unremarkably developed past strong multi-functional teams reporting straight to senior management. (For projects targeting employee interest or quality of piece of work life, teams should be multilevel as well.)
- They tend to have only limited affect on the rest of the arrangement if they are non accompanied past explicit strategies for transferring learning.
All of these characteristics appeared in a demonstration projection launched by Copeland Corporation, a highly successful compressor manufacturer, in the mid-1970s. Matt Diggs, and then the new CEO, wanted to transform the company'south approach to manufacturing. Previously, Copeland had machined and assembled all products in a single facility. Costs were high, and quality was marginal. The problem, Diggs felt, was too much complication.
At the outset, Diggs assigned a small-scale, multifunctional team the task of designing a "focused factory" dedicated to a narrow, newly adult product line. The team reported straight to Diggs and took three years to complete its work. Initially, the projection budget was $x one thousand thousand to $12 meg; that figure was repeatedly revised every bit the team found, through experience and with Diggs's prodding, that information technology could achieve dramatic improvements. The final investment, a total of $thirty million, yielded unanticipated breakthroughs in reliability testing, automated tool aligning, and programmable control. All were achieved through learning past doing.
The team fix additional precedents during the plant'south offset-upward and early operations. To dramatize the importance of quality, for example, the quality manager was appointed second-in-command, a significant movement upward. The same reporting relationship was used at all subsequent plants. In improver, Diggs urged the plant manager to ramp up slowly to full production and resist all efforts to proliferate products. These instructions were unusual at Copeland, where the marketing section normally ruled. Both directives were speedily tested; management held firm, and the implications were felt throughout the organization. Manufacturing's stature improved, and the company as a whole recognized its competitive contribution. Ane observer commented, "Marketing had always run the visitor, so they couldn't believe it. The alter was visible at the highest levels, and it went down hard."
Once the first focused factory was running smoothly—it seized 25% of the market in 2 years and held its border in reliability for over a decade—Copeland built 4 more factories in quick succession. Diggs assigned members of the initial project to each mill's blueprint team to ensure that early learnings were non lost; these people later rotated into operating assignments. Today focused factories remain the cornerstone of Copeland's manufacturing strategy and a continuing source of its cost and quality advantages.
Whether they are demonstration projects like Copeland'due south or ongoing programs like Allegheny Ludlum's, all forms of experimentation seek the aforementioned cease: moving from superficial noesis to deep understanding. At its simplest, the distinction is between knowing how things are done and knowing why they occur. Knowing how is fractional knowledge; information technology is rooted in norms of beliefs, standards of practice, and settings of equipment. Knowing why is more than key: it captures underlying cause-and-outcome relationships and accommodates exceptions, adaptations, and unforeseen events. The power to control temperatures and pressures to align grains of silicon and class silicon steel is an case of knowing how; understanding the chemical and physical process that produces the alignment is knowing why.
Further distinctions are possible, as the insert "Stages of Noesis" suggests. Operating noesis can be arrayed in a hierarchy, moving from limited understanding and the ability to make few distinctions to more complete understanding in which all contingencies are predictable and controlled. In this context, experimentation and problem solving foster learning by pushing organizations up the hierarchy, from lower to higher stages of knowledge.
3. Learning from past experience
Companies must review their successes and failures, assess them systematically, and tape the lessons in a form that employees find open and accessible. One expert has called this process the "Santayana Review," citing the famous philosopher George Santayana, who coined the phrase "Those who cannot remember the past are condemned to echo it." Unfortunately, too many managers today are indifferent, fifty-fifty hostile, to the past, and past declining to reverberate on information technology, they let valuable knowledge escape.
A study of more than 150 new products concluded that "the noesis gained from failures [is] frequently instrumental in achieving subsequent successes… In the simplest terms, failure is the ultimate teacher."iv IBM'south 360 figurer series, for example, 1 of the near popular and profitable ever built, was based on the technology of the failed Stretch computer that preceded it. In this example, equally in many others, learning occurred past hazard rather than by careful planning. A few companies, however, have established processes that require their managers to periodically remember nearly the past and learn from their mistakes.
Boeing did and then immediately after its difficulties with the 737 and 747 plane programs. Both planes were introduced with much fanfare and besides with serious problems. To ensure that the problems were not repeated, senior managers deputed a high-level employee group, chosen Project Homework, to compare the development processes of the 737 and 747 with those of the 707 and 727, two of the company's most profitable planes. The group was asked to develop a prepare of "lessons learned" that could be used on future projects. Subsequently working for three years, they produced hundreds of recommendations and an inch-thick booklet. Several members of the team were and so transferred to the 757 and 767 first-ups, and guided past experience, they produced the most successful, fault-free launches in Boeing's history.
Boeing used lessons from earlier model development to help produce the 757 and 767—the most successful, error-free launches in its history.
Other companies have used a similar retrospective arroyo. Like Boeing, Xerox studied its production development process, examining 3 troubled products in an endeavour to understand why the company's new business initiatives failed then often. Arthur D. Little, the consulting visitor, focused on its past successes. Senior direction invited ADL consultants from around the world to a two-24-hour interval "jamboree," featuring booths and presentations documenting a wide range of the company'due south near successful practices, publications, and techniques. British Petroleum went fifty-fifty further and established the post-project appraisal unit to review major investment projects, write upwardly example studies, and derive lessons for planners that were and then incorporated into revisions of the visitor'south planning guidelines. A five-person unit reported to the board of directors and reviewed six projects annually. The bulk of the time was spent in the field interviewing managers.v This type of review is now conducted regularly at the project level.
At the middle of this approach, one expert has observed, "is a mind-set that…enables companies to recognize the value of productive failure as contrasted with unproductive success. A productive failure is one that leads to insight, understanding, and thus an addition to the commonly held wisdom of the organization. An unproductive success occurs when something goes well, merely nobody knows how or why."6 IBM's legendary founder, Thomas Watson, Sr., plain understood the stardom well. Company lore has it that a young director, later losing $10 1000000 in a risky venture, was called into Watson's office. The swain, thoroughly intimidated, began by saying, "I estimate you want my resignation." Watson replied, "You lot can't be serious. Nosotros merely spent $x 1000000 educating yous."
Fortunately, the learning procedure need not exist so expensive. Case studies and postal service-projection reviews similar those of Xerox and British Petroleum can be performed with little cost other than managers' time. Companies can also enlist the help of kinesthesia and students at local colleges or universities; they bring fresh perspectives and view internships and case studies as opportunities to gain experience and increase their own learning. A few companies have established computerized data banks to speed up the learning process. At Paul Revere Life Insurance, management requires all problem-solving teams to complete brusk registration forms describing their proposed projects if they hope to qualify for the visitor's award program. The company and then enters the forms into its computer arrangement and tin can immediately remember a listing of other groups of people who have worked or are working on the topic, forth with a contact person. Relevant experience is then merely a phone telephone call away.
four. Learning from others
Of grade, not all learning comes from reflection and self-analysis. Sometimes the virtually powerful insights come up from looking outside one'due south immediate environs to gain a new perspective. Enlightened managers know that fifty-fifty companies in completely different businesses tin be fertile sources of ideas and catalysts for artistic thinking. At these organizations, enthusiastic borrowing is replacing the "not invented here" syndrome. Milliken calls the procedure SIS, for "Steal Ideas Shamelessly"; the broader term for information technology is benchmarking.
Enthusiastic borrowing is replacing the "non invented hither" syndrome.
According to one expert, "benchmarking is an ongoing investigation and learning feel that ensures that best industry practices are uncovered, analyzed, adopted, and implemented."7 The greatest benefits come from studying practices, the way that work gets done, rather than results, and from involving line managers in the procedure. Almost anything can be benchmarked. Xerox, the concept'due south creator, has practical it to billing, warehousing, and automated manufacturing. Milliken has been even more creative: in an inspired moment, it benchmarked Xerox's arroyo to benchmarking.
Unfortunately, at that place is withal considerable confusion about the requirements for successful benchmarking. Benchmarking is not "industrial tourism," a series of advertisement hoc visits to companies that accept received favorable publicity or won quality awards. Rather, it is a disciplined process that begins with a thorough search to place all-time-practice organizations, continues with careful study of one's own practices and functioning, progresses through systematic site visits and interviews, and concludes with an assay of results, evolution of recommendations, and implementation. While time-consuming, the procedure need not be terribly expensive. AT&T's Benchmarking Group estimates that a moderate-sized projection takes four to vi months and incurs out-of-pocket costs of $20,000 (when personnel costs are included, the figure is three to iv times higher).
Benchmarking is one way of gaining an outside perspective; another, equally fertile source of ideas is customers. Conversations with customers invariably stimulate learning; they are, after all, experts in what they practice. Customers can provide up-to-appointment product information, competitive comparisons, insights into irresolute preferences, and immediate feedback well-nigh service and patterns of use. And companies need these insights at all levels, from the executive suite to the shop flooring. At Motorola, members of the Operating and Policy Committee, including the CEO, run across personally and on a regular footing with customers. At Worthington Steel, all machine operators make periodic, unescorted trips to customers' factories to talk over their needs.
Customers tin can provide competitive comparisons and immediate feedback about service. And companies need these insights at all levels, from the executive suite to the shop floor.
Sometimes customers can't articulate their needs or remember even the almost recent issues they take had with a product or service. If that'south the instance, managers must observe them in activeness. Xerox employs a number of anthropologists at its Palo Alto Research Center to detect users of new document products in their offices. Digital Equipment has developed an interactive process called "contextual inquiry" that is used by software engineers to find users of new technologies as they go well-nigh their work. Milliken has created "kickoff-commitment teams" that accompany the first shipment of all products; team members follow the product through the customer'south production process to see how it is used and then develop ideas for further improvement.
Learning organizations cultivate the fine art of open, attentive listening. Managers must be open to criticism.
Whatsoever the source of outside ideas, learning volition only occur in a receptive surround. Managers tin't be defensive and must be open to criticism or bad news. This is a difficult challenge, but it is essential for success. Companies that approach customers assuming that "nosotros must be right, they have to exist incorrect" or visit other organizations certain that "they tin't teach us anything" seldom learn very much. Learning organizations, by contrast, cultivate the art of open up, attentive listening.
5. Transferring knowledge
For learning to be more than than a local affair, knowledge must spread quickly and efficiently throughout the organization. Ideas carry maximum impact when they are shared broadly rather than held in a few hands. A diverseness of mechanisms spur this process, including written, oral, and visual reports, site visits and tours, personnel rotation programs, pedagogy and preparation programs, and standardization programs. Each has distinctive strengths and weaknesses.
Reports and tours are by far the near pop mediums. Reports serve many purposes: they summarize findings, provide checklists of dos and don'ts, and describe important processes and events. They cover a multitude of topics, from benchmarking studies to accounting conventions to newly discovered marketing techniques. Today written reports are often supplemented by videotapes, which offering greater immediacy and fidelity.
Tours are an equally popular means of transferring knowledge, especially for large, multidivisional organizations with multiple sites. The most effective tours are tailored to different audiences and needs. To introduce its managers to the distinctive manufacturing practices of New United Motor Manufacturing Inc. (NUMMI), its articulation venture with Toyota, General Motors adult a serial of specialized tours. Some were geared to upper and middle managers, while others were aimed at lower ranks. Each tour described the policies, practices, and systems that were most relevant to that level of management.
Despite their popularity, reports and tours are relatively cumbersome means of transferring cognition. The gritty details that prevarication backside complex management concepts are difficult to communicate secondhand. Absorbing facts by reading them or seeing them demonstrated is one thing; experiencing them personally is quite another. As a leading cognitive scientist has observed, "Information technology is very difficult to become knowledgeable in a passive fashion. Actively experiencing something is considerably more than valuable than having information technology described."8 For this reason, personnel rotation programs are one of the most powerful methods of transferring knowledge.
In many organizations, expertise is held locally: in a particularly skilled reckoner technician, mayhap, a savvy global brand director, or a partitioning caput with a track record of successful joint ventures. Those in daily contact with these experts benefit enormously from their skills, merely their field of influence is relatively narrow. Transferring them to different parts of the system helps share the wealth. Transfers may be from partition to segmentation, department to department, or facility to facility; they may involve senior, middle, or start-level managers. A supervisor experienced in but-in-time production, for example, might move to another factory to apply the methods in that location, or a successful sectionalisation manager might transfer to a lagging segmentation to invigorate information technology with already proven ideas. The CEO of Time Life used the latter arroyo when he shifted the president of the company's music sectionalisation, who had orchestrated several years of rapid growth and high profits through innovative marketing, to the presidency of the book division, where profits were flat because of continued reliance on traditional marketing concepts.
Line to staff transfers are another choice. These are most effective when they allow experienced managers to distill what they take learned and diffuse information technology across the company in the form of new standards, policies, or training programs. Consider how PPG used just such a transfer to advance its human being resource practices around the concept of high-commitment work systems. In 1986, PPG constructed a new float-glass plant in Chehalis, Washington; information technology employed a radically new engineering science as well as innovations in human resources management that were adult by the plant manager and his staff. All workers were organized into pocket-size, self-managing teams with responsibility for work assignments, scheduling, problem solving and improvement, and peer review. After several years running the manufactory, the plant managing director was promoted to director of man resources for the entire glass group. Drawing on his experiences at Chehalis, he developed a training program geared toward kickoff-level supervisors that taught the behaviors needed to manage employees in a participative, self-managing environment.
Every bit the PPG example suggests, education and training programs are powerful tools for transferring knowledge. But for maximum effectiveness, they must exist linked explicitly to implementation. All too often, trainers assume that new knowledge will be practical without taking concrete steps to ensure that trainees really follow through. Seldom do trainers provide opportunities for practice, and few programs consciously promote the awarding of their teachings subsequently employees accept returned to their jobs.
Xerox and GTE are exceptions. Equally noted earlier, when Xerox introduced problem-solving techniques to its employees in the 1980s, everyone, from the tiptop to the bottom of the organisation, was taught in minor departmental or divisional groups led past their firsthand superior. After an introduction to concepts and techniques, each grouping applied what they learned to a real-life work trouble. In a like spirit, GTE's Quality: The Competitive Edge program was offered to teams of business-unit of measurement presidents and the managers reporting to them. At the beginning of the 3-day grade, each team received a request from a visitor officer to ready a consummate quality programme for their unit of measurement, based on the course concepts, within 60 days. Discussion periods of two to 3 hours were set aside during the program so that teams could brainstorm working on their plans. Afterward the teams submitted their reports, the company officers studied them, and and then the teams implemented them. This GTE program produced dramatic improvements in quality, including a contempo semifinalist spot in the Baldrige Awards.
GTE proved noesis is more than likely to be transferred effectively when the right incentives are in place.
The GTE example suggests another important guideline: knowledge is more likely to be transferred finer when the right incentives are in place. If employees know that their plans will be evaluated and implemented—in other words, that their learning volition be practical—progress is far more likely. At most companies, the status quo is well entrenched; only if managers and employees see new ideas as being in their own best involvement will they accept them gracefully. AT&T has developed a creative approach that combines strong incentives with data sharing. Called the Chairman'southward Quality Award (CQA), it is an internal quality contest modeled on the Baldrige prize simply with an important twist: awards are given not only for accented operation (using the same one,000-point scoring system as Baldrige) merely also for improvements in scoring from the previous year. Golden, argent, and bronze Improvement Awards are given to units that have improved their scores 200, 150, and 100 points, respectively. These awards provide the incentive for modify. An accompanying Pockets of Excellence program simplifies knowledge transfer. Every year, it identifies every unit of measurement within the company that has scored at least 60% of the possible points in each award category and then publicizes the names of these units using written reports and e-mail.
Measuring Learning
Managers have long known that "if you tin can't measure it, you tin can't manage information technology." This maxim is as true of learning every bit it is of any other corporate objective. Traditionally, the solution has been "learning curves" and "manufacturing progress functions." Both concepts date back to the discovery, during the 1920s and 1930s, that the costs of airframe manufacturing fell predictably with increases in cumulative volume. These increases were viewed equally proxies for greater manufacturing noesis, and well-nigh early studies examined their impact on the costs of directly labor. Afterward studies expanded the focus, looking at total manufacturing costs and the impact of experience in other industries, including shipbuilding, oil refining, and consumer electronics. Typically, learning rates were in the lxxx% to 85% range (pregnant that with a doubling of cumulative production, costs barbarous to fourscore% to 85% of their previous level), although there was broad variation.
Firms similar the Boston Consulting Group raised these ideas to a college level in the 1970s. Drawing on the logic of learning curves, they argued that industries equally a whole faced "experience curves," costs and prices that brutal by predictable amounts as industries grew and their total production increased. With this ascertainment, consultants suggested, came an iron law of competition. To enjoy the benefits of experience, companies would have to speedily increase their production ahead of competitors to lower prices and proceeds market share.
Both learning and experience curves are yet widely used, especially in the aerospace, defense, and electronics industries. Boeing, for instance, has established learning curves for every piece of work station in its assembly found; they assist in monitoring productivity, determining work flows and staffing levels, and setting prices and profit margins on new airplanes. Experience curves are common in semiconductors and consumer electronics, where they are used to forecast manufacture costs and prices.
For companies hoping to become learning organizations, however, these measures are incomplete. They focus on only a single measure out of output (cost or price) and ignore learning that affects other competitive variables, similar quality, delivery, or new product introductions. They suggest merely one possible learning driver (total production volumes) and ignore both the possibility of learning in mature industries, where output is flat, and the possibility that learning might be driven by other sources, such as new technology or the challenge posed by competing products. Perchance most important, they tell us piddling about the sources of learning or the levers of modify.
Another measure has emerged in response to these concerns. Called the "half-life" curve, it was originally developed past Analog Devices, a leading semiconductor manufacturer, as a way of comparison internal improvement rates. A half-life curve measures the fourth dimension it takes to achieve a 50% improvement in a specified performance measure. When represented graphically, the performance measure (defect rates, on-fourth dimension delivery, fourth dimension to market) is plotted on the vertical axis, using a logarithmic scale, and the time scale (days, months, years) is plotted horizontally. Steeper slopes so correspond faster learning (run into the insert "The One-half-Life Bend" for an analogy).
The Half-Life Curve Analog Devices has used half-life curves to compare the performance of its divisions. Here monthly data on customer service are graphed for seven divisions. Division C is the articulate winner: even though it started with a high proportion of belatedly deliveries, its rapid learning rate led eventually to the best accented performance. Divisions D, East, and G have been far less successful, with little or no comeback in on-time service over the period. Source: Ray Stata, "Organizational Learning—The Key to Management Innovation," Sloan Direction Review, Spring 1989, p. 72.
The logic is straightforward. Companies, divisions, or departments that take less fourth dimension to ameliorate must be learning faster than their peers. In the long run, their curt learning cycles will translate into superior functioning. The fifty% target is a measure of convenience; it was derived empirically from studies of successful improvement processes at a broad range of companies. Half-life curves are also flexible. Unlike learning and feel curves, they piece of work on whatever output mensurate, and they are not confined to costs or prices. In add-on, they are easy to operationalize, they provide a simple measuring stick, and they allow for gear up comparison among groups.
Yet even half-life curves have an important weakness: they focus solely on results. Some types of knowledge take years to digest, with few visible changes in performance for long periods. Creating a total quality civilization, for example, or developing new approaches to product development are difficult systemic changes. Because of their long gestation periods, one-half-life curves or any other measures focused solely on results are unlikely to capture any curt-run learning that has occurred. A more comprehensive framework is needed to track progress.
Organizational learning tin can normally be traced through three overlapping stages. The showtime footstep is cognitive. Members of the organization are exposed to new ideas, aggrandize their noesis, and begin to retrieve differently. The second footstep is behavioral. Employees begin to internalize new insights and alter their beliefs. And the tertiary step is performance improvement, with changes in behavior leading to measurable improvements in results: superior quality, better delivery, increased market share, or other tangible gains. Because cognitive and behavioral changes typically precede improvements in performance, a complete learning audit must include all three.
Surveys, questionnaires, and interviews are useful for this purpose. At the cognitive level, they would focus on attitudes and depth of understanding. Have employees truly understood the meaning of self-direction and teamwork, or are the terms still unclear? At PPG, a squad of human resource experts periodically audits every manufacturing institute, including all-encompassing interviews with shop-floor employees, to ensure that the concepts are well understood. Accept new approaches to customer service been fully accustomed? At its 1989 Worldwide Marketing Managers' Meeting, Ford presented participants with a series of hypothetical situations in which customer complaints were in disharmonize with short-term dealer or company profit goals and asked how they would answer. Surveys like these are the first step toward identifying changed attitudes and new ways of thinking.
To appraise behavioral changes, surveys and questionnaires must exist supplemented by direct observation. Here the proof is in the doing, and there is no substitute for seeing employees in action. Domino's Pizza uses "mystery shoppers" to assess managers' commitment to customer service at its individual stores; L.50. Bean places telephone orders with its own operators to assess service levels. Other companies invite exterior consultants to visit, nourish meetings, find employees in action, and then report what they accept learned. In many means, this approach mirrors that of examiners for the Baldrige Award, who make several-24-hour interval site visits to semifinalists to meet whether the companies' deeds match the words on their applications.
Finally, a comprehensive learning audit as well measures performance. Half-life curves or other performance measures are essential for ensuring that cognitive and behavioral changes accept actually produced results. Without them, companies would lack a rationale for investing in learning and the assurance that learning was serving the organization's ends.
Starting time Steps
Learning organizations are not built overnight. Almost successful examples are the products of carefully cultivated attitudes, commitments, and management processes that take accrued slowly and steadily over time. Nonetheless, some changes tin can exist fabricated immediately. Any company that wishes to go a learning organisation can begin past taking a few simple steps.
The first footstep is to foster an environment that is conducive to learning. There must be time for reflection and assay, to think about strategic plans, dissect client needs, assess electric current work systems, and invent new products. Learning is hard when employees are harried or rushed; it tends to be driven out past the pressures of the moment. Only if top direction explicitly frees upward employees' fourth dimension for the purpose does learning occur with any frequency. That time will be doubly productive if employees possess the skills to use it wisely. Training in brainstorming, problem solving, evaluating experiments, and other cadre learning skills is therefore essential.
Another powerful lever is to open up boundaries and stimulate the substitution of ideas. Boundaries inhibit the flow of information; they keep individuals and groups isolated and reinforce preconceptions. Opening upwards boundaries, with conferences, meetings, and project teams, which either cantankerous organizational levels or link the company and its customers and suppliers, ensures a fresh flow of ideas and the hazard to consider competing perspectives. General Electrical CEO Jack Welch considers this to be such a powerful stimulant of change that he has made "boundarylessness" a cornerstone of the company's strategy for the 1990s.
Once managers accept established a more than supportive, open environment, they tin can create learning forums. These are programs or events designed with explicit learning goals in mind, and they tin can take a diverseness of forms: strategic reviews, which examine the changing competitive environment and the visitor's product portfolio, technology, and marketplace positioning; systems audits, which review the wellness of large, cantankerous-functional processes and delivery systems; internal benchmarking reports, which identify and compare best-in-class activities within the organization; study missions, which are dispatched to leading organizations around the world to ameliorate sympathise their operation and distinctive skills; and jamborees or symposiums, which bring together customers, suppliers, exterior experts, or internal groups to share ideas and acquire from one another. Each of these activities fosters learning by requiring employees to wrestle with new knowledge and consider its implications. Each can too be tailored to concern needs. A consumer appurtenances company, for example, might sponsor a study mission to Europe to learn more than virtually distribution methods within the newly unified Common Market, while a high-engineering science company might launch a systems audit to review its new product development procedure.
Together these efforts help to eliminate barriers that impede learning and begin to move learning college on the organizational calendar. They also suggest a subtle shift in focus, abroad from continuous improvement and toward a delivery to learning. Coupled with a amend understanding of the "three Ms," the pregnant, direction, and measurement of learning, this shift provides a solid foundation for building learning organizations.
References
ane. Peter M. Senge, The Fifth Discipline (New York: Doubleday, 1990), p. 1.
two. Ikujiro Nonaka, "The Noesis-Creating Company," Harvard Business Review, Nov–December 1991, p. 97.
3. Robert Howard, "The CEO every bit Organizational Architect: An Interview with Xerox's Paul Allaire," Harvard Business Review, September–October 1992, p. 106.
four. Modesto A. Maidique and Billie Jo Zirger, "The New Product Learning Cycle," Research Policy, Vol. fourteen, No. vi (1985), pp. 299, 309.
v. Frank R. Gulliver, "Postal service-Project Appraisals Pay," Harvard Business Review, March–April 1987, p. 128.
vi. David Nadler, "Fifty-fifty Failures Tin can Exist Productive," New York Times, April 23, 1989, Sec. 3, p. 3.
vii. Robert C. Camp, Benchmarking: The Search for Industry All-time Practices that Lead to Superior Performance (Milwaukee: ASQC Quality Press, 1989), p. 12.
8. Roger Schank, with Peter Childers, The Creative Attitude (New York: Macmillan, 1988), p. 9.
9. Ramchandran Jaikumar and Roger Bohn, "The Development of Intelligent Systems for Industrial Use: A Conceptual Framework," Research on Technological Innovation, Management and Policy, Vol. 3 (1986), pp. 182–188.
A version of this article appeared in the July–Baronial 1993 effect of Harvard Business organization Review.
Source: https://hbr.org/1993/07/building-a-learning-organization
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