Developing a flexible, learning

organisation

Some strategic thoughts and some practical advice

29th June 2015

© Re-Formation Associates Ltd 2000-15 all rights reserved

Purpose

• Stimulate thought and discussion about:

– How flexible/ agile is your organisation

– The benefits of creating a flexible/ learning organisation

• Provide you with a simple method to audit your flexibility

and learning capability

• Provide you with some ideas that you can take away to

create your own road-map for change.

Why What How

Why?

Innovation

LearningFlexibility

Flexibility

1. Temporal – the rate at which an organisation can adapt to environmental

changes.

2. Range – the degree to which an organisation is able to respond to both

foreseen and unforeseen environmental change.

3. Intention – the degree to which an organisation's stance towards flexibility is

reactive/defensive or proactive/offensive.

4. Focus – whether the flexibility applies to factors internal to the organisation

(e.g. human resource policies) and/or external factors (e.g. alliances). – Golden and Powell (2000)

“Flexibility is treated as the capacity to respond to changing environmental conditions…such flexibility is a necessary condition for

enhancing, or even just maintaining, organisational performance. Hence, the importance of flexibility is commonly cited in association

with concepts such as “competitive advantage” and “innovation”.”Dunford R et al (2013) "“Flexibility” as the rationale for organizational change: a discourse perspective“

Journal of Organizational Change Management, Vol. 26

“…organizations where people continually

expand their capacity to create the results

they truly desire, where new and expansive

patterns of thinking are nurtured, where

collective aspiration is set free, and where

people are continually learning to see the

whole together”.Senge, P (1990) The Fifth Discipline

Learning

“The ability to learn faster than your

competitors may be the only sustainable

source of competitive advantage.”

Slater and Narver, Journal of Marketing July, 1995

Learning

“Recent research suggests that success rates could improve if

firms incorporated organisational unlearning into the management

of their innovation processes” Becker, 2008, 2010

“The lack of an organisation-wide commitment to unlearning has

been established as a clear competitive weakness of many firms” Akgün et al.,2006, 2007; Hedberg, 1981

Why?

Innovation

LearningFlexibility

Creative culture

Why culture is key

• “There is no statistically significant relationship between financial

performance and innovation spending”. 1

– Apple (ranked the most innovative company) and P&G (8th) spend less

than 3% of sales on R&D

However………

• “Companies with both highly aligned cultures and highly aligned

innovation strategies have 30% higher enterprise value growth and

17% higher profit growth than companies with low degrees of

alignment”. The two most important cultural attributes are;

– Strong identification with the customer and an overall orientation towards

the customer experience

1. The Global Innovation 1,000 PWC/ Booz & Co Issue 65 Winter 2011

http://www.strategyand.pwc.com/innovation1000

http://www.boozallen.com/consulting/strategic-innovation

2. Payne, A & Frow, P “The role of multi-channel integration in Customer Relationship Management” Industrial Marketing Management 33 (2004) p 529

“The provision of a ‘seamless and consistent’ customer experience at every juncture will engender

trust, which in turn will reinforce the relationship” 2

Why culture is key

• “There is no statistically significant relationship between financial

performance and innovation spending”. 1

– Apple (ranked the most innovative company) and P&G (8th) spend less

than 3% of sales on R&D

However………

• “Companies with both highly aligned cultures and highly aligned

innovation strategies have 30% higher enterprise value growth and

17% higher profit growth than companies with low degrees of

alignment”. The two most important cultural attributes are;

– Strong identification with the customer and an overall orientation towards

the customer experience

– Passion for and pride in the products and services offered 1

1. The Global Innovation 1,000 PWC/ Booz & Co Issue 65 Winter 2011

http://www.strategyand.pwc.com/innovation1000

http://www.boozallen.com/consulting/strategic-innovation

McKinsey

Structure

What

• The removal of road blocks

– Perceptual, Cultural,

Environmental, Emotional,

Intellectual

• The office space

– Open plan

– Break out areas

– Glass or solid?

How

• Re-draw the org chart

Empowered

employees

Supportive

SMT

The role of structure

Co-creation

not

Competition

Structure

What

• The removal of road blocks

– Perceptual, Cultural,

Environmental, Emotional,

Intellectual

• The office space

– Open plan

– Break out areas

– Glass or solid?

How

• Re-draw the org chart

• Move to project focus from

functional focus

• Mix up the departments

• When the strategy changes,

change the structure to fit

• Does the structure smooth the

customer journey or get in the

way?

Win Deliver Bill Retain

Systems and processes

What

• The removal of road blocks

– Perceptual, Cultural,

Environmental, Emotional,

Intellectual

• Combined with organisational

initiatives that enhance:

– Closeness to customers

– Cross-functional communication

– Multi-functional teamwork

• The removal of conflict

– Task and Process

• Right first time, every time

• Ensure information flow is

moving fast enough, in the

right direction with right content

How

• Deploy Yammer

• Deploy Padlet

• Deploy Dropbox

• Deploy Slideshare

• Get customers to address away-

days

• Map the customer journey looking

for “moments of truth”

• Introduce TQM

• Engage customers in NPD

• Actively seek out and manage

tacit and explicit knowledge

• Turn knowledge into intelligence

Hooley et al, 2012 pp 347-348 Isaksen & Ekval, 2007 Mumford et al, 2002 Gibson, V. and Luck, R. 2006

Win Deliver Bill Retain

Customer intelligence that is only listened to and acted upon by

a flexible, learning organisation

Systems and processes

What

• The removal of road blocks

– Perceptual, Cultural,

Environmental, Emotional,

Intellectual

• Combined with organisational

initiatives that enhance:

– Closeness to customers

– Cross-functional communication

– Multi-functional teamwork

• The removal of conflict

– Task and Process

• Right first time, every time

• Ensure information flow is

moving fast enough, in the

right direction with right content

How• Deploy Yammer

• Deploy Padlet

• Deploy dropbox

• Deploy slideshare

• Get customers to address away-days

• Map the customer journey looking for “moments of

truth”

• Introduce TQM

• Engage customers in NPD

• Actively seek out and manage tacit and explicit

knowledge

• Turn knowledge into intelligence

• TNA relevant to future objectives

• Map the flow of information in and

out/ up and down – is it helping?

• Activate environmental scanning

• What’s on the agenda?

– Communication

– Reflection and improvement

Hooley et al, 2012 pp 347-348 Isaksen & Ekval, 2007 Mumford et al, 2002 Gibson, V. and Luck, R. 2006

Action

What did we do?

Outcome

What impact did it have?

Interpretation

Why did it have that impact?

Change

What could we do differently?

Bain & Co (Rob Markey and Fred Reicheld) Loyalty Insights “The Keys to Effective Learning”

How we

learn as:

Individuals

Team

Organisation

Staff and skillsWhat

• The removal of relationship

conflict

• Creation of a positive

organisational culture based

on:

– Challenge/ involvement

– Freedom

– Trust/ openness

– Idea time

– Playfulness/ humour

– Minimised conflict

– Idea support

– Debate

How

• Give up the right to be right

• Belbin team roles

• Training in double /triple loop thinking

• Set challenging tasks then support

• Get rid of job titles

• Balance enquiry/ advocacy

• Fabulous failures

• Engage staff in developing shared

vision and values

• Support for self development (CQ)

• Employment policies

– Check hiring and promotion decisions –

more PLU?

– “Flexible working”

– Use of temps/ contractors/ interims/

consultants

– Reward mechanisms

– Job rotation

– Empowerment

Isaksen & Ekval, 2007 and Mumford et al, 2002 and Brence, 2010 and Schein, E 2010

CQ: Cultural Intelligence

IQ EQ CQ

Middleton, J Cultural Intelligence. Common Purpose 2014

Prerequisites of a leader with CQ• A deep interest in other people

• A determination to understand why s/he feels so superior or inferior at

different times, in different situations

• Stamina and resilience to undertake the journey • (p.s. there is no end destination)

• Willingness to stand up to cultural intolerance

No-one said it would be easy!

© Re-Formation Associates Ltd 2000-15 all rights reserved

Measurement

Predictability

Routine

Repeatability

Formality

Safer?

Values

Unpredictability

Highly variable

Ad hoc

Informality

Riskier?

Discussion

Thank you

E: malcolm@reformationassociates.com

M: +44 (0)7767 754022

Resources and extra slides with references

• http://www.nao.org.uk/wp-content/uploads/2009/02/n0809129_Literature_review.pdf

• http://www.scie.org.uk/publications/learningorgs/know/know2.asp

• http://www.flexibiliteitsaudit.nl/downloads/theorie/LRP%20Building%20Flexible%20Organisations

%20for%20Fastmoving%20Markets.pdf

• http://agile.org.uk/what-is-agile-working/

• http://www.ikmagazine.com/xq/asp/sid.0/articleid.3FD08B70-6013-465C-A84C-

CB04C6F2776D/eTitle.Building_a_corporate_KM_community/qx/display.htm

• http://www.amazon.co.uk/Harvard-Business-Review-Knowledge-

Management/dp/0875848818#reader_0875848818

• http://www.innovation-portal.info/

• http://www.mckinsey.com/insights/operations/bringing_out_the_best_in_people

• http://www.bain.com/publications/articles/the-journey-north-business-standard.aspx

• http://assets.cambridge.org/97805215/37179/frontmatter/9780521537179_frontmatter.pdf

Benchmarking your own organisation’s learning ability

Clarity of mission and vision• The degree to which employees have a clear understanding of vision/mission

of the organisation and understand how they can contribute to its success

and achievement.

Leadership• The role of leaders in the organisation with respect to helping employees

learn and elicit behaviours that are consistent with an experimenting and

changing culture.

Experimentation• The degree of freedom employees enjoy in the pursuit of new ways of

getting the job done and freedom to take risks.

Transfer of knowledge• The systems that enable employees to learn from others, from past failures

and from other organisations.

Teamwork and group problem-solving• The degree of teamwork possible in the organisation to solve problems and

generate new and innovative ideas.

Benchmarking the learning capability of organizations Goh, S and Richards, G European Management Journal Vo115 No 5 October 1997

Clarity of Purpose and Mission

1. There is widespread support and acceptance of the organization's mission statement.

2. I do not understand how the mission of the organization is to be achieved (r).

3. The organization's mission statement identifies values to which all employees must conform.

4. We have opportunities for self assessment with respect to goal attainment.

Leadership Commitment and Empowerment

5. Senior managers in this organization resist change and are afraid of new ideas (r).

6. Senior managers and employees in this organization share a common vision of what our work should accomplish.

7. Managers in this organization can accept criticism without becoming overly defensive.

8. Managers in this organization often provide useful feedback that helps to identify potential problems and opportunities.

9. Managers in this organization frequently involve employees in important decisions

Experimentation

10. I can often bring new ideas into the organization.

I1. From my experience, people who are new in this organization are encouraged to question the way things are done.

12. Managers in this organization encourage team members to experiment in order to improve work processes.

13. Innovative ideas that work are often rewarded by management.

I4. In my experience, new ideas from employees are not treated seriously by management (r).

Transfer of Knowledge

15. I often have an opportunity to talk to other staff about successful programs or work activities in order to understand why

they succeed.

16. Failures are seldom constructively discussed in our organization (r).

17. New work processes that may be useful to the organization as a whole are usually shared with all employees.

18. We have a system that allows us to learn successful practices from other organizations.

Teamwork and Group-Problem Solving

I9. Current organizational practice encourages employees to solve problems together before discussing them with a

manager.

20. We cannot usually form informal groups to solve organizational problems (r).

21. Most problem solving groups in this organization feature employees from a variety of functional areas.

Use a Likert scale and remember to reverse the scoring on the questions marked (r)

Benchmarking the learning capability of organizations Goh, S and Richards, G European Management Journal Vo115 No 5 October 1997

Focus The concept of organisational learning Practices

Individual

learning

“Organisational learning occurs when individuals within an

organisation experience a problematic situation and inquire

into it on the organisational behalf” (Argyris & Schon, 1996 p.

16)

Staff training & development

Process or

system

Organisational learning is the process whereby organisations

understand and manage their experiences (Glynn et al 1992)Enhancement of information processing

and problem solving capability

Culture or

metaphor

“A learning organisation should be viewed as a metaphor

rather than a distinct type of structure, whose employees learn

conscious communal processes for continually generating,

retaining and leveraging individual and collective learning to

improve performance of the organisational system in ways

important to all stakeholders and by monitoring and improving

performance” (Drew & Smith, 1995)

Creation and maintenance of learning

culture: collaborative team working,

employee empowerment and

involvement, etc.

Knowledge

management

Organisational learning involves knowledge acquisition,

dissemination, refinement, creation and implementation: the

ability to acquire diverse information and to share common

understanding so that this knowledge can be exploited (Fiol,

1994)

Facilitation of interaction and

strengthening of knowledge base

Continuous

improvement

“A learning organisation should consciously and intentionally

devote to the facilitation of individual learning in order to

continuously transform the entire organisation and its context

(Pedler et al 1991)

The adoption of TQM practices

Innovation and

creativity

In the hyperdynamic business context, organisation learning is

the process by which the organisation constantly questions

existing product, process and system, identify strategic

position, apply various modes of learning, and achieve

sustained competitive advantage

Facilitation of triple-loop learning and

knowledge creation; focus on creative

quality and value innovation

Summary of organisational learning concepts and practices

A Review of the Concept of Organisational Learning

Catherine L Wang & Pervaiz K Ahmed

Working Paper Series 2002

• Avoiding “dualism” and the “quick-fix”

• Seeing conflict as providing opportunities for learning

• Transforming “industrial relations” into “learning relations”

• Developmental work and learning – prerequisites for organisational learning

• high degree of task complexity – variety and control regarding the

“actions” being undertaken;

• high degree of task-relevant knowledge required – offering possibilities

for personal development;

• opportunities for feedback, evaluation and reflection on work undertaken

that requires deliberation and choice;

• possibilities for employee participation in shaping the design of the work

environment and bottom-up collective learning, as distinct from more

formalistic top-down and standardised approaches;

• formal participation in problem handling and developmental activities.

• Importance of a supportive learning environment

• Informal learning

• Who leads the learning organisation?

• Balancing the needs of the company with wider societal needs

Barry Nyhan Peter Cressey Massimo Tomassini Michael Kelleher Rob Poell, (2004),

"European perspectives on the learning organisation", Journal of European Industrial Training, Vol. 28 Iss 1 pp. 67 - 92

Key principles to ensure that organisational

learning can take place

10 Pre-requisites for a learning culture

1. Top management’s commitment

2. Aligning learning culture to business needs

3. Setting clear objectives

4. Personalising learning

5. Create the right environment for learning

6. Developing contract for learning

7. Removing barriers in learning

8. Building learning culture

9. Encourage experimental mindset

10.Listen to the feedback

Senge, P; The Fifth Discipline: The art and practice of the learning organization from 1990 (new edition 2006).

Schein’s 10 dimensions of the

learning culture

1. Proactivity

2. Commitment to learning to learn

3. Positive assumptions about human nature (Theory Y)

4. Belief that environment can be managed

5. Commitment to truth through pragmatism and inquiry

6. Positive orientation toward the future

7. Commitment to full an open task-relevant communication

8. Commitment to cultural diversity

9. Commitment to system thinking

10. Belief that cultural analysis is a valid set of lenses for understanding

and improving the world

10 Steps to a learning organization

1. Assess your learning culture

2. Promote the positive

3. Make the workplace safe for thinking

4. Reward risk-taking

5. Help people to become resources for

each other

6. Put learning power to work

7. Map out the vision

8. Bring the vision to life

9. Connect the systems

10.Get the show on the road

Kline, P and Saunders, B 2010

Barry Nyhan Peter Cressey Massimo Tomassini Michael Kelleher Rob Poell, (2004),"European

perspectives on the learning organisation", Journal of European Industrial Training, Vol. 28 Iss 1 pp. 67 - 92

Category Ideal component of a flexible firm

Internal flexibility factors

Structure Flat organisational structure

Access to right information at right time

Management Setting of clear vision and goals

Rapid decision making and execution (few decision-makers)

Empowerment of employees

Accountability

Management attitude receptive to change

Flexible working

Culture A high performance culture

A positive atmosphere

Continual process improvements via organisational learning

External flexibility factors

Technology Introduction of new ITC technology

Introduction of other forms of new technology

Product Introduction of new products / services/ positions /business models

Market Focus on customer needs and relationship management

Constantly scanning the external environment

Attempt to conquer new customer groups

Adapted from:

Gjerding et al (1997) cited in Casey, B, Keep, E, Mayhew, K (1999), Flexibility, quality and competitiveness, National Institute Economic Review

Economist Intelligence Unit (2009) “Organisational Agility: How Business can survive and thrive in turbulent times.”

Denison, D. R (1990) Corporate culture and organizational effectiveness.