1. Summarize the following in an in-depth reflection:
2. What are the five characteristics of Organization according to the following?
3. Why are they important?
4. What is essential to learn from these five characteristics of organization if you are a manager?
5. What is essential to learn from these five characteristics of organization if your are an employee?
6. What are some advantages to using the fiver characteristics of organization?
7. What are some disadvantages to using the fiver characteristics of organization?

In his classic book The Fifth Discipline, Peter Senge makes a compelling case that an organization's survival is linked to its ability to learn and adapt. He describes a Learning Organization as one that can develop not only new capabilities but also undergo a fundamental mindset transformation.126 To stay competitive, organizations must continuously innovate. The responsibility of any organization desirous of change and innovation in a rapidly changing environment must be for its leaders to make it a priority to build and maintain a learning culture that engages employees in learning activities and that enables them to master new knowledge, skills, and abilities.

In this section, we examine the link between learning and high-performing organizations, policies and practices of Learning Organizations, and senior leadership's role in fostering a Learning Organization Environment.

The Link Between Learning and High-Performing Organizations

A Learning Organization is defined as one that is skilled at creating, acquiring, and transferring knowledge that modifies behavior and leads to the achievement of exceptional results/performance.127Without accompanying change in behavior brought about by learning something new, only the potential for improvement exists.

Learning Organization one that is skilled at creating, acquiring, and transferring knowledge that modifies behavior and leads to the achievement of exceptional results/performance

Returning to the definition of a high-performing organization as "one that consistently achieves financial and nonfinancial results that are exceptionally better than those of its competitors over a sustained period of time by being disciplined and focused," it becomes clear that the two concepts (learning and high-performing organizations) are intertwined. Learning creates knowledge, knowledge influences behavior modification, and behavior influences outcomes (actions). Behavior turns the potential for improvement to actual results.

The Learning Organization culture describes a work environment where five principles hold true: (1) work patterns, structures, and routines are open to continuous adaptation and improvement; (2) everyone engages in continuous learning; (3) the culture is supportive of experimentation, creativity, and innovation; (4) knowledge creation and application is an imperative; and (5) decision making is informed by objective facts and analysis.

Earlier, we said the HPOs are also governed by five principles: (1) results oriented, (2) operational excellence, (3) accountability, (4) sustained engagement/motivation, and (5) commitment to continuous improvement and innovation.

The Learning Organization is driven to learn and acquire new knowledge while the HPO is driven by the need to consistently achieve extraordinary results (outputs). Continuous improvement requires a commitment to learning and continuous learning enables sustained performance. An organization cannot improve without first learning something new. Activities such as solving a problem, introducing a new product, and reengineering a process all require seeing the world in a new light and acting accordingly. In the absence of learning, companiesand individualssimply repeat old practices.128

Policies and Practices of Learning Organizations

Learning Organizations share five salient characteristics: (1) experiential learning, (2) a supportive work environment, (3) knowledge sharing, (4) multiple sources of learning, and (5) systemic learning. Many organizations may publicly express these features, but few are actually known for making learning a way of life because they rely largely on chance and isolated examples of learning. By creating systems and processes that support these features and integrate them into the fabric of daily operations, companies can manage their learning more effectively.

Experiential Learning

In the past, organizations generally viewed learning as formal training programs that took place during specified periods of the year. However, many now recognize that learning should be an ongoing activity for every employee. Each assignment, job responsibility, temporary or permanent project, and other daily tasks are opportunities for expansive learning. Learning creates knowledge and knowledge improves performance and opens up other opportunities for more learning.129

Supportive Environment for Learning

Leaders, especially those in top positions, must create the type of environment that supports and nurtures collective learning (also known as organizational learning). Only through learning do members acquire new knowledge and develop capabilities that result in new products/services. Organizational knowledge has been referred to as intellectual or human capital and is seen as a powerful asset for sustaining one's competitive advantage in today's volatile marketplace. Human capital is among key organizational resources that are hard to imitate; therefore, maintaining and developing it is crucial for organizations to stay competitive.130

High Value in Sharing Knowledge

Superior performance is achieved when newly acquired knowledge is disseminated and integrated with existing knowledge and applied to solve problems. The tendency by some to hide new knowledge from coworkers is counterproductive and creates other problems. The findings of one study revealed that when employees hide knowledge, they trigger a reciprocal distrust loop in which coworkers are unwilling to share knowledge with them and everyone suffers.131 Organizations must invest in human capital development approaches that lead to knowledge creation and application.

Multiple Sources of Learning

Organizational learning can occur from interactions that take place internally or externally. Externally, an organization can learn from its customers, suppliers, competitors, industry and academic publications, business partners, and consultants. Internally, organizations can learn from their employees. Every employee, especially those who work directly with customers, is a great source of new ideas.132

Learning Is Systemic

A Learning Organization culture recognizes that learning should be systemicflow forward (from those at the bottom to the top) and flow backward (from the top to those at the bottom). And that learning is a multilevel, organization-wide process. The most successful Learning Organizations compound their learning advantage by encouraging employees at all levels to collect and share information across boundaries rather than hoarding it.133 The infrastructure for these types of exchanges are communication and information hubs that facilitate the flow and exchange of information.

Exhibit 12.4 Fostering a Learning Organization Environment

Encourage creative thinking. Creative thinking can occur at the individual, group, and organizational level. At the individual level, leaders can enhance learning by encouraging members to "think outside the box"in other words, consider possibilities that do not already exist. Rather than responding to known challenges, employees are encouraged to compose the future.

Compose a climate of risk taking and tolerance for failure. Some of the most important inventions or scientific breakthroughs resulted from investigating failed outcomes. Unfortunately, in many organizations, when experiments or full-scale ventures fail, the tendency is to immediately abandon the activity to save face or avoid negative consequences. This is often the wrong approach, because more learning takes place from things that go wrong than from things that go right. In Learning Organizations, there is acknowledgement that people learn more from their mistakes than successes. Thus, failure does not draw the same negative reactions like in other organizations.

Provide incentives for learning and innovation. The use of incentives and rewards is a powerful tool that leaders can employ to encourage learning and innovation. Organizations are often criticized for proclaiming themselves as champions of learning and innovation whilenot being able to provide matching incentives. Employees who upgrade their skills package through continuous learning have better employment prospects than those who stick with their current knowledge base.

Build confidence in followers' capacity to learn and adapt. Providing opportunities for employees to solve problems will increase their confidence and pride in the process especially when their successes are rewarded and celebrated. With each celebrated success comes greater confidence in dealing with new challenges. Over time, a habit of creativity and resulting innovation is institutionalized and becomes a way of life.

Encourage systems thinking. To enhance broad-based learning, leaders encourage members to see the organization as a system in which everybody's work affects the work of everybody else. The emphasis on the whole system eliminates boundaries both within the organization and with other partners, which allows for collaboration and continuous learning. Benchmarking of best practices is encouraged. Benchmarking is a process that allows an organization to adopt the best practices of others. An organization striving for excellence will even improve on the best practices of competitors and launch innovations ahead of competitors.

Institute mechanisms for channeling and nurturing creative ideas for innovation. The birth of a new idea begins with the individual and spreads out. Knowledge that is shared has a multiplying or cumulative effect. Ideas generated within or outside an organization may become the source of new products or innovations. Venture teams, task forces, information systems networks, seminars, and workshops are mechanisms that can be used to diffuse knowledge and to channel creative ideas to appropriate locations for evaluation and application.135

Create a shared vision for learning. Creating a shared vision enhances learning as organization members develop a common purpose and commitment to make learning an ongoing part of the organization. If employees all believe the organization is headed toward greatness, they will be motivated to be part of it by learning and contributing their best ideas and solutions.

Broaden employees' frame of reference. A person's frame of reference determines how they see the world. The ways we gather, analyze, and interpret informationand how we make decisions based on such informationare affected by our personal frames of reference. A frame of reference influences people's assumptions, and those assumptions, consciously or unconsciously, affect how they interpret events. To enhance employees' ability to learn, it is important for leaders to broaden the lens through which employees see the organization and the world around them. Exposing employees to different experiences and practices outside of their normal environment is one way to broaden their frame of reference. A manufacturing business, for example, may take its employees to observe how a NASCAR pit crew functions during races. Or, a retail chain may take its staff to Las Vegas to observe how casino and hotel staff perform their cleaning and customer service jobs.