Organizational Learning: The Complete Guide for Businesses
"The theme going forward is just volatility in everything."
Those are rather dire words from a roundtable of CEOs, for anything -- from describing your day, your spring cleaning, your study sessions, to your company. Volatility epitomizes instability, and those that are unwilling to employ organizational learning are swallowed up by it.
This is true for your company. The scourge of the 2020 Covid-19 pandemic, and the ravages that it wrought upon world economies, only quickened this volatile trend that the technology sector was hastening upon businesses.
And now, more than ever, customers are gaining control of the market, forcing a dramatic shift from how companies operated in the past.
But there's a solution. Adaption, or organizational learning, is the one way that you can make sure that your company is set up for success, in 2022 and beyond.
So, let's dive into how organizational learning works, why it is so vital, and how you can apply it to your business model.
What Is Organizational Learning Theory?
Organization learning is a process that can be painted with broad strokes across every industry on the planet, from education to manufacturing, to marketing. It is the ability of a group, or organization, to craft, keep, and transfer knowledge within their group. This comes from the willingness of the organization to learn from past mistakes and to adapt.
Usually, this change is the result of a conflict. Companies are run by people, and most people are fine with the status quo until an event forces us to adapt.
This "idea" is the brainchild of Chris Argyris and Donald Schon, which sprang forth from the notion that learning is done through reflecting upon, and acting upon, mistakes. In a business sense, this could be brought on by a slumping sales quarter, low engagement on marketing channels, plunging customer reviews, etc.
So, why is this important? After all, learning has been a universal human concept since our conception.
Why Is Organizational Learning Important?
Organizations are more than just people. They are vast networks that are interconnected. After all, to change the motion of tug-of-war, a concerted effort of all individuals needs to be exerted, so that the organizations can stay balanced.
How can an organization improve without advancing its knowledge?
Stagnation will be your enemy during this evolving time, driven by the tech revolution, as well as the shifting market that Covid-19 has brought upon us. So, if you don't want to keep pace with the companies that are embracing remote work and innovative technologies such as augmented/virtual tech, then your organization won't be able to keep up.
Xerox was one such example of this innovation.
In 2016, when office workers were waging wars of frustration against their copiers and scanners, Xerox adapted and invested in augmented technology, which allowed customers to use an app that virtually solved problems.
With a technician in their ear, they fix the problem without anyone having to be sent out to them.
This is just one example of how you can use technology to adapt to the growing times, but it will also have to be paired with a commitment within the organization to this change. That's why organizational learning is so vital.
Change involves the whole, not just management or mid-level employees.
This not only fosters positive growth within the company but also comes with a host of benefits, such as:
- Increased satisfaction amongst employees
- Lower turnover rates
- Productivity increases, which is good news for your profits and efficiency.
But how does it all work?
How Organizational Learning Works
First, companies need to do a little soul searching. If something isn't working, then you might need to go back to the purpose of your company.
What is the mission statement, and how is your current process serving that mission statement? This is the value that your company provides; and if sales are dropping or engagement is waning, then the problem could be how well you are conveying that message to your stakeholders.
In the past, companies used to believe that with solid production practices, the one who could move the most products out to their consumers won. This could be at the expense of employees and even the quality of the products. But that was before the age of social media.
And leaks.
Now, with a more informed public and remote-centered workforce, that kind of model just won't fly.
How a Couple of Companies Nailed It
"Shareholders can no longer be the purpose of an organization," echoed 181 CEOs.
This sentiment reflects a rising shift in how companies are adjusting their mindsets. Now, it's about rolling out the red carpet for your consumers, embracing them through innovation, while showing that you're caught up on the economic and social trends of the time.
With the market becoming consumer-centric, it's about the benefits that you can offer your consumers, and about showing empathy. That connection is vital, and it's what Delta exhibited during the peak of the Covid-19 Pandemic.
Instead of focusing on profits, they increased spacing on their liners, which helped ease the harried minds of flyers.
This innovation doesn't have to result in decreased sales. Consumer appliance brands, such as IKEA, allowed customers to bring products into their houses, with Extended Reality! Instead of going into stores, consumers could project IKEA furniture into their houses, allowing them to try the product before they bought it.
So, develop a strategy that adapts to the market.
That strategy can't be crafted in a bubble. It needs input from all levels of the company, so that both leaders, and employees, can move forward together with a common purpose.
Just be sure that this change is within the confines of what the company can pull off, and the choreography of how the changes will be implemented, from priorities, to in what sequence they will be acted upon, take current resources into account.
By fostering this learning culture and building a "can-do" mindset within all levels of the company, you can create a flexible organization that bends, but doesn't break, to the constantly evolving trends of this new marketplace.
Types of Organizational Learning
To start implementing organizational change, we need to dive into the various forms that it imbibes. Which ones should you deploy in your masterpiece of a plan? It starts with knowing what kinds of tools are in your toolbox.
So, let's crack it open, shall we?
Individual Learning
This is the most granular form of organizational learning. It is used when there's an employee that needs to boost his efficiency in how he or she operates, enhancing their overall performance.
This employee then becomes a conduit of a sort, transferring this new knowledge to their team. Remember what we said about connecting your employees with the overall goal of your change? This could be a great way to have them learn the new strategies that you seek to implement, while also transferring that change from within their team.
Sometimes executives can be a bit "stuffy" to lower levels if the company culture isn't good. With positive team-level environments, this could be a fantastic option for fostering the change that you wish to promote.
The downside?
Should that employee jump ship before he/she could transfer that new knowledge, then you have just lost time and resources. And possibly benefitted a competitor.
If that scared you away from this viable option, then invest in the power of the group!
Group Learning
This is the next tier up; and instead of putting the onus on an individual, it encourages a group to learn new skills together. This is a fantastic way for you to leverage team-building to foster that killer new outlook you are planning.
Through this group conduit, your employees can take action together, as well as share feedback. This not only helps them learn the new practices but also to develop a unique understanding of the practices that are special to them. These could take the form of special acronyms that are unique to them, but still contain the same level of understanding that is universal throughout your firm.
Organizational Learning
This tier is the next grand step up and entails the onus being put on the organization to implement effective practices that enhance the structure, layout, and flow of the organization. While this is the main attention of the article, the previous methods are still worth mentioning because they include different ways for you to implement your organizational learning goals.
Because it's not enough to simply announce a change of company policy, you also need to allow the different levels of your firm to learn the new changes in their manner.
For example, you may announce a change, but you still have hundreds of employees to transfer not only the new policy to but also any possible training.
By macro-managing, you can lean on the strength of your team leaders, by allowing them to implement group learning while staying true to the new values that you wish to bring forth.
If you utilize your stellar employees, you can make your new messaging ring true throughout your organization.
Continuous Learning
By using the power of development programs, you can promote your new messaging with these various programs.
Learning Through Empowerment
Why take the creativity out of the hands of your employees? By trusting their impeccable ability, you can build up a whirlwind of creative growth, by entrusting the learning of the new values to their responsibilities.
Embedded Systems Learning
This encapsulates the entire system of your organization, from the workflow system, process, and operational systems to learning management systems. Instead of implementing new programs, learning is done through the systems already inherent in your firm.
Leaning From Leadership
This is a fantastic way to put a personal voice into the new policies and provide an example to the employees. By leading through action, you can empower and motivate your employees, while also building up that magical connection with employees of all levels.
Dialogue and Inquiry Learning
This Socratic-method style of learning is amazing because it provides a level of comfort within your organization. If employee questions had to be ferried through different channels, resulting in a very restrictive learning style, then this could be a great way to shake things up.
By nurturing the ability of employees to ask questions and build conversations about the new policies, then a greater sense of cooperative learning can be achieved.
You can do this through weekly surveys or discussion groups -- there is some magic in those polls we scribbled onto papers during grade school!
Team Learning
This goes back to group learning, but it allows the team to come together to gain a greater understanding of the goals. This small group can provide support and give more confidence to other employees who would normally feel overwhelmed by these new policies.
Now, use these types of learning as you see benefit your organization. Just remember that you don't have to limit yourself to only using one strategy. Each company is different, and the layers of each company are different from the other, with different dynamics.
What might work for the fun and energetic marketing department might not work for the accounting team -- although accountants can have fun too!
Now that we have the types in place, we need some processes to implement them. So, how can you start using organizational change within your company?
The Process of Organizational Change
70%, or 30%.
Can you guess which one is the percentage of change initiatives that fail? If I said that the picture isn’t a rosy one, then that should give you a hint. But there’s a reason that these companies failed on their goals, and in some case gone under.
So, what does organizational learning look like? What kind of actionable steps can you and your company take to implement the change that you desire?
Plan and Manage Organizational Change
When Amazon plans some kind of change, it goes all out in making sure that the change is understood by the company. As such, it has a detailed roadmap that paints a narrative of how the company is looking to change.
Beth Galetti, Amazon’s HR chief, makes sure that the story is told in six-page memos that make a case for the change. That is a vital element that many companies seem to forget. It’s not just about making a pitch to sponsors and shareholders, but to their employees.
They must be sold on the change that you’re pushing because for it to be successful, it needs to be a coordinated effort – a symphony of collective aspiration between employees, managers, and leaders. At the very least, you must effectively communicate what the scope of the change will be.
But to light some fire underneath your teams, a sense of urgency needs to be ignited – and it needs to be compelling. Remember that narrative by Amazon? By creating that roadmap, you can guide stakeholders through the transitions.
Engage Sponsors and Influencers
2022 will be the year of the influencers if this eMarketer report is any indication:
72.5% of marketers will lean on influencer marketing. Consequently, your influencers and sponsors will be vital in securing investment in the change. The key to this communication will be if they can articulate the rationale for the change, understand the plan to get there, and know the part they are expected to play.
If only Blockbuster had heeded this advice.
Communicate With Stakeholders
It’s 1994. The Soviet Union had crumbled, denim jeans were ripped, and Blockbuster was feeling good.
It had been sold to Viacom for a whopping $8.91 billion. But it wasn’t a portent of good things to come. Instead, it heralded a massive series of missteps that led to the video rental chain being swamped by Netflix.
Hello late-fee policy, farewell stakeholders. By alienating their base with excessive late-fee charges, they bungled a company change that dumped them into the swath of Netflix conquest. Their story is a cautionary tale that shows you need to:
- Analyze who your high-value stakeholders are
- Gauge how they will be impacted
- Create a roadmap on how you plan to communicate your change to them
By encouraging free, open conversation about the change, you can decrease implementation time by as much as 1/3. But sometimes the track of change is a rickety one, and a derailment can be right around the corner.
So, how do you increase your chances of staying on course? Check out how we get it done for you!
Manage Change Risk and Readiness
A roadmap is not something that is launched and put on autopilot. The best way to mitigate and combat risk prospects is to monitor the changes and impacts that they have on:
- The people: skills, knowledge, and organization design
- The processes: business course of action
- The technologies: systems, and tools
The good news? If you did your homework on the previous steps, then you are well on your way to crafting a fortress against unforeseen challenges. In a CEB survey, employee engagement shot up by 38% when there was communication about changes.
Amazing what a little openness can do, isn’t it?
Align Organization
Are you looking to cut down on wasted resources? Perhaps the time to relay decisions is more lethargic than a tortoise going up an escalator?
Things may move a little slower when you first roll out your change initiative, as departments take their time to get adjusted to the new policies. Make your communications and processes happen at a greater pace with a strong alignment strategy.
You do this by delineating very succinct organizational change goals, which frees up your employees to make decisions that serve your change initiative. If the goals aren’t clear, the resources could be wasted as they are thrown around needlessly.
It’s vital as you move throughout this process that you are constantly updating your understanding of how communication is progressing through your departments. Nothing can hold up this progress more than confusion on how the chain of command operates, much less clarity of the initiative's goals.
By ensuring rock-solid communication channels, you can empower your employees to perform at peak level, by freeing up any doubts about:
- What they are doing
- Who they need to go to for help
During this process, you will want to keep a change summary to track how the change initiative is progressing.
Train Stakeholders
Remember the lifeblood of your company: the stakeholder. From large stakeholders to your employees, you will need to train them on how the new processes for your strategy will function. This confusion-zapping step is key to gifting smooth processes that will cut down on wasted time:
- Employees can work more freely
- Customers will understand the new quality of products they will receive
- Large investor stakeholders will be confident in where their money is going
You will want to outline your training program, and the tools necessary, to inject a strong air of confidence all across your stakeholder hierarchy. Now, go bring that swagger back!
Sustain the Change
It’s not good enough to simply build an organizational change plan. It must be nurtured, like a stubborn child. And what do children like?
Goodies!
Incentives will be key to ensuring that your training program goes off without a hitch and that your change initiative is seen through to glorious completion. Partner up with HR management to make sure that the incentives line up well with your company's performance management practices.
To help things stay on track, four to six-week reviews are always beneficial.
Change Is Coming
And you'd best be on board, or risk getting plowed over by the changing trends of 2022. From the “Great Resignation” to the rise of VR/AR, the business world is becoming more remote and more tech-focused.
And with Generation Z entering adulthood, your consumers are more tech-savvy and trendy than ever before. But change doesn’t have to be a thorn in your side!
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