Building the learning organisation: an Australian case study

| August 10, 2021

In a companion piece to his essay, Learning for competitive advantage and business success Les Pickett outlines how a large Australian company transformed itself by developing a culture that put continuous, organisation-wide learning at the centre of its philosophy.

INTRODUCTION

Leaders may think that getting their organisations to learn is only a matter of articulating a clear vision, giving employees the right incentives, and providing lots of training. However, this assumption is not only awed; it is, in fact, risky, given the challenges of intensifying competition, advances in technology, and shifts in customer preferences. Organisational learning is more important than ever – each company must become a learning organisation.

Workplace learning is a highly critical business strategy that provides the foundation for long-term organisational value creation. It is likely to assume even greater importance in the years ahead. Failing to keep pace with the rate of change within an industry or professional field is expected to lead to business failure over time, and possibly to corporate collapse.

Organisational learning develops competent people who utilise and enhance their collective knowledge and experience to achieve defined outcomes that provide business enterprises with their effective strategic advantage – the opportunity to develop a high-performance workforce that can quickly adapt to future change.

Successful organisations of the future will have a clear vision and create a culture and environment that encourages their people to share knowledge and value learning as personal responsibility and a lifelong process.

THE KEY TO FUTURE SUCCESS

A survey of more than 1,200 people conducted by the Chartered Institute of Personnel andDevelopment in February 2020 identi ed effectivepractices being carried out by high-performing organisations. These include:

+ conceptualising learning as a driver of business value and revenue – moving away from learning as a cost;

+ investing in strategic learning to drive the skills needed in future work and using learning as an enabler of agility;

+ nurturing a learning culture where learning is valued and supported by leaders – and understanding and facilitating people to help each other to learn constantly;

+ personalising learning for individuals, providing learning that is just enough and just for me;

+ weaving learning into the ow of work and performance, where people learn as they work and work as they learn;

+ tapping into the value of powerful digital learning from apps to advanced simulations,
to virtual reality, extended reality and investing in learning platforms;

+ being more creative and innovative in learning experiences, in a way that keeps learners coming back.

AN AUSTRALIAN CASE STUDY

I was engaged as a consultant by one of Australia’s leading financial services enterprises to help them increase the company’s effectiveness by developing practical initiatives to enhance and fully utilise the competencies of people at all levels of the organisation.

The publicly listed, financially sound, diversified company was firmly established, well-regardedand committed to high corporate governance standards, with around one thousand employees and progressive people management practices.

In my role, I participated in executive meetings, was fully involved in numerous planning and strategy discussions, frequently consulted when offsite, maintained regular direct contact with the chief executive and the head of the people and culture function, facilitated the project and carried out an effectiveness review post-launch.

One of my basic philosophies is that external consultants’ use should be limited to the essential addition of knowledge and experience not already available within an organisation. Also, the process should facilitate participation in, and ownership of, each project by the people who will make it work.

In presenting this case study of workplace learning in an Australian organisation, I have drawn on an edited version of this project’s actual material. In practice, a number of the following activities were carried out concurrently and not always in thesequence presented. This means there may be some minor duplication and several omissions in the material.

I have used the process outlined on several occasions in private, public and not-for-pro torganisations in Australia, Asia and Europe. It is straightforward and non-threatening, providing a basis for building an effective learning organisation.

It uses a survey tool based on the recognition that an effective learning organisation must incorporatethe ve critical subsystems of learning, organisation,people, knowledge and technology (see Table 1).

I used the same tool when assessing a wide rangeof organisations in the Asia-Paci c region in my roleas a member of the International Judging Panel for the World Initiative in Lifelong Learning.

A number of the statements of policy and intent presented here are the result of numerous discussions, which had the benefcial outcome of educating and involving many people, including members of the senior executive team whose understanding and visible support are critical factors in success or failure. These discussions are essential to tailoring the overarching framework to a special context. Those involved are provided with a sense of ownership. Organisational learning is not imposed on them from outside but developed by and with them.

An understanding of the potential and demands of becoming an effective learning organisation was developed during these meetings. These ranged from one-on-one discussions to larger groups.

The maximum group size was kept to under ten people to encourage participation and debate wherever possible. A strong sense of understanding and ownership was developed – this became their project.

Only Central (which includes head office) scores above the company average in all categories. Apart from South recordinga score for Technology Applications and West recording a score for Organisational Transformation above the Hypothetical average, all other scores are below average.

An effective learning organisation should score in excess of 80 points in the Grand Total column

These scores must be treated as indicative. They are not absolute but re ect the perceptions of members of staff ofHypothetical. These can be impacted by a number of factors including managerial level (knowing what is going on), thequality and frequency of managerial communication, levels of delegation and style of managerial leadership in each region.

They provide an effective starting benchmark against which to measure future progress.

The company in which the case study took place is among the leading performers in finance and banking and is listed on the Australian stock exchange. It is well-established and highly regarded with an impressive history of growth and profitability. Over recent years, the markets in which the organisation operates have become more competitive. A detailed analysis of several performance indicators highlighted a gradual tapering of growth in both market share andpro tability. Underlying these were several other concerning indicators.

Managerial, specialist and staff turnover increased, the duration of employment was shortening, and absenteeism was rising. Despite enhanced technology product and service, processing times were longer, leading to more clients expressing dissatisfaction with waiting times. Client complaints and turnover was increasing, and client retention rates slowly reducing.

There was also a very concerning increase in compliance as the error rate was gradually increasing. There are severe penalties for non-compliance with industry regulation and an accompanying downside of possible negative media exposure.

Rapid changes in technology, accompanied byfrequent reporting requirements, highlighted an ongoing need for retraining and skills acquisition.The increase in staff turnover further emphasised the need for more effective basic operational training for new employees. A combination ofthese factors was also identi ed as a signi cantcause of increased pressures on front-line and mid-level managers.

Following several informal discussions, an important decision was made at an executive level to address these issues to protect the business’s future profitability and sustainability by transforming to a more pro table, sustainable, objective-oriented learning organisation.

The case study organisation’s senior management team was intensely focused on the company’ssuccess, the provision of high-quality client serviceand the creation of shareholder value. They agreed that the company needed to continue to grow and diversify in a very complex and highly competitive market and recognised that it was their people who make the difference.

They were committed to the need to continue to develop and maintain a high-performance workforce to ensure that they remained highlycompetitive in the future and that this required the identi cation and development of the criticalcapabilities needed for success.

To achieve that goal, the first step was to define a high-level objective for the initiative as follows:

To increase the company’s effectiveness by delivering high-quality, professional services by developing and introducing practical initiatives that will enhance and fully utilise the competencies of people at all levels of the organisation.

The introduction of an effective learning initiative provides an opportunity to strengthen the existing focus on client service. Also, to create an environment in which individual skills and capabilities are utilised, staff motivation is increased, and a higher level of performance is achieved. It can also position the company to respond rapidly and positively to future changes and challenges.

To ensure consistency about the learning process, the following objectives were agreed:

• That the introduction and application of changing technology to our work will continue and we will be expected to operate in different ways, using different tools and processes.

• The identification, adaptation and introduction of new technology will require the acquisition of newcompetencies. This means that our people will be challenged to develop new knowledge and skills.

• We recognise learning as a lifelong process that impacts all we do both at work and in our private lives. We need to facilitate and develop a framework that will support learning as a continuing process.

Before launching the initiative, it was essential to define the commitment involved. This entailedensuring a clear understanding of, and strong support for, the organisational learning project on the part of senior management. The executive team agreed the following guidelines:

  • We are committed to delivering competitive advantage through our people and will do this by creating and the environment in which our employees are successful, developed and well rewarded.
  • We recognise learning as a continuous, strategically focused process that will bere ected in our company’s overall achievementand future success.
  • We recognise that organisation-wide learning is essential if we are to maintain our leadership rolein our various specialisation elds and create anenvironment that encourages ongoing learning and creativity.
  • We will develop and enhance the knowledge andskills required to enable our people to performtheir current roles effectively and competently and prepare them for new and changing roles.
  • We will identify and develop suitable people for increased future responsibilities, where appropriate.Following further consultation and discussion, we identified the importance of conceptualising learning as a continuous process and agreed on the following:

    • Learning is a lifelong process and impacts on all we do both at work and in our private lives.

• The introduction and application of changing technology to our work will continue, and we will be expected to operate in different ways, using different tools and processes.

• The identi cation, adaptation and introduction of new technology will require the acquisition ofnew competencies. This means that our people will be challenged to develop new knowledge and skills.

• We recognise the need to facilitate and support learning as a continuing process. We will develop a framework that will assist in providing a practical and timely focus on this development.

To put our plans into action, we established several critical project guidelines:

• minimal divergence of managers from their key responsibilities;

• managerial ownership and staff support for the program;

• progressive consultation and review to ensure project integrity;

• integration of activities and processes with existing HR programs;

• minimal paperwork and documentation;

• minimal use of external consulting support;

• strong focus on improving client service provision.

To make the plan work, a primary three-stage program was implemented. In Stage 1, current practices were reviewed, and the organisationallearning pro le was established to ensureconsistency and currency. This was communicated to management via executive briefings. A draftaction plan was created, following several informal discussions with the key players, which was then reviewed by the senior executive team.

In more detail, the key action points in this Stage were to Conduct an Initial Briefing – that is, a presentation on the linkages between learning, competencies, effectiveness and performance incorporating the requirements of becoming a learning organisation together with the benefits this can bring to both the enterprise and members of staff. Also, we undertook a Review of Current and Projected Activities, which entailed conducting a preliminary review of current activities and planned future initiatives relating to human resource management, staff training and management development programs. This was an essential precursor to Establishing the Learning Organisation Profile, which aims to reflect the current perceptions of staff members and provide a basis for the future evaluation of progress towards becoming an effective learning organisation.

Once these steps were undertaken, it was possible to Conduct an Executive Brie ng, thatoutlined the speci c actions required to build aneffective learning organisation within the context of the company’s mission, values, principles of good conduct and strategies. This step included a participative component to identify issues and potential problem areas. Based on these, it was possible to Develop an Integrated Program Structure, an action-focused strategy documentrecommending the speci c steps to be taken.

An important component was the recognitionthat changes may be required as we drilled intothe project. A progressive staged initiative was agreed as follows:

  1. Prepare an integrated strategy for the development of a learning culture within the company;
  2. Conduct an executive brie ng on the linkagebetween learning and performance and
    the requirements of becoming a learningorganisation;

3. Review current human resource programs, processes and planned future initiatives, includingperformance appraisal and the identi cation ofmanagerial and specialist capabilities.

4. Review training and development programs and activities including any projects currently being undertaken;

5. Establish a learning organisation pro le whichincorporates the perceptions of our staff;

6. Develop an integrated program and action plan;

7. Design a model of the practical learning organisation initiative to facilitate understandingand provide de ned action guidelines;

In Stage 2, we worked together with staff toDevelop a Model. A model of the process requiredto become a learning organisation was developed in an easily understood format. The model provides both a basis for the implementation of the current project and the subsequent evaluation stage. The development of a plan of action and a strategy for implementation relied on continuous learning based on management and staff feedback. This was part of the agreed-upon progressive staged initiative
as follows:

8. Implement the agreed strategy;

In Stage 3, the program was reviewed to establish if objectives set during Stage 1 were achieved.

9. Evaluate the effectiveness of the program.

A key action point from the guidelines established in Stages 1 and 2 that took place in Stage 3 is theReview of Program Effectiveness, a series of formal reviews to be carried out on a progressive basis to ensure that the desired project outcomes become embedded in the day-to-day operations of the company.

To lay a foundation for the organisation’s futureand clarify the requirements of a supportive environment, we prepared and agreed on the following to guide all nine steps outlined above:

  • We understand the importance of a working environment, which recognises the critical links between effective learning and business success.
  • In our competitive environment, we need to develop an integrated team of people capable of maintaining and further enhancing a high level of performance and client service and rapidly adapting to changing circumstances.
  • We have de ned and communicated our mission,values and principles of good conduct to provide a set of professional guidelines and expect that
    all of our people will respect and apply these.
  • Our objective setting and strategic planningprocesses provide us with speci c targets andfuture direction.
  • We have recon gured our organisation tostreamline our structure, improve communication and collaboration, clarify accountabilities and enhance decision making.
  • We will introduce and utilise appropriatetechnology to improve business ef ciency,enhance the sharing of knowledge, and facilitate communication and learning.
  • We are committed to becoming an organisation which values learning and recognises learning as a lifelong process.
  • We actively encourage our people to enhance their current knowledge and skills, participate in team activities, assist their colleagues inacquiring relevant workplace knowledge, andaccept prime responsibility for their learning.
  • Our company learning and development programs form an integral part of our businessplans and re ect our strategic directions andcritical objectives.
  • Our performance review, staff training, management development, succession, and career planning programs are all designed to contribute to our business’s future success by developing our people.

• The primary objectives of our company-wide training and development program are to:

− improve the performance of our people in their current role;

− develop our people per their capabilities and aspirations.

• We believe that the quality of each person’swork will improve with effective two-way communication and competent guidance from their manager.

• While the nal responsibility for learning anddevelopment rests with each individual, a recognised and organised procedure is the most effective way to ensure that this occurs.

• People need to know and understand what is expected of them. They need to know what
to do and how to do it. They need time frames and priorities.

• Clear objectives will be established for each business unit, section, manager, supervisor and for other specialist and administrative roles where appropriate.

• We will conduct a performance review program based on agreed objectives.

• A company-wide training and development program will be prepared based on input from the strategic business plan and performance reviews. Individual training and career development plans will be designed where appropriate.

• There will be an ongoing dialogue with effective two-way communication and realistic feedback between each manager and their work team.

An essential step in any project is identifying project outcomes that should be achieved and measuring whether these outcomes have taken place. On review of the project’s aims and whether they have been completed, we successfully met the following project outcomes as a result of the above steps and guidelines. It is important to note that many inter- related factors impact company performance, and it can be challenging to identify specific contributors.In reviewing this project, there was a combination of indicative evidence and hard data showing that the learning organisation initiative positively contributed.

Over 18 months, market share and pro tabilityincreased, productivity improved, absenteeism and staff turnover reduced, people stayed longer, the calibre of applicants for employment improved, compliance error rates and customer complaints reduced, and client retention rates improved.

As a result of the enhanced learning and development activities, there was tangibleevidence that managers were better equippedand more comfortable carrying out their roles in an increasingly challenging environment.

CONCLUSION

There are many bene ts to be gained by developingan ongoing organisational learning culture. Essential success factors include the support and involvement of the senior executive team, making sure managers can put the policies and statements of intent into practice in the workplace, and that individual employees accept their responsibility for training and self-development.

The interaction of the ve critical elements oflearning dynamics, organisational transformation, people empowerment, knowledge management and technology applications are essential components of a learning organisation initiative. This article has outlined how these elements can be put into practice via a structured approach that relies on management and staff involvement.

While there is considerable literature about creating a learning organisation, there seems to be little research into the longer-term impact and effectiveness of the original initiative. It would be interesting to see some comprehensive reviewscarried out three to ve years down the track.

REFERENCES

Chartered Institute of Personnel and Development (2020), Learning and Skills at Work 2020 Mind the Gap: Time for Learning in the UK, https://www.cipd.co.uk/Images/learning-skills-work- repor t-1_tcm18-79434.pdf

Garvin, D., Edmondson, A. and Gino, F. (2008),
‘Is Yours a Learning Organisation?’, Harvard Business Review

This blog post first appeared in the Journal of behavioural economics and social systems, volume 3 number 1, 2021. To read more stories from the Journal go to the Global Access Partners website. 

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