Let our People learn and innovate!

In the current, rapid changing times of volatility and uncertainty, many organizations are just striving to survive and remain competitive. In order to grow and perform in the long-term, however, enterprises need to adapt and update their knowledge to keep capabilities of innovation. In this respect, Organizational Learning has been regarded as one of the central strategic means of archiving long-term organizational success (Senge, 1990). In this article, and in-line with Huber (1991), I define organizational learning as the process by which the organization develops new knowledge and insights from the common experiences of people in the organization, and with the potential to influence behaviors and improve the organization´s capabilities.

Organizational Learning fosters a Culture of Innovation

Research shows that organizational learning plays a crucial role as a mediating variable between knowledge management and organizational innovation (Liao & Wu, 2010); in other words: Organizational Learning transforms knowledge management into organizational innovation which then leads to a superior organizational performance if well done (Jiménez-Jiménez & Sanz-Valle, 2007).

Therefore, knowledge is not only an important resource for any organization, but it also serves as a basic source of competitive advantage. Without knowledge management, an organization can’t develop personal or group learning abilities which are required to generate innovations. The basic assumption is that learning plays a key role in enabling companies to achieve speed and flexibility within the innovation process.

One can conclude that the higher the learning the greater the organizational innovation (Weerawardena et al., 2006).

Knowledge Management as Critical Success Factor

Innovation helps the company to deal with the turbulence of external environment and to come up with new products, services, or processes. As such it is one of the key drivers of long-term success in business. In dynamic environments, innovation is an obligation and requirement which usually improves an organization´s performance. Cui, Griffith, and Cavusgil (2005) postulate that knowledge management capabilities consist of three interrelated processes: knowledge acquisition, knowledge conversion, and knowledge application. The acquisition of knowledge from outside the company depends on the capacity of the firm to absorb new ideas, that is, the firm's ability to understand, assimilate and apply the new external knowledge to commercial ends. Knowledge conversion entails the transformation and exploitation of existing knowledge; which requires that employees share information and knowledge. Knowledge application, means that management postulates and lives by a mental model of open-mindedness, experimentation, and the willingness to make mistakes and to fail once in a while; and then to learn from it.

How to embrace Organizational Learning – A Roadmap

Organizational learning supports creativity, inspires new knowledge and ideas that have potential influence on organizational innovation and performance.

Therefore, an organization hoping to enhance corporate performance through innovation should improve its organizational learning processes.

This seems to be especially important for smaller and younger firms and for those firms operating in highly turbulent environments. Some recommendations in this line are the following.

First, firms should promote the acquisition of new knowledge, for example by making employees attend relevant seminars, conferences, fairs etc. regularly, consolidating innovation policies and processes, and fostering the development of new ideas and experimentation within the firm. Second, they should enhance the knowledge distribution and interpretation within the firm, for example by using formal mechanisms to guarantee the sharing of best practice among different employees and departments, making employees talk to each other, using teamwork, making individuals responsible for collecting, assembling and distributing employee's suggestions internally. Third, firms should try to archive critical know-how and knowledge by maintaining and constantly updating comprehensive knowledge databases: they should strive at facilitating access to these databases through virtual networks accessible for all relevant stakeholders.

Conclusion

Snell et al. (1996) stated that employees contribute to learn when they have the knowledge and abilities that the company needs and also have the motivation to learn. Organizational learning could be rooted in extensive employee trainings, adaptive performance management systems, motivational performance appraisal processes, a learning- and performance-based compensation philosophy, authentic employee empowerment, and constant competency development of the whole workforce. For example, to better cope with technological developments and new innovations, job trainings – e.g. via computer-based training - could be provided to the employees on regular basis. Similarly, managers should empower employees by encouraging them to participate in discussions and decision making processes. Organizations could award employees for best suggestions to encourage valuable input. Another option is, to let employees choose stimulating project work or other forms of job enrichment (e.g. short-term assignments) to assist them in learning and growing. 

Finally, and as Simpson et al. (2006) point out, organizational learning and innovation are expensive and risky activities, with positive outcomes on a firm´s performance but also with negative outcomes, such as increased exposure to market risk, increased costs, potential employee dissatisfaction or unwarranted changes; if not managed well. To counter-balance and mitigate these risks, any organization is well-adviced in treating its organizational learning initiatives with the highest level of relevance and as a central part of their holistic business strategy and culture. 

What is your experience with Organizational Learning? How do think it can be improved? Please leave a comment and join the discussion!

Kind regards,

Andreas von der Heydt

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Andreas von der Heydt is Director of Talent Acquisition & Recruiting at Amazon. Before he held various senior management positions at Amazon and L'Oréal. He's a leadership expert and management coach. Andreas worked and lived in Europe, Australia, the U.S. and Asia. Currently he lives with his wife and daughters in Seattle, USA. Andreas enjoys blogging as a private person here on LinkedIn about various exciting topics. His latest book is about what makes a future leader. All statements made, opinions expressed, etc. in his articles only reflect his personal opinion.

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References

Cui, A. S., Griffith, D. A., & Cavusgil, S. T. (2005). The influence of competitive intensity and market dynamism on knowledge management capabilities of MNC subsidiaries. Journal of International Marketing, 13(3), 32–53.

Huber, G. P. (1991). Organizational Learning: The Contributing Processes and the Literatures. Organization Science, 2(1), 88-115.

Jimenez-Jimenez, D., Sanz-Valle, R. (2011). Innovation, organizational learning, and performance. Journal of Business Research, 2011, Vol.64(4), 408-417.

Liao, S.H., Wu, C.C. (2010). System perspective of knowledge management, organizational learning, and organizational innovation. Expert Systems with Applications, 37, 1096–1103.

Senge, P.M. (1991). The fifth discipline: the art & practice of the learning organization. London, UK: Random House.

Simpson, P. M., Siguaw, J. A., Enz C. A. (2006). Innovation orientation outcomes: the good and the bad. Journal of Business Research, 59(1), 1133–1141.

Snell, S. A., Youndt, M. A., & Wright, P. M. (1996). Establishing a framework for research in strategic human resource management: Merging resource theory and organizational learning. In G. R. Ferris (Ed.), Research in Personnel and Human Resources Management 14, 61–90. Greenwich, CT: Jai Press.

Weerawardena, J., O'Cass, A., Julian, C. (2006). Does industry matter? Examining the role of industry structure and organizational learning in innovation and brand performance. Journal of Business Research, 59(1), 37-45.