System Feedback Loops - Essay Example

System Feedback Loops System Feedback Loops Introduction The Industrial Services of America Inc is one of the leading players in the metal market responsible for the supply of good quality materials to mills in both domestic and international markets. The company is strongly committed to its customers to provide high quality goods and serves the needs of its customers through expertise in industry standards and highly skilled personnel who understands the business requirements (ISA website, 2012). The strategic focus of the company is on retaining its market leadership through innovative products and services that meet the emerging requirements of its customers in the defined industry segment. The environment in which organizations operate is not only complex but driven by numerous factors that define the competitive strengths and strategic plans of the business. These factors include the market competition, their strategic approach, customer expectations, preferences, research and development capabilities, economic, political and social aspects driving market trends, and technology know-how that involve new product ideas, techniques, and innovation (Smith, 2001). One of the biggest challenges faced by any organization operating in such environmental conditions is the ability to adapt to the needs of the changing market environment and the capability to harness its resources in the desired direction to achieve defined goals. Competitive strengths and advantages are developed by organizations through a deeper understanding of market driving forces and constant efforts in the direction of enhanced performance and productivity. Human resources play a vital role in helping the organizations achieve the defined goals and targets. A key aspect driving the performance of human resources is employee learning and skills development (Uslar & Prof Norbert, 2007). The paper explores the different dimensions of a learning organization through a study of feedback loops and its application within Industrial Services of America Inc (ISA). Reinforcing feedback loop The market shares of the company have gone up steadily with the company focusing on delivering high quality products at competitive prices. However, the competitive industry environment offers distinctive challenges in the form of constant focus on product quality and innovative products to retain its market shares. Firms are finding it difficult to maintain pace with the rapid changes taking place in technology and need to adopt innovative work practices to launch new and improved product designs (Nowotny, 2006). ISA’s focus in such a scenario should be on developing its competencies and skills that strongly contribute to its market performance. The market segment catered by ISA comprises of waste management processes, recycling and scraps management processes. Competitive advantage in this sector is defined by the extent to which the company applies innovative techniques to identify and meet the requirements of the evolving market trends. Innovation in processes can help in achieving maximizing efficiency in the existing market segment. The company has focused its efforts on adopting innovative mechanisms that have resulted in increase in alloys, ferrous and non-ferrous trading volumes in the last financial year (Businesswire website, 2011). Organizational goals and targets are driven by emphasizing the need to improve and enhance operational processes. Adopting and implementing innovative work practices within organizations require highly skilled workforce who has the capability to adapt themselves to evolving trends and new technology application (Nowotny, 2006). Learning and development hence, form a critical aspect driving this practice. The figure below illustrates the reinforcing loop existing between innovation and sales: Innovation at work place is the vital factor that can help the company distinguish its products from the competitors. Promoting an innovative work culture can help the company in developing cost effective models that support wide range of functions and increased utility for customers. Moreover, innovation is the key to promote creative designs in future product models that can help the company in retaining customer interest and demand for its products. However, promoting an innovative work culture is not an easy task, since it requires organizational focus on developing its manpower skills and competencies that contribute to creativity at workplace (Nowotny, 2006). The company can enhance its operational efficiency and contribute to organizational goals by adopting a learning culture that is based on the principles of knowledge sharing and workforce training practices. Hiring skilled professionals for doing the job is not enough in a business environment where skills are found redundant within a few months of acquiring it. New technologies and approaches to product design and development make their way to replace existing practices and this creates the demand for developing an effective knowledge sharing system within the organization. Employees working in specific fields or work processes must be kept updated on new and emerging technologies that can lead to new and improved product designs. Balancing feedback loop Adopting a learning culture entails integrated efforts of the management on identifying individual employee skills, talents, and competencies that can contribute to its business goals. However, this alone is not enough. Businesses need to identify the specific skills and competencies required to perform the job effectively, and this requires an in-depth understanding of business processes and objectives that can help the organization in achieving its goals. The next step involves the identification of gaps that exists between the current employee skills and desired employee skills for meeting the organizational goals. The skills gap reflects the areas of focus that guide the human resource managers to develop its workforce in the desired direction. Learning and development practices focus on reducing the skills gap and help the organization develop its existing skills to meet business goals (Smith, 2001). Thus, there is a balancing loop between the three variables – business goals, employee skills and skills gap. While business goals help the organization identify the desired skills, learning and development help in reducing the skills gap, thus helping the organization in meeting its goals. The figure below illustrates the balancing loop that exists between organizational goals, learning and development and its impact on skills gap: Organizational learning and employee skills management at ISA Organizational development and growth are strongly aligned with employee development, and this is evident in the way learning improves the organization’s ability to manage work processes more efficiently, creating a better work culture through employee empowerment and collaborative management. Learning and employee development practices should be aligned to the business objectives in order to be effective. Business models centered on employee skills development and information sharing practices are well adapted to survive in challenging market conditions. The increasingly changing market demographics and business environment dynamics have created the need for effective training and development programs on a regular basis to fine tune the employee skills and capabilities (Uslar & Prof Norbert, 2007). The reinforcing loop identified in the discussion illustrates the significance of incorporating an innovative work culture for improving market shares and profits (Bellinger, 2004). ISA has displayed its focus on developing its innovative capabilities through constant training and development of its workforce. Hiring skilled and specialized professionals to do the job is a challenging task but retaining its skills and developing competencies to the desired level is even more difficult. The company has invested in enhancing its technological capabilities and deliver cost effective products that help the company in retaining its cost advantage and profitability. Adopting a learning culture involves an in-depth study of business requirements and as observed in the balancing loop, a focused approach to developing the desired levels of skills and competencies (Larsen, 1999). Conclusion There is a number of strategic alternatives that ISA can take to promote its market shares and sales growth. These involve the adoption of effective knowledge sharing and information sharing systems that enable easy exchange of data and information related to work processes. Training and development workshops are also vital in promoting organizational strengths. To conclude, a learning organization is well equipped to meet the adversities and challenges posed by the dynamic business environment that firms operate in. It helps the organizations in developing its strengths and capabilities for enhanced performance and delivery of high quality goods and services contributing to a successful enterprise. References Bellinger, G. (2004). Introduction to systems thinking. Retrieved on Jan 20 2012 from http://www.systems-thinking.org/intst/int.htm Businesswire website. (2011). Industrial Services of America Inc. issues guidance for the fourth quarter 2010. Retrieved on Jan 20 2012 from http://www.businesswire.com/news/home/20110223005955/en/Industrial-Services-America-Issues-Guidance-Fourth-Quarter ISA website. (2012). About Us. Retrieved on Jan 20 2012 from http://www.isa-inc.com/recycling/overview Larsen, K. (1999). Learning organizations. Retrieved on Jan 20 2012 from http://leeds-faculty.colorado.edu/larsenk/learnorg/index.html#_Toc356579325 Nowotny, H. (2006). Cultures of technology and the quest for innovation. Berghan Books. Smith, Mark. (2001). Peter Senge and the learning organization. Retrieved on Jan 20 2012 from http://www.leadingtoday.org/weleadinlearning/msapr03.htm Uslar, Mathias Gronau, Prof Norbert. (2007). Integrating knowledge management and human resources via skills management. 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