The Transformation of Nordef into a Learning Organisation - Essay Example

Running head: A REPORT ON THE TRANSFORMATION OF NORDEF INTO A LEARNING ORGANISATION A Report on the Transformation of NORDEF into a Learning Organisation [The name of the writer appears here] [The name of the institution appears here] Introduction The increasing need for learning in organisations is one of the latest isms' of current management literature. Not only is the ability to learn expected to create the major source of competitive advantage age for organisations in the future (Senge, 1990), but learning itself is seen as a prerequisite for the survival of today's organisations. This is because organisations continuously need to change internally, as well as adapt to changes they meet in their operational environment. The learning organisation (LO) has been defined as an organisation that facilitates the learning of all its members and continuously transforms itself' (Pedler, Bourgoyne and Boydell, 1991). What is really meant by this definition has usually been clarified by offering a list of the various elements of a learning organisation. In other words, a learning organisation is defined via the existence of organisational conditions that favour learning per se. This report is a blueprint for analysing the transformation of NORDEF, a defence communication provider, in to a learning organisation. NORDEF - The Organisation NORDEF is a Defence communication provider; it began making equipment for strategic defence communications systems in Australia in 1988. The company has come a long way since initial conception, remaking itself as a major defence communication provider, a change that hasn't gone unnoticed. NORDEF was recently called the poster boy for companies making the transition into the new economy. Major changes began at NORDEF when James Plant, the company's current president and chief executive, took office in 1997. He saw that the marketplace of defence communications was shifting from a traditional line based technology to sensor to shooter, or satellite based systems. The trick was figuring out how to speed up the process of getting new products and services into the defence market so NORDEF could keep ahead of the fast-paced defence orientated procurement world. In the past, it often took as long as 10-15 years to complete a research and procured developed project to actual in-service usage. Processes for Transformation The literature regarding learning organisations is largely prescriptive in nature and proposes how organisations should be designed and managed in order to promote effective learning. Pedler, Burgoyne and Boydell's (1991) model of a learning organisation is seemingly the most penetrative of the competing models and probably has therefore become the most popular and widely referred-to model in recent literature. This is the area where theory building has clearly reached the point of synergetic models. There are 11 characteristics of a learning organisation identified in this model and even though these traits are organized differently, they also appear as similar ideas to the five main disciplines': mental models, shared vision, personal mastery, team learning and systems thinking -- which form the foundation of the learning organisation' according to Senge (1990). According to Pedler, Burgoyne and Boydell (1991), learning approaches to strategy and participative policy-making are closely connected to policy- and strategy-forming processes referring to the sharing of involvement in these processes. Information systems, formative accounting and control systems, internal exchange of information and reward flexibility are elements within the organisation that may either be a help or hindrance to learning. Equally important factors are enabling structures with loosely structured roles and temporary departmental and other boundaries which create opportunities for individual and business development. The ability to learn by benchmarking in external relationships by using boundary workers and to promote inter-company learning by engaging in a number of mutually-advantageous learning activities form the fourth group characteristic of a learning organisation. Finally the learning climate and culture that offer learning opportunities for all are emphasized as basic elements and contextual factors for organisational learning. Facilitating members' experimentation and learning from experience and giving appropriate feedback and guidance by the help of which people are encouraged to take responsibility for their own professional development are the primary tasks of the leader. There is always an underlying assumption concerning the role of the leader, the guiding force behind the learning process and who, depending on the particular situation, has to adopt different, but similarly effective roles (Senge, 1996). Under Plant's leadership, NORDEF was dramatically restructured. Forums were created where nominated employees from every level gathered to help make the company more in tune with the marketplace. NORDEF moved to outsourcing much of its production, resulting in the closure of 5 of the company's 13 plants. The company also began paying its executives based on their contribution rather than their rank, which weeded out about a third of its executive team. In all, the changes have helped put NORDEF at the top of its league. By introducing the model called The Ladder of Inference' Senge has tried to describe the individual learning process and simultaneously make it easier for the members of an organisation to identify how their mental models are created and perpetuated. This model also shows how easily people might end up with false or biased conclusions and actions. According to this model NORDEF can implement the following steps for learning to take place: observing data in terms of own experience, selecting suitable data, adding meanings, making assumptions, drawing conclusions, adapting beliefs and finally taking actions based on these beliefs. (Senge, 1994; Senge et al., 1995). A Learning model for NORDEF NORDEF is fighting to remain the number one provider of strategic communications equipment in the strategic netro-centric domain. Its main competitor is Rascal Systems, which started at Australian Defence Industries in South Australia in 1984, a company that linked communications and grew with the popularity of defence secure satellite communication requirements. Although many of the items could be connected to the learning process as a whole, when evaluating the inter-item correlations for NORDEF it is possible to divide them into three groups which then represent the different phases of learning process. The summary of the three steps which should be followed at NORDEF is as follows. At Step 1: building the ability to learn individuals' ability and willingness to learn are necessary conditions for organisational learning. In our model we assume that learning takes place when hindrances to individual's learning are removed and the organisation supports the process in a proper way. The notion of unlearning is extended here so that the acceptance and adoption of new cognitive models is also included within this phase. According to common understanding, there are eight individual level indicators that can be linked to step 1 (see Next page). At Step 2: collaborative setting of missions and strategies commitment to organisational goals and strategies is a necessary condition for structural change. Committed people are apt to accept the new mission (or new direction) which in turn indicates that individual-level attitude changes are becoming an organisational-level phenomenon. Step 2 is a mediator between Step 1 and Step 3 and has four indicators. At Step 3: building the future together structural changes are the very essence of organisational learning, because by them, learning is rooted in the organisation. Without new structures, i.e. new enabling organisational arrangements, routines, systems and so on, it is difficult for an organisation to be more efficient or learn and adapt to environmental changes. For Step 3 there are eight indicators. Step 1: Building the ability to learn An open-minded and positive attitude towards risk taking Learning by mistakes Open communication Willingness to develop oneself Challenging and meaningful work Preconditions for taking initiatives Encouraging activeness in ones work Minimal distress of personnel Step 2: Collaborative setting of missions and strategies Commitment to change process Awareness of business objectives Commitment to objectives Active participation in decision-making Step 3: Building the Future together Ability to cooperate Efficient decision-making Fluent and efficient information flow Ability to use teamwork Business-oriented operational culture Efficient strategic planning Fluent work processes Management's support of personal development Cost Justification The learning organisation concept, when first encountered, may seem complex, utopian, and difficult to translate into action and for many people an undesirable cost. However, in today's rapidly changing environment and the enhancements in technology the organisations need to change and adapt for their survival. For that they need to improve and learn the new trends and structures which are constantly emerging. The reorganisation studies typically employ activities involving clarification of vision, reliance on teams, and participation from all levels of the organisation, strategic planning, and occasionally some rudimentary efforts at systems thinking. The new structures incorporate more of a team orientation, with increased value assigned to innovation, risk-taking, and collaboration instead of individual accomplishments and security. Other elements often found in the new organisational structures include an integrated approach to task performance and more staff carrying multiple responsibilities which cut across the lines separating traditional functions. Thus, NORDEF needs to overlook the element of cost for its transformation into a learning organisation as the benefits outweigh the cost factor by far and in the long run they only seem to multiply. Conclusions & Recommendations The complete learning organisation is more an ideal than a reality. Examples of learning organisations in the business literature typically describe organisations focusing on one or two particular aspects of a learning organisation effort. The business literature describes several methods of promoting a learning organisation culture. Job rotation can encourage communication and help employees develop a system-wide perspective. Amid the rise of Internet and technology stocks in the late 1990s and early 2000, investors piled money into NORDEF stock. The share price rose to an intraday peak of $124.50 AUD in late July 2001. But then the Internet bubble burst and the U.S and subsequently the world economy fell into a slowdown. Optimistic forecasts from the company gave way to two successive negative projections for the first quarter and the announced layoff of 12,000 workers. Subsequently, the company announced a further 6,000 layoffs and issued another profit and revenue warning. Investors slashed the stock's price; it is now listed at $24.19 AUD per share. Considering the status quo at NORDEF, universal organisational concerns of the learning organisation theory such as problem-solving, communication, personnel, and innovation are logically applicable to its operations. NORDEF should consider five main practices in transforming to a learning organisation: systematic problem solving, an ongoing program of experimentation, learning from past experience, learning from others and transferring knowledge quickly and efficiently throughout the organisation. (Garvin 1993) Systematic problem solving consists of using data as a basis for decision making. For example, analysis of materials circulation data may support a decision to acquire additional resources in a particular subject area, while the analysis of reference service statistics should inform decisions about staffing levels or hours of reference service. Qualitative data are equally valuable; for example, decisions involving any type of reorganisation effort should be based largely upon information about processes and relationships. Data-gathering tools associated with Total Quality Management, such as flow charts, Pareto charts, fishbone diagrams, run charts, histograms and scatter diagrams are essential in supporting decision making. Ongoing programs of experimentation occur regularly in organisations like NORDEF and include such practices as establishing pilot projects for end-user computer search programs or document delivery projects, or changing staffing patterns on a trial basis to accomplish a cataloging or collection management project. Learning from past experience involves systematically evaluating the organisation's successes and failures. This might entail forming a team to evaluate the reasons why a service-is underutilized or why completion of a processing project is delayed. Learning from others, a form of "benchmarking," involves a disciplined and systematic process to identify best practices. NORDEF should make it a practice to do a market research about organisations providing such services to identify the opportunities and threats as imposed by the external environment for its successful existence. Finally it is recommended for NORDEF to incorporate the following eight basic assumptions into its policies, procedures, strategies, value statements, and personnel practices (Kramlinger 1991): Everyone can be a source of useful ideas. For example, a custodian might offer suggestions about building use patterns or improving physical arrangements. The people closest to the problem usually have the best ideas about solutions. This involves decision making at the lowest possible hierarchical level, and it has implications for using the insights of others. Learning flows up as well as down in the organisation; general managers can learn much from clerks, paraprofessionals, and lower-level managers. Nothing is sacred except the governing vision and values; all employees need to identify preconceived notions and remain open to new ideas. The process of open dialogue improves ideas. Open dialogue is defined as the sharing of information and ideas, unencumbered by fears, insecurities, or concerns over turf and status. This can be nurtured through mechanisms such as retreats or cross-functional work teams. Ground rules may be established for open dialogue; assumptions are suspended; disagreement is considered an opportunity to learn; and blame is avoided. (Senge 1990) The more information people can access, the better. With the exception of privileged personnel matters, all significant information should be made available to all employees. This includes internal information such as budget data, planning documents, and user complaints or comments, as well as government-level information. New ideas are valuable and can be generated by activities such as brainstorming at retreats, the conduct of focus groups or team meetings, and by the establishment of open suggestion forums. A mistake is simply an opportunity to learn; new ideas are encouraged; and mistakes are accepted as an inevitable part of the innovation process. However, resistance to change is inevitable, especially among long-standing employees. Critics and malcontents must be made an integral part of the planning and implementation process, so that their complaints are dealt with openly. Clear communication and education about proposed changes are essential, and managers must ensure that employees have adequate emotional support and the necessary training to adjust to new work arrangements. Team leaders need training in group facilitation; they must acquire the skills necessary to keep meetings focused and ensure that problems are dealt with constructively. Some managers may initially be reluctant to yield control, just as some employees may have difficulty in working more independently. Thus, the adaptation process could take several years. The learning organisation concept calls for no less than a cultural realignment of the organisation and may be an effective tool in breaking the organisation free from powerful inertial forces. The ideas which make up the theory are not new; they represent an eclectic combination of elements from the quality movement, matrix management, systems theory, and organisational development and culture, to name a few. What is unique is the way in which Senge combined them into a holistic theory of organisational effectiveness. Future research is needed in building models and testing the validity of the theory. References Garvin, D. A. (1993). Building a Learning Organisation', Harvard Business Review, 71(4), 81-89. Kramlinger, Tom (1991). 'Training's Role in a Learning Organisation' Training 29 (April 1991): 46-51. Pedler, M., J. Burgoyne and T. Boydell (1991). 'The Learning Company: A Strategy for Sustainable Development'. McGraw-Hill, London. Senge, P. (1996). The leaders new work: building learning organisations'. In: K. Starkey (ed.), How Organisations Learn, pp. 288-315. International Thompson Business Press, London. Senge, P. M. (1990). The fifth discipline, the art and practice of learning organisation. Doubleday Dell, New York. Senge, P. M. (1994). Learning to Alter Mental Models', Executive Excellence, 11(3), pp. 16-17. Senge, P. M., C. Roberts, R. Ross, B. Smith and A. Kleiner (1995). The Fifth Discipline Fieldbook: Strategies for Building Learning Organisation. Doubleday Dell, New York. Read More