The Learning Organization

The term 'learning organization' (LO) came into vogue in the 1980s and 1990s, but in today's dynamic and competitive environment, the concept and its application is as important as ever. Its commercial roots can be traced to companies like Shell, where Arie de Geus, former head of Shell's Strategic Planning Group, described learning as the only sustainable competitive advantage. The Learning Organization is seen as a response to an increasingly unpredictable and dynamic business environment. Here are some other definitions:

"The essence of organisational learning is the organization's ability to use the amazing mental capacity of all its members to create the kind of processes that will improve its own" (Nancy Dixon 1994)
"A Learning Company is an organization that facilitates the learning of all its members and continually transforms itself" (M. Pedler, J. Burgoyne and Tom Boydell, 1991)
"Organizations where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning to learn together" (Peter Senge, 1990)

We have drawn on these and more to develop a working definition to guide managers wanting to develop LO capabilitiesin their organization:

A learning organization is one that has in place the culture, systems, mechanisms and processes, that are used to continually enhance the capabilities of those who work with or for it, and collectively enhance the organization's knowledge so that it can achieve sustainable ooutcomes - for themselves and the communities in which they participate.

The important points to note about this definition are that learning organizations:

  • Are adaptive to their external environment
  • Continually enhance their capability to change/adapt
  • Develop collective as well as individual learning
  • Use the results of learning to achieve better results, i.e. a sustainable future

Why the Interest in 'Learning Organizations'?

Basically, it's the search for the (unattainable) Holy Grail. Companies are seeking to improve existing products and services (continuous improvement), and to develop new products and services through innovation (breakthrough strategies). For knowledge intensive organizations - which is most of them, these days - one of their key assets is the knowledge in their people. But this knowledge must be harnessed in an effective way. Also, when we consider why many strategic initiatives, such as IT investments, fail or do not meet their stated objectives, it is usally lack of attention to human and social factors, such as skills, attitudes and organisational culture, that are the root cause.

Interest in adopting the principles of a 'learning organisation' stems from the recognition that attention to people, their knowledge and their capacity to learn and develop, is a core competence and a competitive advantage. Organizations that have adopted LO principles report various benefits, such as:

  • Solving what appears to be intractable problems, for example with product quality or customer service
  • Coping with rapid change or unexpected events where existing 'programmed' responses are inadequate
  • Provide flexibility to cope with a changing economic and competitive environment
  • Developing innovative products and services that give a competitive edge in the marketplace
  • Having a deeper understanding of customer needs - both explicit and implied - and as a result developing novel solutions
  • Allow front-line staff to respond with initiative based on customer needs vs. being constrained by business processes established for different circumstances.

As various management writers put it:

"Organisations must develop a capacity for fast-paced innovation...learn to love change" (Peters)
"As the competitive environment becomes more complex and variegate, the need for greater genetic variety - a broader range of managerial beliefs, and a greater repertoire of managerial actions - grows apace" (Hamel and Prahaled).
"Top companies seem to organise around people...honouring these needs - feeling of control, something to believe in, challenge, lifelong learning, recognition" (Waterman)

With the pace of change ever quickening, the need to develop mechanisms for continuous learning and innovation is greater than ever.

From Training to Learning

A learning organization is not about 'more training'. While training does help develop certain types of skill, a learning organisation involves the development of higher levels of knowledge and skill. We have developed a 4-level model:

Level 1.- Learning facts, knowledge, processes and procedures. Applies to known situations where changes are minor.

Level 2.- Learning new job skills that are transferable to other situations. Applies to new situations where existing responses need to be changed. Bringing in outside expertise is a useful tool here.

Level 3 - Learning to adapt. Applies to more dynamic situations where the solutions need developing. Experimentation, and deriving lessons from success and failure is the mode of learning here.

Level 4 - Learning to learn. Is about innovation and creativity; designing the future rather than merely adapting to it. This is where assumptions are challenged and knowledge is reframed.

Furthermore this model (or adaptation of it) can be applied at three levels - to the learning of individuals, of teams and of organisations. Organizations that achieve learning to Level 4 will "reinvent not just their organization but their industry" (Hamel and Prahaled in Competing for the Future)

The shift from a training to a learning approach is summarized in the following table

Training Focus Learning Focus
Teacher-oriented Student-oriented
Curriculum Process
Training centres On-the-job learning
Scheduled As needed (any time, any place)
Input measures (e.g. training hours) Outcome measures (e.g. overall performance)
Perceived as a cost [1] Considered an investment
Accumulated knowledge Applied knowledge

Adapted from Management Strategies for Knowledge Innovation: The Ken Awakening, Derba M Amidon, Butterworth-Heinemann (1997).

Characteristics of a Learning Organization

Observation and research identifies four types of factor that are prevalent in a learning organization:

  • A learning culture - an organizational climate that nurtures learning, allowing quiet time for reflection on tasks performed, encouraging participation in forums to share experiences and giving people incentives to share and develop their knowledge with others. There is a strong similarity with those characteristics associated with innovation.
  • Networking and self-organizing structures - much learning takes place outside of the formal organization; staff participate in communities of practice; they self-organize into groups to enhance their personal and organizational knowledge.
  • Processes - processes that encourage interaction across departmental boundaries. These are infrastructure, development and management processes, as opposed to business operational processes.
  • Tools and techniques - methods that aid individual and group learning, such as creativity and problem solving techniques.
  • Skills and motivation - to learn and adapt; not to be satisfied with the status quo.

Here are some additional points on the first three of these.

A learning culture

  • Future, external orientation these organisations develop understanding of their environment; senior teams take time out to think about the future. Widespread use of external sources and advisors e.g. customers on planning teams.
  • Free exchange and flow of information - systems are in place to ensure that expertise is available where it is needed; individuals network extensively, crossing organisational boundaries to develop their knowledge and expertise.
  • Commitment to learning, personal development - support from top management; people at all levels encouraged to learn regularly; learning is rewarded. Time to think and learn (understanding, exploring, reflecting, developing)
  • Valuing people - ideas, creativity and "imaginative capabilities" are stimulated, made use of and developed. Diversity is recognised as a strength. Views can be challenged.
  • Climate of openness and trust - individuals are encouraged to develop ideas, to speak out, to challenge actions.
  • Learning from experience - learning from mistakes is often more powerful than learning from success. Failure is tolerated, provided lessons are learnt ("learning from fast failure" - Peters).

These characteristics overlap those of a knowledge-enriching culture.

Key management processes

  • Strategic and scenario planning - approaches to planning that go beyond the numbers, encourage challenging assumptions, thinking 'outside of the box'. They also allocate a proportion of resources for experimentation.
  • Competitor analysis - as part of a process of continuous monitoring and analysis of all key factor in the external environment, including technology and political factors. A coherent competitor analysis process that gathers information from multiple sources, sifts, analyses, refines, adds value and redistributes is evidence that the appropriate mechanisms are in place.
  • Information and knowledge management - using techniques to identify, audit, value (cost/benefit), develop and exploit information and knowledge as key corporate resources; extensive use of collaborative technologies and associated processes.
  • Capability planning - profiling both qualitatively and quantitatively the competencies that the organization needs for the future. Profiling these on a matrix can be helpful to planning changes in the workforce and emergent skill requirements.
  • Team and organisation development - the use of facilitators to help groups with work, job and organisation design and team development - reinforcing values, developing vision, cohesiveness and a climate of stretching goals, sharing and support.
  • Performance measurement - finding appropriate measures and indicators of performance; ones that provide a 'balanced scorecard' and encourage investment in learning (see, for example, Measuring Intellectual Capital).
  • Reward and recognition systems - processes and systems that recognize acquisition of new skills, team-work as well as individual effort, celebrate successes and accomplishments, and encourages continuous personal development.

Tools and Techniques

There are numerous learning, creativity and knowledge-sharing tools and techniques that can be used to underpin day-to-day activities. Here are just a few, organized into the following categories:

  • Inquiry - interviewing and knowledge elicitation techniques, information searching
  • Creativity - brainstorming, associating ideas
  • Making sense of situations - systems thinking, organising information and thoughts, simulation, modelling
  • Making choices - decision trees, options analysis
  • Observing outcomes - recording, observation
  • Reframing knowledge - embedding new knowledge into mental models, memorizing

There are also some specific techniques and approaches that can be used to achieve collective learning (at team and organizational level):

  • Corporate 'universities' - focal points for learning, often with close links to a leading academic establishment
  • Learning resource centres - drop in centres where staff can access a range of learning resources
  • e-learning - brining learning to the desktop, often in byte-sized chunks (a few minutes at a time) when the learner needs it - 'just-in-time learning'
  • Sharing best practice - recording information in databases, using facilitators to draw out key findings
  • After Action Reviews (AARs) - a structured process for taking stock at a project milestone or at completion of an assignment
  • Storytelling - bringing the lessons from a situation alive in a more memorable format
  • Lessons learned databases - distillation of lessons structured according to context, objectives and other factors.

Underpinning many of the above techniques are specific skills needed by participants if they are to achieve the maximum benefit. In particular, where sharing of implicit and tacit knowledge is concerned, assumptions and beliefs that are traditionally "beneath the surface" need to be uncovered. Key skills here are:

  • Communication, especially across departments, which may have their own jargon
  • Active listening and observing - not being afraid to interject with questions on basics
  • Mentoring and supporting colleagues - open dialogue without concern for appearing ignorant
  • Taking a holistic perspective - seeing the team and organization as a whole, rather than parochial interests
  • Coping with challenge and accepting uncertainty - not all the answers are known; ambiguity is tolerated up to a point.

Getting Started

As with many 'interventions', there are many good places to start, depending on the specific context. Some ones often recommended are:

  • Start at the top - helpful to give an impetus
  • Start with a chronic problem - always a good place to get the thinking caps on
  • Initiate a task force - a common response, but they will need drive and vision
  • Start with an organizational diagnosis - HR and management consultants favour this one - guess why!
  • Link to an existing process or initiative - go where there is existing energy and 'pull' (see comments on knowledge management below)
  • Review existing systems and processes - a skills and/or training needs analysis to identify a 'capability' gap
  • New Product Development - offers a focussed project, often with new teams and an open outlook, in which to introduce some of the proven techniques

We particularly favour the latter. It is tangible, is an opportunity to be innovative, and needs a lot of 'boundary crossing' to succeed. It draws on many of the processes, tools and techniques to become effective at learning.

Learning and Knowledge Management

learning organization and km

It is a sad reflection on 'silo' mentalities that often Learning Organization and Knowledge Management are viewed as separate initiatives. After all, they often originate in different parts of the organization (typically HR / training for the former and IT / marketing / strategy etc. for the latter). However, in Creating the Knowledge-Based Business[2], knowledge management and organizational learning are described as being "two sides of the same coin":

"Learning comes through creating and applying knowledge, whilst learning increases an individual's and organization's knowledge asset"

KM and LO are inter-dependent. The above diagram shows some of these linkages. For example, a disposition to learning encourages the acquisition and development both of personal and organizational knowledge, while KM provides the infrastructure and techniques to assimilate learning and enhance the quality of organizational knowledge. Today, learning is a key feature in many KM practices, such as After Action Reviews and sharing best practice. On the other hand KM can support learning activities, such as through the better classification, organization and management of e-learning modules on a corporate portal.

The Role of Systems

It is our belief that many learning organization initiatives are high-jacked by the HR function or outside specialists. This should not be the case. Developing a learning organization is about doing it from within and taking a holistic systems perspective. MIS departments and IS professionals have a major contribution to make.

  • they have a systems approach and mind-set: a strong background in logical methods and process and are generally capable of developing creative solutions and holistic views.
  • they often provide some of the best project managers within an organisation, capable of co-ordinating multiple activities across several functions and involving significant change in work processes.
  • an information infrastructure that enables information flows, including networked connections between internal systems and access to external networks and databases
  • likely to be "early adopters" of important learning enabling technologies, such as groupware, computer conferencing, videoconferencing, Internet exploration, multimedia
  • have systems integration knowledge, essential aspect of making efficient connections between information, and more importantly knowledge

In conjunction with an information management / services function (of the library tradition rather than IT tradition) they play a key part in the management of information and knowledge resources. Providing the systems and processes for the management of knowledge and flow of information is, we believe, a crucial and underrated aspect of the learning organisation.

Inhibitors to becoming a Learning Organization

These are some of the most common obstacles to becoming a learning organization:

  • operational/fire fighting preoccupation - not creating time to sit back and think strategically
  • too focused on systems and process (e.g. ISO9000) to exclusion of other factors (bureaucratic vs. thinking)
  • reluctance to train (or invest in training), other than for obvious immediate needs
  • too many hidden personal agendas
  • too top-down driven, overtight supervision = lack of real empowerment


Here are a few examples of how different organizations have embraced the Learning Organization approach in practice over the last couple of decades:

  • Motorola University - this is the learning division of Motorola and was responsible for developing the Six Sigma methodology for quality management. In the 1980s, the then CEO Bob Galvin recognized the importance of Motorola's employees "gaining timely mastery" in "mental processes". The emphasis of the universty - still going strong today - is to distil knowledge and learning that is essential to day-to-day operations.
  • US Army - The US Army is renowned as the organization that developed After Action Reviews a key plank of its work. This "learning after doing" approach started around 1985 and is now a formal regulation (Army Regulation (AR) 11-33), backed up by guidance. Knowledge is extracted and codified from AARs by CALL (Center for Army Lessons Learned) and is turned into practice through military doctrine and ongoing training.
  • Glaxo Wellcome (now Glaxo SmithKline) - following the merger of Glaxo and Wellcome in 1995, a strategy reviewed identified the need for the company to become an effective learning organization. Its then CEO, Sir Richard Sykes, addressed a workshop of senior managers, with the remit to articulate what the concpet meant in practice. As a result a number of learning and KM initiatives emerged including customer intimacy, a revised IT strategy (to give more focus to the needs of knowledge workers) and a revised reward and recongition system.
  • Dow Chemical - Learn@Dow is Dow's online elearning system. Under the guiding principle that "training and knowledge should be available to every employee", a wide range of course modules is available online. Part of the stimulus was the need for culture change to transform a geographically spread and diverse company into an integrated global player. Early courses were on workplace responsibility and business ethics. Dow reports considerable savings over classroom tuition, but the main benefits are flexibility, control and convenience for the employee and a consistent quality of training output across the company.
  • BAe Systems - The Virtual University (VU) at BAe Systems was developed as an intranet portal to help knowledge sharing across this global organization. It provides a focus for elearning and for sharing best engineering practice quickly. Making the interface intuitive and easy-to-use, as well as a rapid launch were crucial aspects of the project. But the key aspect of the project is that it brings together KM and LO in a cohesvie way. The VU is the umbrella for many activities including links with academia, and access to a wide range of information databases and personal expertise (not just elearning modules) through a standard interface that is customisable for different people and different work teams.

Resources and Notes

1. Which is why, that in a severe economic downturn, training is one of the first things to be cut. For example, job vacancies for trainers in the UK declined by 30% in 2010. If those cuts are for traditional training, that probably does not matter too much. But do the companies that cut out training reinvest their savings from training into learning?!

2. Creating the Knowledge-Based Business, David J Skyrme and Debra M Amidon, Business Intelligence (1997). Chapter 7 of this report 'Roles and Skills' for the Knowledge Age' has a section on the Learning Organization. There are also case studies on Anglian Water, Glaxo Wellcome, Unipart, Motorola University, Rpover and other Learning Organizations.

3. The Learning Company: a Strategy for Sustainable Development, Mike Pedler, John Burgoyne & Tom Boydell, McGraw-Hill (1991). More Details.

4. The Organizational Learning Cycle, Nancy Dixon McGraw-Hill (1994). More Details.

5. The Learning Organisation, Bob Garratt, Harper-Collins, (1994). More Details.

6. The Fifth Discipline Fieldbook by Peter Senge, C. Roberts, R.B. Ross, B.J. Smith, A. Kleiner, published by Nicholas Brierley (1994). The five disciplines are Personal Mastery, Systems Thinking, Team Learning, Shared Vision, Mental Models - More Details.

7. Learning In Action: A Guide To Putting The Learning Organization To Work, David A. Garvin, Harvard Business School Press (2003). Links theory and practice including case studies from Xerox, L. L. Bean, GE and the U.S. Army (Garvin was instrumental in helping the US Army develop the AAR method).

8. 'What are the Characteristics of the Learning Organization', Eve Mitleton-Kelly, Global Environmental Management Initiative (2007) accessible at

9. Society for Organizational Learning - created in 1997 to continue the work of MIT's Center for Organizational Learning (1991-1997) under Peter Senge. Today it has associated organization across the world running courses, coaching and consultancy.

Related K-Briefings

The Networked Organization, The Virtual Corporation, Knowledge Networking.

© Copyright. David J. Skyrme. 2010. Based on an Insight first co-authored with John Farago (Oct 1995). This material may be copied or distributed subject to the terms of our copyright conditions (no commercial gain; complete page copying etc.)

Last updated: 24th March 2011



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