In a Word Organizational learning is the ability of an organization to gain insight and understanding from experience through experimentation, observation, analysis, and a willingness to examine successes and failures. There are two key notions: organizations learn through individuals who act as agents for them; at the same time, individual learning in organizations is facilitated or constrained by its learning system.

In Brief

A knowledge advantage is a sustainable advantage that provides increasing returns as it is used. However, building a knowledge position is a long-term enterprise that requires foresight and planning. To begin, one should grasp the fundamental, allied notions of organizational learning , and the learning organization , which some contrast in terms of process versus structure.

On Learning Organizations

In the knowledge-based economies that emerged in the mid- to late 1990s, the organizations with the best chance to succeed and thrive are learning organizations that generate, communicate, and leverage their intellectual assets. In The Fifth Discipline, Senge (1990) labels them “…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 see the whole together.” He catalogues their attributes as personal mastery, shared vision, mental models, team learning, and systems thinking (the fifth discipline that integrates the other four).Footnote 1 Command of these lets organizations add generative learning to adaptive learning .Footnote 2 Thus, they seldom make the same mistake twice. Organizational learning promotes organizational health.Footnote 3 As a result, organizational performance is high.Footnote 4 Peter Senge has characterized the core learning capabilities of organizations as a three-legged stool—a stool that would not stand if any of its three legs were missing.

The most useful piece of learning for the uses of life is to unlearn what is untrue.

—Antisthenes

Other authorsFootnote 5 see learning organizations in different ways and the search for a single, all-encompassing definition of the learning organization is attractive but frustrating. In the final analysis, the most useful description is likely to be that which each organization develops for itself. That should be a well-grounded, easy-to-apply definition. An important feature to bear in mind is that, for associated benefits to arise, a learning organization must be organized at five, sometimes overlapping, levels: (i) individual learning,Footnote 6 (ii) team learning, (iii) cross-functional learning, (iv) operational learning, and (v) strategic learning (Fig. 41.1).

Fig. 41.1
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Why create a learning organization ? Source Author

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… And Organizational Learning

In the final analysis, other definitions of learning organizations share more with Peter Senge’s than they disagree with, but it should not be assumed that any type of organization can be a learning organization. In a time of great change, only those with the requisite attributes will excel. Every person has the capacity to learn, but the organizational structures and systems in which each functions are not automatically conducive to reflection and engagement. There may be psychological and social barriers to learning and change. Or people may lack the knowledge management tools with which to make sense of the circumstances they face. In this sense, the learning organization is an ideal toward which organizations must evolve by creating the motive, means, and opportunities (Fig. 41.2).Footnote 7

Fig. 41.2
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Single-loop and double-loop learning . Source Author

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The literature on learning organizations is oriented to action and geared to the use of strategies and tools to identify, promote, and evaluate the quality of learning processes. In contrast, that on organizational learning concentrates on the detached collection and analysis of the processes involved in individual and collective learning inside organizations. That is to say, organizational learning is the activity and the process by which organizations eventually reach the ideal of a learning organization. The dividing line between the two is the extent to which proponents emphasize organizational learning as a technical or a social process.

Everybody who is incapable of learning has taken to teaching.

—Oscar Wilde

Jean Lave and Etienne Wenger think that learning is inherently a social process that cannot be separated from the context in which it takes place. They coined the term “community of practice” in 1991 based on their work on learning theory in the late 1980s and early 1990s (even if the phenomenon to which it refers is age old). Learning is in the relationships between people. Social learning occurs when persons who share an interest collaborate over time to exchange ideas, find solutions, and build innovations based on ability, not hierarchical position. Jean Lave and Etienne Wenger argue that communities of practice are everywhere and that we are generally involved in several of them—at work, school, or home, and even in our civic and leisure activities. We all are core members of some groups and at the margins of others. Naturally, the characteristics of communities of practice vary. But they can be defined along three dimensions: (i) what they are about (their domain), (ii) how they function (their community), and (iii) what capabilities they produce (their practice) (Wenger et al. 2002).

I never teach my pupils; I only attempt to provide the conditions in which they can learn.

—Albert Einstein

More recently, communities of practice have been associated with knowledge management as organizations recognize their potential contributions to human and social capitalFootnote 8 as well as to organizational performance. Communities of practice can drive strategy, spawn new ideas for products and services, transfer good practiceFootnote 9 and decrease the learning curve of new employees, respond more rapidly to specific client needs (requested or anticipated) for certain information, solve problems quickly, minimize organizational knowledge loss (both tacit and explicit), reduce rework and prevent “reinvention of the wheel,” develop professional skills, and help engage and retain talented individuals. Even with the help of community-oriented technologies,Footnote 10 however, harnessing them in support of organizational development is not easy. Communities of practice benefit from cultivation, but their organic, spontaneous, and informal nature makes them resistant to supervision and interference. Importantly, knowledge and activity are intimately connected, and knowledge workersFootnote 11 have a strong need to feel that their work contributes to the whole. To get communities of practice going, leaders should (i) identify potential communities that will enhance the organization’s core competencies, (ii) provide supportive infrastructure, and (iii) use nontraditional methods to measure their value. In a learning organization , leaders are designers, stewards, and teachers. Fundamentally, they should move from managing to enable knowledge creation. Communities of practice are voluntary, and what will make them successful over time is their ability, within an enabling environment, to generate enough excitement, relevance, and value to attract, engage, and retain members.