Ethics plays an important role in conducting of research. While the individual researcher is responsible for his/her ethical practice, any research sponsored by an organization, university, or government program has a review process guided by a code of ethics. Besides the code of ethics, the Institutional Review Board (IRB) plays an important role in monitoring research. Your task in this discussion is to examine the origins of the IRB and analyze how the Review Board guides or monitors research. In your 250 word post answer the following three questions:
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What does the IRB do to protect a research participant from harm?
One of the reasons for the existence of the IRB has to do with screening research applications. What is the basis for such screening?
The IRB provides the guidelines for ethical research practice. What would the researcher responsibilities be in terms of these guidelines?
Ethical Implications – discussion 2
Assume you were interested in the issues related to violence in elementary level school children. You are aware of the increased incidences of bullying, leading to serious problems. Specifically, you want to video tape children’s behavior out of school on their way home to and from school. You want to capture, on video, the social interactions that take place, trying to record behaviors that are definitely bullying behaviors or “could lead to bullying.” So you are focusing on the perpetration of bullying. For this discussion, you are asked to identify “ethical” factors involved in your proposed research. Your list would include research issues and ethical implications beyond the basic informed consent condition. Answer in 250 words.
Partnerships – discussion 3
View the Malcolm Gladwell video,
Malcolm Gladwell on Innovation (Links to an external site.)
, about today’s customers desiring partnerships.
How does employee empowerment aid in building partnerships between companies and their customers? Describe why the structure of an Agile Organization might meet the goal of empowerment and partnership. Provide an example from your experience as an employee or customer. Construct your answer from the theories you’ve learned.
Your initial post should be at least 200 words in length. Support your claims with examples from required material(s) and/or other scholarly resources, and properly cite any references.
Organizational Learning – discussion 4
Evaluate the four traits of organizational learning. Provide examples of how learning and change can impact one another.
Your initial post should be at least 200 words in length. Support your claims with examples from required material(s) and/or other scholarly resources, and properly cite any references.
Required Resources
Text
Weiss, J. W. (2016).
Organizational change (2nd ed.)
. Retrieved from https://content.ashford.edu/
Chapter 5: Adapt & Rejuvenate: Agile and Learning Organization
Multimedia
Her Campus Media. (2011, July 10).
Malcom Gladwell on innovation (Links to an external site.)
[Video file]. Retrieved from http://www.youtube.com/watch?v=wg0Zg8-2_Jo
This video will assist you in your Partnerships discussion forum this week. This video has closed captioning and a transcript.
Accessibility Statement (Links to an external site.)
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36 hours
5 Adapt and Rejuvenate: Agile and Learning Organizations
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Learning Objectives
After reading this chapter, you should be able to do the following:
1. Analyze key traits of successful change leaders.
2. Describe how agile organizations approach change compared to traditional ones.
3. Examine the characteristics, levels, and principles of learning organizations.
4. Explain the relationship between learning and change in organizations, the process a company goes
through to become a learning organization, and the importance of leadership.
5. Summarize the mind-set that both agile and learning organizations must have in the 21st century.
over realize that success depends on their ability
to respond to new opportunities and threats as
they emerge, and to keep rethinking their
strategies, structures, and tactics to gain
ephemeral competitive advantages.
—Perry Keenan, Stephanie Mingardon, Harold Sirkin,
and Jennifer Tankersley
Pretest Questions
1. True/False: The traditional leadership traits of decisiveness and composure con-
tinue to rank high in current change leadership models.
2. True/False: Agile organizations tend to have a high tolerance for failure.
3. True/False: A learning organization is holistic, which means it considers how the
entire industry and business market contribute to its specific goals.
4. True/False: Learning organizations respond well to market swings because they can
bring in outside marketing experts to advise them on how to react.
5. True/False: In the 21st century, both agile and learning organizations must accept
that change demands doing things differently.
6. True/False: Tension can actually be a source of energy and renewal for a learning
organization.
Hyundai’s current successes may be surprising to those who know its past. The Korean
automotive company has shed its former image of producing low-quality, “me-too” vehicles—
and the experience of suffering a near collapse in sales in 1998—and replaced it with that of a
$66 billion company that controls 5% of the market today (Holstein, 2013). The company’s cars
have vastly improved and are moving to the top of the list in quality: J. D. Power and Associates
ranked Kia (owned by Hyundai) as number two, behind Porsche, and Hyundai as number four,
behind Jaguar (Levin, 2015).
This change happened by design, not by chance. Hyundai’s skills in design, product launch, and
consumer awareness are credited to its recently implemented product management model. The
company’s overall success is attributed to the fact that it has focused leadership; a dynamic
culture; competitive strategies; high-quality products; innovative design; operational excellence;
shrewd marketing; and an empowered, disciplined workforce.
Chung Mong-Koo, chair of Hyundai Motor Company, assumed leadership in 2000. He succeeded
his father, Chung Ju-Yung, who founded the Hyundai Group. Chung has rejuvenated the
workplace, changing Hyundai’s culture and its overall approach to auto manufacturing. The
company’s redefined culture emphasizes learning and innovation. This focus became clear in
2009, when Chung began recruiting top-level design talent from Germany, Italy, and the United
States (Holstein, 2013) to execute his new design approach: fluidic sculpture, inspired by natural
shapes. The company’s new designers are young and keep an edgier, innovative culture that has
a degree of fearlessness (Levin, 2015).
Chung didn’t make these changes alone. John Krafcik, CEO of U.S. operations, helped Chung
implement new strategies to move the company forward through 2013, which employees
meticulously executed. Hyundai’s workplace culture operates with a mix of Korean superiors
and coordinators who are mostly U.S.-educated and more Westernized than their counterparts
in Seoul. Coordinators help bridge communications between Western and Eastern employees
and in some ways are equals of the U.S. executives for whom they work (Holstein, 2013).
As the company expands its global reach, its major concerns include balancing quality with
production and innovation with sustainable reliability, while maintaining an entrepreneurial
pace in a hypercompetitive environment.
Critical-Thinking Questions
1. What are some competitive advantages Hyundai has shown that have contributed to
its marketplace success?
2. What changes has Hyundai made to evolve from a low-quality, me-too company to a
significant global competitor? (In your answer, refer to concepts in the text as well as
specifics in the opening scenario.)
wei82650_05_c05_207-248.indd 209 12/22/15 10:21 AM
Introduction: The Road Ahead
We began this text by defining different types of change and showing how organizational
change can be diagnosed, planned, and implemented. In the chapters that followed, strategies
and methods for sustaining change were presented. Here we examine how organizations can
adapt to continuous change by emphasizing innovation, creativity, agility, and learning, as is
the case with Hyundai.
Leading people is a crucial part of whether an organization successfully adapts to continuous
change. Although leaders must facilitate and manage change by articulating clear strategies
and creating flexible structures, they must also create a culture that sustains not only the
“hard” dimensions of change (like strategies, structures, and systems) but also its “soft”
dimensions, which involve motivating and developing people to higher performance levels.
While transformational change happens rapidly and sometimes dramatically, organizations
must also continue to make equally dramatic adjustments to survive and succeed (Paton &
McCalman, 2000). At the same time, developing cultures that attract high-quality talent
involves learning, innovation, and creativity.
Motorola’s 2011 restructuring exem-
plifies this type of continuous inno-
vation and creativity. The company
successfully split from a unified cor-
porate parent into Motorola Solu-
tions, which houses its businesses
that manufacture wireless devices
that are sold mainly to enterprises
and governments; and Motorola
Mobility, which sells cell phones and
set-top boxes to consumers. CEO
Greg Brown has helped engineer
the transformation from cell phone,
cable set-top box, wireless network,
automotive, and barcode scanner
divisions to a pure-play public-safety
LTE, a network technology that offers
high speeds and low lag times over
long distances. (Among other uses, it
provides first responders with valu-
able photos, video, and other infor-
mation via police radios equipped with specially designed smartphones and other devices).
The turnaround involved trimming $500 million in annual operating expenses in 3 years,
changing out 21 of 70 vice presidents, and adding 20% more sales staff (Pletz, 2015).
Organizations that plan, implement, and strive to sustain change must continually adapt
to unforeseen global competition, uneven economic shifts, new technologies, and the rapid
increase of available data. Other challenges may be indirect and less dramatic, such as learn-
ing how best to incorporate recent graduates into the workforce when they may lack certain
skills because educational systems can’t keep pace with changes in the workplace (Marquardt,
AP Photo/Richard Drew
CEO of Motorola Solutions Greg Brown helped Motor-
ola Inc. split into two successful companies, Motorola
Solutions and Motorola Mobility.
2002). Looking ahead, it is nearly impossible to predict the types of adaptations individuals,
leaders, and entire organizations will need to make in order to stay competitive.
5.1 The Leadership Challenge
Different leadership styles and strategies relevant to guiding change have been discussed
throughout the text. These discussions have highlighted that one of the principal challenges
company boards face is finding and developing leaders who can guide their organization
through uncertainty. Effective change leaders must fill new roles, many of which have yet to
be defined.
Successful Change Leaders
Over the past decade, business leaders and psychologists have attempted to identify the qual-
ities of successful change leaders. In a study conducted by the Center for Creative Leadership,
76% of its constituents believed the definition of leadership had already changed, and 91%
believed leaders face increasingly complex challenges. Respondents ranked key traits lead-
ers must have to be successful under these new conditions. Forty-nine percent believed in
the importance of collaboration. They also highlighted change leadership, the ability to build
effective teams, and the ability to influence employees without exerting authority as impor-
tant leadership qualities. More traditional traits such as decisiveness, composure, and finding
ways to get results were ranked low (Martin, 2007).
IBM’s Global Business Services group interviewed more than 1,500 CEOs to analyze the
traits they valued in leaders tasked with managing complex environments. Overall, they
cited creativity as the most important of a CEO’s skills. Digging deeper, they identified seven
approaches exemplified by creative CEOs.
1. A willingness to change business models to meet goals
2. Encouragement of risk taking
3. Openness to out-of-the-box solutions
4. Comfort with ambiguity and experimentation
5. Valuing innovation
6. Decisiveness
7. Inventiveness with new business models (ChiefExecutive.net, 2011)
Creative CEOs share a willingness to change. In other words, these leaders adapt to change
and steer their organizations toward it, rather than clinging to tried-and-true methods of
management.
wei82650_05_c05_207-248.indd 211 12/16/15 11:58 AM
Vineet Nayar, HCL Technologies Ltd.
Vineet Nayar, vice chair and former CEO of HCL Technologies Ltd. (HCLT), a $3.5 billion global
IT services company based in India, is an example of a creative change leader. Nayar joined
HCLT in 1985 and became president in 2005. He led the company in a complete turnaround
over the following 5 years, expanding from 30,000 to 75,000 employees, tripling revenues,
and doubling market share (HCL Technologies, 2001).
Along with Apple, Google, Lenovo, and Cognizant, HCLT was one of five global technology
firms to reach revenues above $2 billion, with a compound annual growth rate over 30%.
(Flinders, 2010). In his book, Employees First, Customers Second: Turning Conventional Man-
agement Upside Down, Nayar (2010) explains that his leadership approach involves convert-
ing an organizational structure into a transparent, accountable, and value-driven culture.
Under Nayar’s leadership, HCLT has been recognized as one of the best employers with the
most innovative and most democratic workplaces worldwide.
But why redefine leadership away from author-
ity and “doing whatever it takes to get results”?
Given the variety of changes an organization may
encounter and the complexity involved, individual
leaders can no longer serve as ultimate authori-
ties or experts. As noted in Chapter 4, emotion-
ally intelligent leaders and followers have a com-
petitive edge with regard to change, as compared
to more rigid, closed thinking, and closed feeling
professionals. Because effective leaders rely on
employees for information and insight to resolve
complex situations, collaboration and communi-
cation take priority over authority. Today’s lead-
ers create environments in which employees can
share information and propose alternate solu-
tions to problems.
Scott Cook, Intuit
Scott Cook is the cofounder of the software com-
pany Intuit, which creates personal and small-
business finance products such as TurboTax and
QuickBooks. When Cook wanted to revitalize his
organization, he imagined a design-driven model
like Apple. However, he quickly realized that he
was no Steve Jobs, a visionary CEO with the power
to inspire and compel his employees.
Instead, he turned his company upside down, let-
ting the vision come from designers close to the
front lines. He worked with one of Intuit’s design directors to create the Design for Delight
(D4D) forums, which encourage employees to engage problems in new ways. Intuit eventually
AP Photo/Al Behrman
Scott Cook, cofounder of Intuit, revital-
ized his organization by turning his com-
pany upside down. He let the vision come
from designers close to the front lines
rather than from top management.
developed a D4D customer- and design-centered process. It begins with a “painstorm” to
understand real consumer issues and thus better identify ways Intuit can help. These front-
line conversations take place directly with customers.
The team then has a “sol-jam” to generate as many solutions as possible and then develops
prototypes to test what they come up with. Finally, the team has the “code-jam” to quickly get
a product to user testing. From painstorm to testing, the entire process takes 4 weeks and has
yielded some of Intuit’s most popular products, including its highly rated smartphone apps
(Martin, 2011). Now, with Brad Smith as CEO, the firm is included on Fortune’s 2015 100 Best
Companies to Work For list (Fortune, 2015c).
While leaders place increasingly greater emphasis on relationship building and creating open
work environments, the idea of leadership has shifted; it is no longer regarded as a quality
desired only in management. Leadership responsibilities have been pushed down in orga-
nizational hierarchies (Martin, 2007) to enable potential challenges to be identified more
quickly and to compress response times. Another way to describe this shift in expectations
is empowerment. As we discussed in Chapter 4.2, employees are empowered when they are
given more autonomy to make decisions, which is paired with increased responsibility. At
Intuit, the initial D4D facilitators were recruited with the following responsibilities:
Actively participate in a one-day brainstorm/workshop.
Commit to the execution of initiatives generated through the … workshop.
Become a more visible Design for Delight leader across Intuit.
Be a D4D coach/facilitator that the larger company can draw upon. (Martin,
2011, “Recruiting the Innovation Catalysts,” para. 4–7)
These designers were at least one step removed from directorships, meaning they were closer
to the bottom of the organizational hierarchy than to the top. However, they were tasked with
changing the company’s culture and finding ways to more immediately respond to their cli-
ents’ needs.
Jason Kayzar, PhishLine
Jason Kayzar, COO at PhishLine, a social engineering management platform built for informa-
tion security professionals, has a similar mind-set to Cook at Intuit. PhishLine assists Fortune
1000 clients in addressing social engineering threats using risk- and action-based precision
techniques and decision-making processes (Schawbel, 2015). When asked in an interview,
“How do you approach process improvement within your organization?” Kayzar’s quick
answer was “Empowerment” (Schawbel, 2015). He continued:
I have worked in a number of traditional office environments where demo-
cratic rule by committee took the place of leadership. In some ways this can
be a good process, especially if the goal is one of making everyone feel good
but more often than not it slows the process and/or can lead to decision
paralysis. Our business moves at light speed, and is growing in size and scope
accordingly. Our people are smart, and therefore they are empowered to make
many of the process improvement decisions on a daily basis that help move us
closer to achieving our overall goals. We have an internal suggestion process
within our software, so all ideas are captured, catalogued and can be reviewed
by any employee at any time. There are no bad ideas. Many may be rejected,
or added to a future projects list while many others are often implemented
immediately. (Schawbel, 2015)
The following section presents roles, resources, and different ways that organizational devel-
opment consultants provide help to employees.
OD Consultants as Sources of Empowerment
As organizations move from old to new business models, leaders often employ OD consul-
tants. Today many OD consultants view their roles as “educators” or “facilitators” (Rothwell,
Stavros, Sullivan, & Sullivan, 2010) rather than as external experts who present solutions.
This change mirrors evolving leadership roles and organizational cultures.
To recap from Chapter 1, an OD consultant has several goals, including:
• to deeply understand how the various parts of an organization fit together to com-
pose a whole system;
• to communicate that systemic understanding to their clients so that the potential,
organization-wide ripple effects of individual and departmental changes become
clear prior to implementation;
• to facilitate the empowerment of employees so that they constantly aim for improve-
ment and look for creative solutions to problems;
• to consider multiple ideas without judgment and to encourage others to do the
same; and
• to step aside as needed (Rothwell et al., 2010).
An OD consultant may also serve as an executive coach. Organizations hire executive coaches
to advise on complex decisions and individual and/or team skill building aimed at developing
personal and professional performance (Executive Coach Academy, n.d.). These professionals
model the leadership behaviors that flexible and responsive organizations require. They help
establish cultural norms and practices that reflect innovation and change, and then let the
players fulfill their redefined roles, trusting their abilities and the updated processes. In this
way organizations can “learn by doing.”
Organizations are given an opportunity to step back, reflect, and then implement initial
changes under the guidance of a facilitator who eventually exits the process (Rothwell
et al., 2010). As the organization moves forward, its leaders facilitate the same type of
reflective process in whatever new change scenarios arise. An increasing number of
Fortune 500 companies are using executive coaches with OD expertise not only to help
leaders and employees develop new skills, but also to strengthen every part of the orga-
nization, including its productivity, work flow, and well-being, and to increase the bottom
line (McNamara, n.d.).
For example, an organization that plans to move from a hierarchical to a team-based model
may hire an OD consultant to facilitate this shift. Prior to recommending changes, the con-
sultant needs to understand the organization, its leadership, the vision-mission-values and
rationale for desiring the change, the corporate structure, and how various roles fit together.
The consultant would also need to understand individuals’ perceptions of their positions and
how they contribute to the whole. Once the consultant understands the existing system and
the desired outcomes, the shift must be communicated to employees so they understand the
reasons behind the changes and buy in to them.
This process allows OD consultants to gain enough knowledge about an organization to coach
its leaders and managers on how to model new methods of leadership. For example, OD con-
sultants involve employees in the process rather than decreeing change from the C-suite or
the executive team (CEO, COO, CFO, and CIO, or chief information officer).
As changes are implemented, the consultant asks employees for feedback and suggestions and
makes modifications accordingly. Those involved in the change are most likely to understand
what works and what doesn’t, so this reinforces the shift toward employee empowerment.
The OD consultant creates situations in which employees can contribute thoughts that posi-
tively affect outcome. Employees, in turn, take ownership of a process that otherwise would
have been imposed on them. In this way the shift becomes a practical learning experience for
everyone in the company, from the employees up to the CEO; all the OD consultant needs to
do is step aside and let the revised company run itself.
How Leaders Can Develop Employees for Change
There are five emerging trends that impact organizations: globalization, diversity, flexibility,
flattened structures, and networks (Tan, 2015). Globalization and diversity go hand in hand;
organizations now span continents, leading to new challenges of managing in terms of creating
a consistent culture across the organization, communicating effectively, and understanding
local cultures. Organizations attempt to increase flexibility for their workforces by experi-
menting with flexible schedules, alternative compensation packages, and revised reporting
structures.
Instead of highly structured, top-down management hierarchies, decision-making power is
passed to the employee level, flattening layers of management. Rather than communicating
vertically across an organizational chart, employees are encouraged to network laterally and
to work in teams across divisions. Moreover, surveys, discussions, and feedback sessions are
held with teams and employees to obtain information on their need to achieve higher perfor-
mance levels and to yield suggestions that would enhance organizational planned changes.
Cisco Systems designs, manufactures, and sells networking and communication devices
worldwide. The company employs 71,833 people (Yahoo! Finance, 2015). Its vision has
focused on transforming its workplace to “drive employee attraction, retention, productivity
and a perpetual collision of creativity” (as cited in Crandell, 2014), according to Alan McGinty,
senior director of the Global Workplace Solutions Group. The company identified three objec-
tives for its new culture: “Provide different solutions to meet the needs of all types of work,
teams and environments; utilize the company’s own collaborative technology; and have poli-
cies that support workers to work where and when they want to fit their lifestyles” (Crandell,
2014). To that end, Cisco holds local employee teams accountable for “the health and happi-
ness of their neighborhoods and ensure each employee has an environment that is right for
them” (Crandell, 2014). This is a collective approach to managing people and “is all about
choice and making sure that everyone has ‘more skin in the game’” (Crandell, 2014).
As part of its revitalization, Cisco tran-
sitioned from a centralized model to
a decentralized one because it real-
ized that creative solutions can come
from anyone, and a conventional
pyramid can hinder creative infor-
mation sharing (Useem, 2009). Tech-
nology allowed Cisco to implement a
company-wide communication solu-
tion. It created a “Ciscopedia,” similar
to Wikipedia, for internal use, and the
500 senior managers collaborate lat-
erally to make decisions about prod-
ucts. This leads to faster facilitation
and more localized decision making
and deployment (Useem, 2009).
To some, this may sound utopian. How
can a large organization stay produc-
tive and competitive in these conditions? And how can a hierarchical organization, designed
for stability, reinvent itself ? The key is to develop human capacity within the organization.
Rather than simply executing assigned tasks, employees are asked to contribute ideas and
are recognized for their successes. They take on increasingly creative roles and solve prob-
lems, so they become invested in the organization’s overall success, staying focused on the
big picture and finding ways to meaningfully contribute to the organization’s growth. Moving
forward, leaders and employees are not the only ones that must change; organizations, too,
must transform.
Check Your Understanding
1. Identify some methods that Cisco Systems has adopted to stay competitive in its industry.
2. What are some specific changes organizational leaders can implement to increase employee
effectiveness?
5.2 Agile Organizations
An agile organization is one that can quickly react to changes in the market. This means
that companies can and do successfully respond to new competitors, technologies, and shifts
in the market (BusinessDictionary.com, 2015). Stated another way, agile organizations stay
competitive by identifying and implementing opportunities faster than their competition
(Sull, 2009). Having the ability to respond to changing environments can mean life or death
for an organization. More uncertain, turbulent environments and market changes require
more agility.
AP Images/Chang xu/Imagechina
Cisco changed from a centralized to a decentralized
structure to allow for creative solutions from all lev-
els of the organization, instead of just management.
Two traditional methods of managing a large-scale enterprise—delegation and
specialization—work well in stable environments. All employees know and understand their
roles, and work flows in a predictable manner. However, when this type of organization faces
a threat, whether from an internal or external source, it often struggles to respond effectively
and rapidly (Reeves, Morieux, & Deimler, 2010). Rather than make an adjustment or try an
alternate process, employees turn to managers for decisions, who in turn look to senior man-
agement. Rapid responses can become lost in a maze of hierarchy.
In a traditional organization, once a threat has been identified, a proposed solution moves up
the chain of command, laterally across divisions, and then down again once a decision is finally
made and is ready to be executed. This process is time-consuming, and, as in a game of tele-
phone, the initial proposal may evolve, perhaps in less productive or efficient ways, in each
subsequent telling as each person reinterprets the suggestion according to areas of expertise,
sometimes adding personal stakes. The individual or team that identified the problem and pro-
posed a solution doesn’t have the decision-making power to execute it and instead must find a
supporter in management. This causes a second problem, in addition to slow response time.
Many organizations that emphasize hierarchy have low tolerance for failure and adopt cul-
tures that favor consensus and obedience (Reeves et al., 2010). In this environment employees
have little incentive to suggest bold solutions or
innovate. They stick to tried-and-true methods
that are sure to be approved by management
rather than attempting to convince multiple lev-
els of hierarchy to take a risk. These organiza-
tions lack flexibility in both process and culture
and therefore struggle to respond to change in
quick and meaningful ways.
When Bob Iger became the CEO of Disney in
2005, he inherited a company that had stag-
nated. It was centralized and hierarchical, due
in part to an ingrained culture in which division
leaders were afraid to make decisions without
the leader’s approval. The company simply could
not respond to new technologies or opportuni-
ties because it lacked the flexibility and freedom
to take small, independent risks that could lead
to new products.
Iger restructured the company and empowered
divisions to make decisions quickly and locally.
The meetings he led changed from directives to
conversations, setting the tone for the rest of the
corporation to engage, ask questions, and listen.
Under Iger, Disney experienced some spectacu-
lar failures, such as the ESPN phone that was
meant for sports fans but never took off. It also
became much more aggressive about acquisi-
tions and launching entire new product lines.
AP Photo/Reed Saxon
When Bob Iger took over at Disney, the
company was stagnant. Iger restructured
the company and empowered divisions to
make decisions quickly and locally, result-
ing in some failures but ultimately herald-
ing a new era of growth and innovation.
Iger’s success prompted the company to make him chair in March 2012, a title he will hold
until he retires in June 2016 (Smith, 2011).
Agile organizations are similar to the built-to-change firms discussed in Chapter 4.4. They
can quickly adapt and respond to new situations, whether these are opportunities or threats,
because change is already central to their culture and practice. These organizations value
experimentation, communication, decentralized decision making, and modularity.
Modular organizational structures particularly allow divisions to come together and disband
as needed. A temporary and new organizational structure may form to create and launch a
new product. This may include product development, testing, marketing, sales, and customer
service. Once the product is released, the structure can dissolve and each component can join
other projects, so the engineering team that worked on one product may join another while
the sales team continues to add new products to its overall portfolio. In addition to offer-
ing flexibility, modular structures facilitate the transfer of skills and knowledge across the
organization.
Each team learns unique lessons, and when disbanded, individual members can apply their
experiences to new situations. This type of flexibility relies on a relatively flat hierarchy so
that groups don’t compete with each other or report to each other; rather, they meet on equal
footing and exchange ideas.
Responding Rather Than Predicting
Agile organizations are different in that they don’t use in-depth research and analysis to
attempt to predict what will happen. Instead, they watch the market and try to quicken their
response time in situations that require action. For example, the clothing industry has a
6-month production cycle, and organizations typically attempt to predict consumer habits
two seasons into the future. Mistakes are costly, as is the research that goes into making pre-
dictions (Spark, 2011).
One clothing manufacturer, Zara, addressed these challenges by shortening its production
timeline. Instead of trying to research, analyze, design, and manufacture its clothing over the
typical 6-month cycle, it skips the research and analysis stages and focuses on manufacturing
popular, in-season products as quickly as possible and in 15-day cycles. The company simply
observes what people are wearing and produces similar styles. This was a radical shift in its
business model, but one that minimized risk and focused on responding to demand.
Agile organizations face two main challenges: (a) to communicate effectively and (b) to
empower employees to make decisions. Tony Haile, the general manager of Chartbeat, a real-
time web monitoring company, notes that monitoring can only do so much. Companies must
be able to respond in real time, or the information does not help (Spark, 2011).
With a 15-day product-development cycle, Zara employees do not have time to navigate mul-
tiple layers of hierarchy to reach and then implement decisions. Instead, they must take in
new information, make necessary decisions, and dive into implementation. They will quickly
receive feedback on their products and can make adjustments in time for the next 15-day
product cycle.
As a part of a flattened structure, agile organizations rely on leaders to shape the context
for decision making rather than giving top-down directives, so the emphasis is on guiding
principles rather than strict procedures (Reeves et al., 2010). When employees understand a
company’s values and vision, they can make decisions that align with these overarching goals.
For example, Apple’s mission aims to provide the best and most innovative products in the
world (Investopedia, n.d.). When proposing new products, Apple employees will avoid large-
scale business solutions. Microsoft’s mission, on the other hand, aims to help every person
and organization reach their potential (Microsoft, n.d.), so their products and services target
a different market with specific needs.
The Microsoft Solution Framework (MSF) is another example of how a large business incor-
porates agility into its project management process. The MSF is flexible, allowing develop-
ers to use the software-development approach that works best in a particular situation. This
allows them to quickly produce high-quality technology solutions while using fewer people
and creating less risk, thereby addressing the most common issues related to project failure
(Microsoft Developer Network, 2013).
Influenced by learning organization principles—which are discussed later in this chapter—
the MSF includes mind-sets (attitudes, dispositions, ways of viewing how things work), mod-
els, processes, and disciplines that guide planning and implementation of technology proj-
ects. Teams can produce quality products together once the MSF principles are understood.
The nine foundational principles of the MSF include the following:
1. Foster open communications. Communication is needed for teams to be effective
and efficient. Team members must understand what needs to be done and how to
communicate internally across the company and externally to clients and vendors.
The challenge is determining the appropriate level of information to share with each
group.
2. Work toward a shared vision. Sharing a vision creates empowerment throughout
the team. Team members have the appropriate context needed to make decisions
quickly, since they have clear goals and know how to achieve them. Team members
are also able to fill requirements gaps as they arise.
3. Empower team members. As we saw earlier in the chapter, employee empowerment
facilitates creativity and innovation within a company, allowing it to survive and be
successful. A lack of empowerment creates a low morale and diminishes team mem-
bers’ creativity and the ability to create a high-performance team.
4. Establish clear accountability and shared responsibility. When team members are
empowered, they feel accountable and responsible for a project and are more likely
to work at a higher caliber and provide better quality products and services. Team
leaders should encourage positive growth and responsibility for project tasks. In
this way team members share responsibility for the solution and its deliverables as a
whole, fostering collaboration and motivation.
5. Deliver incremental value. This means that teams should provide deliverables that
are of optimal value to stakeholders and correctly determine at which stages to pro-
vide deliverables, also known as frequency of delivery.
6. Stay agile; expect and adapt to change. Change is inevitable and often occurs at the
most inconvenient times. Because of this, teams must remain flexible and open to
new possibilities. Teams and organizations that are agile can smoothly adapt and
adjust to the disruptions caused by change.
7. Invest in quality. Many organizations fail to quantify what quality stands for. Success-
ful organizations are able to do so and incorporate this level of excellence into the
solution delivery life cycle.
8. Learn from all experiences. Learning from the past—processes and deliverables that
did and did not work—is imperative to improvement. Team members must embrace
learning at all levels: the project level, such as refining a project-wide process; the
individual level, in interacting with fellow team members; and the organizational
level, by adjusting quality metrics that are collected for a project.
9. Partner with internal and external customers. Collaboration with customers increases
the likelihood of project success. When customers work with the team throughout the
process, valuable feedback can be provided and the solution created will better meet
their needs. This collaboration is mutually beneficial, since it reduces uncertainty and
the time needed to resolve requirement questions and increases the team’s under-
standing of the solution value propositions (Microsoft Developer Network, 2013).
There are more elements to the MSF, including a section on governance and team planning
and implementation roles. The section also reflects the type of mind-sets related to learn-
ing organization principles that Microsoft expects of its leaders, managers, engineers, and
business professionals. Stories of companies that have worked with Microsoft teams pro-
vide examples of how the nine principles work in organizational settings (https://customers
.microsoft.com/Pages/advancedsearch.aspx?mrmcverticals=Hospitality%20&%20Travel).
Learning Agility
Agile organizations’ success depends on the people involved and how comfortable they are
with change. Leaders must be able to adapt to new situations, and one of the predictors of
success in managers and executives is learning agility, or the ability and commitment to
learn from previous experiences to perform successfully in other situations (Lombardo &
Eichinger, 2000). Another phrase for this is leadership versatility (Kaplan & Kaiser, 2006).
In addition to a willingness to change, successful leaders expand their repertoire of strategies
so they have multiple ways to approach each situation.
It can be challenging to identify learning agility as a trait in potential leaders; past perfor-
mance does not necessarily predict future potential. This means that it is impossible to assess
a manager or executive until he or she faces a new situation. It usually takes several trials to
understand how well a leader learns from experience and adapts to new situations.
Learning agility involves practical skills rather than simple intelligence. A leader who can adapt
often will show common sense, strong interpersonal skills, and “street smarts” (Sternberg, Wag-
ner, Williams, & Horvath, 1995). Effective leaders also need to balance humility with confidence
so they can learn from mistakes and continue to grow (McCall, Lombardo, & Morrison, 1988).
Learning requires emotional investment, so the challenges that transform leaders tend to have
high stakes and involve risk. Leaders need to be resilient so they can keep pushing forward.
An example of leadership agility and humility as applied to an organization is Netflix’s CEO
Reed Hastings, who was once touted for being a visionary leader who brought record
growth to his start-up company. Hastings faced harsh criticism in 2011 when licensing
costs for streaming content spiked, leading to a near 60% increase in Netflix’s monthly
rates. Rather than explain the rationale behind the rate hike (of $10 to $15.98 per month),
Hastings essentially dismissed it by saying that for most of the company’s consumers, the
price difference amounted to the cost of a latte. Customers criticized Netflix’s arrogance
and lack of concern for its customers and began to switch to other services. This was not the
end of this story.
Hastings apologized several months
later in a message that was sent to all
customers and posted on the Netflix
blog. He said:
I messed up. I owe everyone
an explanation.
It is clear from the feedback
over the past two months
that many members felt we
lacked respect and humil-
ity in the way we announced
the separation of DVD and
streaming, and the price
changes. That was certainly
not our intent, and I offer
my sincere apology. I’ll try to
explain how this happened.
(Hastings, 2011, paras. 1–2)
Hastings then outlined the reasons for the change and his decision to split Netflix into
two companies: one that focuses on streaming video, the other on DVD rental by mail.
This was met with a second round of outrage from consumers who craved a simple, seam-
less experience. Netflix stock, consumer base, and stockholder confidence plummeted by
taking this risk (Sandoval, 2012), but it may have been the only way to save a company
faced with rising licensing costs and a still-evolving market. Hastings learned the impor-
tance of communicating directly with customers, acknowledging mistakes, and continuing
to build toward a positive future with all of the organization’s constituents. Making hard
business decisions does not mean that leaders have to treat customers and employees
disrespectfully.
Experimentation
Agile organizations encourage experimentation. Companies that attempt to vary their prod-
ucts and processes can respond to change more quickly, in part because they’ve established
a culture of innovation. Instead of fearing failure and sticking to the status quo, they test
alternatives and then scale them (Reeves et al., 2010). These experiments add to an agile
organization’s cumulative knowledge, so when new situations arise, it can pull from deep and
varied experience.
Two large-scale agile organizations have consistently outperformed their competitors. The
first is Reckitt Benckiser, the company that owns 17 “powerbrands,” including Lysol, Woolite,
Kyodo via AP Images
Netflix CEO Reed Hastings learned the hard way about
the importance of communicating openly with cus-
tomers when, in 2011, he came under fire for dismiss-
ing concerns about a near 60% rate hike.
and Air Wick (Mac Iver, 2010), in addition to other smaller brands. CEO Bart Becht described
his four keys to creating a highly successful adaptive (or agile) organization:
1. Ruthless focus
2. Leveling the playing field
3. Encouraging organizational learning
4. Embracing conflict (Mac Iver, 2010)
Ricardo Semler, CEO of Semco Group, has taken more extreme measures in reinventing the
company his father founded. Semco is a democratic organization that engages employees in
all aspects of the business. Employees choose their jobs and salaries, determine the work that
should be done, decide to open or close plants, and actively participate in board meetings. All
employees have access to all company information, and the company trusts them to handle it
appropriately (Mac Iver, 2010).
When Semler first began to chronicle this approach, no one believed he could succeed or cre-
ate a sustainable corporation in the long term. Employees had flexible schedules, so they could
work anytime. What would stop them from arriving late and leaving early? How could work be
completed in this type of environment? Wieners (2004) describes what happened at Semco:
The more freedom [Semler] gave his staff to set their own schedules, the more
versatile, productive and loyal they became, and the better Semco performed.
Nor did he stop with flextime. He did away with dedicated receptionists, org
charts, even the central office—it now resembles an airlines’ VIP lounge, with
people working in different areas each day. He encouraged employees to sug-
gest what they should be paid, to evaluate their bosses, to learn each other’s
jobs, and to tolerate dissent—even when divisive. He set up a profit-sharing
system and insisted that the company’s financials be published internally, so
that everyone could see how the company was doing. (p. 1)
Semler opted for complete transparency and gave his employees both personal and professional
freedom. In return he received more loyalty and higher productivity on a company-wide level.
Whereas Becht focuses on building flexible structures within his organization, giving each
brand independence and institutionalizing experimentation and discussion, Semler empha-
sizes personal connections and investment. In both cases the company’s culture reinforces the
values of an agile organization: experimentation, communication, empowerment, and learning.
Managing Change
The Agile Organization
We all know the story of how the Borders Group was unable to respond in time to keep up
with the Kindle and the Nook. One of the fundamental aspects of business—and one that
relies heavily on the expertise of change managers—is being agile and able to quickly adapt to
consumer demands. Getting any company to turn on a dime is difficult, but it is a necessity in
1. What are characteristics and principles of agile organizations?
2. Can employees learn agility? Explain your response.
5.3 Learning Organizations
Whereas agile organizations move quickly and deliberately, learning organizations take a “big
picture,” reflective approach. Agile organizations can and must adopt learning organization
characteristics and practices to become great. Massachusetts Institute of Technology profes-
sor Peter Senge published a seminal work on organizational development in 1990 called The
Fifth Discipline. In it he introduced the concept of a learning organization, reframing orga-
nizational growth and development in the language of education. This concept remains one
of the most influential and relevant cornerstones of organizational change to date. A learn-
ing organization adapts and evolves at individual and holistic levels, in which individuals
increase their ability to create results, new ways of thinking are cultivated, collective goals
are conceived, and people learn to see the whole organization together (Senge, 1990).
Although this definition has sometimes been criticized for being too abstract and idealistic,
it offers a principled framework by which to exact ongoing, sustainable, and effective change.
Senge (1990) states that real learning is at the heart of being human and is what allows indi-
viduals and organizations to re-create themselves. However, while “survival learning” or
Managing Change (continued)
the modern world. As with other aspects of society, technology has sped up the pace of business
Whether you’re a brand-name snack and soft drink manufacturer responding to the focus
on obesity and healthy eating, a restaurateur responding to customer demand for quicker
service by doing away with paper tickets, or a doctor responding to technological advances
by using a tablet during appointments to research and electronically submit prescriptions—
agility is a business imperative for competitive advantage.
Just as it takes the right ingredients to make any business work, it takes the right
combination of leadership, strategy, culture, and employee initiative to achieve agility. All
companies must grow, but agility is the ability to do it quickly while not compromising the
core of the business.
Discussion Questions
1. How can organizations best address customers’ needs and preferences?
2. How can organizations be managed for continuous improvement?
3. What are some agile practices that individual customers want from organizations?
4. What needs might organizations meet that users haven’t yet thought of ?
(See the end of the chapter for possible answers.)
“adaptive learning” is necessary, it must be used in conjunction with “generative learning,”
which enhances the ability to create.
Senge (1990) stated that the process of learning in an organization involves transforming
every experience into valuable knowledge that is accessible to all employees and is relevant
to the organization’s mission. This aligns closely with the adaptive organizations previously
described. Both Becht and Semler emphasize the importance of transferring knowledge across
their organizations, whether by moving people, configuring teams as needed, or encouraging
employees to try other positions.
The following is a helpful checklist that all leaders and followers can use to overcome old
habits and resistance to change and to facilitate real learning:
1. Are you willing to examine and challenge your “sacred cows” [things you value so
highly that you believe they cannot or should not be criticized]?
2. What kinds of structures have you designed [that you would be open to have exam-
ined for effectiveness and efficiency]?
3. When people raise potentially negative information, do you “shoot the messenger”?
4. Does your organization show capabilities it didn’t have before?
5. Do you feel as if what you know is qualitatively different, “value-added” from the
data you took in?
6. Is the knowledge accessible to all of the organization’s members? (Senge, Kleiner,
Roberts, Ross, & Smith, 1994, p. 49)
Learning organizations assume “learning is valuable, continuous, and most effective when
shared and that every experience is an opportunity to learn” (Kerka, 1995, p. 3). Some con-
ceptions of learning organizations are that they:
• provide continuous learning opportunities;
• use learning to reach their goals;
• link individual performance with organizational performance;
• foster inquiry and dialogue, making it safe for people to share openly and take risks;
• embrace creative tension as a source of energy and renewal; and
• assure that the learning organizations are continuously aware of and interact with
their environment (Kerka, 1995).
Harvard University professor David Garvin (1993) stated that a learning organization is
skilled in generating, obtaining, and sharing knowledge and changing its behaviors to reflect
what it learns. This definition implies that change occurs in the way work gets done. Garvin’s
definition fits with current change in organizations that focuses on innovation, knowledge
management, and IT.
Garvin (2000) points to L. L. Bean as a learning organization because of its skill in acquiring
knowledge, which in turn leads to behavioral changes within it. Rather than following the
traditional model of conducting market research through surveys to discover potential prod-
uct needs and areas of improvement, L. L. Bean turned to customers who rigorously used its
products and recruited them as testers. Field tests lasted for 3 months, and testers received a
product from L. L. Bean and one from a competitor so they could compare the two over an
extended period of time.
Although L. L. Bean only required feedback at three
points (beginning, middle, and end), it encouraged
additional touch points over the course of the testing
cycle. In the case of the Cresta Hiker, a failing product
line, L. L. Bean sent designers, marketers, and suppliers
along with the testers for an intensive and immersive
learning experience. Designers could apply feedback
from a live field test to new prototypes, which could
then be retested. Marketers and suppliers also had
firsthand experience with the product.
After a redesign and subsequent relaunch, the Cresta
Hiker ended up with an 85% increase in sales. L. L.
Bean fit Garvin’s initial definition of a learning orga-
nization because it created learning opportuni-
ties, devoted time and resources to both acquiring
and transferring knowledge, and then modified its
behavior based on what was learned. This process
resulted in a product reboot and complete turn-
around in sales, a proactive response to a struggling
line (Garvin, 2000).
The assumption here is that organizations that can
effectively create and sustain transformations in the
face of rapid change are those that not only adapt to
markets but also generate innovations through peo-
ple. Senge (1990) notes that to sustain generative
change, organizations must understand how to draw
on individuals’ commitment and ability to learn at all levels.
Levels and Types of Learning
We have described the dual nature of a learning organization—the learning that happens
at individual and collective, company-wide levels—and how these should complement and
motivate each other. Marquardt (2002) describes three interrelated levels that exist in a
learning organization:
1. Individual learning—the skills and knowledge an employee gains through
study and/or observation
2. Group or team learning—the collective skills and knowledge a group
obtains
3. Organizational learning—the overall productive capacity an organization gains
through the intentional and continual pursuit of improvement
AP Photo/Pat Wellenbach
Instead of following the traditional
market research model, L. L. Bean
turned to customers and recruited
them as testers.
Each level informs and affects the others, so individual learning contributes to both group
and organizational learning. An organization’s collective knowledge can in turn serve as a
resource for an individual. In order to leverage all levels of learning within an organization,
the structure needs to be flexible enough to facilitate collaboration and communication,
whether it is through a flat structure or modularity.
Organizations can also take multiple approaches to learning:
1. Adaptive learning, or using past experience to influence future actions
2. Anticipatory learning, or envisioning possible futures to identify and pursue new
opportunities
3. Action learning, or reflecting on the present in order to guide development across
learning levels (Marquardt, 2002).
By examining the past and present and looking toward the future, leaders essentially employ
a 360-degree view to examine all aspects of an organization and plan for multiple possible
outcomes. Because they balance immediate action with long-term goals, the organization
continually progresses.
Oil companies like Shell face a great deal of uncertainty, given limited fuel resources. They
have profitability goals, both at the quarterly and annual levels; however, they know they
must start building for a future that does not rely on oil. Long-term goals include transform-
ing Shell from an oil company to an energy company. The challenge is that no one can yet
predict which energy source or sources will replace oil, so a wide range of possibilities must
be investigated.
Shell has been exploring renewable energy, biofuels, wind and hydrogen power, and carbon
capture and storage. Its immediate, short-term actions are straightforward: to keep up with
changes in the energy sector. The company must continue to build its research, development,
and demonstration capabilities for new technologies. It must also remain cost effective and be
ready to work with both government and society when changes occur in the sector (Rausser,
Stevens, & Torani, 2011). Although the company doesn’t know what the future will hold, it is
keeping its options open through research, organizational flexibility, and conversations with
policy makers.
Learning Cultures and Visions
Learning culture is described as “collaborative creativity in all contexts, relationships and
experiences” (Jacacci, as cited in Marquardt, 2002, p. 23). A learning culture is interdepen-
dent, so employees alternate between the roles of student and teacher. They learn indepen-
dently, but they also teach their colleagues in collaborative situations and, in turn, continue to
learn themselves. This type of exchange requires a great deal of trust and honesty. To improve,
everyone must be willing to acknowledge faults and failures and try to move beyond them—
the goal is to learn from experiences rather than dwell on them.
The organization should support feedback, reflection, and action. Leaders set the tone by
modeling desired interactions, so they must also seek feedback and demonstrate learning and
growth. They facilitate collaboration, experimentation, and reflection to maintain an active
learning cycle, and they ensure that the organization stays focused by communicating and
modeling a shared vision.
A strong vision can motivate employees, engaging their emotions and intellect, which,
as Senge (1990) describes, is instrumental in learning. Vision statements provide a call
to action while still providing parameters for employees to follow. Explicitly stating
organizational values can serve as an additional guide for employees (Marquardt, 2002).
Google’s corporate value statement, that the company has since omitted after becoming
part of its new umbrella firm,
Alphabet, may be the most
famous: “don’t be evil” (as
cited in D’Orazio, 2015).
This simple principle guides
both managers and develop-
ers in their work.
The grocery store chain
Whole Foods Market unites
employees and customers in a
common experience through
its strong values, which have
become a large part of its
brand. Whole Foods Mar-
ket lists seven values on its
website:
1. Selling the highest quality natural and organic products available
2. Satisfying and delighting our customers
3. Supporting team member happiness and excellence
4. Creating wealth through profits and growth
5. Caring about our communities and our environment
6. Creating ongoing win–win partnerships with our suppliers
7. Promoting the health of our stakeholders through healthy eating education (Whole
Foods Market, 2015).
Whole Foods Market emphasizes teamwork, quality, caring, and the environment. These
principles also provide clear parameters for employees. New product lines will never include
junk food. The store will not stock high-preservative foods with artificial flavors and color-
ing. Employees are expected to work in teams and to support each other in a positive culture,
which is both a goal and a method for stores’ operation.
Learning organizations aspire to constantly evolve and improve. As a result, they have lofty
expectations and high standards. To meet or exceed these, a learning organization must reflect
on its own learning process and find ways to improve, whether by identifying new ways to
collaborate across the company or creating new learning opportunities for individuals (Mar-
quardt, 2002). Learning cultures are simultaneously rigorous and positive. New challenges
are viewed as creative opportunities that at best can lead to growth and at worst can offer
lessons to apply to the next challenge.
AP Photo/Tony Dejak
Whole Foods manages to unite employees and customers in
a common experience through its strong values, which have
become a large part of its brand.
Senge’s (1990) five principles—known as the learning organization’s basic disciplines or
“component technologies”—are the foundation of the transformational change approach.
These principles include:
• systems thinking,
• personal mastery,
• mental models,
• shared vision, and
• team learning (Senge, 1990).
Organizations that build learning communities and principles into their cultures and sys-
tems differentiate themselves from bureaucracies in that they experience innovations and
Managing Change
The “Postmortem”
Suppose you are the manager of a project that, in the end, went as wrong as it possibly could.
Despite your best efforts, the output had to be redone, deadlines were missed, and budgets
were overshot. In some organizations this would be a fatal failure, and you’d be lucky to
scrape by with your job, a scolding, and some wounded pride. But in a learning organization,
failure is an opportunity.
You, your team, your internal client, and your supervisor decide to meet for a postmortem on the
project, or an “after-action review.” Rather than point fingers and damage working relationships,
after-action reviews take a step-by-step look at the project and where it went wrong. By
examining its flawed path, mistakes become lessons that can be applied to future projects. Doing
this requires openness, honesty, self-awareness, and an ability to acknowledge responsibility in
such a situation. If all parties come to the table from the same place, all can leave armed with the
knowledge of how to do it better. This is a prime example of a learning opportunity.
Learning organizations take a reflective, big-picture look at themselves. Learning allows an
organization to adapt and evolve—critical skills for a successful business. Most organizations
and hierarchies impede the natural abilities needed for a learning environment:
communication, creativity, innovation, and collaboration, among others. Learning can
occur in both directions in an organization—at the individual level from experiences at the
organization and at the organizational level, whereby the individual contributes knowledge
learned to the organization.
Discussion Questions
1. What is the difference between learning and training?
2. What are three types of approaches to learning?
3. How are learning organizations and agile organizations related?
4. What are some examples of learning opportunities in an organization?
(See the end of the chapter for possible answers.)
continuous improvement. This transformation is accomplished by mastering the five disci-
plines. As agents, individuals use these disciplines to change their organization’s systems and
structures. Effective change occurs when individuals adopt a holistic, proactive stance. They
realize they can shape their own reality when they shift from seeing parts to seeing the whole
picture. Rather than reacting to present conditions, individuals proactively work toward the
future (Senge, 1990). Each discipline is discussed in turn below.
Systems Thinking
Systems theory and thinking is the ability to comprehend the whole and examine the inter-
relationship among the parts to accurately identify and solve problems. Systems theory is the
incentive and the means to integrate the disciplines (Senge, 1990).
Systems thinking is the cor-
nerstone of the five disciplines.
Without it, there can be no
learning organization or moti-
vation for using the other dis-
ciplines. For example, vision—
outside the context of systems
thinking—is a utopian idea with
no understanding of the inter-
related forces that must be dealt
with to realize a vision. Systems
thinking requires the disciplines
of building shared vision, mental
models, team learning, and per-
sonal mastery to mobilize the
vision. Systems thinking moves
the “me” to a “we” mentality and
makes the learning organization
a reality.
Senge (1990) argued that the basic tools of systems theory are straightforward and can be
used to build more sophisticated models. A major criticism of management theory is the sim-
plistic frameworks used to understand and work with complex systems. People tend to focus
on the parts rather than understanding the whole; they often fail to see the organization as a
dynamic set of interrelated processes. Seeing the whole before trying to solve one of the parts
is the first step toward identifying the problem.
Morieux (2011) provides an example in which the hotel portion of an international travel and
tourism group faced falling occupancy rates, spiraling prices, and unhappy customers. Hotel
and sales managers immediately blamed the young receptionists, who came to them with
little experience and often left after a few weeks. Clearly, the receptionists lacked customer
service skills and motivation and had little interest in developing either.
Simple problems had conveniently simple solutions. Managers decided to give these recep-
tionists additional customer service training and add incentives to their compensation struc-
ture based on occupancy rates. However, this solution failed. Receptionists continued to
leave, customers continued to complain, and occupancy rates continued to fail expectations.
william87/iStock/Thinkstock
Businesses are composed of many different parts. The abil-
ity to step back and understand how all of the pieces inter-
act and affect each other is the basis of systems thinking.
Managers finally took a step back to try to understand the entire system and identify the
actual failure points. After a month of observation, sales managers realized the receptionists’
failure resulted from a lack of teamwork from support staff, including housekeeping, room
service, and maintenance.
Housekeeping would clean a room and neglect to tell maintenance about broken appliances.
Customers would turn to receptionists with their complaints. Receptionists had very few
solutions to offer beyond upgrades and refunds, which affected occupancy levels and drove
down rates. The most invested receptionists would try to solve the problems themselves,
leaving their desks and letting queues of other customers form, who would then become frus-
trated with the lack of customer service. The problem, upon further investigation, was a lack
of teamwork and systemic thinking, not of incentive or interest. In fact, the most committed
receptionists had the highest turnover rate because they burned out from trying to indepen-
dently solve all problems. It took this extra step to understand the actual cause, rather than
the readily apparent one.
Personal Mastery
Personal mastery, the second discipline, involves having good self-awareness. It means
continually defining and deepening our personal vision, focusing our energies in appropri-
ate places, learning patience, and being objective (Senge, 1990). No learning occurs without
personal mastery, because organizations cannot learn when their individuals do not learn.
Individual learning is a necessity to organizational learning, though it does not guarantee
organizational learning (Senge, 1990).
Developing all the disciples involves developing personal vision. Personal mastery depends
on cultivating a personal vision, having creative tension or the ability to see what is needed
to make visions a reality, recognizing organizational tensions and constraints and our role in
them, being honest and trustworthy, and using the subconscious (Senge, 1990).
Mental Models
Mental models are the deep-rooted beliefs, assumptions, and generalizations that shape our
understanding of the world and that motivate us (Senge, 1990). Influenced by Chris Argyris
and Donald Schön (1978), Senge (1990) reasoned that we are not aware of the effects that our
mental models and assumptions have on our behavior, communication, and actions, both at
work and in our personal lives. Our goal is to develop the capability to understand the impact
of our own and others’ assumptions and ways of seeing the world.
Senge (1990) noted that the discipline of mental models begins when we turn our focus
inward to identify our beliefs and assumptions and rigorously scrutinize them. This also
involves learning through open conversations in which all participants share their thoughts
and allow others to influence their view. Being closed-minded and having rigid mental mod-
els prevent changes that could stem from systems thinking (Senge, 1990).
Changing the organization, especially with a large-scale change, involves working through and
transcending internal politics, games, and bureaucratic mind-sets that impede open thinking
and sharing. This practice allows business responsibility to be spread throughout the orga-
nization, while still maintaining control. This creates a localized organization (Senge, 1990).
Shared Vision
In previous chapters, we discussed the importance of building shared vision in preparing
for, implementing, and sustaining a major change initiative. Here, Senge (1990) incorpo-
rates shared vision as a discipline, one that involves learning to sustain positive and effective
change.
Shared vision starts with leadership, as we have discussed throughout this text. For centuries
leaders have inspired organizations to hold and share visions of the future. Visions are pow-
erful. They can uplift, motivate, encourage experimentation, and yield new inventions. Just as
importantly, visions from a learning organization perspective can hold people and organiza-
tions to a long-term commitment of a future state.
When an organization has a genuine vision, employees have a strong desire to excel, accept,
and implement it. This does not always occur, as leaders’ personal visions may not be verbal-
ized or translated into a shared vision. A set of principles and best practices are needed to
facilitate this process (Senge, 1990).
Team Learning
Team learning is the process of aligning and expanding a team’s capabilities so it is able to
produce results (Senge, 1990). Team learning builds on the other disciplines and takes the
learning organization to an action level—people must be able to create synergy, solve prob-
lems jointly, and create new products and services together in real time. Teams that learn
together benefit the organization and the individuals of which they are composed.
The team-learning discipline begins with the art of dialogue (that is, the capacity of team
members to suspend assumptions and judgment and enter into an authentic process of “think-
ing together”). The Greek word dia-logos refers to an uninhibited flow of meaning through a
group via a process by which the group can discover insights not achievable by individu-
als alone. Dialogue involves identifying the patterns of interaction between team members
(Senge, 1990).
When combined with systems thinking and the other disciplines, teams are able to create
a language that can account for complexity. Team problem solving and creativity can then
focus on deeper structural issues and underlying forces rather than become preoccupied with
trivial diversions related to personality differences, politics, status, and leadership style. The
emphasis on dialogue is a major conceptual and practical tool in learning organizations as
they incorporate and sustain new changes.
Check Your Understanding
1. What are learning organizations, and how are they different from organizations that do not
value or use learning methods and concepts?
2. What are some habits and practices employees (and leaders) would benefit from relinquishing
in order to adopt learning methods and ways of operating?
5.4 Change and Learning Organizations
At the heart of the learning organization is the idea that change and learning go hand
in hand. Learning organizations develop internal structures that can respond to change
(Watkins & Marsick, 1993) and behave proactively. At the same time, learning leads to
organizational change. The purpose of a learning organization is to empower organiza-
tions, from employees to executives, to accept change as a positive part of their existence
(Senge et al., 1994).
Learning organizations can be defined according to four traits: constant readiness, continu-
ous planning, improvised implementation, and action learning (Rowden, 2009). Constant
readiness refers to a learning organization’s ability to respond to change situations. Unlike the
highly structured traditional organizations that are optimized for stability, learning organiza-
tions are optimized for change. They are willing to question themselves and their assump-
tions and make adjustments. This readiness normalizes the possibility of change rather than
the expectation of routine.
With continuous planning, leaders focus on strategies and flexible approaches rather than
mapping every step of a process. However, many high-powered learning organizations have
successfully combined flexible strategic approaches with electronic databases; the speed and
accuracy this allows for helps organizations adopt more fluid and organic decision-making
processes, as we will illustrate in this section.
By focusing on high-level strategies, organizations can rapidly reevaluate and change course
as needed. Whereas traditional organizations emphasize a strong guiding vision and mission,
learning organizations value revision (Rowden, 2009). They review their assumptions, ana-
lyze implementation, and adjust accordingly. Their clearly articulated guiding principles and
strategies are based on improvised implementation and action learning. In articulating these,
they can provide enough structure to plan; by staying focused on the big picture, organiza-
tions move proactively toward a positive, shared goal.
Improvised implementation has several meanings. First, as a part of a culture that wel-
comes change, learning organizations that adopt improvised implementation encourage
experimentation and reward small successes before scaling these wins company-wide.
Improvised implementation also means that everyone in the company plays a creative role
and contributes to the big picture. Individuals and teams have a high level of autonomy
and responsibility when it comes to decision making. Eventually, successful experiments
become part of the organization’s system, as learning occurs at individual and organiza-
tional levels.
Action learning also refers to continuous planning—that is, instead of annual review-
style reflections and planning, organizations that engage in action learning constantly
reflect and adjust. Because experimentation and innovation are integral to organizations
that need to frequently respond and change in today’s complex environment, reflection,
learning, and continuing are inherent in the culture. Constant experimentation means fre-
quently assessing what worked, what didn’t, and what could be managed differently. These
micro-action learning scenarios eventually add up to large-scale organizational learning
and change.
The organization implements learning
through training with outsiders.
Stage 3: Maturing
The organization provides internal
training to employees.
Stage 4: Adapting
The organization makes learning part of
the organization’s strategic plan.
Stage 5: Learning
The organization makes learning a
part of their daily activities.
Section 5.4 Change and Learning Organizations
Becoming a Learning Organization: Woolner’s Five-Stage Model
A central characteristic of the learning organization is the capacity to create (Woolner, Lowy, &
Redding, 1995). This proactive vision keeps the organization competitive by emphasizing
innovation (Johnson, 1998). Learning organizations go beyond simply responding and adapt-
ing to factors that demand change. They generate new knowledge, products, systems, and
models, embracing organizational change as an opportunity for improvement and growth.
However, it takes time and conscious effort to create the learning opportunities and incorpo-
rate processes that allow experimentation and reflection. This model may not be appropri-
ate for every organization. A company may value learning and change management without
completely transforming into a learning organization. Woolner, Lowy, and Redding (1995)
mark five stages that an organization passes through when becoming a learning organization:
(a) the forming organization, (b) the developing organization, (c) the maturing organization,
(d) the adapting organization, and (e) the learning organization (see Figure 5.1).
As the name suggests, the first stage per-
tains to start-ups. These organizations
learn through trial and error rather than
through formal processes. At the beginning
of a company’s life, every decision provides
a learning opportunity as founders develop
products and a viable business model.
They constantly test variations, whether in
branding, outreach, product design, or pric-
ing, to determine which combination will be
successful.
Organizations in the developmental stage
have begun to solidify their business mod-
els and products. They are starting to set
up formal, proactive learning situations
through training with outsiders. This kind
of development is not part of the organiza-
tion’s regular processes, although organiza-
tions recognize the need for this change.
Third-stage organizations understand the
need for employee learning and begin to
provide internal trainings. These events
are still not part of the organization’s regu-
lar operations; however, they are valued as
integral to the company’s growth.
Stage 4 is similar to stage 3, except learning
becomes part of the organization’s strategic
plan. Learning is integral to the company’s
long-term growth at individual, group, and
organizational levels.
Figure 5.1: Stages toward becoming a
learning organization
A learning organization needs to work toward
integrating learning as part of its daily activities.
Based on Woolner, P., Lowy, A., & Redding, J. (1995). Learning
organization 5 stage diagnostic survey and workshop version.
Toronto: Woolner Associates.
Stage 1: Forming
The organization learns through
trial and error.
Stage 2: Developing
The organization implements learning
through training with outsiders.
Stage 3: Maturing
The organization provides internal
training to employees.
Stage 4: Adapting
The organization makes learning part of
the organization’s strategic plan.
Stage 5: Learning
The organization makes learning a
part of their daily activities.
Finally, in stage 5, learning becomes
part of an organization’s day-to-day
activities. It is fully integrated into
operations and is viewed as part of
the organization’s health and success.
Part of what defines a learning orga-
nization is that all employees contrib-
ute to the organization’s knowledge
(Watkins & Marsick, 1993). In this
stage the organization encourages
formal and informal learning with
a strong emphasis on teamwork so
that new knowledge can be commu-
nicated quickly and effectively across
the organization. Learning comprises
past experience, current experience,
and best practices from other organi-
zations (Garvin, 1993).
Senge (1990) emphasizes that learning organizations can create the results they desire. In
part this comes from their proactive behavior. Instead of responding to change as it arises,
learning organizations experiment and innovate in pursuit of specific goals that add up to
larger organizational strategies and vision. They also pay attention to past experience and
adjust to future situations accordingly (Johnson, 1998).
Examples of Learning Organizations
Learning organizational practices can be found in a myriad of settings. This section takes a
brief look at some real-world examples of how learning organization principles are imple-
mented to effectively respond to and enact change.
The U.S. Army
The U.S. Army has a division devoted entirely to learning. Founded in 1985, the Center for
Army Lessons Learned (CALL) gathers data from battle simulations run at its National Train-
ing Centers (Garvin, 2000). CALL observation centers serve as a knowledge repository for the
army, and they collect and distribute information. As the army’s duties changed, so did the
information gathered by CALL. Because of their role as institutional memory, CALL teams are
usually among the first deployed in new operations. They gather information, identify poten-
tial problems, and recommend solutions based on past experiences.
Learning occurs through cycles of trial and reflection. Organizational learning follows
the same path—companies incorporate opportunities for trial and reflection into their
systems and processes. In turn, a learning organization constantly changes at micro and
macro levels, providing the practice and experience needed when unexpected change situ-
ations arise.
monkeybusinessimages/iStock/Thinkstock
Organizations in the third stage of Woolner’s model
begin to understand the importance of learning and
provide internal training opportunities.
AT&T’s Bell Laboratories
During the 1990s, AT&T’s Bell Laboratories focused on organizational learning by finding
ways to scale the individuals’ knowledge to entire divisions. The company focused on its most
productive software engineers and tried to understand why some were more effective than
others. After identifying top performers, it conducted in-depth interviews with them to under-
stand how they approached their work and what techniques they used to stay productive.
The company translated this research into a hands-on training program, which top perform-
ers used to work with fellow programmers. Productivity improved by 10% immediately and
by 25% by the end of the year (Garvin, 2000). Although this foray into organizational learning
focused on productivity, it also improved problem solving, teamwork, collaboration across
the organization, and customer care (Garvin, 2000).
AT&T
More recently, AT&T has become one of the most highly regarded learning and development
organizations in the United States (Nikravan, 2011). Cynthia Brinkley was named senior vice
president of talent development and chief diversity officer of AT&T in 2008. In 2009 the com-
pany invested $244 million toward employee learning and development programs. It also
allotted $27 million in tuition reimbursement for 9,800 employees—49% of whom were
women and 54% persons of color. In 2010 AT&T created its Leading With Distinction pro-
gram, which encompasses all of the company’s leadership and strategic alignments, includ-
ing strategy and culture. The company delivered the program globally to more than 105,000
managers (AT&T, 2009).
AT&T believes learning and development hold employees’ attention and keep them invested
in all company changes (Nikravan, 2011). Employees know about all upcoming products
and work with the business and device manufacturers to develop mandatory training for all
those involved with the product. This training is provided through webinars, job aids, and
coaching tools.
The Bell Labs and AT&T examples are remarkable not just for their dramatic results, but the
fact that top software engineers became trainers. They accepted new leadership roles that
required a separate skill set and additional responsibilities. Implementing these changes took
team effort, with each member of the leadership and learning groups stretching their knowl-
edge and abilities. Rather than serving as training authorities, managers stepped back and
simply created a learning opportunity while the developers filled the traditionally authorita-
tive role. This point brings us to the final topic in this section: the importance of leadership in
enacting learning organizational principles.
Leadership
The biggest challenge for learning organizations does not come from external threats; it comes
from the time and commitment it takes for leaders and followers to implement changes.
Moreover, because organizational learning depends on changing structures and processes, it
requires long-term commitment (Watkins & Marsick, 1993). This, in turn, depends on strong
and visionary leadership.
Invest in Learning Programs
Accenture, a preeminent global management consulting, technology services, and
outsourcing company, invests hundreds of millions of dollars on its learning and lead-
ership programs each year. In 2009 the company spent nearly $800 million on these
programs.
Accenture’s leaders understand that first and foremost, developing people influences busi-
ness (Margolis, 2011). As the company develops its employees, they apply their new skills
to their industries, and as a result, those industries grow. Learning and development spur
advanced thinking and improve employees’ skills, allowing them to produce more innova-
tions for Accenture’s clients.
Accenture’s executive team measures the impact and value of its learning strategy holistically
and operationally. Operationally, the executive team needs to know whether learning assets
deliver required results and if the right people receive the development they need (Margolis,
2011). The company uses a scorecard, which is updated monthly, to track goals and objectives
against annual targets. An annual Business Sponsor Satisfaction Survey uses feedback from
executive sponsors to determine value delivered against business leaders’ expectations. The
firm’s single evaluation tool also compares results on learning programs and expenditures
across workforces, geographies, and vendors so that decisions are made using current data
(Margolis, 2011).
Use Improvised Implementation
Leadership also uses the idea of impro-
vised implementation that was discussed
earlier. Like action learning, improvi-
sation teaches employees how to take
risks and respond confidently and in
real time to challenges that emerge.
Employees who improvise foster an
outlook that focuses on curiosity, listen-
ing, flexibility, strong relationships, and
resiliency (Giardella, 2013). At the same
time, improvisation requires people to
think holistically and connect thinking to
action.
For example, Marissa Mayer, a Google
vice president, serves as an “idea con-
nector.” She holds three weekly sessions
where she is available to all Google
employees who want to pitch a new idea.
Mayer brainstorms with these so-called
scout-equivalents and encourages them
to share details on a proposed prod-
uct’s functionality. She then decides
whether to promote the ideas to the company’s cofounders, Larry Page and Sergey Brin
(Brokaw, 2011).
Associated Press/Joe Schildhorn/BFA
To encourage experimentation and improvisa-
tion, Marissa Mayer, a vice president at Google,
holds weekly sessions for Google employees who
want to pitch new ideas.
Use Action Learning
Action learning offers increased perception and understanding by interweaving action
and reflection. However, it may take time to execute, since it requires careful thought
(Dilworth, 1998). Although speed and efficiency are important to organizations, getting
decisions right is just as important, if not more so. GE has used principles of action learn-
ing in its WorkOut training program throughout its global operations. The program con-
sisted of teams working on real problems in real time, while executives offered feedback
and tips to employees.
Encourage Change
Leadership must guide an organization through change and find ways to help it adapt (Ahn,
Adamson, & Dornbusch, 2004). Strong management is critical to maintaining an organiza-
tion’s competitiveness, especially in organizations that face constant change (Nohria, Joyce, &
Roberson, 2003; Waldman, Ramirez, House, & Puranam, 2001). In order to stay competitive,
organizations must encourage constant, meaningful change.
However, this can be a challenge. Despite the theories and approaches available, many leaders
lack an understanding of change management; that is, what leads to change, effective pro-
cesses for managing it, and how to win follower buy-in for change initiatives (Armenakis &
Harris, 2002). Leaders must be able to motivate their followers, communicate effectively, and
facilitate team building in order to implement smooth organizational change (Gilley, Gilley, &
McMillan, 2009).
Create Learning Opportunities
Many managers view their role as the ultimate authority—as the person who is always right
or who can swoop in to save the day. Instead of fixing employees’ problems for them, how-
ever, effective managers act as a guide that helps employees find their own solutions—and in
the process, improve their skills and performance. Effective managers also aim to constantly
improve management processes and systems by creating learning opportunities that involve
experimentation and reflection (Horan, 2006).
For example, under the leadership of Jack Welch, GE made adjustments toward becoming a
learning organization by emphasizing action learning (Garvin, 2000). Rather than trying to
predict the adjustments the company would have to make, it focused on improving change
management and optimizing processes for effective and rapid response.
In GE’s Change Acceleration Process (CAP), teams of 8 to 12 participants came together
to solve a real problem. Process experts coached each team through the new model of
problem solving, so employees learned the process through participation and experience.
Each of the learning scenarios included an abstract discussion of the CAP framework and
methodology and involved applying the model to the problem at hand. The combination
of action and reflection helped employees apply this process to future scenarios. The CAP
program helped transform GE Plastics in Japan. After 4 consecutive years of posting losses,
managers turned to the CAP program in 1994. The division broke even by the end of the
year and was profitable in 1995.
Section 5.5 Agile and Learning Organizations in the 21st Century
Check Your Understanding
1. How do action learning and improvisation help leaders and followers respond to real-time
issues more effectively? Offer an example from your own experience.
2. What steps could organizational leaders take to introduce and support organizational learning
principles and practices in an organization before a crisis occurred?
5.5 Agile and Learning Organizations
in the 21st Century
As we discussed at the beginning of this chapter, agile organizations can respond effectively
to changes in their competition, technologies, and markets by being flexible and innova-
tive. Being agile means more than change at face value. It represents disruptive change that
demands employees do things differently (Adamopoulos, 2012). To get to this state of agility,
a number of things must be considered. The top two are cultural change management and
training agile teams.
Organizational learning principles and techniques deal directly with cultural change and
teaching leaders and teams how to implement and sustain constructive, deep change. Com-
bining agility practices with learning principles is a winning combination that takes into con-
sideration both the short- and long-term value of all stakeholder interests.
The idea of organizational learning is compelling and has proved effective in the face of con-
stant change. Rowden (2009) warns, however, that the concept of a learning organization
can easily become a fad; the big ideas could
get watered down into simple, packaged
solutions. Organizational learning should
also not be viewed as a one-size-fits-all
solution. Learning involves failure, and
learning organizations fail regularly. They
attempt to keep experiments small but are
only effective if they internalize the lessons
learned from failures. In fact, failure does
not negate a learning organization’s effec-
tiveness. It is part of the process.
Organizations that fail to grasp this idea may
think that organizational learning simply
doesn’t work or is a utopian ideal with lim-
ited practical application. However, learn-
ing organizations are less a solution than a
process. Unexpected change always disrupts
work flow, but learning organizations have
the systems, human capacity, and depth
of knowledge to make changes as needed,
whether that change is triggered by an exter-
nal event or an internal innovation.
kasto08/iStock/Thinkstock
Although organizational learning is crucial, it
is important to avoid watering down big ideas
and simplifying principles for a one-size-fits-all
approach.
Section 5.5 Agile and Learning Organizations in the 21st Century
Given the unpredictability of the future, organizations need as many tools as possible to
respond to change. Agile businesses and learning organizations provide two models for how
to embrace change, leveraging it to spur innovation and growth. Although we don’t know
what the future holds, it promises to be both exciting and challenging for the organizations,
employees, and leaders who can mindfully and competitively steer the way.
Check Your Understanding
1. How could organizational learning and agile principles be misunderstood or misinterpreted by
employees who are not accustomed to these practices?
2. Would you prefer to work at an agile organization or a learning organization? Explain your
reasoning.
Managing Change
Companies Are Only as Good as Their People
Suppose your company has experienced an epic fail: A product line that required huge
investments of time, capital, and human effort has gone belly up. Planning and execution,
manufacturing and distribution, and supportive processes took nearly a year to solidify
and prepare, and it ended in a loss. Nearly one third of the company’s human capital was
allocated to this project.
Fortunately, the company stands on solid enough ground that it can absorb the loss. But its
reputation has been compromised, and you and your leadership team find yourselves pulling
the company up by the bootstraps. It’s decision time: What should you do with the one third
of your staff that worked on this product? The answer—take a learning approach. Firing one
third of company staff would be misguided and only done, if ever, in extreme circumstances.
Although the assessment may be relative, the fact remains that firing staff would create a
greater loss than the failed product. Intellectual capital would be squandered, and the cost of
hiring and onboarding would be enormous. So what’s the next step?
Some say you are only as good as your brand; others say you are only as good as your
last product. But it could be strongly argued that an organization is only as good as its
people, and fostering development and enhancing learning can only positively impact
the organization. Learning organizations fail as a rule, and they have the systems, human
capacity, and depth of knowledge to make the necessary changes.
Discussion Questions
1. How does learning facilitate organizational change?
2. What are some caveats to the concept of a learning organization?
3. What are some examples of large-scale organizational failures?
4. Suggest some ways you would recommend from this chapter to have prevented the
failures in question 3.
(See the end of the chapter for possible answers.)
Chapter Summary
Leading and managing change are not easy processes. In fact, planned transformational
change in organizations can be messy because politics, power, emotions, and conflict
are interlaced with technical, cultural, and social expertise. That is why change manage-
ment and OD skills, competencies, and experience are essential for diagnosing, designing,
implementing, and sustaining not only specific planned changes but continuous change.
Going forward, it is not only change that is required for most organizations but change that
is characterized and supported by agile and learning leaders, followers, and processes.
This text has described how to identify, assess, plan, enact, and reinvigorate agile learning
and organizational change. Classic and contemporary examples of different types of change
were discussed: developmental, transitional, and transformational, to name a few. We pre-
sented terminology, studies, methods, and frameworks from the fields of change manage-
ment and OD that provide a common language used by scholars and practitioners. With this
information and understanding, students of organizational change have a conceptual and
working knowledge for advancing into other areas to study and/or apply this knowledge.
Posttest Questions
1. An IBM global study found that fewer than half of the more than 1,500 surveyed
CEOs feel comfortable with __________.
a. increased complexity of change management
b. diversity in staffing
c. out-of-the-box solutions
d. creativity in business models
2. As a successful change leader who develops human potential within her organiza-
tions, Latisha would be LEAST likely to do which of the following?
a. Ask her employees to actively contribute ideas.
b. Urge her employees to be problem solvers.
c. Recognize her employees for their contributions.
d. Encourage her employees to pay attention to even the smallest detail.
3. How do agile organizations approach change compared to traditional ones?
a. They create monopolies across industries more often.
b. They identify opportunities faster than their competition.
c. They hire international CEOs, who typically have more experience with change.
d. They invest more in training than traditional organizations.
4. With which of the following statements would the author most likely DISAGREE?
a. Agile organizations regard change as a central part of their culture.
b. Agile organizations can train employees to be agile.
c. Agile organizations appreciate centralized decision making.
d. Agile organizations value modularity.
5. Learning organizations facilitate learning by being willing to __________.
a. commit to their “sacred cows”
b. challenge their “sacred cows”
c. disregard their “sacred cows”
d. let their “sacred cows” fail in the marketplace
6. A company president sends an email across the organization illustrating how the
marketing team’s ideas resulted in increased sales. Which of the following learning
organization principles is most reflected in this process?
a. Assure that the organization is aware of its external environment.
b. Provide outside review of a marketing plan.
c. Link individual and group performance with organizational performance.
d. Invite one team to apply its principles to another team’s goals.
7. Whereas traditional organizations highly value __________, learning organizations
highly value __________.
a. mission; revision
b. revision; mission
c. action; caution
d. experimentation; action
8. In the five stages a company passes through to become a learning organization,
learning becomes an integral part of the company’s strategic plan and long-term
growth in the __________ stage.
a. forming
b. developing
c. evaluating
d. adapting
9. Change expert Robert Rowden states that agile organizational learning should be
viewed as __________.
a. a one-size-fits-all solution
b. a failure-proof process
c. growth based on knowledge and failures
d. big ideas condensed to simple solutions
10. A lesson to be drawn from the philosophies of both agile and learning organizations
is most likely “An organization is only as good as its __________.”
a. brand
b. last product
c. systems
d. people
11. As a learning organization, how does L.L. Bean increase its market research
knowledge?
a. It hires outside marketers to survey past customers.
b. It uses IT-savvy people to search the web for competitors’ products.
c. It requires employees to use and rigorously test products.
d. It recruits devoted customers to be product testers.
12. The author discusses how __________ is using a learning model in terms of the way it
explores changes and innovations in the energy sector.
a. Charter
b. Shell
c. SunRun
d. Hyundai
1. Successful change leaders exhibit collaboration, the ability to build effective teams,
and the ability to influence employees. More traditional traits like decisiveness and
composure are less influential in guiding change. Creativity, adaptability, and experi-
mentation are critical traits of change leaders. Successful change leaders cultivate
empowerment in their employees. This involves giving employees greater autonomy
and responsibility. A greater emphasis on building relationships and creating open
work environments has made leadership a necessity at all levels of an organization.
It is required to better identify potential challenges and shorten response time.
Empowered employees can more easily become change agents.
2. Agile organizations have the ability to quickly adapt and respond to new situations
because change is a central part of their culture. They value experimentation, com-
munication, decentralized decision making, and modularity. This flexibility is in
direct opposition to the stability and rigidity of traditional organizations, which lack
the adaptability required to react quickly and appropriately to change. Agile organi-
zations are more responsive than predictive. They also emphasize effective commu-
nication and empowered employees, and they have flatter organizational structures.
3. Learning organizations provide continuous learning opportunities and use learn-
ing to reach their goals. They also link individual performance with organizational
performance, foster inquiry and dialogue to make it safe for people to share openly
and take risks, and embrace creative tension as a source of energy and renewal. The
three levels of learning organizations are individual learning, group or team learn-
ing, and organizational learning. The five principles of learning organizations are
systems thinking, personal mastery, mental models, shared vision, and team learn-
ing. Learning organizations take a big picture view and consider how all pieces of the
organization interact and communicate.
4. Learning and change go hand-in-hand. Learning leads to change within an organiza-
tion and creates an environment of empowerment and affinity, rather than resis-
tance to change. Learning organizations are characterized by constant readiness,
continuous planning, improvised implementation, and action learning. Woolner
suggests five stages in the process of becoming a learning organization: the forming
organization, the developing organization, the maturing organization, the adapting
organization, and the learning organization. Learning often begins through a trial-
and-error process and develops into a fully integrated facet of the organization’s
operations. Learning organizations require significant amounts of time and com-
mitment, which in turn requires strong, visionary leadership. Leaders must develop
flexible strategies and clear communication to foster a culture that welcomes
change. Leaders guide the learning organization through change and find ways to
help it adapt.
5. Being an agile organization in the 21st century means having the flexibility and
innovative mind-set to promote large-scale, disruptive changes to provide better
products and services. Learning organizations are of the mind-set that learning is a
consistent cycle; with this knowledge comes the systems, human capacity, and expe-
rience to make changes as needed.
action learning Continuous planning that
leads to reflection and learning in the cul-
ture of the organization.
agile organization An organization that
can quickly react to changes in the market.
This means that companies can and do
successfully respond to new competitors,
technologies, and shifts in the market.
executive coach A professional hired by
organizations to advise on complex deci-
sions and individual and/or team skill
building aimed at developing personal and
professional performance.
improvised implementation A manifesta-
tion of each employee’s creative role
through experimentation at individual
and team levels before companywide
implementation.
leadership versatility The willingness and
ability to learn from experience and apply
that learning in order to perform success-
fully under new conditions.
learning agility The ability to learn and
adapt to new information and situations. See
leadership versatility.
learning organization Agile organizations
that take a “big picture” reflective approach
in order to adapt and evolve at individual
and organizational levels. A learning organi-
zation continually nurtures new patterns of
thinking and encourages collective aspira-
tion to make learning a fundamental aspect
of the organization.
mental models Assumptions, generaliza-
tions, and images that influence our under-
standing of the world and the ways in which
we take actions.
personal mastery The state of continually
clarifying and deepening personal vision,
focusing energies, developing patience, and
seeing reality objectively.
Key Terms
Discussion Questions
1. What is the difference between “hard” and “soft” dimensions of change? Offer an
example of each dimension from this chapter or from the media.
2. If you were asked to be part of a group to hire a CEO to lead a transformational
change for a large company, what characteristics and skills would you look for, and
why? Base your answer on what you learned in Section 5.1.
3. Why should competent executive coaches be hired to help CEOs and managers sus-
tain changes?
4. Consider this statement: “Agile businesses don’t predict, they respond.” Do you agree
with this statement? Why or why not? Explain your reasoning.
5. What principles and practices from Section 5.2 does the Semco Group demonstrate
to be considered an agile company?
6. What characteristics from Section 5.3 does L. L. Bean demonstrate that classifies it as
a learning organization?
7. Suppose you have been invited to give a talk discussing Hyundai’s turnaround expe-
rience and planned organizational change. What would you say?
8. How does an organization become a “learning organization,” as discussed in
Section 5.4? Do you think any organization can become a learning or agile
organization? Why or why not? Explain your reasoning.
Additional Resources
For more on the Executive Coach Academy
http://hrweb.mit.edu/organizational-effectiveness/organization-development-consulting
Institute of Organizational Development
http://instituteod.com/organization-development-certified-consultant.php
For a video of the “Netflix apology”
To determine if students would like to become an OD consultant, they can read the Guide to
Selecting an OD Consultant
http://impactrising.org/wp-content/uploads/2013/05/guide_to_selecting_an_od_
provider
Managing Change Sample Answers
Managing Change—The Agile Organization
1. A modular organizational structure allows the business to essentially be the sum
of its moving parts. As business develops and initiatives come and go, teams form
to work on a task and then disband when the objective is achieved or the project
ends. This creates flexibility and allows a company to be agile, making it easier
to quickly facilitate a project and then move forward to the next one. Moreover,
employees learn a lot from joining teams and then returning to their regular job
responsibilities.
2. Principles of agility include free-flowing, effective communication and employee
autonomy. Trusting employees to make their own decisions on the fly benefits not
only their engagement but also their development. Furthermore, being able to be
creative and have a direct impact on business processes adds to the business’s ability
to be dynamic because employees at all levels are taking initiative. Achieving this
requires a flatter hierarchy that runs mainly on guiding principles rather than strict,
top-down directives. An agile company also encourages experimentation and fosters
a culture of innovation.
3. Leaders of truly agile organizations must be able to adapt to new situations and be
comfortable with constant change. They should embody the strategy by being open,
flexible, and resilient, and able to acknowledge and learn from mistakes. An agile
company embraces a learning environment. Learning from experience and applying
new knowledge enables agility. Organizations need to provide customers with “bet-
ter, faster, cheaper, more mobile, more convenient or more personalized” (Denning,
2015) services for users.
4. Organizations “must imagine a future that users will truly want, even though users
themselves don’t yet know what that is” (Denning, 2015).
Managing Change—The “Postmortem”
1. Training usually takes the form of a program, session, or class and is goal ori-
ented and finite in nature. Learning is more abstract and ongoing and is a concept
embedded into company culture. You can complete training, but ideally you never
stop learning.
2. Adaptive learning draws from past experiences. Action learning reflects on the pres-
ent to guide next steps. Anticipatory learning utilizes scenarios that could result
from the present situation and studies the different outcomes to identify pitfalls and
opportunities.
3. Agile organizations must be comfortable with a learning environment—learning
makes agility possible. The lesson spawns ideas for the company to take direction
and remain competitive. Learning organizations must constantly evolve and improve
so as to recognize opportunities and take advantage of them. Both require commit-
ment, communication, collaboration, and intellectual curiosity.
4. In addition to after-action reviews or postmortems, other learning opportunities
include experiential learning programs, focus groups, working groups, and team
meetings. Of course, ideally, day-to-day work experiences also provide learning
opportunities.
Managing Change—Companies Are Only as Good as Their People
1. A learning organization embraces experimentation. Over time, successful experi-
ments become part of its fabric. Eventually, a succession of these changes results in
large-scale organizational change. Establishing a learning organization is essentially
a way to effectively manage change.
2. How effective a learning mind-set is depends on leaders’ commitment to an ongoing
process and, more importantly, their ability to accept failure. Organizations that fail
to understand this will be unlikely to take advantage of its benefits or instill a culture
that can foster learning and change. Some might view learning organizations as a
fad or as a pie-in-the-sky idea. A fatal flaw would be to assume it is a one-size-fits-all
solution to business. Learning organizations are administered from a macro stand-
point and offer the flexibility to grow and change with time. As they thrive on the
back of failure, it is important to understand that each organization fails differently.
Each has its own journey. Therefore, the abstract principles of learning organizations
are applied to guide an organization through change; in turn, change fuels learning.
3. “New Coke,” Beta video tapes, Euro Disney, the LaserDisc predecessor to the CD/
DVD, Crystal Pepsi, Friendster—the list goes on. Have fun with it! It may not have
been fun at the time, but most of the companies that pioneered these failures have
followed up with successful products since.
4. Relying on the principles of a learning culture, the first steps would be to commu-
nicate openly about what happened. Show support for those involved and express
commitment to improvement. Show appreciation for good jobs done that may not
have affected the outcome. Collaboration will play a huge part going forward. Per-
haps hold an after-action at the organization’s higher level and communicate the
results. Perhaps hold focus groups to elicit ideas, feedback, and other input from
staff. Pinpoint learning opportunities and apply them to the company’s next moves.
Once a rebound plan is formulated, communicate that to employees, ideally showing
them how their feedback played a part in the new direction.
Answers and Rejoinders to Chapter 5 Pretest
1. False. The more traditional leadership traits of decisiveness, composure, and find-
ing ways to get results are ranked low in current leadership models. Rather, current
research indicates that the ability to build teams, being open to risk taking, and hav-
ing the skills to influence employees without exerting authority are ranked high in
change leadership.
2. True. Many traditional organizations that emphasize hierarchy in their business
model have low tolerance for failure. However, agile organizations accept that failure
leads to learning and perhaps to better products and services. For example, a newly
agile Disney organization suffered failures (such as the ESPN phone) that led to
other more successful experiments.
3. False. A learning organization is holistic, which means it takes into account how all
the components within the organization interact and communicate. A learning orga-
nization evolves holistically at individual, team, and organizational levels, in which
collective goals are conceived and new ways of thinking are cultivated.
4. False. Learning organizations can characteristically better respond to market swings
because they have already developed in-place, internal structures that respond to
threats and opportunities proactively. Learning organizations are distinguished by
constant readiness, continuous planning, and action learning.
5. True. In the 21st century, both agile and learning organizations must have a mind-
set for constructive, deep change that demands employees do things differently.
Combining agility characteristics with learning principles leads to success for all
stakeholders.
6. True. Learning organizations understand that creative tension is a source of energy
and renewal, and they strive to create an environment where inquiry, sharing openly,
and taking risks is safe.
Rejoinders to Chapter 5 Posttest
1. Of the more than 1,500 CEOs surveyed, fewer than half feel they can handle in-
creased complexity in change management. In the same survey, CEOs cited being
open to out-of-the-box solutions and being willing to change business models to
meet goals as being hallmarks of creative CEOs.
2. Effective change leaders develop human potential within their organizations by
encouraging employees to focus on the big picture and to become invested in the
organization’s overall growth and success.
3. Agile organizations react quickly to changes in the market, in technology, and to new
competition. They identify opportunities faster than their competition and imple-
ment changes more readily than traditional organizations.
4. The author would disagree that agile organizations appreciate centralized decision
making. Rather, such organizations value decentralized decision making and prob-
lem solving, and empower employees to do both.
5. Sacred cows are those values/ideas that people rate so highly that they think they
should not (or cannot) be criticized or changed (such as “never question the boss”).
Learning organizations facilitate learning by being willing to examine and challenge
their “sacred cows.”
6. In this scenario, the learning organization principle that is most reflected is “Link
individual performance with organizational performance.”
wei82650_05_c05_207-248.indd 246 12/22/15 10:21 AM
7. Whereas traditional organizations value mission, learning organizations value revi-
sion and thus change more.
8. In the five stages a company passes through to become a learning organization,
learning becomes an integral part of the company’s strategic plan and long-term
growth in the adapting stage.
9. Rowden states that agile organizational learning should be viewed as growth based
on knowledge and (learning from) failures. Failure does not negate a learning orga-
nization’s effectiveness—it is part of it.
10. One lesson to be drawn from the philosophies of both agile and learning organi-
zations is “An organization is only as good as its people.” An organization whose
culture fosters learning and openness to risk and failure will typically have a positive
impact on its employees and its goals.
11. L.L. Bean is a learning organization because of its skills in acquiring knowledge and
effectively converting it to behavioral and business changes. For example, L.L. Bean
increases its market research knowledge when it recruits devoted customers as
product testers, and they give feedback on real products used in actual situations.
12. The author relates how Shell is using a learning model in terms of the way it
researches and explores changes and the innovations it makes in the energy sector.
Although the company does not know what its future holds, it keeps its options open
through organizational flexibility, renewable energy research, and conversations
with policy makers.
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