Introduction
Change
The Need to Learn
The Learning Imperative
Assorted Papers on Organisational Learning
Modelling with Systems Thinking
Soft Systems Methodology
Additional Resources
Introduction Main Topics Dictionary
I tell you, sir, the only safeguard of order and discipline in the modern world is a standardized worker with interchangeable parts. That would solve the entire problem of management.Jean Giraudoux (1882-1944)
French author, playwright
Learning without thought is labor lost; thought without learning is perilous.Confucius 551-479 BC
The Confucian Analects, bk. 2:15
Wear your learning, like your watch, in a private pocket: and do not merely pull it out and strike it; merely to show that you have one.Lord Chesterfield (1694-1773)
English statesman, man of letters
A little learning is a dangerous thing; Drink deep, or taste not the Pierian spring: There shallow draughts intoxicate the brain, And drinking largely sobers us again.Alexander Pope 1688-1744
An Essay on Criticism [1711], pt. II, l. 15
Life is like playing a violin solo in public and learning the instrument as one goes on.Samuel Butler (1835-1902)
English author
On Change...
One change leaves the way open for the introduction of others.Niccolò Machiavelli (1469-1527)
Italian political philosopher
The man recover'd of the bite The dog it was that diedOliver Goldsmith's `Elegy on the Death of a Mad Dog
Tempora mutantur, nos et mutamur in illis [Times change, and we change with them too]. +From Owen's Epigrammata [1615]
For good and evil, man is a free creative spirit. This produces the very queer world we live in, a world in continuous creation and therefore continuous change and insecurity.Joyce Cary (1888-1957)
British novelist
Change the environment; do not try to change man.1R[ichard] Buckminster Fuller 1895-1983
Design Science [1969]
Change is not made without inconvenience, even from worse to better.Richard Hooker (1554-1600)
English theologian
Nothing endures but changeHeraclitus c. 540 - c. 480 BC
From Diogenes Laertius, Lives of Eminent Philosophers, bk.IX, sec. 8, and Plato, Cratylus, 402A
Future shock ...the shattering stress and disorientation that we induce in individuals by subjecting them to too much change in too short a time.Alvin Toffler 1928-
Future Shock [1970], ch. 1
When our first parents were driven out of Paradise, Adam is believed to have remarked to Eve: "My dear, we live in an age of transition."W. R. Inge (1860-1954)
Dean of St. Paul's, London
The philosophers have only interpreted the world. The point, however, is to change it.Karl Marx (1818-1883)
German social philosopher, revolutionary
On Organzation...
Small is beautifulProfessor E.F. Schumacher, 1973
First we look at the underlying cause for the recent emphasis on organisational learning - and that is the increasing pace of change. This idea is continued in the discussion on The Need to Learn. The discussion continues with The Learning Imperative and Assorted Papers on Organisational Learning which have an extensive set of quotes from leading writers and thinkers in this field. Finally a few concrete tools are discussed in Modelling with Systems Thinking and Soft Systems Methodology.

Overlapping Product Cycles
Internationalisation is exacerbating this trend as companies strive to adapt products to local markets and local tastes. Flexible mass production is increasingly required but to keep the benefits of mass production you now have to have differentiated batch production. The need is to combine scale and scope to production. Network solutions lend themselves to scale and scope and they are having an effect on organisational innovation. Examples include the use of Just In Time techniques, strategic relationships between competitors, etc. Many of these new techniques themselves draw heavily upon new technology. This is not however a one-way relationship as the following diagram illustrates:
Minimills are not the old established U.S. steel firms. They have revolutionised the steel industry. Minimills are knowledge companies - products with a high quotient of knowledge (high technology).
A minimill has just started up in Japan.
Minimills are a rapidly growing niche in the steel market.
Drucker gives a helicopter view of the new economy in his article "The New Society of Organisations". He asks and answers three things:
A common feature of markets today are the start-ups which come from nowhere to overtake the dominant players in the market. An example is Walmart taking over K Mart, the minimills, SouthWest Airline against all the big airlines, SMH (Swatch) against Seiko of Japan.
This is a sign of change from static markets to dynamism.
Swatch calls this competing on capabilities. Wal Mart is a good example of Drucker's idea of social change. What did Wal Mart do? It changed retail shopping - and the way people shop. Wal Mart saw that cheap prices can be accompanied by good service and still have everything always in stock. This was achieved by cross docking and centralised procurement. They combined economies of scale (in procurement) with rapid restocking. This gave them a 2 to 3% cost advantage over K Mart - vital in a low margin business.
Cross docking requires a lot of knowledge about customer purchasing. This has driven an information infrastructure from POS right through to the suppliers. They even have their own satellite network.
This information infrastructure is matched by organisational mechanisms like weekly manager meetings and strong supplier links. Some suppliers even have staff in Wal Marts headquarters.
These sort of capabilities involve very large strategic investments. They are a package - in isolation they would not be justified. The whole is greater than the sum of the parts.
But is the change a new sort of change - or is the rise of K Mart 20 years ago the same as Wal Mart's rise today? The change is new in the sense that the change is now constant. Change is measured not in gaps of years but in months. The volatility is what's new. That and the increasing importance of knowledge.
The fog of war.
Ikujiro Nonaka's article, "The Knowledge-Creating Company" is a different sort of language to describe this learning process. It borders on the mystic.
The article seems to neglect the teams aspect of knowledge working. One of the basis for teams is that the sum is greater then the parts - this implies knowledge creation
A flavour of bricolage - just do it philosophy.
"Middle up-down management" was a seminal work by Ikujiro Nonaka in the Sloan Management Review.
John Seely Brown - there is something in this thinking but the language is not right. The discussion honours the confusion in our own minds.
A discussion with John Seely Brown and Susan Haviland about Seeing Differently
Much of this is work in progress.
My job as the Chief Scientist at Xerox is designing experiences to change the way people will see the world.
Rethinking
Reseeing
Recreating
A robust fact: There is no correlation between investment in information systems and productivity. Bad news.
This is based on a Harvard Business School series of researches by Gary Loveland.

Most business re-engineering has concentrated on eliminating waste and not on working smarter.
Can you build technology that helps us learn faster?
Any organisation has `on its periphery' all kinds of naturally occurring `experiments' and innovations...
where the renegades live
where the rubber hits the road.
But we don't see them - first we must learn to see learning.
Let the world do the work for you - cognitive judo.
Rodney Brook's robots (Australian)
The world of the formal user manual procedures
------------------------- -------- vs. ------ ---------------------------
The world of the informal stories/word of mouth
Knowing arises through doing
Understanding is socially constructed
Learning is social and collaborative
I think therefore I am 7
We participate because we are3
Legitimate peripheral participation - is critical in understanding learning.
Community of practice - meaning is constructed.
The core competence of a company lies in the implicit knowledge of a community of practice.
Communities of Practice are not:
The distributed coffee pot challenge. Xerox is trying to develop a distributed active medium for capturing:
Heidegger: The blind man and the cane. Ready at hand. The handle disappears.
A discussion with Robert Howard and John Seely Brown on "Research That Reinvents the Corporation".
The business has changed from copiers to copying and (integrated and networked) systems. The company is now operating in a much bigger (more complex) competitive space.
Organisational architecture is the shaping of behavioural space.
Sun has a system of going to the market place to price each of the products in the Sun value chain (chips to workstations to operating systems to network solutions). Each of these has competing products (Intel chips, HP workstations, etc.). This simplifies the whole issue of transfer pricing and allows the company to concentrate on more important things.
Xerox has not followed this philosophy mainly because they never seriously considered selling their `privileged' technology.
How the internal markets of a company operate is an interesting question to ask.
Benchmarking also has similar problems.
The fog of war = the fog of reality.
Beware the clarity of cases. Cases only represent one view.
Sharp had a major re-organisation. The business divisions were created and the managers of the divisions chose the people they wanted to employ out of the `old' company. Those that were left over were formed into an extra division where all the `unwanted' staff were `left'. The senior management of Sharp, instead of asking them, said instead what business do you want to be in? The answer was - copiers. They have performed very well, in part because these `left-overs' were determined to outperform those which were `chosen'.
A lot of knowledge resides in past products and the tools used to design those products. Often leaps in technology turn situations upside down and result in a fundamental change in the way you look at the world. This means that the `keepers' of the past knowledge may no longer be relevant - even worse they may actively stifle technological leaps. A good example of this is paper handling: it used to be a problem of moving paper to a tolerance of 5 microns, now it is `how do you use the instability of paper to on-line, real-time control the paper feeding process'?
How do you change an organisation from looking inside to outside?
Learning Through Quality (=TQM) [[daggerdbl]] Quality Through Learning[4]
- Looking
- Listening
- Learning
- L
How seriously do you want to treat creative destruction? i.e. by making a low maintenance copier when most profits come from servicing copiers.
The key to succeeding in the increasing fog authentic dialogue is central - power and turf are fundamental blocks to this process.
[[daggerdbl]] Open, honest, discussion.
A discussion with Robert Howard on "Motorola U: When Training Becomes an Education".
This is a story about a internationally successful high technology company. This is a dynamic company which is international (China is their second biggest market [after the U.S.]).
The budget for education is now doubled and it has now opened training centres internationally (Seoul, etc.).
Their approach to education seems to be very traditional. John Seely Brown says that the curriculum is terrible - but it works. He feels that it works but they don't know why it works. It is a political empire. Perhaps it succeeds because it builds networks of people who continue in the workplace.
This is especially true of business school education world-wide, where contacts and networking is central to their attraction.
A discussion with Robert Howard on Julian Orr's paper, "Ethnography and Organisational Learning: In Pursuit of Learning at Work", Xerox PARC paper, September 1992.
Learning is not a problem for individuals - but it is a problem for organisations to learn, and to learn uniformly across an organisation.
An organisation is not a unified, coherent body, however managers often think it is (as demonstrated by actual versus perceived work activities) and this causes problems in organisations learning.
The Denver project was an attempt to change this situation by providing technology (in this case radios) for technicians to support local learning (and thus change the way the corporation services its customers). It was a great help to the technicians and real work groups were created and new technicians learned faster. But the organisation was not changed. Why not? There were three reasons:
1. The technology was considered suspect because it didn't come from the centre (as it usually does). The organisation didn't trust it.
2. The original object was distorted into increased productivity which became to be measured as reduced head count.
3. There was not mechanism in the organisation for discussing the different opinions which the groups could use to reconcile the differences.
Unfortunately this is where the paper ends - there is no discussion about how this organisational failure could be fixed.
A discussion with Robert Howard on Charles Sabel's paper, "Learning by Monitoring: The Institutions of Economic Development", MIT paper, July 1993.
Sabel tries to address the issues raised at the end of Orr's paper - that of organisational learning.
He defines monitoring as the decision which organisations make on how to distribute the newly acquired knowledge. The problem is that the relationships required for monitoring are exactly those most disturbed by the destabilising effect of learning. For example new learning may threaten jobs - how is trust and communication established between workers and management in this situation?
His prescription is negotiated meaning at the organisational level.
Japan has a powerful learning organisation: techniques such as JIT inventory, autonomous work groups, job security and merit based promotion all facilitate organisational learning.
The Japanese government also provided mechanism for learning: by funding research but making that research available to others and setting standards are two examples.
A discussion with Robert Howard on John Seely Brown, Paul Duguid and Susan Haviland's paper, "Towards Informed Participation: Six Scenarios in Search of Democracy in the Electronic Age", Xerox PARC paper, October 1993.
Edward Shapiro and Caar?, "Lost in Familiar Places" is an interesting book to read in relation to organisational learning.
Our families are our first experience of organisations and these experiences form our reactions to other organisations later in life.
Organisational pictures in individuals minds do have irrational aspects which must be taken into consideration when discussing organisations.
Quotes from "The New Society of Organisations", by Peter F. Drucker, HBR September-October 1992
In this society, knowledge is the primary resource for individuals and for the economy overall. Land, labour, and capital - the economist's traditional factors of production - do not disappear, but they become secondary.
Knowledge by itself produces nothing. It can become productive only when it is integrated into a task. And that is why the knowledge society is also a society of organisations:
Innovation, as the great Austro-American economist Joseph Schumpeter said, is "creative destruction.:
In the society of organisations, however, it is safe to assume that anyone with any knowledge will have to acquire new knowledge every four or five years or become obsolete.
This is doubly important because the changes that affect a body of knowledge most profoundly do not, as a rule, come out of its own domain.
For managers, the dynamics of knowledge impose one clear imperative: every organisation has to build the management of change into its very structure.
Organisations increasingly will have to plan abandonment rather than try to prolong the life of a successful product, policy, or practice.
kaizen
Innovation as a systematic process
The need to organise for change also requires a high degree of decentralisation to make decisions quickly.
"Organisations" The Concise Oxford Dictionary did not even list the term in its current meaning in the 1950 edition.
Organisations are purposefully designed and always specialised.
Quotes from "Competing On Capabilities;The New Rules of Corporate Strategy" by George Stalk, Jr., Philip Evans, and Lawrence E. Shulman, HBR March-April 1992
In the 1980s, companies discovered time as a new source of competitive advantage.
"capabilities-based competition"
This strategic vision reached its fullest expression in a largely invisible logistics technique known as "cross-docking". In this system, goods are continuously delivered to Wal-Mart's Warehouses, where they are selected, repackaged, and then dispatched to stores, often without ever sitting in inventory. Instead of spending valuable time in the warehouse, goods just cross from one loading dock to another in 48 hours or less.
With such obvious benefits, why don't all retailers use cross-docking? The reason: it's extremely difficult to manage.
For example, cross-docking requires continuous contact among Wal-Mart's distribution centres, suppliers, and every point of sale in every store to ensure that orders can flow in and be consolidated and executed within a matter of hours. So Wall-Mart operates a private satellite-communication system that daily sends point-of-sale data directly to Wal-Mart's 4,000 vendors.
When the economy was relatively static, strategy could afford to be static. In a world characterised by durable products, stable customer needs, well-defined national and regional markets, and clearly identified competitors, competition was a "war of position" in which companies occupied competitive space like squares on a chessboard, building and defending market share in clearly defined product or market segments. The key to competitive advantage was where a company chose to compete. How it chose to compete was also important but secondary, a matter of execution.
Competition is now a "war of movement" in which success depends on anticipation of market trends and quick response to changing customer needs. The essence of strategy is not the structure of a company's products and markets but the dynamics of its behaviour.
A capability is strategic only when it begins and ends with the customer.
New product realisation, a capability that includes the way a product is not only developed but also marketed and serviced.
Weaving business together into organisational capabilities in this way also mandates a new logic of vertical integration. At a time when cost pressures are pushing many companies to outsource more and more activities, capabilities-based competitors are integrating vertically to ensure that they, not a supplier or distributor, control the performance of key business processes.
Another attribute of capabilities is that they are collective and cross-functional - a small part of many people's jobs, not a large part of a few.
Traditional internal accounting and control systems often miss the strategic nature of such investments.
Speed. The ability to respond quickly to customer or market demands and to incorporate new ideas and technologies quickly into products.
Consistency. The ability to produce a product that unfailingly satisfies customers expectations.
Acuity. The ability to see the competitive environment clearly and thus to anticipate and respond to customers evolving needs and wants.
Agility. The ability to adapt simultaneously to many different business environments.
Innovativeness. The ability to generate new ideas and to combine existing elements to create new sources of value.
Shift the strategic framework to achieve aggressive goals.
Organisation around the chosen capability and make sure employees have the necessary skills and resources to achieve it.
Make progress visible and bring measurements and reward into alignment.
Do not delegate the leadership of the transformation.
Competing on capabilities provides a way for companies to gain the benefits of both focus and diversification. A company that focuses on its strategic capabilities can compete in a remarkable diversity of regions, products, and businesses - such a company is a "capabilities predator".
But the big payoff for capabilities-led growth comes not through geographical expansion but through rapid entry into whole new businesses. Capabilities-based companies do this in at least two ways. The first is by "cloning" their key business processes.
But the ultimate form of growth in the capabilities-based company may not be cloning business processes so much as creating processes so flexible and robust that the same set can serve many different businesses.
Wachovia competes on its ability to understand and serve the needs of individual customers, a skill that manifests itself in probably the highest "cross-sell ratio".
Banc One's distinctive ability is to understand and respond to the needs of entire communities.
Quotes from "The Knowledge-Creating Company", by Ikujiro Nonaka, HBR November-December 1991
In an economy where the only certainty is uncertainty, the one sure source of lasting competitive advantage is knowledge.
Deeply ingrained in the traditions of Western management, is a view of the organisation as a machine for "information processing"
creation of new knowledge.
The centrepiece of the Japanese approach is the recognition that creating new knowledge is not simply a matter of "processing" objective information.
The more holistic approach to knowledge at many Japanese companies is also founded an another fundamental insight. A company is not a machine but a living organism.
In this respect, the knowledge-creating company is as much about ideals as it is about ideas. And that fact fuels innovation. The essence of innovation is to re-create the world according to a particular vision or ideal.
Any company that wants to compete on knowledge must also learn from Japanese techniques of knowledge creation.
New knowledge always begins with the individual.
Making personal knowledge available to others is the central activity of the knowledge-creating company. It takes place continuously and at all levels of the organisation.
The starting point is "tacit" knowledge. Tacit knowledge is highly personal. "We can know more than we can tell".
Four basic patterns for creating knowledge:
Indeed, because tacit knowledge includes mental models and beliefs in addition to know-how moving from the tacit to the explicit is really a process of articulating one's vision of the world - what it is and what it ought to be.
From Metaphor to Model
Through metaphors, people put together what they know in new ways and begin to express what they know but cannot yet say. As such, metaphor is highly effective in fostering direct commitment to the creative process in the early stages of knowledge creation.
The next step is analogy.
the last step in the knowledge-creation process is to create an actual model.
From Chaos to Concept: Managing the Knowledge-Creation Company
The fundamental principle of organisational design at the Japanese companies I have studied is redundancy - the conscious overlapping of company information, business activities, and managerial responsibilities.
Redundancy is important because it encourages frequent dialogue and communication.
At Canon, the company organises product-development teams according to the principle of internal competition.
Another way to build redundancy is through strategic rotation, especially between different areas of technology and between functions such as R&D and marketing. Rotation helps employees understand the business from a multiplicity of perspectives. This makes organisational knowledge more "fluid" and easier to put into practice
Free access to company information also helps build redundancy. When information differentials exist, members of an organisation can n o longer interact on equal terms, which hinders the search for different interpretations of new knowledge.
No one department ore group of experts has the exclusive responsibility for creating new knowledge in the knowledge-creating company.
Creating new knowledge is the product of a dynamic interaction among three roles.
Front-line employees are immersed in the day to day details of particular technologies, products, or markets.
Middle managers synthesised the tacit knowledge of both front-line employees and senior executives, made it explicit, and incorporated it into new technologies and products. In this respect, they are the true "knowledge engineers" of the knowledge-creating company.
Quotes from "Message And Muscle: An Interview with Swatch Titan Nicolas Hayek" by William Taylor, HBR March-April 1993.
There are two main lessons. First it is possible to build high-quality, high value, mass -market consumer products in high wage countries at low cost. Notice I said build, not just design and sell. A Swatch retails for 50 francs in Switzerland and $40 in the United States. The price has not changed in ten years. Yet we build all of our Swatches in Switzerland - where the most junior secretary earns more than the most senior engineer in Thailand or Malaysia. In fact, it's just not possible to build mass-market products in countries like Switzerland. It's mandatory. This is a principle I am passionate about - and a principle business leaders in the United States and Europe don't take seriously enough. We are all global companies competing in global markets. But that does not mean we owe no allegiance to our own societies and cultures. Not so long ago I was in the United States for a meeting with the CEO of one of your big companies. We were discussing a joint venture to produce a new product we had developed. He was what the product could, do, he reviewed the design and he got very excited; "Great, we'll make it in Singapore". His people had done no research or calculations at all. It was a reflex. I said, "No, we'll make it in Alabama".
We must build where we live. When a country loses the know-how and expertise to manufacture things, it loses its capacity to create wealth - its financial independence. When it loses its financial independence, it starts to lose political sovereignty.
This is not commodity competition. Let's say you have three similar watches. One says "Made in Japan" and sells for $100. Another says "Made in Switzerland" and sells for $110. A third says "Made in Hong Kong" and sells for $90. Which watch will consumers prefer? In Europe between 75% and 95% will prefer the Swatch watch - in spite of the 10% premium. In the US, depending on which region you are talking about, between 51% and 75% of all consumers will prefer the Swiss watch. Only in Japan itself will a majority of consumers prefer the Japanese watch to the Swiss watch. What does that mean? If you have a manufacturing process in which direct labour is less than 10% of total costs, you have eliminated those costs from the competitive equation. When we created SMH, our direct -labour costs, on average, were more than 30% of total costs. Today they are well below 10%. If we paid our workers full salaries and the Japanese paid their workers nothing, we could still compete.
This same logic applies beyond watches. CEOs must understand this point. If you can design a system in which direct-labour costs are less than 10% of total costs, it is cheaper to build mass-market consumer products in the United States than in Taiwan or Mexico.
We are vertically integrated because it is the only way to maintain our strategic independence and freedom to manoeuvre in the market.
Quotes from "Research That Reinvents the Corporation" by John Seely Brown, HBR January-February 1991.
The most important invention that will come out of the corporate research lab in the future will be the corporation itself.
One popular answer to these questions is to shift the focus of the research department away from radical breakthroughs toward incremental innovation away from basic research toward applied research. At PARC, we have chosen a different approach, one that cuts across both of these categories and combines the most useful features of each. We call it pioneering research. Like the best applied research, pioneering research is closely connected to the company's most pressing business problems. But like the best basic research, it seeks to redefine these problems fundamentally in order to come up with fresh - and sometimes radical - solutions.
It is important to distinguish this activity from conventional market research. Most market research assumes either that a particular product already exists or that customers already know what they need. At PARC we are focusing on systems that do not yet exist and on needs that are not yet clearly defined. We want to help customers become aware of their latent needs, then customise systems to meet them. Put another way, we are trying to prototype a need or use before we prototype a system.
the persistence of such misunderstandings may be a serious drag on product development.
Thus a critical task for the future is to explore how information technology might be used to accelerate the creation of mutual understandings within work groups. The end point of this process would be to build what might be called an "envisioning laboratory" - a powerful computer environment where Xerox's development and marketing organisations, customers could try out new system configurations, reflect on the appropriateness of the systems for their business, and progressively refine and tailor them to match their business needs. Such an environment would be a new kind of technological medium. Its purpose would be to create evocative simulations of new systems and new products before actually building them.
When this happens, phrases like "continuous innovation" and the "customer-driven company will take on new meaning And the transformation of corporate research - and the corporation as a whole - will be complete.
Quotes from "The Designer Organisation: Italy's GFT Goes Global" by Robert Howard, HBR, September-October 1991.
The periphery has to become the centre - or' at least, the centre of top management's attention. Adapting to local differences requires a far more multifaceted organisational structure, one in which inn ovation occurs at the periphery as well as the centre and where learning flows in many different directions. Strategy is to become an insider in each of its major markets.
The company may be global, but the consumer is not
Quotes from "Teaching Smart People How to Learn", by Chris Argyris, HBR, May-June 1991.
They need to reflect critically on their own behaviour, identify the ways they often inadvertently contribute to the organisation's problems, and then change how they act. In particular, they must learn how the very way they go about defining and solving problems can be a source of problems in its own right.
Put simply: because many professionals are almost always successful at what they do, they rarely experience failure. And because they have rarely failed, they have never learned how to learn from failure. So whenever their single-loop learning strategies go wrong, they become defensive, screen out criticism, and put the "blame" on anyone and everyone but themselves. In short, their ability to learn shuts down precisely at the moment they need it most.
There seems to be a universal human tendency to design one's actions consistently according to four basic values:
Quotes from "Values Make the Company: An Interview with Robert Haas", HBR, September-October 1990
Levi is a pioneer in using electronic networks to link the company more closely to its suppliers and retailers.
A companies values - what it stands for, what its people believe in - are crucial to its competitive success. Indeed, values drive the business.
In a more volatile and dynamic business environment, the controls have to be conceptual. They can't be humane anymore.
In reality, the more you establish parameters and encourage people to take initiatives within these boundaries, the more you multiply your own effectiveness by the effectiveness of other people.
You have to negotiate goals with your work group rather than just set them yourself.
You also have to accept the fact that decisions or recommendations may be different from what you would do. You have to be willing to take your ego out of it.
In most companies ... there is a gap between what the organisation says it wants and what it feels like to work there. Those gaps, between what you say and what you do erode trust in the enterprise and in the leadership...
Most managers say they want to optimise their business decisions. My personal philosophy is to sub optimise business decisions. Too often, optimising really means only taking into only one dimension of a problem into account. Sub optimising means looking at more than one factor and taking into account the interests and needs of all the constituents.
Quotes from "Motorola U: When Training Becomes an Education" by William Wiggenhorn, HBR July-August 1990.
Ten years ago we saw quality control as a screening process, catching defects before they got out the door.
Today we expect workers to know their equipment and begin any trouble shooting process themselves. If they do need an expert, they must be able to describe the malfunction in detail. In other words, they have to be able to analyse problems and then communicate them.
Today we see quality as the process that prevents defects from occurring, a common corporate language that pervades the company.
The corporate goal is to achieve a Six Sigma quality standard. This means six standard deviations from a statistical performance average. This translates to 3.4 defects per million opportunities, or production that is 99.99966% defect free. Airlines achieve 6.5[[Sigma]] in safety...but only 3.5 to 4[[Sigma]] in baggage handling.
When technology changed once in five years, on-the-job training made some sense, but people can't handle constant innovation by watching one another.
Studies of work activities have revealed fundamental differences between the way work is stated as being done (in job descriptions and instruction manuals) and the way it is actually carried out.
Beyond this, it is interesting to also look at the relationships between working, learning and innovation[1]. Classically, work has been thought of being conservative and difficult to change, learning was something divorced from work, innovation is seen as the necessary but disruptive way to change.
What is now emerging is a much more complete picture of these three activities.
It is obvious that an organisation will function better if formal descriptions of work practices accurately describe what people actually do in their work. In practice however work practices are constantly adapting (i.e. innovating) to the dynamic work environment. The corporation which is able to quickly learn and then innovate their work practices will be able to change their work practices to perform better in the constantly changing environment.

Learning is made valuable only when it is based upon real work practices. It is also the informal learning which often really contributes to the successful functioning of organisations. Informal learning is the sort of learning which people get through informal communications channels. These are as diverse as word-of-mouth, war stories and meetings.
Quotes from "The Computer for the 21st Century", by Mark Weiser, Scientific American, September 1991.
"The most profound technologies are those that disappear. They weave themselves into the fabric of everyday life."
Computer (i.e. silicon) based technology is still a long way from being invisible. This is not just a problem of the user interface - it goes deeper than that. Computers require us, as users, to focus first on the machine and only secondly on the use we want the machine for. The change to a `profound' technology can only be achieved when you can absorb the information without even being aware that you are using a computing device. Weiser users the analogy of reading a street sign - you absorb the information without consciously reading.
The most commonly used word to describe this is seamless but terms like ubiquitous computing and transparent are used interchangeably
Multimedia computing, as it stands today, is a technology which is not a step closer to profoundness - if anything it draws attention towards the box screen as a separate, alien, environment. Virtual reality today is also a misleading technology in terms of profoundness. It simulates environments while true profoundness is reached only when the technology invisibly enhances the environment. There is, as yet, no clear answer to the question of whether-or-not virtual realities will enhance our actual environment, and not just create a parallel reality.
Ubiquitous computing is currently not found in high profile technologies such as multimedia and virtual realities. Instead it is found hidden in everyday objects such as cars, light switches and numerous household appliances. This immediately draws the conclusion that there will be dozens, if not hundreds of computers in our environment of the future.
A further feature of these devices will be that they are aware of their environment and especially aware of where they are geographically. A nice example of this are the `active badge' technologies being developed by Olivetti and Xerox. Active badges are computers which look like name badges you clip on to yourself for identification in companies. The active badges go much further than this as they interact seamlessly and extensively with their environment. Doors open to you, telephone calls are transferred automatically as you move around, computers configure themselves to your preferences and electronic mail is routed to where you are.
Another technology being developed at Xerox's PARC laboratory is the idea of becoming computer independent. Instead of taking your computer where you go (like a laptop) you merely use the computer nearest to you and the information you require seamlessly appears on the device you choose to use. This concept is applied to all your private and professional information as well as public information as required.
Ubiquitous computing will not arise out of a computer, rather it will be the result of thousands of interactions between hundreds of computers.
Profound computing technology in fact consists of three groups of technologies which are currently merging into one: hardware, software and networks.
Quotes from a later article by Mark Weiser, "Some Computer Science Issues in Ubiquitous Computing", Communications of the ACM, July 1993, Vol. 36 No.7.
Ubicomp - the future world of ubiquitous computing.
People primarily work in a world of shared situations and unexamined technological skills. The computer today is isolated from the overall situation.
Applications of active badge technology have been extended to provide dynamic maps of people's location in a building.
Shared drawing tools have also been developed.
Xerox PARC research is proceeding in three areas:
Quotes from "Critical IT Issues: The Next Ten Years", by Robert I. Benjamin and Jon Blunt, Sloan Management Review, Summer 1992.
Benjamin and Blunt predict that the year 2000 will see the introduction of environments for knowledge workers which give access to information when, where and in what form they want it to be in.
Their specific predictions are:
The early 1980s saw spreadsheets driving PC usage in companies. The late 1980s saw networks driving PC penetration and the 1990s are predicted to be driven by teamwork applications.
Historically Trend
Information was locked away in database Information will become available
files. Printed reports were the main on-line.
source of information for users.
Collecting information was easier than This will remain true, but to a lesser
communicating it to other people. extent.
Information was filtered through printed The raw information will be made
reports. directly available to users.
Consequently filtering the information
will become much more important.
The information produced was often less Information modelling will become more
than useful. important as uses are found for the
filtered data.
"Research
from the Massachusetts Institute of Technology Management in the 1990s Program
suggests that the major reason that the benefits of IT implementation have been
so slow in coming is that organisational change is not adequately managed."
This is a key problem fro the 1990s."Building an information system...is a statement of war...", from K. Laudon in "A General Model for Understanding the Relationship between Information Technology and Organisations", New York University, Centre for Research on Information Systems, January 1989.
Competitive advantage will accrue to companies which are able to innovate their business practices and decision processes quicker than their competitors.
How well organisations use technology is the key concern of organisational learning.
"Largely missing today is a person to take responsibility for managing technology-driven change."
"Ubik" a novel by Philip K. Dick, Vintage Books, NY 1969.
A futuristic novel about a possible corporate future where computer technology has woven itself into every fabric of society. A great and thought-provoking read but not to everyone's taste, I suspect..
Quotes from "Enacting Design for the Workplace" by John Seely Brown and Paul Duguid, Paper for the conference Technology and the Future of Work, Stanford University, March 28-30, 1990 (paper revised January 1991).
No set of rules can describe or define what work really is.
Learners can usefully be thought of as constructing an understanding of their world, as making sense of what they do not know by whatever means are at hand.
This is similar to Levi-Strauss's concept of bricolage.
Learning involves becoming an "insider." Learners do not receive abstract, "objective" knowledge; rather, they learn to function as a member of the community in which knowledge is situated.
The explicit is not self-sufficient, but neither is the implicit. The two are only productive in conjunction.
People do act individually and design must respond accordingly. But what people do takes on its meaning and can only be recognised within a social context.
Tools that isolate people physically, socially, or conceptually either deliberately or inadvertently work against the formation of those essential components of practice.
People who have been definitively nominated `experts' can be prevented from acknowledging their need to learn by the loss of status involved in becoming a novice.
In fact, the conditions of being a novice recur in different forms and do not disappear with increasing competence.
Nevertheless, boundaries around systems tend to be drawn as tightly as possible. "Peripherals", "software", and even "users" tend to be defined by exclusion.
It is important to regard organisations...as systems in order to develop a sense of the interrelations of all their parts
Carlson's attempts to interest people in the idea of dry photocopying - xerography - provided an example of organisations' tendency to resist enacting innovation. ... All turned down the idea of a dry copier. And it was the idea they turned down. They did not reject a flawed machine; indeed they all seemed to have agreed that it worked. They rejected the concept of an office copier because they could not see a use for one.
What their evaluations concluded was that a machine was not need to make a record copy of documents. Carbon paper already did that admirably and cheaply. What they failed to see was that a copier allowed a proliferation of copies and copies and copies. The quantitative leap in copies then produced a qualitative change in the way they were used. Copies no longer served merely as records of an original. Copies of copies, increasing exponentially and circulating widely, could participate in the productive interactions of organisations' members in a fundamentally new and unprecedented way.
Idiot-proof designs...are based on the mistaken premise that all problems can be anticipated.
Closed design may constrain creative use in the worksite.
People are able to go beyond the explicitly described "functionality" or any device, to use it in new ways, to see its potential for new processes. Restrictively constrained devices, of course, inhibit such activity. Design that is itself potentially innovative must be sympathetic to this sort of improvisation and try to foster it. Design should be capable of helping to generate, circulate, mutate, and preserve emergent practices.
There are three sorts of transparency for technology:
from M. Cooley in "The Product of Illusion", John Thackera, ed., "Design After Modernism", London, 1988.
The importance for designers of being able to "converse" with situations, not with abstractions of situations.
"We do not have to ask whether organisations can afford knowledge. Simply by being organisations they do. The questions are (a) how is any local organisational environment organised so that the participants... can find their way around in it and do what they do in it, in the routine, unproblematic ways that they do; and (b) in what ways can this process of sharing, training, or "enculturalation" be made easier, more flexible, and more broadly based."
from R. Anderson and W. Sharrock, "Can Organisations Afford Knowledge?", 1990.
This analysis suggests why change can be so threatening. If working knowledge were dependent on an "organisation's organisation" - physical, social, technological - any change in the organisational structure would disorient members.... Every structural change would require rebuilding, to a greater or lesser extent, the background to each member's working knowledge.
To avoid resistance, then, designs that bring about this sort of structural change need to be not only user-oriented but user-orienting. That is, they need to be capable of re-establishing the relationship between members of the organisation and the reformed organisational structure in such a way that the working knowledge this relationship afford can be re-deployed.
Orienting people is not simply a matter of producing better maps.
Architecture... needs to learn how to "build on the nature of experience". And this... extends to the architecture of organisations and systems, which must not only build on the nature of experience but also be capable of resurrecting experience after reorganisation.
By deliberately including surroundings as part of the conceptual system, design establishes an important orienting relationship between "centre" and "periphery".
Peripheral features do not simply guide a viewer to the centre. In the process of guiding, they set up certain expectations about what will be found there.
The periphery that is not consciously used by the designer does not remain obligingly inert. People will use it, designed or not, to interpret the centre.
The distinction between constraints and resources (like that between "bugs" and "features") is impossible to pin down. Constraints can be turned into resources, and resources (such as added functionality or hideable controls) can turn out to be severe constraints.
See also David Lodge's novel, "Changing Places", 1978.
Quotes from "What's So New About the New Economy?" by Alan M. Webber, HBR, January-February 1993.
Across the corporate landscape, in every industry and at every level, managers are struggling to adapt to unfamiliar circumstances and new strains of competition.
The remedies at hand make up a familiar menu of corporate change: total quality management, continuous improvement, downsizing, outsourcing, business process re-engineering, focusing on core competencies and capabilities. The same set of programs is proliferating at nearly every company. And yet, the sum of all ;these programs is somehow less than the whole.
What does it really mean to be a manager in the brave new world of business, competition? Or put more simply, what's so new about the new economy?
The move to a new economy takes managers on a journey. It's a voyage that begins with technology and leads inexorably to trust, the new economy is founded on paradox..
The logic goes like this: the revolution in information and communications technologies makes knowledge the new competitive resource. But knowledge only flows through the technology; it actually resides in people - in knowledge workers and the organisations they inhabit. In the new economy, the manager's job is to create an environment that allows knowledge workers to learn - from their own experience, from each other, and from customers, suppliers, and business partners.
Information is the new raw material. And as that material is applied to products, companies, and entire businesses, everything changes. The example of the archetypal "old-economy" product: steel. In the past decade, information has cascaded through the steel industry, transforming the product, the processes by which it is made, the economics of the industry, and ultimately what it means to be a steel company.
In the 1980s, the conventional wisdom had it that the U.S. steel industry was dying, and yet today, the world's lowest cost, highest quality steel is produced in the US. This outcome was the product of neither intervention nor investment but of innovation - the rise of a new generation of "minimill" steel companies like Nucor and Chaparral Steel. The minimill steelmaker's applied information to steel. As Wriston aptly puts it, "A piece of steel, whether raw or as a part for a new automobile or skyscraper, is very different today from what it was a generation ago. It still contains a lot of iron mixed with other metals, but it contains a great deal more information
James Brian Quinn, professor at Dartmouth's Tuck School. In "Intelligent Enterprise"[3], he argues that "leveraged intellect and its prime facilitator, service technology, are reshaping not only the service industries but also U.S. manufacturing, the country's overall economic growth patterns, national and regional job structures, and the position of the US in world politics and international competition."
If that claim seems extreme, Quinn backs it up with a wealth of examples to make the case. Clothing manufacturers who create permanent press and wrinkle-resistant fabrics are building services directly into their manufactured product. Companies like Boeing, Xerox, Apple, and Motorola, who include customers in the design of a new product, are integrating services into R&D and product development. "Smart" products like self-diagnostic elevators, computers, or copying machines use the information-processing power of the microchip to detect the likelihood of failures before they occur - thus extending the reach of the company across the boundary of the sale into the servicing of the product.
Wriston: "Intellectual capital will go where it is wanted," he writes "and it will stay where it is well treated. It cannot be driven, it can only be attracted". In the end, the location of the new economy is not in the technology, be it the microchip or the global telecommunications network. It is in the human mind.
Drucker[4], the knowledge worker is the single greatest asset.
Communication transforms a collection of individuals into a strong, mutually supportive team.
In the new economy, conversations are the most important form of work. Conversations are the way knowledge workers discover what they know, share it with their colleagues, and in the process create new knowledge for the organisation.
For an accurate picture of how work really gets done in any company, don't look at the organisation chart. Map the company's conversation flows.
This is as true outside the company as inside.
That is where conversations go. They create and express the emotional environment of a company.
They depend on bedrock human qualities: authenticity, character, integrity, in the end, conversation comes down to trust.
Trust can be messy, painful, difficult to achieve, and easy to violate.
Quotes from "Teams, Markets and Systems - business innovation and information technology" by Claudio U. Ciborra, Cambridge University Press 1993.
Introduction
the potential effects or impacts of network technologies are:
The efficiency effect: The infrastructure allows barriers in time and space to be overcome, and the surplus in communication and information-processing needs to be taken over.
The content effect: The systems offer programs to process information more effectively; thus they provide scope for carrying out new tasks, such as a survey, in an improved way.
The socialisation effect: By providing more opportunities for reciprocal exchange, the network allows the scope and depth of teamwork and, more generally, group activities, to be enlarged.
The learning effect: Group members are engaged in a number of learning processes because of the technology.
The transformation effect: The interaction between the task force and the systems leads to new ways of thinking about the world and the way to intervene in it.
a common awareness that something has to change in our conception of the technology and the way we design through it new business and public organisations.
"if in the 1974 - 84 period the central problem was one of implementation of information technology by constructing distributed processing systems, then in the period 1985-95 the challenge is to build a management information system conceived as a system for sharing knowledge based on a network of advanced workstations. Such an information system will constitute the method on which basis people will organise their internal and external communications, where the communication process is very much linked to the processes of knowledge sharing and organisational learning rather than to the pure technical idea of data transmission", P.A. Strassmann, "The Business Value of Computers - an Executives Guide", The Information Economics Press, 1990.
Industrial change
The technological changes are not occurring in an organisational vacuum, that is, the organisational settings-markets and firms - are far from being stable or neutral. Rather, they are torn by different economic, organisational and social forces.
The models we are going to consider contain hypotheses on how people in different types of organisations produce, use and communicate information relating to executing tasks, sharing work, co-operating, co-ordinating, solving problems and managing conflict.
Data - record signs and observations in or on a medium. The context of data is generally simple, widely accepted and unambiguous.
Information - shapes the meaning of data in relation to a specific context of action or speech.
Knowledge - describes the capability of an individual or an organisation to relate complex structures of information to new contexts of action.
A discussion with Mr Rafael Ramirez on "Organisational Learning and Information Technology"
Taking learning seriously means that you have to change the way organisations are currently organised.
Error = mismatch between expectation and outcome.
but who owns the error or the problem?
single loop and double loop learning.
learning = interest/(threat x embarrassment)
developmental tension = challenges/capacity to change
WOB WOM
world of business world of management
value creation making it possible
It is better to talk about economies rather than sectors (service, secondary,
tertiary) because it is no longer easy to separate production and consumption.
This is because of the rise of coproduction. Where exchanges take place back
and forth between customers and producers. For example: producing and buying
IKEA furniture.

Most technological breakthroughs involved technology removing a constraint from business activities.



You have to understand the value creation logic of your customers.
Moments of truth. - the point where the customer and the company meet in space and time where value is created for the customer.


As this overlap (coproducing) increases then margins will decline.
AT&T and France Telecom: AT&T is a supplier, competitor, customer and partner to France Telecom.

What is organisational learning?
See McKinsey article in Fortune, May 8, 1992.
How is it done?
OL is simply (and difficulty) seeing things differently.
Theories exist which do not match the evidence and there are alternative theories to explain the evidence.

Definition
"A framework for seeing interrelationships rather than things; to see the forest and the trees."
Gould-Kreutzer Associates, Inc.
Decision support systems (DSS)for corporate executives were first developed in the 1950s and 1960s. This decade saw the development of two technologies: the control engineering based System Dynamics and Decision Analysis[6]. Decision Technology is the combination of these two approaches to support corporate decision making. Microcomputing is now delivering these sorts of systems directly on to the executive desk - allowing direct feedback of decisions. Perversely it is often the process of building the model rather than the decisions generated which deliver the true management benefits[7]. This is because building the model makes you focus on what your business really is and think hard about the qualities of the alternatives available. This is called `planning as learning'. This puts corporate planners in the role of facilitators rather than planners themselves - operators of the techniques and technology of planning. Many companies however do not learn quickly enough[8]. de Geus goes further and comments that "The ability to learn faster than your competitor may be the only sustainable competitive advantage.".[9]
Crisis management is not a good policy because by the time the crisis is noticed your options become very limited and the implementation of the decision is often bad because it is hurried. One of the ways that you can avoid crisis management is to develop different scenarios and think about what the company should do under these scenarios. The effects of doing these sorts of things are to prepare an organisation for change by having it learn to seriously consider the effects on the organisation of fictional future events. Good scenarios and good analysis of them will help an organisation to learn faster and thus be better able to respond to change - even if the scenario which actually happens was not predicted. In other words the organisation improves its ability to learn and the speed at which the learning can occur.
In the 1990s there are currently three sorts of planning tools in regular use:
Adding to your mental frame - by adding knowledge - may not solve your problems. You often need to change your perception of the environment.
Margaret Wheately has done some interesting work on Chaos theory which relates strongly to Systems Thinking.
"Imagination is more important than knowledge"
Albert Einstein
Another benefit of DSS's is that they make implicit knowledge explicit. This makes extra knowledge available to the organisation and will tend to allow the organisation to learn better exactly because explicit knowledge will tend to spread faster through an organisation. In this respect DSS can be considered as an additional method of communication in organisations.
The above discussion is not to say that these tools are universally accepted as their penetration into general business planning use is certainly not assured. Over the past 30 years decision support tools have been touted as solutions destined for the desktop of every executive. This has not yet come true.
One new technology which may be the next step for DSS towards more accepted use are decision conferencing rooms. These are workgroup based tools installed into `boardrooms' for use by groups of decision makers who then work interactively with the DSS acting as the link between themselves.
The `technologists' view of DSS has been discussed but what of the actual business experience to date? One recent step forward was made in the early 1990s when major corporations such as Ford, Federal Express and Digital joined with Sloan's System Dynamics researchers[10]. Together they agreed to co-operate in the Centre for Organisational Learning with the aim of transferring system dynamics from academia into business. The approach is to help managers form views of the world which are more systematic and proactive. This is an ambitious undertaking given the turbulent nature of the 1990s business environment. Indeed the 1990s is both a major reason why companies are supporting this research and at the same time it is the major barrier which system dynamics must overcome. The result of such research is hoped to be the acceleration of organisational learning.
Sloan is currently concentrating on making microworlds where business leaders can act out simulations. This is similar to the military war games approach to learning. On the academic side their research is concentrating on how decisions are made in business, how organisations learn and thirdly in academic learning.
The people working in this field have set themselves very ambitious aims with comments like Peter Senge, the director of the Sloan centre: is "to help people see themselves as part of, not apart from, the human and larger systems within which we all live"[11].
This discussion of DSS's and their declared aims marries well with classical economic theories which assume that markets will tend towards stability because of negative feedback. But in recent years an economic theory based upon positive feedback and increasing returns. This is the model which seems to best describe modern high technology economies where stability is not normal and outcomes are not guaranteed to be the `best'. This new theory basically states that a competitor may `by chance' get ahead of the competition early on in a market and this firm will tend to dominate even if a `better' product is sold by a competitor. Thus the market acts non-optimally. It further implies the possibility of multiple equilibria as different sub-optimal solutions are possible. This is a problem with the language of conventional economics which is unable to fully describe the workings of the marketplace. What appears to be sub-optimal in conventional economics may in reality be optimal because of factors such as momentum and marketing or the fact that individual market transactions may have a crucial effect on the success or failure of a company. This effect on the competitive balance of the market place may be way out of proportion to its perceived importance. This introduces a random effect into any model - so that identical event can occur but with differing results. How can anything be predicted then? That is a good question - it can - but only through the use of sophisticated mathematical theorems developed in the 1980s.
This theory seems to work well in the new, knowledge-based ,economy. Although high technology products require an initial large investment, once production is started then marginal costs are low and seem to often decline - thus profits increase. The effect is more profound than this as often the market leader sets the standard and people like to buy standard high technology products - especially computer-based products. Why is this so? Because of the high information component in the use of such products. They need to exchange information and this requires sophisticated standards.
This is a very general discussion of the new theory and a deeper discussion involves complicated mathematics beyond the scope of this book.
What are the implications of this? While diminishing returns implies a `let the free market do it' approach to high technology policy - the increasing returns of the new policy suggest the opposite. Policies should encourage companies to aggressively seek out product and process improvements which benefit from these increasing returns. Scale is important and co-operation between several firms in the market should be encouraged. Japans policy of co-operation in R&D and standard setting are examples of this. The shared R&D gave Japanese firms economies of scale and allowed them to become very experienced very rapidly in certain high technology products. This created a positive feedback into innovating their products and processes, further extending their advantages in the marketplace.
Brian Arthur gives an interesting set of parallels[12] where `old' economics is compared to the Newtonian system and the new theory to non-linear physics and the punctuated equilibrium theory of evolution.
Introduction Main Topics Dictionary
[2]Walter B. Wriston, "The Twilight of Sovereignty: How the Information Revolution Is Transmitting Our World", New York: Charles Scribner's Sons, 1992
[3]James Brian Quinn, "Intelligent Enterprise", New York: The Free Press, 1992
[4]Peter F. Drucker, "Post-Capitalist Society", New York: HarperCollins, 1993
[5]H.A. Simon, "The New Science of Management Decision", Prentice Hall, 1977.
[6]This discussion is based on "Management Brief: Decisions, decisions", The Economist, 22 July 1989, pp 64-65.
[7]A good example of this is Shell where `planning means changing minds not making plans'. From Planning as Learning, Arie P. de Geus, Harvard Business Review, March-April 1988, pp 70-74.
[8]De Geus points out that "A full one-third of the Fortune 500 industrials listed in 1970 had vanished by 1983."
[9]De Geus et al.
[10]System Dynamics at Sloan, Amiel Kornel, MIT Management, Fall 1991, pp 12-17.
[11]System Dynamics at Sloan, Amiel Kornel, MIT Management, Fall 1991, p 15.
[12]Executive Knowledge, Models and Learning, John D. W. Morecroft, European Journal of Operations Research, 59(1), 1992, pp 9-27.