The concept of Organization Learning has been around since God was a boy. In the 1960’s, Chrys Argryis wrote about single and double loop learning. Single loop learning is where an organization experiences a problem, diagnoses this and finds a ‘fix’. Example: A customer complains about the level of service in a restaurant. The manager intervenes and the customer is satisfied with the outcome. Double loop learning is where an organization has a ‘root cause’ issue and works to unearth this. Example: In a restaurant chain, there is a continuing stream of complaints about staff ‘attitudes’. A diagnosis highlights that a culture has developed where ‘so-so’ service levels has become legitimate and this is successfully tackled. The organization ‘learns’ from the method used and moves on.
Learning Organization: The Learning Organization ideal is normally proposed as follows: Each organization should reflect and ‘learn’ from both positive and negative events. In this way the organization becomes ‘smarter’ and continually adapts to its operating environment. Those organizations that learn faster than the competition eventually climb up the food chain. It’s Darwin’s theory of evolution applied to business. So, what actually happens in practice?
Institutional Memory: Well firstly, organizations don’t learn, managers do. So this concept essentially boils down to the ability of individual managers to learn from their environment and to make lasting changes that reflect this. Does it really happen? In my experience, organizations have very little capacity to learn from events. A number of factors conspire against this. Firstly, in some organizations, the churn in executives is high; consequently the institutional memory is low. Secondly, even where executives stay in place for a long time, the mechanisms to ‘learn’ within an organization are woefully inadequate. There are few reflection sessions and almost zero post-mortems (other than a search for the guilty when something screws up really badly). Thirdly, there is a tendency for new executives to blame the former executives for the sins of the past. They beat their chest and declare: “It won’t happen on my shift” (then go on to make different mistakes). It’s art of making yourself look clever by making other people look stupid. Finally, in what might be termed the ‘Pendulum Theory of Organization’, the response to an error poses a clear and present danger of massive overcorrection. Someone in the banking sector said to me recently: “I’m working for Matthew Elderfied now. The only problem is that he’s not paying me.”
Pendulum Swings: Consider financial services. Few would argue about the need for fundamental change in most banking organizations. We don’t need to drill into the details, just check your pension lump sum. So, how has the financial services sector responded to the most recent crisis? Well, the most visible outcome is that the industry has massively over-corrected in terms of regulation. The sector has jumped from loose controls to a situation where it is now virtually impossible to write new business (mortgages, business loans etc.).
Rise of The BPO’s: We are witnessing the evolution to a new breed of internal manager – the BPO’s (Business Prevention Officers). There must be a back lane running behind the all banks where Credit & Risk Modelling staff are having sex and breeding indiscriminately! There is only one cure. Say the following prayer 5 times daily – while broadly facing the direction of the Central Bank:
O Lord Save us
From BPO’s (Business Prevention Officers)
Who have gone forth and multiplied
Until, they are now more numerous
Than White Rats
But somewhat less useful
Let us return, henceforth
To the world of commonsense risk
And reduce all triplicate paperwork
To save the trees
And our sanity
Risk is an inherent part of banking. Of course there is a need for regulation, but not to the point where this closes down the operation. The message is simple: In learning the lessons from the financial services crisis, have you overcorrected? And, for the rest of us mere mortals who do not work directly in banking, can we really establish learning routines which are more than just a theoretical concept? That’s the challenge.
PS: Lighter Moment: A bit non-PC – but nevertheless good fun. Have a read of ‘The Man Rules’.
The Man Rules…
At last some guy has taken the time to write this all this stuff down. Rules are all numbered ‘1’ on purpose!
Men are NOT mind readers.
Learn to work the toilet seat. You’re a big girl. If it’s up, put it down. We need it up, you need it down. You don’t hear us complaining about you leaving it down.
Saturday sports is like the full moon or the changing of the tides. Let it be.
Crying is blackmail.
Ask for what you want. Let’s be clear on this: Subtle hints do not work! Strong hints do not work! Obvious hints do not work! Just say it!
Yes and No are perfectly acceptable answers to almost every question.
Come to us with a problem only if you want help solving it. That’s what we do. Sympathy is what girlfriends are for.
Anything we said 6 months ago is inadmissible in an argument. All comments become null and void after 7 Days.
If you think you’re fat, you probably are. Please don’t ask us to comment.
If something we said can be interpreted two ways and one of the ways makes you sad or angry, we meant the other one
Christopher Columbus did NOT need directions and neither do we.
If we ask what is wrong and you say “nothing” we will act like nothing’s wrong.
When we have to go somewhere, absolutely anything you wear is fine…Really.
Don’t ask us what we’re thinking about unless you are prepared to discuss Rugby, cricket or golf.
You have enough clothes and too many shoes.
I am in shape (round IS a shape)!
Thank you for reading this. Yes, I know, I have to sleep on the couch tonight, but men really don’t mind that. It’s like camping.
Know someone who’d benefit from reading this blog? Forward it on or ask them to contact firstname.lastname@example.org and we will add them to the mailing list. If you’d like to have a discussion about management or organisation development, give me a call on 087 2439019.