Not just a passing fad, organizational learning is the ticket to ride in the '90s -- and the management accountant needs to play a pivotal role.
To Alain Gauthier's mind, the competitive organization of the '90s will be the learning organization. He's not just talking about an organization that can quickly assimilate masses of information or that can react quickly to change, as useful as those attributes are. By his definition, a true learning organization is one that holds up a mirror to itself to repeatedly question why it does things in certain ways, one that continually probes at its own basic assumptions about the way things work in order to improve them. And asking many of the tough questions -- holding up the mirror -- is a natural role for one member of the organization particular: the management accountant.
Why the need for this corporate soul-searching? In a word: competition.
According to Gauthier, founder and executive director of Core Leadership Group, a leadership development consulting firm in Oakland, California, no organization will make change unless it has to. Today, however, few organizations have much choice in the matter. Thanks to any number of well-documented external forces such as freer trade and the push for productivity, organizations must continually refine the way they do business just to keep up with their competitors. For Gauthier, organizational learning is a company's ticket to doing so: "The learning organization is an organization that continually expands its capacity to re-invent or renew itself."
He's the first to acknowledge that the concept of a learning organization isn't his. Rather, it comes from Peter Senge, director of the Systems Thinking and Organizational Learning Program at the Massachusetts Institute of Technology's Sloan School of Management. He outlined his ideas in his 1990 book, The Fifth Discipline: The Art and Practice of the Learning Organization. Gauthier, who recently directed the book's French translation and adaptation, will discuss the learning organization as a feature speaker at the national conference of The Society of Management Accountants of Canada on July 5.
In order to become a learning organization, Gauthier says, a company must first identify its learning disabilities. What factors prevent it from anticipating and preparing for change? According to The Fifth Discipline, there are seven major roadblocks to organizational learning, as follows:
I am my position. As people focus on their own jobs, they become blinkered to other positions, and fail to see the fallout of their actions elsewhere in the organization.
The enemy is out there. When problems crop up, individuals automatically blame others in the organization rather than compromise their own position.
The myth of proactiveness. "Taking charge" is mostly illusion. People believe they are being proactive when often they are only reacting to circumstances.
Failing to recognize gradual threats. While people are quick to recognize sudden threats, many fail to see more gradual problems arising until it's too late.
Illusion of learning from experience. "Learning from experience" does work, but only when the consequences of actions are readily apparent. Because the results of strategic decisions only appear in the future, few people actually get the chance to experience and learn from them.
The myth of the management team. Stated baldly, management teams often don't work. People can actually prevent one another from learning, resulting in poor decisions or watered-down consensus.
Fixation on events. People focus on single recent events and actions, and miss the broader connections among them.
Gauthier explains that, in order to overcome these disabilities, a learning organization's members must practise in tandem five major disciplines: building shared vision; personal mastery; team learning; mental models; and systems thinking. Sharing a corporate vision links the organization's goals and development with those of its members, and builds commitment to improvement, not simply compliance. This discipline is closely linked to both personal mastery and team learning. Because a learning organization is simply a collection of learning individuals, those individuals must want to learn or reach new benchmarks that in turn take the entire organization forward. And only when groups of people focus on a common purpose can they begin to think and learn as a team. Team learning requires members to freely share information in order to gain new insights on common problems.
Gauthier says management accountants play a "measurement" role in helping group members to master their functions, learn as teams, and share visions. Because of their part in gathering, analyzing and synthesizing information, management accountants are obviously well-placed to measure performance and progress toward goals. But their real value lies in being able to question and challenge the measured results -- digging out the meaning behind the numbers -- and to help managers understand the impact of their actions on the team's or the organization's performance.
For example, rather than simply discard a fledgling total quality management program that fails to yield the desired results, the accountant must assess the reasons for the failure and suggest ways to correct the problem, perhaps by revamping training programs, developing new quality standards, or changing compensation practices. The accountant goes beyond merely keeping score to discovering the reasons for the score and suggesting ways to improve it -- in Gauthier's words, "getting below the surface of measuring finances and exploring the assumptions and whatever underlies (the results)."
Carrying out these new roles requires accountants themselves to work as hard as anyone else on the fourth discipline. According to Senge's theory, people carry around different mental models that they use to interpret the world. Stated simply, accountants see things differently than, say, artists. That's not a problem, as long as individuals recognize these differences. The trouble is that these mental models are usually hidden -- even from their owners -- making it difficult to understand people's actions. Changing mental models requires individuals to question why they think in the way they do -- the first step toward accepting other ways of thinking instead of unknowingly enforcing their own narrow viewpoint.
Looking for underlying assumptions and structures throughout the organization is the point of the fifth discipline: systems thinking. In Senge's model, this is the discipline that integrates the other four. It's also a tough one to master, says Gauthier, partly because our education system -- particularly in such rational, analytical fields as accounting or engineering -- stresses analysis over synthesis. By analogy, we've been trained to build a better car by trying to improve its individual parts rather than by considering how to assemble the entire vehicle differently.
By looking beyond isolated events and functions, he says, a learning organization's members begin to uncover larger patterns. They begin to understand why things work as they do, and why people behave and relate in various ways, the first step toward making change. Management accountants can play a key part in this process. By exposing the thinking behind the bottom-line results, they can prevent people from behaving like sorcerer's apprentices, unaware of the effects of their actions on others. According to Gauthier, "The role of the management accountant is to create the kind of information that would enable managers or teams to see more quickly the impact of their action on the overall performance."
How to implement organizational learning? The initiative must come from the top down, from senior managers who demonstrate to employees their own commitment to learning. Organizational learning requires individuals and groups to look more critically at the organization and their own roles to identify what they might do differently. And, perhaps most important, it requires patience. According to Gauthier, the company must prepare to invest some time into becoming a learning organization, perhaps five, 10, even 15 years: "It's exactly the reverse of a fad."
Andrew Vowles is a freelance writer/editor based in Hamilton, Ontario.…