The Problem with Organizational Learning - "Retention"

We have all heard “Problems are Opportunities”. If you search the internet for this quote you will find thousands of references to who said it and how it is used. In a Lean mindset, problems truly are opportunities. Without that mindset, running any business can be exhausting.

Organizational Learning (OL) uses conceptual elements of Problems Are Opportunities (PAO) and is defined here from Wikipedia as: the process of creating, retaining, and transferring knowledge within an organization. An organization improves over time as it gains experience. From this experience, it is able to create knowledge.

Combining the mindset of PAO and OL into a system where the company maintains the knowledge is where the rubber hits the road and is where most companies fail. Many companies have great problem solvers and usually they have plenty of “theorists” that can talk about Organizational Learning. Few have truly figured out how to learn from problems and institutionalize these learnings.

I recently heard a Plant Manager talk about how they had a quality spill at their customer because the employee did not follow the written procedures, and that he was “going through a retraining session” with all employees to fix the problem. This commentary spoke to me enough to want to write this article. This typical response to a problem occurrence still shocks me each time I hear it, as it is flawed on so many levels.

First of all, the Plant Manager and his team apparently determined “the root cause” as an operator issue, period. Secondly, the corrective action was to re-train everybody on the written procedures. Thirdly, he implied “hope” that this would be the permanent corrective action. This implied hope speaks to the problem of Organizational Learning. The problem this company experienced will occur again and again based on the problem resolution implemented, because it has not learned the importance of knowledge retention.

Shift to another example that is more related to an administrative function. A company had a written contractual agreement with a customer for price modifications for economics tied to commodity pricing. Pretty simple right? Hey it is written; it is clear - no problem. In reality, it went through the date by which pricing should have adjusted (in the company’s favor) but the organizational learning did not translate to a new employee managing customer contracts. When the Finance group realized the lapse, the customer relationship was coming to an end. In the midst of negotiating a closure agreement with the customer, the company had no power to regain lost pricing adjustment dollars since the adjustment was 8 months past due.
True Organizational Learning is a major challenge fraught with nuance, personalities, accountability issues, and lack of systems.

How then do companies move from the broken loop of Problem>Action>Repeat to the continuous loop of Problem>Action>Retention? How do we institutionalize learning?

The solution is relatively simple from a conceptual approach. The details of the solution are necessarily specific to your company. The solution is a structured learning resource, a Retention Leader or Retention Group, that focuses 100% of his or her time on documenting problem resolution, feedforward applications of the solution, and to create both “process documentation” and a “retention accountability system” that reviews key business processes deemed critical to the business model.

When I think about Lean Manufacturing, I think about a Lean Enterprise. The concepts in Lean Manufacturing can, and should be, brought into the Enterprise. Do you think that bringing lean concepts to customer pricing adjustments makes sense? What is the similarity between an operator not following the work instructions and the office manager missing the timing of a contract pricing adjustment? The similarity is “Standard Work”. The connection to organizational Learning is in the “METHOD” by which we retain the learning. We “learned” that the operator needed to follow procedures. We also probably “learned” that we had no procedures for pricing adjustments or we had turnover and didn’t provide the learning to the new person.

This all speaks to the retention portion of Organizational Learning and is the biggest challenge to its effectiveness. Gaining the experience of problem solution is great, but in too many organizations there seems to be a “continuous relearning” problem, because of poor job knowledge retention.

How can you solve the problem of retention? In the case of the missed written procedures, the problem is not the operator. The problem is that management has not figured out how to get the operator to retain that knowledge and effectively apply it all of the time. This boils down to visual standard work for that operator. “Re-Training” may provide a short term hiatus, but almost surely guarantees a long term recurrence. Without the “retention” portion of the solution, operators will be categorized by management as good or bad.

In the office, it is the same issue. The standard work for the office manager is not defined or clear, nor audited or managed. The solution is a form of standard work for the office work.

A great “retention solution” approach is to use your internal ERP system to document and retain these critical process documents and have them identified and available for each and every job function. Have the Retention Leader develop accountability audits of these critical processes so that every process gets touched at least one time per year. Our solution was to develop “CRITICAL PROCESS GUIDES.” These guides become the critical “how-to’s” for critical job tasks. They look like the old “department work instructions” from bygone quality systems of the past. The guides are alive on the ERP system. The department leader takes the responsibility for auditing and validating adherence.

The real leap of faith is in having a resource dedicated to process documentation. This resource does not have to be a high cost function. With the right leader over this resource much can be accomplished at relatively low cost. The position could be a career development position. If organized properly almost anyone can step into the role as it is highly documented approach with naturally built-in structure.

In the definition of Organizational Learning, “….an organization improves over time as it gains experience” is missing a THE key aspect: “…an organization improves over time as it gains experience, and creates documented tasks with an accountability audit to ensure the learning becomes the foundation of the organization.” Without the documentation and the accountability audit, the business will go back through the cycle of failure, problem solving, corrective action – failure.

The cycle of Organizational Learning is like the symbol for infinity but missing the key element of documentation and accountability. The right side of the infinity symbol is truncated and lost in the universe of other problems the business is dealing with every new day.
Your challenge is to close the loop and create organizational learning through a Learning Retention System.