Do Learning Organization Characteristics matter during Lean Strategy Implementation?

Meera Alagaraja, Ph.D.Assistant Professor

Organizational Leadership and Learning ProgramCollege of Education and Human Development

University of LouisvilleMeera.alagaraja@louisville.edu

Ann M. Herd, Ph.D., CPCAssistant Professor

Organizational Leadership and Learning ProgramCollege of Education and Human Development

University of Louisville

Stream: 9 Strategic HRD and Performance

Submission Type: Working paper

Copyright © 2014 Meera Alagaraja & Ann Herd

Abstract

We identify factors that are essential for the successful implementation of Lean strategy. Much

of the Lean literature is grounded in Operations and Management literature and, emphasizing

performance at the individual, team and organizational levels. We theorize that learning

organization (LO) literature with its strong emphasis on multi-level learning involving

individuals, teams and the organization as a whole also offers an effective paradigm for

understanding the success of Lean implementation strategy. We compare and contrast lean

success factors as identified from the Lean literature with the LO dimensions as presented in the

human resource development (HRD) to better understand how individuals, teams and

organizations can facilitate Lean adoption. In order to do so, we compare and contrast key

characteristics of Lean implementation and the Learning organization to identify similarities and

differences of their approaches. The paper concludes with implications for HRD theory and

research.

Keywords: learning organization characteristics, lean strategy implementation, HRD

Womack & Jones (1996) popularized lean strategies coining the term ‘lean thinking

principles’, which formed the cornerstone of modem manufacturing practices, especially in

Toyota. The argument in favor of more “Lean” would have one believe that these interventions

are likely to revolutionize the performance of organizations. Despite the popularity of Lean

strategy, few companies have reported successful experiences in the implementation process.

As a major organizational intervention, lean strategy has received much attention from scholars

and practitioners (Womack & Jones, 1996). Lean strategy is often characterized as a business

paradigm for operational process improvement for achieving and sustaining organizational

performance (Womack, 2000). However empirical studies focused on establishing the impact of

lean strategy on organizational performance has been limited. Empirical evidence on the success

of lean strategy implementation efforts has not been well established (Jackson & Mullarkey,

2000). In fact, very few firms have been able to sustain the improvements of Lean

implementation over time (Stone, 2009).

From a broader perspective, the failures of such strategies occur during the

implementation process (Beer et al, 1990), and not at the formulation stage (Van Der Merwe,

2002). It is not surprising that the implementation phase is often referred to as the graveyard of

strategy (Grundy, 1998). The key success factors supporting strategy implementation rest on

how individuals, teams and the organization learn. We develop explanations of how factors

identified as necessary for the successful implementation of Lean strategy are grounded on the

learning that occurs at multiple levels in the organization.

The premise of the paper is that as lean strategy is progressively implemented over time,

the company, teams, or the business units are likely to develop learning organization

characteristics. Further, firms, business units, departments reporting successful strategy

implementation efforts display strong implementation capability, which in turn is evidence of

strong learning organization characteristics and vice versa. This has led many scholars to suggest

that in order to understand the performance of the organization; researchers need to pay more

attention to learning at the individual, team and organizational level, as well as the structure and

support systems to translate learning into performance (Watkins & Marsick, 2003).

Purpose Statement

The extant literature on Lean has been limited by a prevailing view that positions multi-

level performance as foundational for Lean implementation. We counter this position by arguing

that a key and perhaps neglected aspect of Lean is the extent of multi-level learning that occurs

and must be facilitated for managing the performance of individuals, teams and the organization.

We theorize that learning organization characteristics play a determining role in the success of

Lean strategy implementation.

What is Lean?

As a major organizational intervention, lean strategy has received much attention from

scholars and practitioners (e.g. Womack & Jones, 1996). Lean strategy is often characterized as a

business paradigm for eliminating waste and improving operational processes and procedures.

The extant literature identified the following factors as necessary for successfully implementing

Lean. The importance of gaining buy-in (e.g., Achanga, Shehab, Roy, & Nelder, 2006; Bhasin &

Burcher, 2005), leadership (Bhasin & Burcher, 2005; Brau, Fawcett & Morgan, 2007),

developing shared mindsets (Helper & Kiehl, 2004), communication (e.g., Achanga, Shehab,

Roy, & Nelder, 2006; Bhasin & Burcher, 2005; Brau, Fawcett & Morgan, 2007; Botti &

Bonazzi, 1995; Helper & Kiehl, 2004; Lifvergrenm et al., 2010), training, and developing

productive internal partnerships (Botti & Bonazzi, 1995; Helper & Kiehl, 2004) were identified

as necessary factors for the success of Lean implementation. These factors suggest overlapping

areas of interest for both Lean and HRD practitioners that can offer opportunities for integrating

HRD in strategic decision-making.

Examining Lean and HRD connections

Lean initiatives often underestimate the strategic value of HRD and neglect to include HRD

professionals in the implementation process (Alagaraja & Egan, 2013). Senior management must

have knowledge of Lean in terms of the content, understand the complexity demanded by

implementation efforts as well as manage the consequences of change related decisions

(Jorgensen, 2008; Stone, 2009). The identification of the factors that facilitate Lean underscores

the importance of a strategic role for HRD in the implementation of Lean. Effectively dealing

with these factors is critical to the strategic success of Lean and the organization.

The extant Lean literature has extensively focused on improving operational and

organizational performance. We leverage the learning perspective from HRD and suggest that

even though Lean strategy influences the organizational knowledge base in terms of identifying

areas of waste, streamlining processes and information sharing, they fail to consider the

important of fostering learning organization characteristics that are also critical for Lean success.

With this background, we suggest the need for expanding the traditional performance

improvement focus of the Lean literature to also include learning perspectives from HRD to

better understand and address barriers that can derail Lean implementation.

Learning Organization Characteristics

Although research on organizational learning offers cultural, cognitive and behavioral

perspectives, this diversity has not provided a foundation for operationalizing the construct. In

fact, these studies relied on data from the individual level rather than the more appropriate

analysis at the level of the organization (Huber, 1991). On the other hand, the learning

organization (LO) literature operationalized the concept in measuring LO characteristics and

effect on organizational performance (Garvin, Edmondson & Gino 2008; Marsick & Watkins,

2003). The LO characteristics integrate important organizational perspectives (cultural,

behavioral and cognitive) from the literature and thus is a useful reference point to assess the

core essence of the Lean strategy.

Marsick & Watkins (1993, 1996) proposed a framework for examining the characteristics

of a learning organization (LO). Their LO model emphasized three key outcomes: (1) systems-

level, continuous learning (2) creating and managing knowledge outcomes, and (3) improving

organizational performance. The model emphasizes supportive learning opportunities for

individual employees, identifies concrete learning processes for team learning, strategic

leadership and the promotion of inquiry and dialog as necessary characteristics that define the

learning organization. We compare and contrast LO characteristics with successful Lean strategy

implementation factors to better understand why some organizations become more successful

implementing Lean than others.

Marsick & Watkins (1996) proposed a framework to capture the characteristics of the

Learning Organization (LO) emphasizing three key components namely, (1) systems-level,

continuous learning (2) created in order to create and manage knowledge outcomes (3) leading to

improvement in the organization's performance. Performance is an important outcome of the

empirical study. They provide an integrative and a more holistic perspective on learning that

takes place within an organization and use the term learning organization to measure the learning

characteristics and outcome variables of organizations. According to them, "learning is a

continuous, strategically used process integrated with and running parallel to work" (1996, p. 4)

which they admit is by itself not operational. Summing up years of research in the development

of the learning organization questionnaire, Watkins and Marsick (1993, 1996) describe three

levels of organizational learning. The individual level has two dimensions: 1) continuous

learning and, 2) dialogue and inquiry. The team or group level has one dimension: team

learning and collaboration. The organizational level has four dimensions of organizational

learning: embedded system, system connection, empowerment, and provide leadership for

learning. These dimensions also termed as seven action imperatives are categorized into two

main components: the people component representing individuals and teams who make up the

organization and the structural component representing structures and culture created by the

organization's social institution. Marsick and Watkins (2003) operationalized organizational

measures to support learning and performance at all levels. Their empirical tested LO model

addressed both learning and performance outcomes at the level of the organization.

Organizational knowledge and financial performance were identified as performance outcomes

to complete the learning organization model. According to them, "learning is a continuous,

strategically used process integrated with and running parallel to work" (1996, p. 4).

Lawler and Mohrman (1998) assert that there is no single approach that offers a complete

system of management. They note "the challenge for the future is to develop a complete system

of management that integrates and goes beyond what is offered by anyone of them" (p.207). The

organizational outcome indicators listed by Marsick and Watkins may not completely appraise

the overall performance of the organization. A broader view of organizational effectiveness must

include people-oriented business outcomes such as safety, absenteeism, turnover, work

disruptions and counter productive behaviors (Macy & Izumi, 1993, p.250). We adopt Watkins

and Marsick’s LO model as it provides an integrative perspective on learning that takes place

within an organization that is helpful for our purpose.

Comparing LO and Lean Strategy Implementation Characteristics

The LO model highlights the role of the individual, team and the organization in learning.

The LO model emphasizes supportive learning opportunities for individual employees, concrete

learning processes for team learning, strategic leadership and promote inquiry and dialog. We

compare and contrast these LO characteristics with the new Lean strategy implementation (LSI)

characteristics as identified in the Lean literature and present our findings in Table 1.

The table offers specific ways in which HRD and management scholars can evaluate Lean

implementation efforts from an LO perspective. Some HRD scholars (e.g., Callahan & Davila,

2004) propose both learning and performance as important and necessary for organizations to

thrive.

Similarities with Learning Organization characteristics

Both models share similarities at the individual, team and organizational level. For example,

training and communication at the individual level (LSI model) is similar to the LO model which

advocates for creating continuous learning opportunities. Here, both models focus on promoting

inquiry and dialogue and, employee empowerment. At the team level, both models emphasize

collaborative learning and knowhow through internal partnerships. This is an essential attribute

for the success of Lean strategy implementation. Too often, implementation efforts suffer due to

lack of buy in from other departments and work groups in the organization. At the level of the

organization – top management commitment, empowering people to develop Lean mindsets and,

establish long-term focus highlight the need for quality leadership. These characteristics are

similar to the strategic leadership characteristics associated with the LO model.

Distinctions from Learning Organization characteristics

The LSI model fundamentally frames Lean implementation from a systems perspective.

Thus, the systems level consisting of necessary conditions, mechanisms, tools and techniques

and is essentially a building block that supports other levels. The systems level offers the ability

to see interrelationships, and the need for synergistic interaction and alignment with

organizational level factors. In turn, these two levels produce a pattern of influence directed one

way to the individual and team level. In contrast, the LO model suggests a pattern of influence

from the ‘people level’ which in turn influences the ‘structural level’ to produce organizational

knowledge and performance (Marsick & Watkins, 2003).

The LO model essentially adopts an organizational culture-action perspective. It posits

that LO characteristics are observable, even though these observable actions are not directly tied

to performance outcomes at the individual or team level. In essence, these observable

characteristics “integrate structure and people level to move toward continuous learning and

change” (p.34). I define this display of continuous learning and adaptive characteristics as the

learning capacity of the organization. In the LO model, these observable actions are tied to

organizational level indicators (organizational knowledge and performance). The LSI model on

the other hand, extensively describes these observable characteristics and ties them to

performance outcomes at the individual, team, organization and systems level. Thus, the LSI

model is able to capture operational performance improvement in addition to organizational

performance and knowledge because of a focus on the specific behaviors, tasks and

organizational routines. This focus on operational performance improvement is a distinctive

feature as the LSI model draws from a strong systems-performance perspective where displaying

continuous improvement characteristics define the performance capability of the organization.

This performance capability for example, translates the acquisition of Lean knowledge into

improvements in organizational performance, operational performance and organizational

knowledge.

Another contrast between the two models relates to the importance of external

partnerships. The LSI model comes from a process-performance perspective and essentially

views the organization and the external environment – specifically customers and suppliers as a

part of the organizations’ value chain. Thus, external partnerships are viewed as a team level

factor necessary for product and service improvement. On the other hand, the LO model focuses

on the relationship of the organization with the external environment, from a relational

perspective and suggest this factor as a best fit under the organizational level.

Many scholars focus exclusively either on learning or performance or both but leaving

out some levels of the organization (individual, team etc.) unexamined (CITE) in the HRD

literature. The relative lack of systematic, empirical evidence linking learning and performance

at multiple levels has made the role of HRD, its contribution and linkage to organizational

performance tenuous and open to debate. Despite the extensive importance placed by HRD

scholars on learning and performance from a theoretical perspective, key aspects of performance

in practice such as financial and operational performance have failed to receive adequate

consideration. The dichotomy of the learning and performance paradigm is more evident in

management practice. The design, development, and evaluation of learning traditionally fall in

the HRD domain in organizations. As a result, the learning as a function or department is often

perceived as an organizational “support” process. In contrast, processes associated with

performance significantly fall in the domain of operations departments and are recognized as

“primary” to the organization (Rummler, 2008). This differentiation of primary and support

processes in organizations further separate and position primary processes as adding more value

to the organization. The support or learning processes are not necessarily devalued, but their

contribution is underutilized to the detriment of the organization. An equal emphasis on primary

and support processes in this context would ensure learning and performance as key components

that would continuously enhance flexibility and responsiveness of the organization.

Conclusions

The similarities in LO and Lean strategy implementation characteristics highlight the significant

impact of multi-level learning on implementation outcomes. Further, it appears these

characteristics significantly predict Lean implementation success although more inquiry is

needed. We suggest the assessment of LO characteristics as an important step towards

identifying the factors that affect Lean strategy implementation success. Practitioners and

scholars involved in the Lean literature often fail to emphasize the influence of multi-level

learning that can enhance performance. Consequently, assessing the organization’s capacity for

learning would be helpful in identifying potential implementation barriers. A certain degree of

LO characteristics need to be prevalent before organizations begin rolling out Lean strategy. It

would be fruitful to conduct an assessment of the organizations LO characteristics and identify

potential areas of improvement before Lean adoption.

Implications for HRD theory and research

LO characteristics reaffirm the central role for HRD in strategy implementation. Further, the

importance of fostering LO characteristics becomes significant for enhancing performance.

Continued investigation of the linkages between LO characteristics and Lean strategy uncover

new perspectives as well as increasing the likelihood of success in Lean strategy implementation.

This body of knowledge will not doubt add to our understanding of strategic HRD and the

significance of learning for enhancing organizational success.

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Running head: LEARNING ORGANIZATION CHARACTERISTICS

Running head: LEARNING ORGANIZATION CHARACTERISTICS

Table 1. Comparing LO characteristics with Lean strategy

Level Learning Organization

Characteristics

Lean Strategy Implementation Characteristics

Similarities Distinctions

Individual Create continuous learning opportunities

Training Both models emphasize learning on the job. Lean strategy focuses on training opportunities to reduce Lean knowledge gap. Thus, the Lean agenda ensures a consistent focus on application of knowledge to enhance problem solving skills and reducing gaps.

The LO model is silent on the content of the learning and how this learning is applied in the context of the job. Competing agendas in the organization could potentially weaken this learning capacity.

In the LSI model, training is provided to help employees become multi-skilled which is not necessarily the case for the LO model

Promote dialogue and inquiry

Communication The LO characteristics are similar to the LSI model in that both suggest developing communication pathways using a top down and a bottom up approach to promote information diffusion

The LO literature is unclear on how to reduce resistance to change. Rather, it focuses on providing psychological safety to employees by promoting dialog and inquiry

Team Encourage team learning and collaboration

Internal Partnerships

Lean positions team interdependence at a high level as does the LO model. Both models advocate for collaborations and suggest the company culture as a supportive mechanism for team efforts.

Because Lean involves problem solving at all levels, there is stronger support in the literature for effective communication between different departments and work groups and impact on performance.

External Partnerships

The LO model does not specify the quality of supplier and customer partnerships.

Supplier and customer partnerships are essential in the LSI model as they streamline the organizations’ value chain.

Organization Empowerment of the people towards a collective vision

Mindsets Both models focus on developing a shared vision and implementing the vision.

None

Providing strategic leadership for learning

Leadership

Management commitment

Long term focus

Both models emphasize the quality of leadership

LSI model demonstrates the importance of commitment for aligning the culture with the Lean vision

LSI model suggests that a long term focus helps to nurture a learning environment and emphasizes enterprise thinking

LSI model focused on leadership qualities (e.g. Leaders mediate conflicts that cause resistance)

LO model assumes a strategic perspective for learning and linkage to business results. Leaders champion and model learning

Structure Connecting the organization to the environment

Business capabilities

Both models recommend knowledge of the external environment (including communities) as important in shaping individual job responsibilities and connection with the rest of the organization.

LSI model lists specific capabilities of the business that must be necessary for the selection and choice of specific Lean initiatives. These capabilities also shape the mental models of the organization, as well as schema.

The LO literature is silent on this aspect.