Let’s talk about ROI. No, not the Return on Investment, but the Return on Intelligence. Yes, intelligence – the ability to acquire and apply knowledge and skills. Organisations, just like people, can grow their intelligence, their institutional wisdom, and their habit to learn, reflect, and act on new knowledge. But who should take the lead to instil and nurture this intelligence in your organisation, and how?

The learners inherit the future

As well described by Harold Jarche, the intelligent enterprise is “actively engaging in conversations to continuously make sense of the changing environment”. Indeed, we live in times of exponential change. Business leaders today are facing new realities that create a rather turbulent environment because of their novelty and the speed with which they conquer our lives and business. Recent research has grouped those quickly unfolding trends in seven categories: exponential organisations; lifelong reinvention; unleashed workforce; technology, talent and transformation; the ethics of work and society; the nimble enterprise; and regulated innovation (“The evolution of work: new realities facing today’s leaders”, Deloitte Insights, January 2018).

No industry or business today can be unaffected by technological disruption – this we can easily grasp. However, all of the other developments are also putting high pressure on business leaders to stay afloat. Systems Thinker blog quotes Eric Hoffer’s belief that “in a time of drastic change, it is the learners who inherit the future. The learners find themselves equipped to live in a world that no longer exists.” Or a world that is yet to exist – just think of all the professions and businesses that are already extinct, as well as the new ones popping up as we speak. But how do organisations learn? What makes a company a learning and intelligent organism?

What is a learning organisation?

A learning organisation, explains Peter Senge, “is an organisation where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn together.” Senge highlights that there are five disciplines that, when used together, enable learning organisations to become predictable, stable, and functional – “personal mastery, mental models, building shared vision, team learning, and systems thinking.”

Check out: Co-XL in 2019: Co-create Learning Organisations at MERIT Summit

HBS research provides another definition that helps us envision learning organisations: “an organisation skilled at creating, acquiring, and transferring knowledge, and at modifying its behaviour to reflect new knowledge and insights.” This perspective focuses on the intelligence of an organisation as a system to “actively manage the learning process to ensure that it occurs by design rather than by chance.” HBS highlights that instilling distinctive policies and practices is a prerequisite for success, as they are the building blocks of learning organisations.

In his master class “Driving the New Learning Organisation” during the 2018 MERIT Summit, Andy Lancaster, head of L&D Content at the Chartered Institute of Personnel and Development (CIPD), highlighted how the world has changed in the past decades and what the implications are on learning organisations today. The new levels of globalisation, uncertainty, innovation, technology, motivation, speed, skills, productivity, and customer loyalty are reshaping learning organisations. He outlined six new characteristics that are essential for steering organisations nowadays: clarity of purpose, holistic people experience, thriving ecosystem, agile digital infrastructure, continual engagement, and intelligent decision-making.

Request a copy of the full presentation here.

Those who are curious to measure to what extent their companies can be considered “learning” can use a variety of approaches. For example, HBS professors David Garvin and Amy Edmondson have developed the HBS Learning Organisation Survey for their research and it is still open to companies who want to measure their progress on the way to becoming intelligent organisations.

Another tool to measure where an organisation stands is provided by Bersin’s High-Impact Learning Organisation Maturity Model. According to Bersin, businesses can fall into one of four distinct levels as a learning organisation:

“Level 1: Episodic/Programmatic: Companies at this level seek to simply make work more productive through incidental training that is often tactical or reactive.

Level 2: Responsive/Contextualised: At level two, companies are focused on training excellence, led by a centralised Learning and Development (L&D) team responsible for governance and instructional design.

Level 3: Continuous/Empowering: Companies that mature to level three are characterised by their focus on organisational performance, by making talent development a core competency of management throughout the company, and by measuring key performance indicators.

Level 4: Anticipatory/Flow: At the highest level of maturity, a learning organisation is characterised by business executives and employees throughout the organisation aligned around continuous learning (both formal and informal), aided by the adoption of strategic tools for L&D and an agile corporate structure.”

Bersin’s research revealed that 94% of companies (respondents) fall into one of the first three levels, and only 6% of organisations have achieved full maturity at level 4. Another important finding is that the biggest gap occurs between level 4 (6% of survey respondents) and level 3 (20%). This research equips corporate leaders with yet another framework that enables them to assess their current progress to the higher levels of organisational learning.

Who is to build learning organisations?

Clearly building or transforming a company into an intelligent and agile system is a top priority, as this trait sets companies on the highway to success in the current times of exponential change. But, who should drive, navigate, and enact this transformation?

Senge features the individual: “Organisations learn only through individuals who learn. Individual learning does not guarantee organisational learning. But without it no organisational learning occurs.”  In 2017, over 100 HR and L&D decision-makers of European companies shared their insights of what makes for the success of learning organisations in an international survey conducted by MERIT. The survey report “L&D Trends: Milestones for Learning Organisations” reveals a high level of employees’ commitment to learning and development. These two sources highlight the importance of the bottom-up approach in creating a learning culture.

As part of their research, HBS professors Garvin and Edmondson emphasise that companies should empower “the local leaders who are leading focused work – projects, departments, where the real critical work of the organisation is done.” Moving up the corporate ladder, we find out that C-level has a role to play in this transformation, but is it what we expected? According to the MERIT survey, there is a clear indication of bottom-up expectations for top managers and business leaders to lead by example in the realm of continuous learning and development. C-Level engagement also tops the “10 Characteristics of a Sustainable Learning Organisation” list provided by the Association of Talent Development: “Senior leaders [at sustainable learning organisations] are engaged as visible business partners and learning advocates. Executives can clearly describe how performance-based learning capabilities contribute to organisational mission, values, and effectiveness.”

So, in the current social and business environment, L&D strategists and executives, who are the “usual suspects” whenever it comes to learning, are not alone in the process of building intelligent and agile organisations. Clearly, learning is to be embraced at all levels of a company and the good news is that there are expectations for it at all levels. What a better way to increase engagement than to involve all stakeholders in the process of creating your learning organisation.

The intelligence of co-creating

With the urge at all organisational levels to enable learning and build organisations to be intelligent, companies have invaluable capital to invest. The knowledge, energy, and perspectives that they possess internally should be unleashed and steered to nurture the habit to learn, reflect, and act on new knowledge. Co-creating learning organisations mobilises the human capital in all directions, both vertically and across silos.

Looking beyond the realm of a single company, externally, potential partners are also working in the same direction. Academic research, open, certificate, degree programmes and executive education all enable individual or team-based continuous learning. Universities and business schools create tailor-made solutions for the system approach that building a learning organisation requires.

Companies benefit greatly from intensifying their focused communication internally, as well as with external corporate learning stakeholders. Learning is an on on-going process and there is so much going on today that we can and should learn about. Tapping the diversity of sources to build a collective intelligence to translate the new knowledge into business strategy and a learning culture is the smart approach today. Co-creation thrives in a mindset open to innovation, curiosity, and communication.

Corporate and higher education leaders committed to co-creating learning organisations have been connecting at MERIT Summit for the past three years to explore new avenues of collaboration in an innovative environment. Capitalising on the internal and external intelligence, they access a huge intellectual resource, a healthy diversity of perspectives, and a blast of collective energy. The return on intelligence (ROI) enables companies to inherit the future.

This article was kindly provided by Iliana Bobova, chief editor at Advent Group.