I delivered this address at the Seminar of the National HRD Netwrok’s South Gujarat Chapter on Feb 25, 2012 at Bharuch. This is an edited version.
Peter Drucker said it all: Create Learning Organisations
To begin the discussion, let me say that Peter Drucker’s Theory of Business holds good even today. Just in case I sound very academic to you, let me mention what Peter Drucker said. He said ‘every organisation is built and run on a set of assumptions about markets, customers, competitors, value perception and so on. When those assumptions are in harmony with the external reality there are conditions for growth and success. When there is a mismatch, the seeds of crisis are sown.’
The message is clear. If you want to run your business successfully, first reflect on your assumptions about everything in business, have clear understanding of the reality and ensure that there is a match between the two. Everybody knows that this is easily said than done.
Peter Drucker just stopped short of saying that the organisations need to be ‘learning organisations’ in order to be successful. Peter Senge coined that word. We know that a learning organisation has the capacity to adapt and change. It actually takes Drucker’s thought forward. It is important because it also shows us a way of how to prepare our organisations for future.
Learning Organisations Create a Shared Vision
The first hallmark of a learning organisation is a shared vision. Much has been said on this subject so I am not going to talk about it except pointing out some wonderful exercise done by State Bank of India’s Chairman Mr OP Bhatt.
Mr Bhatt screened the movie ‘The Legend of Bagger Vance’ for his employees. Now you will notice that the word Bagger Vance is phonetically so close to the word Bhagwan. This is not without reason. This is a story based on Bhagwad-Gita itself. This movie is about two persons – one is a golfer but he has lost his swing, or in cricketing terms, he is out of form, and the other is his caddy, who doubles up as a guide. Mr Bhatt used this effectively to convey the point that State bank of India is out of sync with business requirements and needs to get its act together. That was a very interesting way to share the reality and share a vision to get people to subscribe to it.
Learning Organisations Create Opportunities for Reflection and Dialogue
The second hallmark of a learning organisation is that the people discard old ways of thinking which they use for solving their problems. I am reminded of the report in the Times of India on Jan 7. I will read out a part of the news report. It has the statements of two MDs of auto companies, Maruti Suzuki and Toyota. I invite you to listen carefully and note the difference.
So here we go – ‘Maruti Suzuki which lost 83,000 units in sales – worth around Rs 2500 crore – due to the labour unrest that hit its operations last year, is clear that part of the problem was a communication gap between the workers and the management. “I hope the workers in Manesar understand that an internal union better represents their interests,” said Maruti MD Shinzo Nakanishi. While the strike hit Maruti’s sales and profitability, its parent was clear in how it viewed the problem. “Suzuki has a lot of experience handling strikes in Japan and elsewhere,” said Nakanishi. “If a market is growing these problems are not possible to avoid and every company will face this kind of situation. How quickly you handle the issue is important.” Remember what Peter Drucker talked – he talked about assumptions about everything including how to manage conflicts. Do the remarks of Maruti Suzuki’s MD show that he has learnt anything from the two strikes that happened in succession?
The same news report also quotes Mr Vikram Kirloskar, Vice Chairman of Toyota Kirloskar. Remember that Toyota also had their share of the labour strife. Here is the relevant part – ‘Said Vikram Kirloskar, Toyota Kirloskar Motor vice chairman: “We’re trying to improve communication with team members and instil ownership in the company. When we started out, we ended up with fresh hands and failed to understand their demographic and personal requirements. That’s why we had labour problems in the first plant but the second plant the going has been smooth. We have promoted career development and ensured a mix of experienced and new people.” Don’t the remarks of Toyota Kirloskar’s Vice Chairman show that his organisation has learnt something new?
That is the big point about a learning organisation. People must examine their ways of thinking, and assumptions; they must discard old ways of thinking which they use for solving their problems. Toyota seems to have got it right, Maruti Suzuki is yet to learn. At this stage you might ask me how to get people to examine their ways of thinking, and assumptions; and make corrections? This is a valid question. Let us discuss some answers to it.
There are two aspects about any change which are so vital – the first is about the culture. You are aware that Toyota faced a big crisis in Aug 2009. A Toyota Lexus went out of control and resulted in death of a family. That resulted in recalling several thousand vehicles and tremendous cost to Toyota. The book ‘Toyota Under Fire’ recounts this story and culls out lessons for managers. This is what the authors say, I am quoting them:
‘The chief questions to ask yourself about how your company will respond in a crisis are not about contingency plans and policies, but about your culture and your people. Have you created a culture that rewards transparency and accepts responsibility for mistakes? Have you created a culture that encourages people to take on challenges and strive for improvement? Have you created a culture that values people and invests in their capabilities? Have you created a culture that prioritises the long term? Most attempts to change during a crisis fail.’
The culture will promote or prevent learning and adapting. We as HR managers must focus on developing culture. That task is not easy. It is now clear that the language determines the culture. That is one of the ways to change it. We have to examine what language we use at work place. Is it a language of complaint or is it a language of commitment? Is it a language of blame or is it a language of personal responsibility? And to rephrase the point of Peter Drucker that a business is built on assumptions about everything – Is it a language of assumptions that hold us or it is a language of assumptions that we hold?
We discussed three cases – Those of State Bank of India, Maruti Suzuki and Toyota Kirloskar. I leave it to you to conclude what language their managers were speaking – did we hear a commitment or a complaint, and what assumptions which they held were revealed in their remarks.
Change the Language to Create Desired Culture
The language of complaint is counter-productive because it is easily expressed, and it says what we can’t stand. It generates frustration, it is non-transformational, and it is energy sapping. On the contrary, the language of commitment is spoken not casually but intentionally, and it expresses what we can stand for. It generates vitalising energy and is transformational. The language of personal responsibility has similar characteristics.
The issue then is how can we promote a different language, a culture-changing language, within our organisation? The answer, to my mind lies in what we speak to ourselves and how we can create opportunities for meaningful dialogues.
We must reflect on events in our work life, our interactions with people to understand what meaning we make. It determines how we see the world around us and how we act in it. How we talk to ourselves determines how we act. This does not happen automatically but it must be done intentionally.
The interpersonal talk on the other hand must show greater empathy. You will recall that the 5th habit of the famous seven habits of successful people is ‘Understand first and then seek understanding.’ We are discussing ‘Preparing for Future.’ Ladies and Gentlemen, my submission is that we must focus on the language we speak in our organisations and arrange dialogue between various groups that would lead to better appreciation of each others’ view point. Seamless organisation is another characteristic of a learning organisation, and it is achieved by promoting dialogues.
I am now going to talk about one more hallmark of a learning organisation. I am acutely aware that the time is short, and this is the last session, so I will conclude after speaking about this aspect.
Organisation Citizenship Behaviour is promoted through Institution Building
The magazine Frontline published a story in September 2010. The caption is ‘Poisoned Ground.’ It is subtitled ‘Hindustan Unilever is avoiding its responsibilities to its workers exposed to mercury in the thermometer factory it owned in Kodaikanal.’ It alleged death of 23 workers due to mercury poisoning and several others are affected. The article said that the 360 Kgs of mercury was spread over the factory site. But the company that is Hindustan Unilever denies all this. In case you think it was sensational journalism, let me tell you that the was very well researched with 102 references!
In other words we have a case of a corporation which is accused to have negligently caused harm to its own employees.
I am sure that you would have read that when fire broke at AMRI Hospital in Kolkata, the staff fled the scene! [TOI Dec9, 2011].
And here is another story. Contrast it now.
We have watched with horror the terrorists’ attack on Taj hotel in Mumbai. While Taj Hotels did a splendid job of helping the victims and employees, it probably received world-wide attention after an article was published in Harvard Business Review. The story is titled ‘The ordinary Heroes of The Taj’ and is sub-titled ‘How an Indian hotel chain’s organizational culture nurtured employees who were willing to risk their lives to save their guests.’ We are aware of the story, and all here are aware of how the ordinary waiters and bail boys moved to save lives of their guests.
In one case the organisation is allegedly responsible for their workers’ death and in another case the employees are willing to die for it! In one organisation staff runs away on sighting fire, and in another organisation the employees work three days incessantly in spite fire and firing by terrorists! What a contrast!!
What makes the employees willing to place the organisation’s interests before their own lives and their interests? This cannot be achieved through training or clauses in contracts. Only organisation’s culture can create this magic. This perhaps is the highest point of a learning organisation.
This is all about ‘Preparing for Future.’ We must create a learning organisation in our quest for building an institution, not just an organisation. As one book has put it ‘Institutions are more enduring than organisations, have capacity of continuous growth, ability to cope and adopt under diverse pressures and pulls to make thrust into the future, in addition to having an impact on the society or community in which they exist. They perform services and functions which are valued in the community or society and also play the roles of a change inducing, a change-protecting agent within the community.’
I beg to submit that ‘Preparing for Future’ is all about institution building.