Transforming anglian water
It is believed that survival of an organization in contemporary era of globalization & liberalization is directly correlated to the extent to which it utilizes advanced information technology tools and practices Total Quality Management.
The concept of “Learning Organization” was introduced by Chris Argyris and further researched and explained by Sange (1990). Sange defined Learning Organization as the organization “in which you cannot not learn because learning is so insinuated into the fabric of life.
” He further defines Learning Organization as “a group of people continually enhancing their capacity to create what they want to create.”
The purpose of this assignment is to study Anglian Water in the light of Learning Organization and:
1. Investigate the extent to which the organization could actually claim to be a Learning Organization.
2. Identify those factors that may undermine the concept of “Learning Organization” in Anglian Water and call into question the investments made.
3. Explain if Anglian Water can sustain the ideals and practices of a Learning Organization.
While exploring the definitions and characteristics of Learning Organizations, the case study of Anglian waters will be investigated and comparisons will be drawn.
Chris Argyris differentiates between first order or single loop learning versus second order or double loop learning. Learning is further explained as detection and correction of errors. Single loop learning detects the errors and then functions within the construct of organization’s governing variable to achieve the desired result. Double loop learning challenges the governing variable itself and aims at producing drastic cultural changes within the organization. Argyris further divides organizations into Model I and Model II. Model I represents the traditional bricks and mortar culture, a few characteristics of which are: Achieve the purpose as the actor defines it, Win, do not lose, Suppress Negative Feelings, Advocating courses of actions which discourage inquiry, Defensive relationships, low freedom of choice.
Model II represents a learning organization, the characteristics of which are: Valid Information, Free and Informed choice, Internal Commitment, Sharing control, Surfacing conflicting view, Minimally defensive relationships, High freedom of choice, Increased likelihood of double loop learning.
Considering the above view point, Anglian water clearly falls in the Model II category of double loop learning. In the 1990’s it diversified into new markets, conducted employee satisfaction surveys and acted on the results of it. The Management clearly had a vision to introduce and sustain drastic cultural changes and move towards becoming a learning organization. This was achieved to a great extent through employee empowerment & implementation of ‘transformation journey’ which enabled incumbents at all levels to develop attitudinal and behavioral change to be able to cope up with turbulent and uncertain environment.
Argyris further introduces us to the concept of triple loop learning (Learning how to learn) which is in continuation to single loop (What to do); Double Loop (Learning what to do). Triple Loop Learning questions the structures and strategies of learning; and how our mental map affects the way we behave. It is considered as the highest level of organizational learning and restructuring. Triple loop learning leads to restructuring of current systems and processes. Dialogues are initiated with in the organization in the form of “collective mindfulness” to understand the basis of existence of hierarchies; policies, procedures etc and RESTRUCTURING within the organization takes place.
A Learning Infrastructure is created where existing structure is studied, dialogue is initiated and new and more effective structures are proposed. Focus then is on developing competencies and skills of individuals – teams – organization and hence emerges a Learning Organization. Anglian Water as an organization seems to have all the characteristics that the Triple Loop learning mentions as that of a Learning Organization. At Anglian water, face to face communication is given utmost importance amongst employees; university of Water was established to integrate , support and accredit all forms of learning; develop skills and competencies that was required to move Anglian water to the 21st century and place it as a global player.
Peter Senge (1990) remarks “The rate at which organizations learn may become the only sustainable source of competitive advantage”. He differentiates between adaptive and generative learning. Adaptive Learning is the initiation of a company into the community of Learning Organization. Generative learning utilizes the power of creativity and innovation to reconstruct those systems and processes that govern consequences. Senge, in his much acclaimed book The fifth discipline explains the five disciplines which according to him are cucial in building a learning organization.
The first discipline Personal Mastery concentrates on learning of each and every individual in the organization resulting in Learning organization as a whole. Individual goals and tools to measure the proximity to these goals are developed. Significant evidence of Personal Mastery can be found at Anglian water through the introduction of the concept of travelers whose four guiding principles were a willingness to get to know myself, a desire to develop myself, a desire to develop my full potential with and through others, an ability to link my personal development to the development of Anglian water.
The second discipline of Mental Model is the framework of cognitive processes of our mind which determines our thought and action process. Argyris concept of theories of action is similar to the Mental Model concept and govern actual behavior. Espoused theory is what we would like others to believe as our actual action theory. Anglian Water does not seem to have incorporate the Mental Model theory in its learning curve. The third principle of systems thinking or the ability to see interrelationships / circular causations (where a variable is both the cause and effect of another)is prevalent in the practice of Transformation Journey , Total Quality Management , Change Agent Networks.
The Fourth principal of shared vision (build on individual vision of it’s members) is not well supported at Anglian Water. While the vision and value statements were rolled out in the 1990s it is unclear if these were created through the interaction between leaders and employees of the organization. It seems more likely that the vision and values were communicated from top to bottom. The fifth discipline of team learning or “genuine thinking together” was highly encouraged by the leadership at Anglian water and is corroborated with the team and group formations through the methodology of Transformational Journey.
Victoria Marsick states that learning organizations involve deep change in the mind sets of people as well as the culture of the organization and socities. Gephart , Marsic & Van Buren 1997 emphasize on Continuous Learning at the system level which at Anglian Water was initiated in the form of Transformational Journey and University of Water. Knowledge generation and sharing was made possible through the introduction of University of Water which aimed at acknowledging, integrating, supporting and accrediting all forms of learning in the company. The concept was further given a boost with the establishment of an intranet for information exchange and communication.
Systematic Thinking capacity which enables employees to identify linkages and feedback loops. The presence of the concept of systematic thinking can be illustrated by the feedback statements of employees on the Journey being a good learning experience OR the findings of the employee satisfaction survey that clearly demanded a cultural change in Anglian Water.
Greater Participation and accountability by a larger percentage of employees is promoted by Anglian Waters through various methods such as ‘employee satisfaction survey’ , ‘employee empowerment’ , ‘transformational journey’ that saw the participation of more than 3000 employees, new ‘HR Performance Management Policies’. Culture and structure of rapid communication and learning was introduced with the advent of the 2 year long traveler role and Aqua University. Rapid communication was facilitated through the installment of Intranet.
Pedler, another major pioneer, in his work ‘Blue prints of a learning company’ characterizes such organizes through the usage of five themes.
‘Strategy’ is explained through:
i. Learning approach to strategy was seen in the efforts to promote team working and cooperation through transformational journey which would have a direct bearing on the operational effectiveness and business performance.
ii. Participative Policy making is missing in Anglian Water’s organizational learning.
‘Looking in’ encompasses:
i. Informating or use of information technology to inform and empower employees by giving them access to information was being practiced at Anglein Water through installation of Hawk – their intranet system.
ii. Internal Exchange was facilitated through the introduction of Total Quality Management i.e. Each department treated the other as Internal Customer
iii. Formative Accounting and control and
iv. reward flexibility are missing from the grounds of Anglian Water.
‘Enabling structures’ are flexible organizations which revisit & reformat structures, goals, objectives to align with the interest of employees, shareholders and suppliers. Post privatization, Anglian Water reorganized it’s business, restructured to a flatter organization, encouraged cross functional and individual participation to facilitate positive change. Transformational Journey empowered employees to arrange for their own support and skill development.
‘Looking out’ encompasses
i. ‘Boundary workers as environmental scanners’, which refers to the collection of information from the external stakeholders of an organisation in order to establish their needs is evident through the introduction of TQM a key element of which is to be: ‘sensitive to customer requirements and to respond rapidly to them…to achieve customer satisfaction…’ (Stark, 1998)
ii.‘Inter-company learning’ which entails joining with customers and suppliers in training experiences, research and development and job exchanges is conspicuous by its absence in Anglian Water.
Learning Opportunities talks of
i. Learning Climate encourages employees to seek continuous improvement, learn from their experiences and make time to question practices and try out new ones. Establishment of university of water by Anglian Water for the sole purpose of learning and development of employees attests the presence of Learning Climate in the company.
ii. Self Development opportunities for all was encouraged at Anglian Water through the introduction of Transformational journey which was a holistic strategy designed to prepare and equip employees for the technical and emotional challenges of operating in a turbulent and uncertain environment.
To Summarize, whether Anglian Water can claim to be a learning organization, I would like to include a few ideas organized by Art Kleiner states as Why Bother?
i. Because we want superior performance and competitive advantage
ii. For customer relations
iii. To avoid decline
iv. To improve quality
v. To understand risks and diversity more deeply
vi. For innovation
vii. For our personal and spiritual well being
viii. To increase our ability to manage change
ix. For energized committed work force
x. To expand boundaries
Above mentioned ten points are positive results of a successful learning organization. Anglian Water when viewed in the light of the above mentioned results comes out as a winner in the field of learning organizations The next step is to identify factors that may undermine the concept of Learning Organization in Anglian Water.
Senge states that the role of a leader is to build a shared vision. Though the vision and value statement that were released at Anglien Water were designed to inculcate new attitudes and behaviors, no evidence of participation of employees in shared vision building exercise is found.
Shell (1997) also talks of Creative tension as a characteristic of Learning Organization. This enables innovation and visioning the future and further working towards a commonly agreed goal. However, this capacity to vision the future seems to be lacking in the employees of Anglian Water. This was more than evident when in 1990 Ofwat recommended a price reduction of at least 17.5%. and this decision hit the company hard. It suffered tremendous losses and had to initiate a major cost reduction strategy. If the government decision had been predicted by the visionaries of the company, they would have had time to prepare ground for the turbulence that they faced as a result of this Change.
Davenport and Prusak (1998) are concerned with the magnitude of importance that has been given to Information technology centric Knowldege Management in Learning Organizations. They state that it is more important to build a culture conducive to knowledge and learning rather that emphasizing on information storage, retrieval and transfer. Clarke and Cooper state that in their goal to be a learning organization, Anglian Water rolled out a complete Knowledge Management Policy. However, their Intranet, despite of being called HAWK – Harnessing Anglian Water’s Knowledge appears to play only a secondary role.
One of the major characteristics of Learning Organization is Experiential Learning. Polanyi (1967) characterizes experiential learning as tacit or not highly conscious. Lave and Wenger term the process as ‘legitimate peripheral participation’ which further dilutes lessons learnt. Employees undergoing experiential learning might not be capable of fully understanding the reasons for success or failure. Thought Processes that are different from that of the value systems of a learning organization might be considered null and void.
Marsick points out that when an organization is undergoing change and simultaneously assessing feedbacks, a confused and chaotic situation is bound to emerge. Multiple feedbacks emerge resulting in reception to various signals at the same time. Envisioning the environmental factors that would affect the well being of the company in future and predicting the types of challenges that the company should be ready for becomes very difficult. A tiny random fluctuation, often called Noise ‘can induce the path of choice’ (Capra 1996). It is hence expected of a learning organization to analyze well the various feedbacks and signals and prepare for the future challenges. It appears that the visionaries ay Anglian Water missed the point and hence future environmental challenges could not be well predicted.
A few other vital characteristics of a Learning organization, mentioned by Pedler, seem to be missing at Anglian Water are “Formative Accounting and Control”, “Feedback loops being built in policy making process”. Formative Accounting and control insists on accounting , budgeting and reporting systems that are designed to help people understand the operations of organizational finance.
However, It is important to add here “scholars often caution against one size fits all approach to creating the learning organization” (Marsick). Hence, it should not be a mandatory criteria for companies to absorb all characteristics defined by all scholars in the field of learning organizations.
The third step is to analyze if Anglian Water can sustain the ideals and practices of a Learning Organization. If we refer to that portion of case study which is called “The future”, what immediately comes to our mind is that Anglian Water can not sustain the ideals and principles of a learning organization.
When Anglian Water adopts a major cost reduction strategyin 1998 – 99; it seems to be moving away from the concept of Learning Organization. 10% of the employees (400 in number) were seen losing their jobs. While Learning Organizations are all about Investment in social, human and intellectual capital; Cost reduction strategies include downsizing, ‘low levels of risk taking, ‘short term focus’ ‘minimal levels of employee training and development,’ and ‘narrowly defined career paths’ (Schuler and Jackson, 2006:168) These practices are in stark contrast to senior managements bid to change Anglian Water’s approach to doing business to ‘entrepreneurial, innovative and outward looking’ (Jenkins, 2008:1)
Cost Reduction would further mean minimizing overheads and it is assumed that the worse affected areas would be Human Resources & logistics. Under Human Resources, most of the benefits such as training programs, employee engagement activities would have been scrutinized and the logical conclusion would be to cut the costs related to them. In this scenario, existence of a corporate university might come under investigation with respect to the total costs being incurred on it.
Huczynski and Buchanan (2001:135) describe LO practices as: ‘A complex difficult set of practices, difficult to implement systematically.’ This criticism is relevant toAnglian Waterin numerous ways. Firstly, with regards to the University of Water, in the long run, those employees involved may struggle with coping with learning and their ‘day job’ at Anglian Water and also the need to encourage employee attrition and encourage ‘new blood’ at Anglian Water. Secondly after the initiation of the cost-reduction strategy the practices of a Learning Organization would be even harder to implement for reasons which were discussed previously.
It is imperative to mention here that a lot of scholars in the field of Learning Organizations consider downsizing as a part of the Learning and restructuring process. Labbas 1999, states that employment downsizing has been regarded as the preferred route to improving organizational performance. Success or failure of a downsized organization depends on the workforce remaining after the downsizing (Best Practices in Downsizing: 1997). The Organizational trends in late 1990’s and then at the advent of 21st century was moving towards downsizing , restructuring and outsourcing.
Managers continue to use downsizing – and other forms of restructuring – to improve productivity ( Ellis, 1998 ). Downsizing has been termed as a reorganization strategy by Mckinley, Sanchez and Schick. Few other companies which downsized in 1998 and are still going strong are Kodak, Levis and Citicorp. Freeman and Cameron mention downsizing as an intentional reduction in personnel intended to improve the efficiency of the firm.
Last but not the least, the chaos theory related to learning organization deserves to be given its due importance while discussing the probability of success of Anglian Water after downsizing. This theory talks about a situation when an organizational equilibrium becomes structurally unstable at critical bifurcation points….in the system’s evolution where a fork suddenly appears and the system branches off in a new direction (Capra 1996). As a result of occurrence of chaos, a new form of organization would evolve.
Since it is important for an organization to always be in the learning category to be able to survive environmental changes, downsizing at Anglian water could be looked as a phase in the learning process. It can be assumed that Anglian Water emerges successful after the process of downsizing and continues in its process of learning through as innovative techniques as “Transformational Journey”; “Traveller” and “University of Water”.
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