Do Learning Organization Characteristics matter during Lean Strategy Implementation?
Meera Alagaraja, Ph.D.
Assistant Professor
Organizational Leadership and Learning Program
College of Education and Human Development
University of Louisville
Meera.alagaraja@louisville.edu
Ann M. Herd, Ph.D., CPC
Assistant Professor
Organizational Leadership and Learning Program
College 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 multilevel 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) systemslevel, 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
Individual
Team
Learning
Organization
Characteristics
Create continuous
learning
opportunities
Lean Strategy
Implementation
Characteristics
Training
Promote dialogue
and inquiry
Communication
Encourage team
learning and
collaboration
Internal
Partnerships
External
Partnerships
Organization
Empowerment of
the people
Mindsets
Similarities
Distinctions
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.
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
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.
The LO model does not specify the
quality of supplier and customer
partnerships.
Both models focus on developing a
shared vision and implementing the
vision.
In the LSI model, training is provided to help
employees become multi-skilled which is not
necessarily the case for the LO model
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
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.
Supplier and customer partnerships are
essential in the LSI model as they streamline
the organizations’ value chain.
None
towards a
collective vision
Providing
strategic
leadership for
learning
Structure
Leadership
Both models emphasize the quality of
leadership
LSI model focused on leadership qualities (e.g.
Leaders mediate conflicts that cause resistance)
Management
commitment
LSI model demonstrates the
importance of commitment for
aligning the culture with the Lean
vision
LO model assumes a strategic perspective for
learning and linkage to business results.
Leaders champion and model learning
Long term focus
Connecting the
organization to
the environment
Business
capabilities
LSI model suggests that a long term
focus helps to nurture a learning
environment and emphasizes
enterprise thinking
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.
Establishing
systems to
capture and share
learning
Necessary
Conditions,
Mechanisms
Both models agree that learning
must be integrated into daily work
and through technology.
Lean specific
processes and tools
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.
Project ownership, accountability follow up and
continual evaluation are additional specifics
showcased in the LSI model. Further, the model
also discusses the importance of organizational
structure and culture as existing conditions
which shape every other level in the
organization (individual, team and the
organization)
This is specific to the LSI model. Lean specific
knowledge and expertise are crucial for the
successful implementation of Lean and if
needed, must be acquired or created.