Knowledge : Learning Organizations ( Part 4 )

by Kai Larsen, Claire McInerney, Corinne Nyquist, Aldo Santos, Donna Silsbee and Dr. Sue Faerman, May 13, 1996, University of Albany.

The original material is at 



The concept of the learning organization arises out of ideas long held by leaders in organizational development and systems dynamics. One of the specific contributions of organizational development is its focus on the humanistic side of organizations. The disciplines described in this paper "differ from more familiar management disciplines in that they are ‘personal’ disciplines. Each has to do with how we think, what we truly want, and how we interact and learn with one another." ( Senge, 1990, p. 11 ) The authors of this paper see learning organizations as part of the evolving field of OD. To our knowledge, there are no true learning organizations at this point. However, some of today’s most successful organizations are embracing these ideas to meet the demands of a global economy where the value of the individual is increasingly recognized as our most important resource.  


1. This definition is an adaptation of the definition offered by French and Bell ( 1995, p. 28 ). It was developed by the Spring 1996 section of PAD633 Organization Development and Analysis course at the University at Albany, taught by Dr. Sue Faerman.

2. Because Peter Senge is so influential in the field of learning organizations, his book The Fifth Discipline is cited here frequently. All references to The Fifth Discipline are indicated in parentheses as his 1990 work. All other references to works by Peter Senge in this paper are listed by title in parentheses.

3. On-line Lexical Database by researchers at Princeton, builds on the Oxford English Dictionary ( 1928 ).

4. Kofman and Senge argue that fragmentation is a cultural dysfunction of society because it is a byproduct of its past success.

Kofman and Senge argue that fragmentation is a cultural dysfunction of society because it is a byproduct of its past success.

5. Systems modeling and simulation are the foundation of systems thinking. This larger field is known as ‘System Dynamics,’ founded by Jay Forrester of MIT in the 1960s.

6. Example extracted from Senge, 1990, pp. 69-73.


Appendix A

A Systems Thinking Analysis Using a combination of archetypes for the Office of Disabled Student Services DSS ), University at Albany, State University of New York

We draw upon Senge's systemic theory of what happened at People Express to help highlight the consequences of failure to address the issues identified in this strategic planning effort for DSS. ( The Fifth Discipline, pp. 130-135 ) The word and arrow diagram below is an adaptation from the one on p. 133. In it we will find three systems archetypes: ( 1 ) growth and under-investment ( 2 ) balancing process with delay, and ( 3 ) eroding goals. In the analysis, we highlight "the size of DSS’ budget," but any other measure intended to improve the work capacity of the organization would also be appropriate, such as for example "using DSS’ resources more efficiently" ( by spending resources according to pre-defined priorities ). 
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Word-and-Arrow Diagram for DSS’ Budget Problem

The positive feedback loop on the top-left of the diagram represents the growth in demand for services for disabled students ( DS ). This loop indicates that demand for and availability of services reinforce each other: the greater the demand, the more services are provided, which satisfies the needs of disabled students and leads to new demands. The growth in demand which triggered this process was caused by the passage of the Americans with Disabilities Act ( ADA ) of 1990. As previously mentioned, ADA defined disability more broadly and opened the doors of higher education to a much larger group.

The negative feedback loop on the top-right is a balancing loop which prevents the growth in services for disabled students to continue forever. It causes this growth to level-off when the work capacity of DSS has been met. Thus, the limiting factor in this system is the organization's work capacity. This is how it works: As demand grows, perceived performance ( measured in terms of work capacity divided by demand ) begins to fall. The reduced performance ( in a given task ) causes the quality of the work of the organization to fall, which consequently drives disabled students' satisfaction down. Eventually, reduced satisfaction will also cause demand to fall.

The work capacity of the organization does not stay fixed, however. This is captured in the third feedback loop, in the bottom of the diagram. This is also a balancing loop ( negative ), and it serves to balance the organization's perceived performance with its performance standard. This is how it works: Suppose DSS has a performance standard of one ( i.e., it wants its work capacity always to meet --or be equal to-- DS’ demand ). Then, as performance falls because of higher demand, this causes a perceived need to invest in the organization's capacity. If this investment occurs, eventually, it will serve to increase DSS’ work capacity until perceived performance is finally equal to one. In other words, DSS’ work capacity will be adjusted up or down depending upon its perceived performance and its performance standard.

So far, we have discussed ( 1 ) growth and under-investment and ( 2 ) balancing process with delay. The following observations should serve to underscore the conclusions from this exercise in modeling:

  • once demand for services for disabled students is triggered, there is a "snow-ball" effect which causes it to grow even more as a result of an increased level of availability of services;

  • demand grows until the work capacity of the organization has been met; 

  • this causes performance to fall, raises DS’ dissatisfaction, and, eventually, reduces demand;
    the organization can respond by increasing investments to raise work capacity, however, there is a delay between making the

  • investments and collecting payoffs from them;

  • in the mean time, DSS’performance and DS’ satisfaction will fall;

  • the organization may over or under-estimate the amount of investment needed to meet demand;

  • if it overestimates demand, work capacity will build up beyond necessary causing performance to rise above the standard;

  • if it underestimates demand, work capacity will fall short of demand and performance will remain below standard;

  • the delay between making the investment and attaining a higher work capacity causes work capacity to always fall short of demand if demand is continuously growing; and

  • the delay between increasing DSS' dissatisfaction and a fall in demand causes demand to grow much above what the organization's work capacity can handle.

The last two observations lead us into the last archetype in the diagram: eroding goals. There is reason to believe that under a scenario of increasing demand --because of the delay involved in building up the organization's work capacity and because of the gap in time between growing DS’ dissatisfaction and fall in demand-- there will be a permanent gap in the organization's performance ( between perceived and standard ). If the organization allows its performance standard to slip because of this on-going experience with a lower performance level ( positive link between perceived performance and performance standard ), then the problems the organization is experiencing will be magnified. This is because performance standard will be allowed to fall below one, relieving the pressure to invest, lowering actual investment levels, and, ultimately and definitely, keeping work capacity from growing sufficiently to meet demand --indeed, helping increase the gap between DS’ demand and DSS’ work capacity.

This is probably the most important insight offered by this model. It says that an organization which has been suffering for some time with falling performance may never be able to return to previous performance levels simply because it lowered its standards. If this happens, the organization locks itself in a situation of low performance and high dissatisfaction. Naturally, the long-term result will be lowered motivation and morale within the organization. The solution to this problem is to bring the performance standard back up to adequate levels, and making sure that it stays fixed up there.

The above exercise underscores the significance of establishing and keeping track of performance measurements. It also clarifies why it is so important to focus services and establish priorities. Under a condition of increasing demand, it is very easy for one to fall into the trap of trying to do everything and unwillingly allow quality standards to fall. Keeping standards fixed and monitoring performance closely are key concepts not only to identifying much needed increases in work capacity, but also to help advocate increased budget allocations.

The model also suggests that the only way DSS will be able to meet its increasing demand is with increased investments in work capacity. Whether those resources should be raised internally, through federal, state and local agencies, through grant-writing and/or fund-raising initiatives will depend upon the evolving characteristics of the environment. Right now, grant-writing and fund-raising initiatives appear to be the most viable alternatives. If DSS wants to maintain its proactive standing in the region, then it must find ways to implement those alternatives. 


Appendix B - Definitions


According to Fortune magazine, "the most successful corporation ... will be something called a learning organization, a consummately adaptive enterprise." [emphasis added] But Senge argues that increasing adaptiveness is only the first stage in moving toward learning organizations. The impulse to learn in children goes deeper than desires to respond and adapt more effectively to environmental change. The impulse to learn, at its heart, is an impulse to be generative, to expand our capability. This is why leading corporations are focusing on generative learning, which is about creating, as well as adaptive learning, which is about coping.

But generative learning, unlike adaptive learning, requires new ways of looking at the world. Generative learning requires seeing the systems that control events. When we fail to grasp the systemic source of problems, we are left to "push on" symptoms rather than eliminate underlying causes. Without systemic thinking, the best we can ever do is adaptive learning.

Those who believe in the need for shared vision have looked to groups that have this quality, and found them to be best characterized as communities. Companies redefined as communities see all employees as citizens, sharing in the decision-making and dedicated to a higher purpose.

The difference between where we are now and where we want to be results in a feeling that we need to change. This feeling is known as creative tension.

This is a barrier to learning for both the individual and the organization. We are afraid of embarrassment or perceived threats and that prevents us from having an open mind.

Detail complexity is simply when a problem involves several variables. Dynamic complexity are situations where cause and effect are subtle, and where the effects over time of interventions are not obvious.

Senge highlights that when the same action has dramatically different effects in the short-run and in the long-run, there is dynamic complexity. When an action has one set of consequences locally and a very different set of consequences in another part of the system, there is dynamic complexity. When obvious interventions produce non-obvious consequences, there is dynamic complexity.

Senge also argues that conventional forecasting, planning, and analysis methods are not equipped to deal with dynamic complexity.

Any reciprocal flow of influence. In systems thinking it is an axiom that every influence is both cause and effect. Nothing is ever influenced in just one direction.

Computer simulations of "microworlds" that allow us to speed up time and see the results of actions that might be taken by an organization.

Rather than use of a tool, it is through creative ideas, often from unexpected sources, applied to our work activities that gives leverage. A team working with a shared vision can through experimentation develop that extra edge, leverage.

Systems thinking needs the disciplines of building shared vision, mental models, team learning, and personal mastery to realize its potential. Building a shared vision fosters commitment to the long-term. Mental models focus on the openness needed to unearth shortcomings in our present ways of seeing the world. Team learning develops the skills of groups of people to look for the larger picture that lies beyond individual perspectives. And personal mastery fosters the personal motivation to continually learn how our actions affect our world.

But systems thinking makes understandable the subtlest aspect of the learning organization --the new way individuals perceive themselves and their world. At the heart of a learning organization is a shift of mind --from seeing ourselves as separate from the world to connected to the world, from seeing problems as caused by someone or something "out there" to seeing how our own actions create the problems we experience. A learning organization is a place where people are continually discovering how they create their reality. And how they can change it.

Single loop learning is linear. It is trying to find a better way to do a process. It is comparable to continuous quality improvement. Double loop learning goes a step further and asks why we are doing the process in the first place. Should we be doing something else ?

Systems Archetypes are generic structures which embody the key to learning to see structures in our personal and organizational lives. They are types of systemic structures that recur again and again. Their knowledge helps us to identify and understand the underlying causes of problems, possible leverage points, and so forth. Some examples of systems archetypes are:

  • balancing process with delay

  • limits to growth

  • shifting the burden

  • eroding goals

  • escalation

  • tragedy of the commons

  • growth and under-investment

The archetype template is a specific tool that is helping managers identify archetypes operating in their own strategic areas. The template shows the basic structural form of the archetype but lets managers fill in the variables of their own situation.


There are three distinct levels to view reality: events, patterns of behavior, and systemic structure. According to Senge, contemporary society focuses predominantly on events, less so in patterns of behavior, and very rarely on systemic structure. Leaders in learning organizations must reverse this trend, and focus their organization's attention on systemic structure. This is because event explanations --who did what to whom-- doom their holders to a reactive stance toward change; pattern-of-behavior explanations are limited to identifying long-term trends and assessing their implications --they suggest how, over time, we can respond to shifting conditions ( adaptive learning ); structural explanations are the most powerful --only they address the underlying causes of behavior at a level such that patterns of behavior can be changed ( generative learning ).

A discipline that starts with "dialogue," the capacity of members of a team to suspend assumptions and enter into a genuine "thinking together." Team learning is vital because teams, not individuals, are the fundamental learning unit in modern organizations.

Learning about learning. Understanding why we make the choices we do. What predisposes us to act in certain ways ?

This model of learning is based upon observation of animals functioning in the wild. They wait, they focus, they strike, and then they wait again. People also alternate between activity and repose; to make effective change, this pattern must be tapped. The "wheel of learning" has four parts of its cycle--reflecting ( thinking and feeling ), connecting ( looking for links or hypotheses ), deciding ( choosing an action ), and doing. There are both individual and team versions of the cycle. David Kolb and Charles Handy are associated with this concept and Stephanie Spear developed a team variation. 


The Mediagraphy can be found on the Learning Organizations homepage. 

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