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Microworlds: The Technology of the Learning Organization

Microworlds: The Technology of the Learning Organization

Senge, Chapter 17Senge, Chapter 17

THE FIFTH DISCIPLINETHE FIFTH DISCIPLINE

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How can we rediscover the child learner within us?How can we rediscover the child learner within us?

Human beings learn best through firsthand Human beings learn best through firsthand experience. experience.

Learning by doing only works so long as the Learning by doing only works so long as the feedback from our actions is rapid and feedback from our actions is rapid and unambiguousunambiguous

But learning from experience is neither rapid and But learning from experience is neither rapid and unambiguous because the consequences of our unambiguous because the consequences of our actions are separated from us in time and spaceactions are separated from us in time and space

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How then can we learn? Microworlds (MW)How then can we learn? Microworlds (MW)

MWs enable managers and management MWs enable managers and management teams to begin “learning by doing”teams to begin “learning by doing”

MWs are nothing more or less than MWs are nothing more or less than interactive simulationsinteractive simulations

MWs compress time and space so that it MWs compress time and space so that it becomes possible to experiment and to learn becomes possible to experiment and to learn when the consequences are in the distant when the consequences are in the distant future and in distant parts of the organizationfuture and in distant parts of the organization

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Transitional objects: the way children learnTransitional objects: the way children learn

Children have a rate of learning that is truly Children have a rate of learning that is truly astoundingastounding

They rehearse with transitional objects: dolls, They rehearse with transitional objects: dolls, blocks, play-houses, etc..blocks, play-houses, etc..

Managers too have their transitional objects: MWsManagers too have their transitional objects: MWs When teams go white-water rafting, participate in a When teams go white-water rafting, participate in a

role playing exercise, participate in a dialogue role playing exercise, participate in a dialogue practice session, they are engaging in a microworld.practice session, they are engaging in a microworld.

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Transitional objects: Are they the best?Transitional objects: Are they the best?

A white-water rafting trip doesn’t produce A white-water rafting trip doesn’t produce powerful insights into strategic business powerful insights into strategic business issuesissues

Role-playing exercises do not show us Role-playing exercises do not show us whether our personnel policies are aligned whether our personnel policies are aligned with our manufacturing and marketing with our manufacturing and marketing policiespolicies

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What about computer simulations?What about computer simulations?

PC is ubiquitous and getting more powerful PC is ubiquitous and getting more powerful every monthevery month

These simulations will prove to be a critical These simulations will prove to be a critical technology for implementing the disciplines technology for implementing the disciplines of the learning organizationof the learning organization

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How Does Organizational Learning Occur?How Does Organizational Learning Occur?

According to Shell’s Arie de Geus, byAccording to Shell’s Arie de Geus, by Changing the rules of the game (through Changing the rules of the game (through

openness and localness)openness and localness) Through playThrough play Microworlds are places for relevant playMicroworlds are places for relevant play

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MWs allow for….MWs allow for….

issues and dynamics of complex business issues and dynamics of complex business situations to be explored through trying out situations to be explored through trying out new strategies and policies and seeing what new strategies and policies and seeing what might happenmight happen

Costs of failed experiments disappearCosts of failed experiments disappear Organizational sanctions against Organizational sanctions against

experimentation are nonexistentexperimentation are nonexistent

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MWs are being used today by managers….MWs are being used today by managers….

for managing growthfor managing growth for product developmentfor product development for improving quality in both service and for improving quality in both service and

manufacturing businessmanufacturing business and they build upon the system archetypesand they build upon the system archetypes

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MW1: Future Learning: Discovering Internal Contradictions in a Strategy

MW1: Future Learning: Discovering Internal Contradictions in a Strategy

Lying behind all strategies are assumptions, Lying behind all strategies are assumptions, which remain implicit and untestedwhich remain implicit and untested

These assumptions have internal These assumptions have internal contradictionscontradictions

Such internal contradictions cause the Such internal contradictions cause the strategy to also have internal contradictionsstrategy to also have internal contradictions

Such internal contradictions make the Such internal contradictions make the strategy difficult to implementstrategy difficult to implement

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The Business Plan of Index Computer CompanyThe Business Plan of Index Computer Company

GOAL: reach 2 billion in sales in four yearsGOAL: reach 2 billion in sales in four years Reqd. James Sawyer, vice pres. of sales, to Reqd. James Sawyer, vice pres. of sales, to

double his sales forcedouble his sales force Other top managers were unsympathetic Other top managers were unsympathetic

saying “you will work it out”saying “you will work it out” While uncomfortable, Mr. Sawyer did not While uncomfortable, Mr. Sawyer did not

want to become a “nay sayer.”want to become a “nay sayer.”

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Executives split into 3-person microworld teams to play out the consequences of the sales plan

Executives split into 3-person microworld teams to play out the consequences of the sales plan

They constructed an explicit model of the They constructed an explicit model of the assumptions behind the planassumptions behind the plan

20% annual sales growth20% annual sales growth Hire 20% more salespeople and you make 20% Hire 20% more salespeople and you make 20%

more salesmore sales Sawyer says “wait a minute...not all salespeople Sawyer says “wait a minute...not all salespeople

are equal…there is much they have to learn…are equal…there is much they have to learn…before they can sell a single systembefore they can sell a single system

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Sawyer continues...Sawyer continues...

we got most our of our sales people we got most our of our sales people originally by hiring away from competitorsoriginally by hiring away from competitors

today 20% is so many people that we cannot today 20% is so many people that we cannot posibly get experienced people from our posibly get experienced people from our competitorscompetitors

assumptions were changed to show assumptions were changed to show inexperienced sales people to be only 1/3 to inexperienced sales people to be only 1/3 to 1/4 as productive as experienced salespeople1/4 as productive as experienced salespeople

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ConsequencesConsequences

could not reach goal of $2 billion in sales in could not reach goal of $2 billion in sales in four yearsfour years

could only get to $1.5 billioncould only get to $1.5 billion Attempts to get to $2 billion resulted in Attempts to get to $2 billion resulted in

having to having to doubledouble the sales force in the fourth the sales force in the fourth year aloneyear alone

This would wreak havoc on the sales This would wreak havoc on the sales organization and the personnel budgetorganization and the personnel budget

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Sawyer’s assessmentSawyer’s assessment

There would be a lot of pressure on our There would be a lot of pressure on our veteransveterans

And, our veterans would have to train the And, our veterans would have to train the new salespeoplenew salespeople

This wold result in more veterans leavingThis wold result in more veterans leaving This would create a vicious cycleThis would create a vicious cycle Many of our veterans came to us to escape Many of our veterans came to us to escape

this kind of situation somewhere elsethis kind of situation somewhere else

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Then Susan Willis, Director of Human Resources had her sayThen Susan Willis, Director of Human Resources had her say

sales people resist any call to invest their sales people resist any call to invest their time in training and developing new time in training and developing new salespeoplesalespeople

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Further, Susan Willis said:Further, Susan Willis said:

Sawyer said this was because of hiring the Sawyer said this was because of hiring the most aggressive salespeople who get their most aggressive salespeople who get their kicks and their commissions from closing a kicks and their commissions from closing a sale in the fieldsale in the field There are no incentives or commissions for There are no incentives or commissions for

helping newcomershelping newcomers The proposed strategic plan would simply The proposed strategic plan would simply

reinforce this problemreinforce this problem

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Conclusions of the MW session at IndexConclusions of the MW session at Index

Train new sales people more quicklyTrain new sales people more quickly Establish new rewards for sales managers to Establish new rewards for sales managers to

develop their staffsdevelop their staffs Get more support to help senior sales Get more support to help senior sales

people mentor and train new sales peoplepeople mentor and train new sales people Create a MW for training new sales peopleCreate a MW for training new sales people

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MW2: Seeing Hidden Strategic Opportunities: How our Beliefs Influence our Customer’s Preferences

MW2: Seeing Hidden Strategic Opportunities: How our Beliefs Influence our Customer’s Preferences

Here again MWs are helpful in surfacing Here again MWs are helpful in surfacing different assumptions and discovering how different assumptions and discovering how they can be related in a larger understandingthey can be related in a larger understanding

Bill Seaver and John Henry are president Bill Seaver and John Henry are president and VP for Meadowlands shelving and VP for Meadowlands shelving company company

They have reached an impasse in the way They have reached an impasse in the way they saw their customers and their marketthey saw their customers and their market

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Seaver believes...Seaver believes...

That the key to success in the market place That the key to success in the market place lay in having good products priced lay in having good products priced competitivelycompetitively

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Henry agrees but...Henry agrees but...

Also felt service quality could play a big part in Also felt service quality could play a big part in whether or not customers chose Meadowlandswhether or not customers chose Meadowlands

Believed the company should invest in Believed the company should invest in upgrading its service through training upgrading its service through training Meadowlands dealers in performing a wide Meadowlands dealers in performing a wide raange of services from better account raange of services from better account management to office design and management to office design and troubleshooting customers problemstroubleshooting customers problems

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Seaver’s response was...Seaver’s response was...

These are good ideas but he didn’t support These are good ideas but he didn’t support spending significantly more on dealer spending significantly more on dealer support because he was convinced that it support because he was convinced that it would not have significant impact on would not have significant impact on Meadowlands’ sales.Meadowlands’ sales.

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Sales people said...Sales people said...

““Our competitors are discounting like mad and we Our competitors are discounting like mad and we can only hold our own if we match or better themcan only hold our own if we match or better them

When Henry himself talked with customers, When Henry himself talked with customers, frequently they said they would rather have 5% off frequently they said they would rather have 5% off on their sales order than better service after the on their sales order than better service after the salesale

Still he held onto his belief that there must be a Still he held onto his belief that there must be a way to gain competitive advantage through better way to gain competitive advantage through better serviceservice

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What the MW showed...What the MW showed...

Continual discounts in the face of poor Continual discounts in the face of poor service quality became a vicious circleservice quality became a vicious circle

Efforts to maintain customers with better Efforts to maintain customers with better service quality lacked credibility because service quality lacked credibility because that had experienced poor service for so that had experienced poor service for so longlong

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Further, the MW showed…Further, the MW showed…

Investing in service quality took a long time Investing in service quality took a long time to exhibit its effects becauseto exhibit its effects because customers have to experience improved service customers have to experience improved service

before thy take it seriouslybefore thy take it seriously the repurchasing delay in the shelving industry the repurchasing delay in the shelving industry

to two-to-four yearsto two-to-four years

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Both Seaver and Henry were right….Both Seaver and Henry were right….

Seaver was right in the short runSeaver was right in the short run Henry, in the longHenry, in the long Both learned a lot about the way the Both learned a lot about the way the

company interacted with its customers and company interacted with its customers and within itself.within itself.

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MW3: Discovering Untapped Leverage: The Drift to Low Quality in Service Businesses

MW3: Discovering Untapped Leverage: The Drift to Low Quality in Service Businesses

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Managing for Quality in Service BusinessesManaging for Quality in Service Businesses

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Microworlds and Organizational LearningMicroworlds and Organizational Learning

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Copyright C 2000 by James R. BurnsCopyright C 2000 by James R. Burns

All rights reserved world-wide. CLEAR All rights reserved world-wide. CLEAR Project Steering Committee members have Project Steering Committee members have a right to use these slides in their a right to use these slides in their presentations. However, they do not have presentations. However, they do not have the right to remove this copyright or to the right to remove this copyright or to remove the “prepared by….” footnote that remove the “prepared by….” footnote that appears at the bottom of each slide.appears at the bottom of each slide.

Prepared by James R. Burns