In the mid-1990s there was a shift in the literature away from the learning organisation towards the new notion of knowledge management. This shift built on existing themes of people management but there was an increased call to integrate emerging themes of IS/IT and intellectual capital. Lena Aggestam (2006) has examined the two literatures looking for similarities and differences between them. Her analysis based on keywords is shown in Table 6.4.
Table 6.4 Keywords in the learning organisation and knowledge management literatures (Aggestam 2006)
Keyword LO: ‘an entity’, which requires KM
KM: ‘a process’, which assumes a LO
Culture A LO has a learning culture. (e.g.
Personal Mastery, Team Learning, Mental Models)
Culture constrains the efficient use, because KM is carried out by individuals Leadership/management Leadership fosters the culture Management has a central
role, but acts within a culture Vision A shared vision is necessary KM must have a vision Work processes A LO integrates attention to every
aspect of knowledge
KM must be integrated Organisational learning A LO is good at OL, OL is a
collective cognitive process
Knowledge is the result of OL External factors Must meet these demands –
Internal factors Must meet these demands Constrains the efficient use, e.g. culture and IT
System’s thinking How a LO thinks about the world –
Organisational memory – E.g. data repository
Technical – Is a prerequisite
Chapter 6 / The learning organisation 177 The learning organisation is conceptualised as managing external factors such as cus- tomers and competitors, whereas knowledge management is about managing internal factors within an organisation. In this sense, the learning organisation exists at a higher level of abstraction, whereas knowledge management exists at the level of work pro- cesses. The learning organisation is the overall organisational system whereas knowl- edge management is a sub-system within it.
Organisational memory has a much greater prominence in the knowledge manage- ment literature. In its explicit form it is captured in a variety of information systems and, in its tacit form, it resides in stories and narratives within organisational com- munities. The learning organisation literature places less emphasis on organisational memory except as a subset of organisational learning.
The learning organisation literature does not really engage with the information systems aspects of learning and consequent development of intellectual capital. This oversight may be historical. Much of the theoretical underpinnings of the learning organisation started way before information systems and Web 2.0 technologies gained prominence as important artefacts to mobilise knowledge and aid learning. A useful theoretical contribution to the literature would be an integration of human and techni- cal perspectives at the level of a learning organisation.
CASE STUDY
Takeo Fukui, CEO of Honda, met Masaaki Kato, CEO of Honda R&D, along the corridor. They hadn’t seen each other for over a month even though their offices were less than 50m apart.
‘Have you got time for a quick tea and a chat?’
asked Mr Fukui. ‘Yes of course, my morning meeting’s been cancelled! How serendipitous!’
replied Mr Kato. ‘What’s the latest in battery technology? I’m mindful that General Motors have invested heavily in battery technology espe- cially with their new Chevrolet Volt,’ enquired Mr Fukui. Mr Kato was clear about the use of 100- volt Nickel Metal Hydride batteries on Honda’s new ‘Insight’ petrol-electric hybrid car. He added
‘But though lithium-ion batteries pack more ener- gy than the nickel-metal hydride power sources found in hybrids like Toyota’s Prius, they would not satisfy most consumers because they are cost- ly. Lithium-ion batteries still hold less than half the energy of gasoline as measured by weight.1 Mr Kato insisted that the major challenge with electric and hybrid cars was the range, power and reliability of batteries. He joked that if their Honda Accord was purely electrically driven,
it would require more than two tons in batter- ies. He saw the future of Honda in inexpensive hybrid compact vehicles rather than the more expensive electric vehicles favoured by their com- petitors. As ever, Mr Fukui was clear that Honda’s future competitiveness lay in its knowledge and ability to learn. At present, this learning was focused on battery technology with predictions that different types of electric vehicles might command between 10–25 per cent of the global automotive market by 2020. He asked Mr Kato to reflect on their overall knowledge and learning processes at Honda and if there were any grounds for improvement.
Honda is the world’s leading manufacturer of motorcycles and power products and a global leader in automotive manufacturing. The com- pany has over 23 million customers globally and produces a diverse range of products from scooters to cars and humanoid robots. Honda has revenues of $94.8 billion and margins of around 9 per cent. It had spent $9.5 billion on research and development in 2008 and intended to increase this to $10 billion in 2009. There is a
Honda (Japan)
➨
distinct ‘Honda Way’ in terms of the firm’s val- ues and ways of doing things. This is typified by their entry into the car market from the motor- cycle market in 1963 in Japan despite opposition from many government departments. There is a certain air of defiance in their attitude. Another example is their entry into the US car market in 1969. They capitalised on their Honda Civic in the oil crisis of 1973 when there was a greater demand for fuel efficiency rather than traditional gas-guzzling American cars. They took the risk of manufacturing their cars in the US with a small group of suppliers who lacked their own US plant. Subsequently, the US has become their largest and most profitable market. There is a commitment in Honda to create products of the highest quality at an acceptable price. At most meetings, workers will reflect on ‘What would the customer want us to do?’.2
An interesting aspect to Honda’s approach is their use of slogans. In 1978 they had used the slogan ‘Let’s Gamble’ for the development of a concept car when they felt that their Accord and Civic cars were becoming outdated. A young design team, with an average age of 27, was charged with coming up with a concept car that was fundamentally different from pre- vious Honda offerings at an inexpensive (but not cheap) price. The team coined another slo- gan ‘Theory of Automobile Evolution’ to help them explore how cars may evolve if they were like organisms. The team answered this slogan with another slogan ‘Man-maximum, machine- minimum’ to show that they wanted to tran- scend conventional perceptions of cars. They transformed this slogan into a sphere, as the sphere gave the customer the greatest level of comfort and used the least space on the road.
Soon this figurative language and reasoning led to the formation of the Honda City, an innova- tive urban car.3 At a global level, Honda brands its products with a slogan ‘Power of Dreams’.
Honda’s success has been in its ability to allow its engineers to play with and experiment with products and ideas. On one level, this can appear entrepreneurial, and on another quite quirky. For example, Honda’s engineers have developed a four-foot humanoid robot called ‘Asimo’ that can balance on one foot, recognise faces and distin-
guish between different sounds. The assumption is that these robotic features may have applica- tions in other parts of their business. Honda’s R&D engineers are fiercely independent and tend to avoid engaging in alliances with other organ- isations. Even though they are a subsidiary of Honda Motors, they have provided CEOs for the main organisation since its inception in 1948.
The lack of direct consumer orientation at Honda R&D has led it astray on the odd occa- sion. For example, Honda launched a hybrid car called ‘Insight’ in 1999 and was the first car to market in the US. However, it was the Toyota Prius that captured the giant share of the hybrid market, selling over 180,000 cars in 2007. Toyota Prius was a conventional small car whereas the Honda Insight had a bizarre appearance and lacked a back seat. In 2006 Honda’s Insight was withdrawn from production.4
Training is combined with personal coaching at Honda under the corporate guise of ‘talent management’. The rationale is to improve the potential of each employee rather than just the stars. It is ultimately about behavioural change rather than attendance at training courses. In the UK, talent management is based on a structure of 10:20:30:40. Each figure represents the quantity of resources to be expended on talent manage- ment activities.
• Ten per cent of resources are to be spent on finding the right coaches with high levels of persistence and passion to avoid future failures.
• Twenty per cent of resources to be spent on training employees on coaching and allowing them to take responsibility for change and their own training.
• Thirty per cent of resources to be spent on coaching after their training courses to ensure behavioural change. Also, for coaching the next batch of corporate coaches in order to dis- pense with the need for external coaches.
• Forty per cent of resources to be spent on inte- grating learning into mainstream activities.5 Mr Fukui reflected that much of Honda’s early success was a mixture of miscalculation, serendip- ity and organisational learning. In the 1960s it was all about the Honda 50 under their ad slogan