In simple terms, a learning organization is an accumulation of individuals who are good at learning. Learning is intrinsic to being human, so what’s the real difference between a learning organization and a traditional organization? One word: culture.

Organizational culture is defined as the environment created by the core values and beliefs of the organization in action. Culture guides the way decisions are made, employees operate, and people are rewarded.

For example, the culture of the traditional organization rewards individual performance, fostering competition between individuals working toward individual goals. In these organizations there is a “right way” business should be conducted—only when that way is followed and personal performance is rewarded will the organization be successful. This leads to employees thinking that if they follow the rules and do their job, they will be successful. Realizing that problems are viewed as a symptom of poor performance, employees in this culture are likely to avoid or hide problems.

By contrast, the culture of the learning organization rewards organizational performance, fostering collaboration among individuals working toward common goals within a continuously improving system. There is no “right way,” and problems are seen as opportunities for learning and improvement.

In this environment, the organizational mindset is that when collaborative performance is rewarded, the organization will be successful. The employee mindset is that if the organization is effective, they will be successful. The challenge for the employee is to uncover problems and implement new solutions as needed.

Realizing that each solution leads to new challenges to be solved, employees are encouraged to quickly identify problems and implement solutions. This empowers the employee, improves the process, and keeps the organization competitive.

What’s a learning organization look like?
In theory, the two cultures are easy to distinguish, but in the real world, it’s hard to envision what the culture of a learning organization looks like or how to get there.

In our work with organizations of all types, we see firsthand the impact of culture on performance. We also see it reflected every time we engage an organization’s employees in the discovery learning process using a business simulation.

In the simulation, participants are employed by a plane manufacturer and given the opportunity to sell as many planes as they can make, provided they meet quality and performance standards. Each participant plays a role in the process (inspector, tester, fabricator, supervisor, etc.)

The simulation consists of three production runs, reflecting an evolving organizational culture. After each run, group members evaluate their efforts by production cost, quality, customer satisfaction, time to market, and profitability. Serial interventions from the customer complicate the work redesign and production process.

In the first run, participants use a traditional production design, simulating the competitive culture of traditional organizations which operate within clearly defined functions. In the first evaluation, participants, startled by their poor performance, point fingers and blame others for mistakes that produced planes that didn’t meet standards.

Participants discover that this attitude is counter-productive to achieving organizational goals. They quickly begin to understand that the true culprits are: a lack of clearly defined common goals, a system that rewards individual performance, a lack of awareness of how the pieces fit together, and a lack of timely feedback when problems occur.

Based on this discovery, participants make a second production run working within a system they helped design. As they take more ownership of the process and the adjustments required for success, the door for learning is opened. They experience firsthand the positive impact of employee involvement and attitude on quality, cost, commitment, and morale.

Participants go at it again within a system of continuous improvement, simulating the culture of a learning organization that operates on the assumption that the process can (and must) always be improved. During this final run, the group makes the critical shift from reacting to problems to viewing them as opportunities for improvement.

By taking ownership of the process without fear of being blamed for mistakes, the group also takes ownership of any needed change. As a result, problems are identified faster, proper feedback is applied, changes are easier to implement, and performance goes through the roof.

Start with a culture survey
You can’t expect to change an organization’s culture overnight, but a good place to start is with a culture survey. A good survey will highlight the relationship between culture and performance, which can help you decide on a few important things to measure. Once identified, you must measure your chosen indicators honestly. Honest reflection is the core building block of a learning organization; without it, there can be no learning or improvement.

Remember that culture is a result of the organization’s values in action. As demonstrated in the discovery learning process, the most important cultural change is the relationship to problems. When people feel afraid, threatened or blamed, they learn to hide, deflect and defend—behaviors that are incompatible with learning. When they are rewarded for identifying problems, opportunities for learning are identified without fear, enabling quick and appropriate corrections.

To cultivate this behavior, leaders must make clear that it’s okay to reveal problems and let them become learning opportunities for the entire organization. Once it’s apparent that problems aren’t something to hide, solutions can be quickly devised and dispersed, minimizing any impact on performance.

When individuals can work without the stress of being blamed for the problems they expose (a culture of continuous learning), they aren’t afraid to try different approaches (innovation), ask others for help when necessary (collaboration), and do their best (improve performance) to achieve the goals of the entire organization.

But the best benefit is this: when the culture supports these behaviors, work becomes less stressful and a whole lot more fun (greater employee satisfaction) for everyone involved. And because we know that employee satisfaction positively correlates with product quality and customer satisfaction, we can clearly see the impact of culture on the bottom line.

Chris Musselwhite is president and CEO of Discovery Learning, Inc. and author of Dangerous Opportunity: Making Change Work (Xlibris, 2004). He can be reached at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .