How organizations learn

Creating smart organizations based on lessons from educational psychology.

Tarmo Toikkanen
May 15, 2017 · 8 min read

While it is clear that individuals need to keep learning to stay relevant in the changing world, the same applies to organizations as well. A smart organization (or a learning organization) can adapt to changing conditions and even lead change by showing the way. Some people like to use the word ‘innovation’. But let’s cut through the hype to what learning organizations really are about.

For an organization to learn, all the people involved with it need to learn. They also need to share what they know to benefit other individuals, teams, and the organization. The whole concept of learning teams or organizations is relatively new even as a research field, but we do know some key principles that allow organizational learning to happen. In this article I’m referring to several episodes of Boss Level podcast, which has excellent insight into management, leadership, organizational culture, and working methods.

Principles for learning organizations

Do not measure individuals. No matter how many speeches are made about team work, if at the end of the day (or fiscal year), individual performance is rewarded, that is what individuals will aim for. To really get teams to learn, the incentives need to reward team performance and team learning. TransferWise is an example of a company with numerous autonomous teams with team level performance metrics.

Amplify casual encounters. Much of the important knowledge in an organization is hidden in the tacit knowledge that usually is not written down, and is only passed on through casual, social encounters. Coffee breaks, watercooler gatherings, and any other possibilities for staff to meet without an agenda are vitally important. Open office spaces by themselves do not help, unless people can freely discuss amongst themselves. Designing physical spaces to amplify social encounters while minimizing the cost of interruptions is not an easy task, since the physical layout is only part of the equation, the other parts being culture, personalities, and atmosphere.

Create organizational memory. As organizations grow, casual encounters are no longer sufficient, and something more scalable is needed. This is often when organizations start using intranet solutions, which mainly do not help at all. Most readers probably acknowledge that an intranet is only used to find the cost claim form, occupational health contact information, or document templates, but not really for sharing and learning from colleagues. Some organizations adopt more agile methods of inter-team communication channels, but they mainly work for reporting on current status and building a holistic picture of the organization’s state. However, they rarely are designed to capture, collect, and enrich the growing understanding of the organization’s key areas of expertise. If the channels being used do not mention and analyse failures that have been made, they are not working.

Work + Reflection = Learning. Any and all work outputs or performances are opportunities to learn. Virtually the only thing needed is the possibility to reflect on the performed work. Reflection allows for learning from mistakes and for new insights to develop. Postmortems are a common method used to ensure process improvement, but basically what is needed is time for the people involved to reflect on their recent work. All agile or lean workflows include opportunities for reflection and learning.

Create a culture of sharing. Organizational learning is dependent on information flow. New insights, lessons learned, and success and failure root causes need to permeate the organization. Not many corporate cultures are built around sharing of failures, asking for help or admitting inadequacy. Frank, constructive, and respectful criticism should be encouraged in all encounters. Yes-men are detrimental, misunderstandings must be confronted. No-one can become out-of-touch with reality.

Cross the organizational boundary. For any field in the world, it is clear that the best expertise is not to be found within an organization’s staff, but rather from competitors, partners, customers, and clients. Therefore the sharing and learning processes need to cross the organizational boundaries, in both ways. Traditionally this has happened through recruitment and poaching of experts from competitors, but by leveraging the existing social networks of staff, sharing can happen in a mutually beneficial manner. Engaging with customers and partners on a continuous interactive learning process is another method of learning what really happens around the company. This is what Esko Kilpi says is the future of knowledge work:

Alternate between complicated and complex. Complexity theory tells us that companies operate in various states of complexity, and the methods of working need to change based on the situation. A learning organization will attempt to control its environment to regularly alter between complicated and complex situations, which will push the organization to learn and adapt. Cynefin is one model to work with complexity theory:

Knowledge building. Any new knowledge or learning that happens in individuals, teams, or organizations, is added on top of existing knowledge. In some cases, new knowledge is a simple addition to existing knowledge structures, which is relatively straightforward. However, often new insights will challenge pre-existing notions and require a restructuring of existing understanding. For individuals, this is a very arduous cognitive process, sometimes referred to as “unlearning”. For organizations, explicit and implicit culture and ways of working need to changed, and this change then needs to happen in all individuals as well. Anyone who has tried to “implement” a new strategy knows this is nearly impossible to achieve.

Methods for learning organizations

Shared expertise. In any well functioning team, the different competence areas of its members will complement each other. In effect, the team’s competences can be seen to be the union of its members’ competences. In short: create multitalented teams. And remember that teams are different from groups run by a manager. Teams will take initiative and responsibility, challenge themselves and learn from their mistakes, create space for casual encounters and time for reflection, and they should be measured as a whole.

Progressive inquiry. The process of knowledge work and that of researchers can be summarised into a process of progressive inquiry. Any new work starts with a question or a problem to be solved. People then propose quick hypotheses to solve that problem, based on their existing understanding and expertise. These are evaluated and quickly dismissed if they do not pan out. Potential solutions are further developed, tested out, and finally the problem or issue is resolved. People from outside the core group are consulted. Often this process leads to deepening questions that would need resolving, but due to limited resources, the process needs to be cut off when a reasonable partial understanding has been achieved. All this should be self-evident, but it’s of course crucial that the organization’s culture and working methods allow and support this sort of open ended problem solving and knowledge building process that pushes teams and structures to complex terrain.

Trialogical learning. When a dialogical process of progressive inquiry also includes the creation and enrichment of artefacts (documents, reports, memos, videos…) we can start talking about trialogical learning, where learning results get inscribed into the artefacts that team members create. They will not be status reports or anything as boring as that. Their purpose is to help the team solve the problems at hand, by externalizing and recording their insights and their process, so that computers and external people can participate in the process. When some thought is given to the artefacts in terms of their value to outsiders after the process, they will form the basis of organizational memory and enable the sharing of new insights across the organizational boundary in a scalable manner.

Related fields of research

Professor Engeström has worked extensively on activity theory and its application to learning organizations and service design [2].

I would be amiss not to mention notable scholars like Carl Bereiter and Marlene Scardamalia on their work on knowledge building [3], as well as Jean Lave and Étienne Wenger on their work on situated learning and communities of practice [4].

Research conducted in Helsinki University in Finland has been tightly coupled with experimentation and study of students and teaching methods in Finnish primary schools, vocational training, and university studies. The research has even influenced policy in Finland, with new pedagogical models such as progressive inquiry projects having entered the curriculum in early 2000s.

Design of physical spaces and furniture to facilitate learning is another field of research and design that is active in Finland. Architects, designers, teachers, and students co-design new schools and learning spaces all around Finland, with Europe’s best experts facilitating these encounters.


When trying to affect people’s actions and thought processes through service design, outcomes usually differ from expectations. Implementing the principles outlined earlier require iterative participatory design with partners and focus groups all around the world in numerous contexts. Gaining this practical understanding is what LifeLearn R&D is doing and constantly improving on.


2. Engeström, Y., Miettinen, R., & Punamäki, R. L. (1999). Perspectives on activity theory. Cambridge University Press.

3. Scardamalia, M., & Bereiter, C. (2006). Knowledge building. The Cambridge.

4. Lave, J., & Wenger, E. (1991). Situated learning: Legitimate peripheral participation. Cambridge university press.

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Sharing Economy of Skills