New role for leaders

Today’s leaders must build learning organisations.

The Fourth Industrial Revolution is on its way. It combines digital technology with Artificial Intelligence which, in future, will combine with nano-technology and bio-engineering. This will spawn new industries and new types of organisations with new theoretical underpinnings. The new types of organisations that will emerge will be learning organisations, because only they focus on new learning, new skills and new forms. Indeed, there are learning organisations existing even now: they are dynamic and learn new skills. Let us consider the case of Arvind Mills, which was established in 1931 in Ahmedabad, Gujarat, India. Although most of these mills are gone, Arvind Mills still survives because it adopted some of the attributes – though not all – of learning organisations.

No learning organisation goes very far without creating a vision. However, Arvind Mills was one of the few companies which created a vision early in its development. In my study on learning organisations, it was found that during the period between 1991 and 2000, Arvind Mills developed a global orientation. In fact, Arvind Mills followed an idea of “core competencies,” which led to a focus in the denim business. Arvind Mills created a vision to achieve global domination in selected businesses around its core competencies. Furthermore, Arvind Mills adopted traditional mechanisms of meetings, bulletin boards and training programmes to spread its vision.

Moreover, Arvind Mills adopted modern HR policies and practices and adopted a policy of job enrichment by increasing the areas of authority of managers at all levels. Arvind Mills also adopted a policy of “benchmarking” and decided to be a truly multinational company through innovation, quality and development, and to be a world-class company. Arvind Mills also adopted a systems view of management in its organisation. A learning organisation which is in need of the Fourth Industrial Revolution is not built overnight.

Peter Senge, the pioneer in the idea of learning organisations, in his book, The Fifth Discipline (1990), has laid down five key concepts for the fruition of learning organisations:

1. Systems Theory: Senge has developed the idea of “systems archetypes” and mentions that systems have their own in-built limits to growth;
2. Personal Mastery: This involves continuous learning to see current reality more clearly. The resulting gap between “vision” and “reality” produces the “creative tension” from which learning emerges;
3. Mental Models: These are the basic assumptions of organisations. Managers must reorganise the pattern of thinking at organisational levels and should escape from the traditional patterns of behaviour;
4. Shared Vision: Senge argues very subtly when he says that organisational vision is shared when team members do not see these visions as separate from the self; and
5. Team-Learning: This demands dialogue and discussion. Dialogue means exploration and discussion means the opposite process of narrowing down the best alternative available.

Arvind Limited in pursuit of core competence

Recently, Arvind Limited formed a joint venture with US-based Adient to develop, manufacture and sell automotive fabric in India. This joint venture company will manufacture high quality performance fabrics for automotive systems at Arvind’s manufacturing facility near Ahmedabad. The joint venture will benefit from synergies between US-based Adient and Arvind, each bringing industry-leading technology and designing capabilities in their respective fields. This new company will provide Indian and global auto-marketers with product quality and innovative solutions in fabric, enabling them to deliver new levels of comfort, aesthetic variety and design versatility to end users in India. Through new technologies, collaborations and partnerships, Arvind Limited is transforming itself by exploring non-traditional but innovative uses of fabrics through its extensive manufacturing capability.

The Mahindra Group

The Mahindra Group is also fulfilling a part of its learning organisation initiative through constant innovation, technological collaborations and joint-ventures. It is accepting a challenge to develop a small electrical vehicle which is the demand of the Fourth Industrial Revolution. In fact, in 1995 – when Ford first entered India – it had a 50-50 joint venture with Mahindra group under which the two produced a sedan called Escort.

However, this joint-venture was dissolved in 1998; but Mahindra group is making a new start with Ford Motor Company to co-develop mid-sized and compact SUVs and a small electric vehicle. The product that would be developed will be targeted towards India and other emerging markets. This will be a win-win situation because the alliance aims to focus on leveraging the benefits of Ford’s global reach and expertise and Mahindra’s scale in India. This will not only help Ford to expand its distribution network in India, but will also help the Mahindra group in gaining prominence in other emerging markets too, where Ford has a strong distribution chain. Although it is not explicitly stated by Peter Senge, leveraging natural strengths through synergistic partnerships must be a true strength of learning organisations.

Hero Motor Corporation

Hero Motor Corporation is the world’s largest two-wheeler manufacturer. This organisation has laid the foundation for its eight manufacturing plants at Chitoor in Andhra Pradesh, India, the first in the Southern region. With this new plant, the company will achieve the milestone of crossing the ten million units of production record per annum. Spread over 600 acres, the facility will have an installed capacity of 1.8 million units per annum. The construction work will begin soon and the plant is expected to go on stream by December, 2019. The plants expected to provide jobs to over 2,000 people directly.

This organisation currently has five plants in India and one each in Columbia and Bangladesh. Furthermore, this organisation has a combined installed capacity of 9.2 million units per annum which is the highest in the country. After the Andhra Pradesh plant begins to work, the installed capacity will touch eleven million units per annum. Hero Motors Corporation has been the world’s largest twowheeler manufacturer for 17 years in a row. The accomplishments of this organisation indicate successful teamwork, systems thinking and a vision, which are the ingredients of a learning organisation. This company has constantly learned for the past 16 years and has become the world’s largest two-wheeler manufacturer. This is not possible without its employees sharing the vision of Mr Munjal, CEO and Chairman.

Fourth Industrial Revolution

Klaus Schwab, the founder and executive chairman of the World Economic Forum, wrote a book entitled The Fourth Industrial Revolution. In this book, the he indicated that the Fourth Industrial Revolution, which has recently started, is driven by the fusion of physical, digital and biological innovations. This revolution would be more disruptive comparable to the changes brought about by the first three Industrial Revolutions. The essence of the fourth revolution would be Artificial Intelligence, gene sequencing, nano-technology and the Internet.

Indeed, Mr Schwab advised business leaders to re-orient their processes, organisations and thinking to tackle the challenges thrown up by the Fourth Industrial Revolution. It seems that only learning organisations will survive the Fourth Industrial Revolution because learning organisations will be better at learning than robotic learning. In fact, it is time that today’s managers re-open the book, The Fifth Discipline, by Peter Senge (1990) in order to understand and apply the dynamics of team-learning, vision sharing, systems thinking, personal mastery and building new mental models by challenging old mental models. Indeed, it is easy to learn from this book because the author has operationalised each of the abovementioned concepts of learning theory so as to enable leaders to put this into practice.

Dr Archan Mehta has a PhD in Management and is based in India. He has over 10 years of work experience in sectors like Media, Food Services, Hospitality, Education, and Security. He is currently a Consultant.

This article appeared in the September 2018 issue of HR Future magazine.

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