How Building a Learning Organization Affects Performance

Posted by Matt • March 29, 2016 (Last modified July 29, 2018) • 4 min read

Does the idea of “change” give you chills or leave you excited? How about “high performing organization”? That probably has a positive connotation. However you might feel about change, businesses are finding that in order to have a high performing team, they must be able to adapt to changing markets, trends, and industries.

Though “high performing organization” is a subjective idea, we will define it as any company who delivers a profit margin between 50-150% above the industry average. While it is a high expectation, it’s probably a goal any company would be happy to meet on the regular.

Unfortunately, hitting those goals isn’t as simple as sending new orders to the sales team. If it were easy, departments like HR and marketing wouldn’t be necessary and burn out would be inevitable. Instead, investing resources in building a learning organization will get your team to their peak performance and positively affect the bottom line.

What is a Learning Organization?

The idea was coined by Dr. Peter Senge and he explains in order to develop a learning organization, you must have these 5 components:

  1. Systems thinking: a framework to gain knowledge of the industry/business

  2. Personal mastery: individual learning

  3. Mental models: company knowledge that can and should be challenged

  4. Shared vision: a common goal

  5. Team learning: ability to work together to meet goals

In more simplistic terms, high performers are invested in always learning, both through development of soft skills and knowledge sharing. No matter the industry, we would be willing to bet your company is constantly dealing with change, whether it be in correlation with technology, the economy or simply a customer’s needs evolving. Those changes, in a high performing company, are catalysts to advancing internal knowledge.

The Real ROI of Adaptation

A learning organization sees change as an opportunity to grow the team’s expertise and meet market needs. Obviously, learning should always be encouraged, unfortunately, sometimes knowledge growth leaves employers feeling insecure. Thinking employees are growing skill sets to eventually use elsewhere is damaging and simply untrue. Employees are far more engaged and loyal to a company who offers or encourages personal and professional development. One study found 66% of people valued learning over monetary rewards and 89% of employees felt it very important their employer supported their growth.

Tactics that support and increase employee engagement should not be overlooked. One UK bank discovered when employee engagement significantly increased in branches, those branches experienced 16% greater profit margin compared to those who experienced an engagement decreased. Educated and supported employees are more engaged and engaged employees produce better profits. Not to mention, when you invest in skills employees are interested in obtaining, you end up with a greater internal knowledge base without having to recruit and onboard new team members.

Making your Team a Learning Org

No longer is anyone in the dark about the ROI of an engaged workforce, but how does a team begin building their learning organization? Focusing on employees is the ultimate first step to just about any process in business, whether it be employer branding or customer loyalty. If you don’t already, make performance reviews two-way conversations. After providing employees with feedback on their work, ask for feedback on company processes. What do they wish would change and what do they believe is working well? Note patterns and common answers to see what might need to be adjusted.

Consider the way performance is currently being handled as well. Sometimes an annual meeting tries to cram too much information. If possible, develop a process that provides continual performance reviews.

“It’s important for us to remember that the process of change doesn’t mean going from a state where something is bad or wrong to a state where something is good. Change can involve going from a state of good to better.”

– Sharlyn Lauby, HR Bartender

There is no such thing as knowing too much when it comes to your industry, audience or product/service. The companies who have survived changing times made continuous adaptation and performance a concern. If you are looking to improve your employees’ performance to meet company goals, check out Trakstar’s performance appraisal tool. It’s easy to start and will give you a whole new look on your team’s capabilities.

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