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Developing a Learning Culture in a Project Organisation. Rhomberg Bau GmbH

Bachelor Thesis 2015 55 Pages

Business economics - Business Management, Corporate Governance

Excerpt

Table of Contents

1. Introduction
1.1 Background
1.2 Aim and Purpose
1.3 Structure
1.4 Delimination

2. The Importance of Organisational Learning

3. Learning in Project Organisations
3.1 Key Characteristics of Projects
3.2 A Learning Model for Project Organisations

4. Applying the Learning Model
4.1 Testing of Experience
4.2 Sharing of Knowledge
4.3 Advancing Learning
4.4 Summary

5. Implementing Learning Disciplines at All Levels
5.1 Learning of the Project Organisation
5.2 Learning of Teams
5.3 Learning of Project Personnel
5.4 Summary

6. Potential Learning Obstacles in Project Organisations

7. Implementing the Concept of Learning at Rhomberg
7.1 Case Study: Re-Implementing the Project Management Plan
7.2 Approach and Methodology

8. Findings and Recommendations for Rhomberg
8.1 Fostering Learning through Individual Experience
8.2 Making Shared Knowledge Available to Teams
8.3 Setting the Foundation for Organisational Learning

9. Final Review and Critical Appraisal

Abstract

This bachelor thesis examines organisational learning concepts in a project environment. Learning of organisations takes place on individual, team and organisational levels. In project organisations these levels carry unique characteristics as to how learning can emerge successfully. Certain learning disciplines help to implement learning on all levels.

This bachelor thesis suggests a learning model for project organisations. It evolves around promoting individual reflection on projects and how it can be turned into knowledge. When knowledge gets shared, project teams make use of it and organisational learning evolves through what is described in this work as double loop learning. The learning model incorporates the testing of whatever has been learned on an organisational context by individual experience in future projects.

All theories and principles get compared to a case study at the civil engineering business unit of Rhomberg Bau GmbH. With their re- implementation of a Project Management Plan, many parallels of this work can be applied in the case study. Individual learning was promoted in the process by critically reflect on the content of the Project Management Plan and use important lessons learned in future projects. The bachelor thesis concludes with a critical review whether learning can be implemented in a project organisation the way it is suggested in this work.

Kurzreferat

Diese Bachelorarbeit untersucht das Konzept einer Lernenden Organisation in einem projektorientierten Unternehmen. Lernen entfaltet sich auf individueller, Team und organisatorischer Ebene. In projektorientierten Unternehmen bestimmen besondere Merkmale von Projekten wie Lernen erfolgreich Gestalt annehmen kann. Gewisse Lerndiszipline helfen dabei eine lernende Kultur auf allen Ebenen zu verwirklichen.

Diese Bachelorarbeit stellt ein Lernmodel für projektorientierte Unternehmen vor. Es verknüpft den Aspekt von individueller Reflexion mit Wissensmanagement. Durch das Teilen von Wissen können Projektteams in Form von Doppelschleifenlernen lernen, was der gesamten Organisation zugute kommt. Das Lernmodel führt den Kreislauf weiter, in dem das auf organisatorischer Ebene Gelernte wieder durch individuelle Erfahrung getestet wird.

Alle Theorien und Prinzipien werden anhand der Case Study des Hoch- und Tiefbaus des Bauunternehmens Rhomberg Bau GmbH beschrieben. Mit der Wiedereinführung des Projekthandbuchs wurde die individuelle Reflexion gefördert, in dem kritisch auf den Inhalt des Projekthandbuchs eingegangen wurde und Lessons Learned für zukünftige Projekte verwendet werden. Am Ende dieser Bachelorarbeit wird kritisch hinterfragt, ob Lernen auf die Art und Weise in ein projektorientiertes Unternehmen implementiert werden kann, wie in diesem Werk vorgeschlagen.

Table of Figures

Figure 1: Learning Model for Project Organisations - Stage 1

Figure 2: Experiential Learning Cycle by David Kolb

Figure 3: The Architecture of Learning Organisations

Figure 4: Single and Double Loop Learning

Figure 5: Learning Model for Project Organisations - Stage 2

Figure 6: Learning Model for Project Organisations - Stage 3

Abbreviations

Abbildung in dieser Leseprobe nicht enthalten

1. Introduction

1.1 Background

Today’s business world is increasingly shaped by the complexity of impacts on the organisation. Strategic and operative decision-making is getting more difficult because of the many interests of stakeholders that place a high demand on senior management. Even frontline management are at the mercy of multiple legal and qualitative requirements that make it impossible to operate like “in the good old days.”

For these reasons the concept of the learning organisation becomes a key success factor for any organisation. In actual fact it potentially could be the difference maker for a business to differentiate itself from another business in the same industry. Hence, it can originate competitive advantages short and long-term turning the business into a great company in the future.

The reference position for organisational learning in this work is based on the company Rhomberg Bau GmbH, a construction business, which operates mainly in Vorarlberg, a state in Austria. Next to the worldwide operations of the Rhomberg Sersa Rail Group, civil engineering at Rhomberg can be traced back to the early days in 1886. Since then, the business was passed through four generations as a family business and added eight additional business units to complete the current product portfolio of Rhomberg.

Due to the nature of the construction industry, Rhomberg is a project organisation, which presupposes that most personnel are employed on projects and actively contribute to the turnover of Rhomberg Bau GmbH. For the sake of this work, only civil engineering activities will be analysed towards certain learning concepts.

1.2 Aim and Purpose

This work aims to analyse learning principles relevant to project organisations. It examines dynamics and characteristics that apply to projects and how projects can be conducted so that profits can be increased and risks of errors diminished. The question of how to best implement learning amidst a high demanding schedule and external influences is essential to ensure that learning can not only be promoted but also become the driving force in a project organisation. Further questions that will be covered:

1) Does learning happen automatically?
2) Are experienced project personnel enough to ensure the success of a project?
3) What steps does a project organisation need to take if it wants to become a learning organisation?
4) How can teams best profit from knowledge created?
5) Are the obstacles to learning greater than the potential benefits?
6) What can Rhomberg take away from the concept of learning?

The thesis, which will be subject to examination, is to combine the concept of a learning environment with the characteristics of a project organisation. The work will critically investigate whether it is true that organisational learning in a project organisation can only have a lasting impact if individual experience is turned into team knowledge, which if appropriately used, leads to organisational learning. It will also determine whether organisational learning needs to be continuously tested by individual experience to complete the ongoing improvement cycle and to re-use the knowledge created in projects.

1.3 Structure

This work will firstly take a look at why learning is important in an organisational context. Some of the most significant definitions of learning from relevant authors will be referenced. Some guidelines are discussed for a project organisation to assess, whether learning has already taken shape in their organisation and whether an organisation can learn to learn.

Secondly, some key characteristics of projects and a resulting learning model for project organisations will be presented, which will underline the thesis. This will build the foundation of the work and explain what needs to be considered in promoting reflection to advance the experience of project personnel, and how knowledge can be efficiently stored and shared. The chapter will conclude by addressing the architecture of learning organisations according to Peter Senge.

An approach to how to implement learning on an organisational, team and individual level will follow in the next chapter. The content will draw on Peter Senge’s five learning disciplines and look at some guiding factors and principles on how to integrate holistic management in a project organisation. In the process the learning model will be refined to build a more solid case underscoring the thesis.

This work will also look at many obstacles that could hinder learning in a project organisation. Every organisation faces different dynamics than other organisations and as a result are more exposed to particular road blocks.

In the final part of this work, the case study of the re-implementation of the CEBU Project Management Plan (PMP) will combine theory with practise. All literature was selected to support a successful methodology to build learning into the business of Rhomberg. Each step of the implementation process points out how Rhomberg aims to learn from past experiences and train project personnel on lessons learned to become an enduring learning company.

The work will conclude with findings and recommendations that should be considered for the future to continue on with a strong emphasis on organisational learning. A critical review will directly present the authors suggestions as to where Rhomberg should put its focus in becoming a learning organisation.

1.4 Delimination

Much of the content of the work is evolved around the authors Peter Senge and David Kolb. Peter Senge predominantly includes systems thinking into the concept of the learning organisation and builds strong cases for companies to build a learning culture. David Kolb, as well as many other authors writes about how much of individual learning is stimulated by experience. His 4-stage experiential learning cycle is an effective method to promote and nurture personal learning.

The work does not consider any technical implementation strategies such as the introduction of new software or the changing of work procedures. It focuses solely on the managerial and theoretical aspects of learning in the context of Rhomberg. Any psychological issues have also been omitted.

2. The Importance of Organisational Learning

There are many reasons why organisations exist. One possible motivation is the belief in a product or service that contributes to the greater good of the human civilisation or makes it easier for organisations to conduct business. Another reason could be the expected profit margins, which promise significant personal gains from a lucrative business model. Some businesses might be established for self-realisation while others get handed down through generations to keep the lineage alive. But what ensures a lasting success in all of the cases mentioned above? How does a start-up turn from a well thought through business venture into an enduringly great company? Many answers can be traced back to the crucial element of learning in an organisation (Baldegger and Julien 2011, p. 136).

Today’s market place is characterised by its dynamics and complexity and therefore the organisational change becomes more demanding (Bratianu and Orzea 2013, p. 2). Customer demands pop-up by emails in an instant with no notice about the short delivery time. Regulatory requirements expose the need for corporate decision making to be instant and precise. Technology can be used as an accelerator to enhance ideas and to adjust precisely and quickly to external and internal changes. Overarching all this is the need to improve productivity and quality of the service provided and the goods delivered. In order to achieve these and other goals a company needs to become clear of its development and application of a concept of learning, in order to transform itself continuously. In other words, a learning organisation needs to make use of lessons learned and previous experience (Riis and Neergaard 1994, p. 392).

The beginnings of authors writing about learning can be traced as far back as the 1930s. At that time, John Dewey in his book “Experience and Education” firstly wrote about theories that can be closely interlinked with today’s literature about individual learning.1 Around two decades later, psychologist George Kelly wrote his widely known book “Personal Construct Psychology” where he introduced the five phases of experiences that build much of the basis for effective learning.2 From the 1970s, culminating with Peter M.

Senge’s book “The Fifth Discipline” in 1990, the concept of organisational learning could no longer be ignored. Since then the importance of learning has also emerged into project organisations due to their high demand of spontaneity and efficiency (Rattay 2003, p. 229).

In order to better understand the importance of learning in an organisation, we will first examine the definitions of organisational learning. In their book “Organizational Learning, A theory of action perspective,” Chris Argyris and Donald Schön define organisational learning as a process where members detect and correct errors. This occurs by restructuring action embedding the results of their inquiry in organisational maps and images (Argyris and Schön 1978, p.116). For the purpose of this thesis this definition will be mostly neglected because in a project organisation such as Rhomberg, learning is about more than detecting and correcting errors. Peter Senge notes that “learning organisations are organisations where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspirations are set free and where people are continually learning how to learn together” (Senge 1990, p. 3). A project organisation will most likely gain more benefits from a proactive approach on learning and developing their project personnel so they are able to contribute as much as possible to the organisation.

Other authors add the aspect of knowledge management into the formula of organisational learning. In order to build deliberate learning habits into an organisation, actions to advance knowledge and understanding need to be promoted (Fiol and Lyles 1985, p. 803). This has special value in project organisations because knowledge acquisition, information distribution and interpretation within the organisation intentionally or unintentionally influence positive organisational change (Templeton et. al 2002, p. 189). If knowledge and lessons learned remain unused project based experiences, there is a high probability of mistakes happening over and over again. David Kolb refers to learning as the process whereby knowledge comes into existence through the transformation of experience (Kolb 1984, p. 41).

Why should a project organisation build learning into their operations?

There are different learning aspects to observe in project organisations. For one-man businesses or smaller organisations it appears to be somewhat easier to learn than for larger organisations (Pedler et. al 1997, p. 67). In small organisations the few employees and supervisors must learn in order to either get the organisation started or to stay flexible in its operational environment. The larger a project organisation becomes the more structures, processes and systems are required to effectively run it (Rattay 2003, p. 33). Interestingly, individual members of any organisation will learn regardless of whether they wants to or not. It learns on a daily basis through operations and interactions with its external environment, for example governmental agencies, competitors, suppliers or customers (Riis and Neergaard 1994, p. 393). Project personnel are continuously making efforts not to make the same mistakes over and over again, which could potentially lead any business into bankruptcy.

Much potential of building learning into the project organisation is when all members want to learn from mistakes so that over time inconsistencies and unintended consequences are discovered before actions are implemented (Maani and Cavana, p. 109). Where learning is promoted, people’s efforts are aligned and their energy directed. By equipping project personnel with new tools and competencies, it expands their capacity and helps teams to start to work towards performing at their best (Flood 1998, p. 266). Learning from past mistakes requires active leadership and decision-making. It is often made easy for project personnel to learn from their mistakes when plans, processes and work patterns are as transparent and authentic as possible. As a result failures are no longer seen as bad and turn into the opportunity to create best practice examples for everyone in the organisation to follow (Hinz and Rey, p. 30). This mindset shift carries the potential to increase results because the culture of “I am allowed to make mistakes” enhances the development of learning in a project organisation.

On an organisational level it is absolutely vital for project organisations to develop their methodologies on how to handle their projects professionally. The understanding of the three levels of organisational learning indicates the importance of why learning is crucial (Rattay 2003, p. 283-285):

Level 1: On this level all information are held by a few project managers. Due to a lack of written processes the organisation is dependent on individuals and project documentation needs to be developed from scratch every single time. There is no appropriate knowledge retention and therefore learning is impossible.

Level 2: Tasks and roles are defined for a single project but there is no big picture thinking. It is unclear how individuals contribute to the overall success of the organisation. Therefore they lack the appeal and incentives to develop in a transparent project environment and exploit the best possible learning value.

Level 3: Projects are conducted according to a set of methods in order to use synergies and experiences. There is a high extent of awareness of goal setting and how customer demands fit in the overall company strategy. Due to the systematic approach of project management, employees share the vision of the organisation and enhance the culture by autonomous work habits. Project organisations are continuously improving their work practices and therefore making the most of potential learning opportunities.

The further up the hierarchy of levels that a project organisation moves, the more the concept of learning has emerged in the organisation.

Can a project organisation learn to learn?

These days many project organisations have understood the importance to keep the organisation on course and avoid fatal errors. As a result they have become proficient in developing an understanding about their operative, social and governmental environment, setting appropriate objectives and evaluating the performance towards these objectives (Morgan 2006, p. 84). This approach can many times limit the project organisations as it gets stuck in single loop learning, which will be discussed at a later stage. For a project organisation to learn to learn effectively it first needs to undo, or unlearn, what it has always been doing (Kogut and Zander 1991, p. 385). A key behaviour is to move away from current practices and purposefully create new ways of doing things. As this evolves more and more in an organisational context, the organisation moves naturally towards learning. Hence, knowledge is being created, retained and transferred in projects and carried across the organisation by aligning its environment and strategic outlook (Fiol and Lyles 1985, p. 804).

Peter Senge identifies seven learning disabilities in his work “The Fifth Discipline.” One of them is especially relevant as it is a deadly “learn-to-learn- killer” in project organisations. He describes learning from experience as a powerful learning tool, yet, questions the dilemma when a project manager no longer experiences the consequence of his or her action and decision making (Senge 1990, p. 23). Depending on the types of projects, a project manager works on several projects at the same time, which is especially true for construction businesses. Once a project is completed the transition to the next is usually very short, which implies that any problems created never have to be fixed and therefore the learn effect is completely missing.

Thus, there are many learning obstacles for project organisations and if they are not mindful of the long-term consequences of neglecting to do something about gathering and reusing knowledge, it can harm the organisation for its future success. Before looking at learning in the context of a project environment, it must be recognised that learning to learn is possible. However, it takes effort to challenge the status quo and commitment to manage the tension generated through the learning process. Before the new can come, the old, most of the time, needs to go. “Old business” has to make room for “new business”. The “Don’t change” will be superseded by the “Rise up” (Morgan 2006, p. 95).

3. Learning in Project Organisations

Learning in a project environment has somewhat unique learning traits compared to, for example, functional organisations. Much of the value creation happens in and through projects. As a result much of learning happens in projects, too. In order to get a better understanding of the nature of a project organisation, a few key characteristics need to be identified and how they fit into the overall picture of learning.

3.1 Key Characteristics of Projects

A project can be defined as a “temporary endeavour undertaken to create a unique product or service” (Harrington et al. 2000, p. 136). Every worksite, not only at Rhomberg, has an end date where the building owner wants his building project ready for the desired use. Hence, projects are timely limited and very complex in their execution due to the high customer demand and because of its originality (Rattay 2003, p. 22). The time factor has increased in importance over the last decade. Building owners want their projects delivered in a shorter period of time than ever before. The pressure of this short time window places high demand on project personnel. Additonally, projects are new and unique in their scope and purpose (Project Management Institute 1996, p. 5). The building might be alike in the way the concrete is being delivered and the building is being built storey by storey, but the storage area on the worksite can differ, the season or weather conditions can look different from day to day, labourers get moved between worksites, external parties such as subcontractors or stakeholders ask for unusual things from project personnel. There is knowledge to be managed and learned in all aspects of the project.

Key characteristics of projects are, but not limited to, the following (Harrington et al. 2000, pp. 136-137; Rattay 2003, pp. 21-22; Dewhirst 2001, p. 160; Schreckeneder 2011, p. 13):

1) Size

A project is defined by its size and depending on the scope and extent, additional importance is placed on it. This can result in the allocation of additional resources such as material, plant or labour in order to meet the projects requirements and to deliver the expected outcomes.

2) Time

Projects are executed in long or short periods of time. At Rhomberg a large project can take up to five years from the project start to the final hand over, however, time is always limited (Pircher 2013, p. 116). Time is of high importance due to the contractual penalties that can result in the delay of the project and, therefore, carries the risk of financial difficulties in a project organisation.

3) Cost

A successful project execution implies completion within the budget. Many times unforeseen circumstances can cause significant overruns. Many times a project in the construction industry is initially estimated based on many unknown aspects (weather conditions or ground conditions etc.). These uncertainties carry high risks to the overall financial results.

4) Quality

Quality can often be measured by customer and project team satisfaction. There is a high chance if the desired result of a project is achieved, that the morale of the project personnel will be high. Additionally, the quality of the project execution can many times be interlinked with successful results of time and costs measures.

[...]


1 This book will not be further discussed in this thesis. For information please refer to Dewey, J. (1938) Experience and Education Kappa Delta, Collier, New York.

2 This book will not be further discussed in this thesis. For information please refer to Kelly, G.A. (1955) Theory of Personality : The Psychology of Personal Constructs W.W. Norton, New York.

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Title: Developing a Learning Culture in a Project Organisation. Rhomberg Bau GmbH