Systems Thinking and The Learning Organisation
Imagine walking onto the factory floor of Toyota—where every sound, movement, and slight improvement tells a story. At Toyota, the challenge was enormous: maintaining continuous improvement (kaizen) across a massive, global operation without falling into routine or stagnation.
Here's how they did it:
When workers spotted a misalignment on the assembly line, instead of simply fixing it and moving on, the team gathered in a special "war room" called an Obeya (Japanese for "big room")¹. In this room, managers and staff would discuss the issue using a method called Toyota Kata². Rather than dictating a fix, managers acted as coaches. They asked questions like, "Why did this happen?" and "What can we learn from this?" This approach is known as double-loop learning—not only solving the problem but also questioning the underlying processes and assumptions³.
Teams discovered better ways to work by experimenting with minor changes, such as tweaking the layout of an assembly station. They tested their ideas, measured the results, and then shared their findings with teams across the globe. Toyota's suggestion system, known as the Toyota Creative Idea and Suggestion System (TCISS), encouraged employees to generate ideas. As of 2011, Toyota had reached a cumulative total of 40 million ideas submitted since the program's inception in 1951⁴, and as of 2024, the Toyota brand consistently ranks #1 in dependability studies (147 problems per 100 vehicles vs. the industry average of 190. 135 problems per 100 vehicles for its luxury brand, Lexus)⁵.
Toyota's story is a powerful example of a learning organisation. One where a culture of continuous learning and a systems approach can turn everyday challenges into opportunities for lasting innovation.
Organisational Learning
Think about how you learn from your own mistakes and successes. Organisational learning is the process through which a company as a whole learns and grows from its experiences. It's not just about patching up errors; it's about creating a culture where every lesson counts. Remember the Toyota story?
Organisational learning means turning individual insights into shared knowledge that can improve the entire organisation.
The ideas popularised by Peter Senge in The Fifth Discipline⁶, this edition's recommended book, outline what makes up a learning organisation:
Personal Mastery: Each person commits to ongoing learning and self-improvement.
Mental Models: We question our assumptions to see if there is a better way to do things.
Shared Vision: A common purpose aligns everyone's efforts.
Team Learning: When teams learn together, they develop creative solutions beyond what individuals can do alone.
Systems Thinking: The "fifth discipline" that binds the others together, ensuring that improvements in one area support the whole system.
More on Systems Thinking
Now, imagine a spider web. Pull one thread, and the whole web vibrates. Systems thinking is like that—it's the art of seeing how every part of an organisation is connected. Rather than looking at problems as isolated events, systems thinking helps us understand the whole picture⁷. It shows how a slight change in one area can affect many others. For example, changing your IT system might improve performance and influence customer service, security, and employee satisfaction - changing one node can affect other nodes. Systems thinkers use different concepts and tools to think about systems⁸.
Why This Matters for Leaders
Drawing on insights from the 2008 Harvard Business Review article "Is Yours a Learning Organization?" the authors emphasise that building a learning organisation requires more than a clear vision or simply lots of training. They introduce a measurement tool structured around three building blocks essential for organisational learning and adaptability: a supportive learning environment, concrete learning processes and practices, and leadership behaviour that provides reinforcement⁹.
For CIOs, today’s digital world is full of complexity. Systems thinking and organisational learning offer concrete approaches to address key challenges and drive strategic improvements across your IT organisation.
Some practical approaches to address today's challenges include:
1. Breaking Silos
IT departments often work in isolation from other parts of the business. This separation can lead to miscommunication and inefficiencies.
CIOs can break down these silos by mapping out how different IT systems and business units interact. When every part of the organisation is seen as interconnected, decisions in one area are made with the whole system in mind. This holistic view helps prevent problems from going unchecked. For example, when the architecture review board granted an exception in a former organisation, we ensured that this exception was tracked by the enterprise risk management function and fully integrated as part of the risk management process. That way, we followed a holistic approach to handling exceptions across the enterprise.
2. Boosting Cybersecurity
Cybersecurity is no longer just about installing firewalls but protecting a web of interconnected systems. And by web, I don’t mean the World Wide Web. With the rise of generative AI, hybrid work and other trends, vulnerabilities can arise.
A systems view of cybersecurity means understanding how data flows between departments and identifying weak links before they become serious threats. Chaos engineering, where teams practice responding to threats, helps build a robust learning culture¹⁰. Each incident becomes a learning opportunity that refines and strengthens the defence mechanisms across the organisation, building resilience.
3. Developing Talent
New technologies are emerging faster, and trends are impacting the future of work. For example, 39% of skills that were cutting-edge yesterday might be outdated tomorrow¹¹. This implies that professionals need to learn new ways of working almost continuously.
A learning organisation promotes coaching, team collaboration, and continuous training. When managers act as coaches, like Toyota's approach with Toyota Kata, they guide employees through regular, iterative learning cycles. This not only improves individual skills but also builds a more adaptable team that is ready to meet future challenges head-on.
CIOs can transform their IT departments into dynamic, adaptive units by embracing systems thinking and organisational learning strategies. This holistic approach addresses today's challenges and builds a foundation for sustained innovation and growth.
Sticking with the context of IT function, systems thinking ensures people don't make quick fixes in isolation. Instead, leaders evaluate every decision within the context of the entire system (the enterprise), which helps prevent unintended consequences. Organisational learning then captures the feedback from these decisions, enabling continuous improvement. This balance keeps the organisation agile while building long-term resilience.
Further Reading
Lean Enterprise Institute. Obeya. Retrieved January 27, 2025, from https://www.lean.org/lexicon-terms/obeya/
Mondisa, J. TK Homepage. University of Michigan. Retrieved January 27, 2025, from http://public.websites.umich.edu/~jmondisa/TK/Homepage.html
Ballé, M. Unearthing the Mystery of Toyota’s Success. The Systems Thinker. Retrieved January 27, 2025, from https://www.thesystemsthinker.com/unearthing-the-mystery-of-toyotas-success/
Clifford, J. (2014). Power to the People – Toyota’s Suggestion System. Toyota UK Magazine. Retrieved January 27, 2025, from https://mag.toyota.co.uk/toyota-and-the-power-of-suggestion/
J.D. Power. (2024). 2024 US Vehicle Dependability Study (VDS). Retrieved from https://www.jdpower.com/business/press-releases/2024-us-vehicle-dependability-study-vds
Senge, P. M. (2006). The Fifth Discipline: The Art and Practice of the Learning Organization (Revised ed.). Currency Doubleday.
University of Phoenix. What Is Systems Thinking? Retrieved January 27, 2025, from https://www.phoenix.edu/blog/what-is-systems-thinking.html
Ugwu, K. (2025). Everything You Know and Everything Everyone. LinkedIn. Retrieved from https://www.linkedin.com/posts/kainepro_everything-you-know-and-everything-everyone-activity-7274780975413309441-dCAy/
Garvin, D. A., Edmondson, A. C., & Gino, F. (2008). Is Yours a Learning Organization? Harvard Business Review. Retrieved from https://hbr.org/2008/03/is-yours-a-learning-organization
Principles of Chaos. (2019). Principles of Chaos. Retrieved from https://www.principlesofchaos.org
World Economic Forum. (2025). The Future of Jobs Report 2025. Retrieved from https://www.weforum.org/publications/the-future-of-jobs-report-2025/
Recommended Book
In this newsletter edition, I highly recommend The Fifth Discipline for anyone interested in deepening their understanding of systems thinking and organisational learning. Peter Senge breaks down complex ideas into understandable parts, making them accessible even for those new to the topic. His book describes personal mastery, mental models, shared vision, team learning, and systems thinking as a framework that shows how all these concepts work together to drive continuous improvement. Even decades after its publication, the ideas in The Fifth Discipline remain highly influential, especially in a world where change is the only constant.
Get it on Amazon.
The Fifth Discipline by Peter Senge
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