Learning Organizations: The BAA's Terminal 5 Project

Introduction: Globalization and Organizational Learning

In the globalized environment of today, organizations must continually learn and adapt. This is particularly true as organizations now face intense competition from firms outside their geographic region. Learning organizations are characterized by their ability to continually learn and innovate. Competitors, particularly those from emerging markets, are learning from their more developed counterparts in the United States and Europe. Aspects such as product know-how and product innovation continue to come under intense pressure from emerging communities. This pressure results in further innovation from market-leading companies to better maintain their overall competitive position.

One such example of a learning organization is the British Airport Authority. This organization displayed many of the common characteristics of a learning organization to help facilitate its growth. The BAA displayed all five features of a learning organization: facilitating systems thinking, accomplishing personal mastery, utilizing mental models, sharing its vision with all parties, and engaging in team learning. This case study demonstrates how these principles can be applied in a complex, large-scale organizational context.

The Terminal 5 Project and Public-Private Dynamics

The British Airport Authority, in an attempt to facilitate global trade, wanted to expand its airports. The BAA created the Terminal 5 project to help improve operational efficiency while also facilitating seamless travel between domestic airlines. This project was unique as it combined various elements of public and private sector dynamics. In some instances, the relationship between the general public, the private sector, and the public sector can be at odds with one another. This unique approach was the catalyst for creating the overall learning organization at BAA.

The British Airport Authority faced significant organizational challenges in undertaking this ambitious project. For one, the organization has a higher level of bureaucracy within its structure. Learning was difficult because the large amount of corporate layers did not allow pertinent information and knowledge to flow properly. As a result, corporate decisions or project alterations generally require more time compared to private sector counterparts. Additionally, the government is generally not in the business of making profits, whereas private sector counterparts are. Furthermore, the BAA may not understand the complete inner workings of the Terminal 5 construction project as well as the private contractors do. This created complications as it related to the implementation of certain projects.

The Balanced Scorecard as a Learning Tool

To help alleviate the concerns mentioned above, the BAA developed the balanced scorecard to facilitate learning and innovation within the organization. This scorecard allowed the BAA, a governmental organization, to learn and adapt with its private sector partners. A quadrant within the traditional scorecard is "Financial Focus." The metrics used to evaluate this metric will vary between a private contractor and a government entity. Another quadrant is "Internal Focus," which is also different between organizations. As such, the BAA could learn and alter the overall plan to better coincide with the objectives of all involved parties.

From a training and development perspective, the organization was in a better position to collaborate with independent third parties on a shared vision. This shared vision ultimately allowed both the government and private enterprise to learn from one another. This shared perspective better allowed the human resources department to align incentives, learning, and training to achieve the overall goal of the BAA.

Systems Thinking, Shared Vision, and Collaboration

In addition to the shared learning and systems thinking mentioned above, a large amount of collaboration was needed to successfully implement the project. The project was delivered by BAA working in partnership with suppliers and the airline operator British Airways. By 2008, around 50,000 people—employees and key stakeholders—had been involved with building the T5 terminal, working both on-site and off-site. Only about 120 employees were directly employed by BAA. The project deployed circa 100 first-tier contractors and consultancy firms, of which only three contractors were designated as principal contractors. As such, a majority of the work was conducted by contractors who needed to collaborate with one another in a more intimate fashion compared with more traditional approaches.

Human resources, training, and development were needed to help facilitate this transition into a learning organization. For example, the training and development teams at the BAA required suppliers to sign agreements to work in an integrated manner and display true partnering behaviors. This is where the unique approach to the balanced scorecard begins to take hold. Due to this sheer amount of collaboration, a shared vision was developed between all stakeholders. All stakeholders were aligned in an integrated fashion to achieve a desired result, creating a unified sense of purpose across the diverse participant base.

Conclusion: Flexibility and Adaptation

In conclusion, a learning organization must be flexible and have the ability to continually adapt. As evidenced in the example above, proper training and development is needed to properly align multiple stakeholders to a single goal. The Terminal 5 project demonstrates that even in the face of unprecedented organizational complexity and conflicting institutional cultures, the systematic application of learning organization principles—supported by tools like the balanced scorecard—can foster collaboration, knowledge transfer, and successful project delivery.