Increasing market pressures require organizations to rethink the development of change capability. Building a sustainable and flexible organization capable of responding in a timely manner to quickly changing customer demands without compromising technological excellence and quality is a complex task. This chapter builds on a five-year study of transformation efforts at a product development unit of Ericsson. The complexity of designing and managing learning mechanisms as both a transformation engine and a way to improve new product development is captured. The chapter points toward the challenges of designing and managing learning mechanisms that enhance organizational agility.

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