I first came across explanations of learning by doing when I was involved with Action Learning courses for some of my team. Each delegate took a problem he or she were trying to solve and told the other delegates. Then what? The delegates sat around until one of them realised that they needed to take the initiative and do something; at this stage the course tutor would assist them!
In brief: Action Learning is learning from concrete experience and critically reflecting on that experience through group discussion, trial and error, discovery and learning from and with each other.
Building on this experience my team discovered Peter Senge's work on learning organisations and used the model in his book The 5th Discipline , Senge develops the learning model shown here:
More in a while..