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Abstract
Purpose To develop a theoretical model for strategic change that links learning in an organization
to the strategic process.
Design/methodology/approach The model was developed from a review of literature covering a
range of areas including: management, strategic planning, psychology of learning and organizational
learning. The process of forming and implementing strategy in an organization was looked at critically
and then the links between learning and strategy were explored, particularly in relation to innovation
and radical strategic change.
Findings The degree of correspondence found across various strands of the literature implies a
general principle: that the development of strategy is closely linked with learning. The paper proposes
that, if appropriately designed, purposeful strategic activity will help to develop an organizational
learning culture. As the strategic planning process is widely accepted across all sectors of the
economy, it has the potential; to provide an effective means of directing resources in order to achieve
desirable learning within an organization towards its long-term viability.
Originality/value The paper develops a theoretical model of strategy formation, called The
maturity model for strategy formation, which describes a developmental continuum for strategy
based on the application of appropriate strategic approaches which are linked to suitable learning
approaches and a consideration of the roles of management and staff in the change process.
Keywords Strategic change, Innovation, Learning organizations
Paper type Research paper
Introduction
The first part of this paper considers a wide ranging review of literature from across a
number of strands of research: strategic change, management, project management,
educational psychology and learning organizations from which some common themes
emerge. In the final part of the paper, these themes identified are synthesized to into a
model for strategic change that acknowledges the developmental nature of change and
its links to learning.
Individual learning
Argyris and Schon (1996) pointed out that an organization can only accumulate
knowledge through the actions and capabilities of the individuals which make it up, so
individual learning is at the heart of organizational learning. In exploring individual
learning for professional practitioners, Kemmis and McTaggart (2000) referred to three
forms of inquiry: technical, practical and critical. Each form of inquiry is based on
action, but they differ according to the nature of purpose of the learning.
In a technical inquiry, the aim of the learning is efficiency: for example, to improve
an existing situation, policy, process or activity. This form of learning is concerned
with incremental improvement: the underlying content is not in question. Technical Strategy and the
inquiry is concerned only with the means, not the ends. Kemmis and McTaggart (2000) learning
considered processes such as quality assurance to fall within this category of inquiry.
Schon (1987) referred to this as single loop learning, while Eisner (2003, p. 41) used organization
the term first order learning. This form of learning clearly fits within an incremental
or improvement oriented learning culture.
In a practical inquiry, both the ends and means are problematic. This form of 359
inquiry is suited to understanding complex situations which may involve conflicting
sets of values. The aim of this form of learning is to educate the participants to make
informed decisions and become aware of the consequences. It acknowledges that the
different perspectives, reactions and behavior reflect the values of the participants
(Kemmis and McTaggart, 2000). Schon (1987) referred to this type of learning as
double loop learning, while Eisner (2003, p. 41) called it second order learning. This
clearly fits within an Adaptive organizational learning culture.
A critical inquiry addresses not only the means and the ends, but also the rationale
for the strategy. It takes an empowerment stance, and while it addresses elements of
both the technical and practical inquiry, it also examines the context of the situation
and where it might lead. In this form of learning, the practitioners question the status
quo as well as the historical and social contexts which brought it about. Sun and Scott
(2003, p. 203) described this as triple loop learning where the organizations mission,
vision, market position and cultures are challenged.
Learning at this level may well have political and power implications that may lead
to the discomfort for some managers referred to earlier McTaggart (1991, p. 40), but it
is also central to a generative learning culture and the creative processes which bring
about innovation and radical change.
A high level of correspondence between each of the three learning cultures, the three
strategic models and the individual learning approaches is evident from the preceding
discussion. This leads to the main contention of this paper: that the effectiveness the
formation and implementation of strategy, and by implication, organizational learning,
will be enhanced if these links are explicitly acknowledged and consciously built into
the strategic processes, structures and the roles of individuals and teams. It must be
accepted that strategic change requires holistic alignment of an appropriate
organizational culture, structures and processes which promote and reward learning.
What this means in practice is considered next.
Figure 1.
The maturity model for
strategy formation and
development
Maturity model for strategy
Stage Initiation Implementation (establishment) Implementation (consolidation)
formation
361
Table I.
13,4
362
TLO
Table I.
Maturity model for strategy
Stage Initiation Implementation (establishment) Implementation (consolidation)
Role of staff Finding creative solutions Engaging and participating in change Developing awareness of change
Offering critical comment and feedback Participating in capability building Incorporation of change into normal
based on experience activities practice
Building capability and taking risks. Looking for improvements and making Looking for efficiencies
suggestions based on experience
Key learning activities Action learning projects, pilot projects, Building staff capability through formal Establishment of realistic performance
research, scenario planning, stakeholder training targets
consultations Action learning projects Building the strategy into normal
Evaluation of progress through Evaluation of progress through operations
discussion, formal feedback, discussion, formal feedback, Alignment of organizational processes:
communication, sharing of ideas communication, sharing of ideas budgets, plans
Documenting learning, understanding Adapting or designing suitable Continuous improvement activities and
implications and synthesizing ideas organizational structures, budgets, work reports
planning, recruitment, reward systems,
etc
Evaluation models Formative continuous evaluation and Formative continuous evaluation and Periodic evaluation of progress
feedback. feedback.
Key performance Identifying key success factors, risks and Response to formative evaluation and Evaluation of long-term costs/benefits of
measures resources requirements feedback data to monitor progress the change
Response to formative evaluation and Development of appropriate structures Achievement of performance targets
feedback data to monitor progress and processes
Recommendation of possible solutions Clarification of realistic performance
with a view to implementation targets, based on learning
The mechanism to operationalize the maturity model is based on a two stage approach Strategy and the
for the adoption of innovation, as proposed by Rogers (1995, p. 371). This process, learning
which involves an Initiation stage and an Implementation stage, has also been mapped
onto Figure 1. organization
Initiation phase
This is an early stage in the development of the strategic response. During the 363
initiation stage the situation is highly uncertain so the purpose is to explore
alternatives and reduce uncertainties, and thereby lower risks for the organization to a
level where management can make informed decisions. An interpretive strategic
approach is most appropriate at this stage.
The key strategic learning goal is to explore the range of possibilities and
continually monitor the environment in order to build organizational understanding of
the situation to a point where management is sufficiently confident to proceed to the
implementation phase. The emphasis is on encouraging individual and organizational
learning to increase understanding and reduce the uncertainties. A variety of related
activities such as scenario planning, research, pilot projects, feasibility studies,
stakeholder consultations, etc. can be used to good effect to increase the understanding
of the situation.
As described earlier, research and development teams may be formed and
quarantined from the constrictions of the formal bureaucratic processes to
maximize learning. It is essential that the staff involved in such teams take a third
order or critical approach to learning. Feedback and formative evaluation is
essential to provide the information and to lay the foundations for a common
understanding to develop in the organization (Kenny, 2003, 2002). The knowledge
gained should provide valuable information regarding the most appropriate
solutions, organizational processes, organizational structures and the level of
resources required to meet the strategic challenges of particular solutions.
Ultimately, based on this knowledge and the constant monitoring of the external
environment, management will be in a position to make a decision to move to the
implementation phase. This is a significant decision point as it is likely to involve a
considerable investment in technology, training and/or organizational structural
change.
Conclusions
The strategic planning process is the means by which organizations come to terms
with the circumstances in which they operate, set directions and mobilize their
resources to meet their needs in the medium to long term. As a widely accepted
process, it is central to organizations survival.
Modern organizations operate in very uncertain and challenging times. The
demands of globalization, rapid technological change and increasing competitiveness
put enormous pressure on them to remain viable. To ensure long-term sustainability,
organizations have to develop appropriate strategic responses to change.
Traditional centralized rational strategic planning processes assume a high degree
of predictability and order, but the prevalence of these processes has led to a tendency
to modify them to deal with the increasing uncertainty. Such attempts tend to be
unsuccessful as the centralized processes are unable to respond rapidly to new
developments and learning from action. A more responsive strategic process is
required where managers establish of a culture of trust, encourage participation and
support individuals to learn from their experience and contribute their practice based
knowledge to formation of better strategic outcomes.
The maturity model of strategy formation outlines an approach to transformational
strategic change which is based on learning. Initially, a generative (third order)
learning culture must underpin the strategic process. The main strategic goal is to Strategy and the
increase understanding of the strategic problem, then, as understanding grows, the learning
strategy matures to a point where a solution can be implemented across an
organization. Here the strategic process is based on an adaptive (second order) learning
organization
process. At this stage, the strategic goals include developing shared visions,
developing plans, building capabilities and implementing workable processes and
structures across the organization. 365
Ultimately, the strategy and the associated new approaches may become
sufficiently mature to be fully incorporated into normal operations. It is at this stage
that a linear strategic planning model based on continuous (first order) learning may be
suitable. At this stage of development the strategic process will concentrate on
efficiency and continuous improvement and a more centralized formal planning
process may be suitable.
The maturity model presents managers with a framework to consciously design an
appropriate approach to the strategic change process. Armed with this knowledge, the
development and implementation of strategic change should prove to be far more
effective.
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Corresponding author
John Kenny can be contacted at: John.Kenny@utas.edu.au