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The current issue and full text archive of this journal is available at www.emeraldinsight.com/0969-6474.htm

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0969-6474.htm

Strategy and the learning organization: a maturity model for the formation of strategy

John Kenny

School of Education, University of Tasmania, Launceston, Tasmania, Australia

Strategy and the learning organization

353

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.

Dealing with change There is general acceptance in the literature that there have been dramatic changes in the social and economic environment in which organizations operate. The globalized modern economic environment is networked by new technologies and has been described as volatile, fiercely competitive. As they become more reliant on gaining knowledge, new organizational structures are needed that are more flexible, responsive and less hierarchical (Grant, 2003; Chaffee, 1985; Rae, 1997; Mintzberg, 1994; Ansoff, 1994; Combe and Botschen, 2002; Whittington and Melin, 2003).

Combe and Botschen, 2002; Whittington and Melin, 2003). The Learning Organization Vol. 13 No. 4, 2006

The Learning Organization Vol. 13 No. 4, 2006 pp. 353-368 q Emerald Group Publishing Limited

0969-6474

DOI 10.1108/09696470610667733

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characterized by the

presence of contestability, challengeability, uncertainty and unpredictability

of conceptual risk”. McNiff (2000, p. 11) also called for new forms of organization, in which

organizational values are linked directly to the strategic vision and learning because

everything “is part of a transformative order of emergence

“generative transformational” forms of learning to deal with an external reality in which everything is constantly evolving or “becoming” (McNiff, 2000, pp. 140-141). Tosey and Robinson (2002, pp. 105-106) studied the use of the term “transformational change” in the management literature and recognized that the form of change adopted (the means) in an organization related to the underlying intention of the change (the ends). They presented a “transformation matrix” of organizational change in which the ends ranged from simple survival, to increased efficiency, to cultural change and ultimately to the development of potential. Each of these ends had corresponding means which involved progressively less “programmed” and controlled activities: ranging from outcome focused activities such business process re-engineering and total quality management (TQM), through to more process based activities involved in forming learning organizations and even “spiritual” organizations. In these forms of transformational change, a “leap of faith” is required, as the outcomes are unknown and there may be “intense pain and struggle” as values, ideals and beliefs are questioned. In the strategic change literature, Whittington and Melin (2003, p. 37) observed similar trends, where the form of the organization is “blurring” and the process of strategizing is becoming the key function. They proposed an “organizational duality” where the “organization is the strategy.” By this they mean that the structure of the organization is in a state of constant “organizing” flux, as social collectives form and reform, organizations “continuously mutate” and there are no organizational “end states”. Stacey (1995, pp. 485-486) argued that organizations consist of both formal and informal structures or networks. The formal networks exist to promote order and stability and are represented by the officially sanctioned structures and constraints established within an organization. The informal networks are a “shifting network of social and other informal contacts between people within an organization and across its boundaries.” Informal networks are the means by which organizations are able to deal with rapid change and unpredictability and that for an organization to be truly creative and innovative, it “must operate in a state of bounded instability.” De Wit and Meyer (1999, pp. 120-121) pointed to the “typically fragmented, evolutionary and largely intuitive” strategic change process that occurs in even “well managed major organizations”. Whittington and Melin (2003, pp. 37-38) further argued that such an organizational process “cannot be controlled centrally”: that successful organizations will be those which are able to “continually restructure and respond effectively”. Thus flexibility and changeability in structure and process is widely regarded as a necessary condition for organizations to function effectively in the highly volatile modern environment. They have to be able to “feel their way” through strategic problems and rapidly respond to unexpected and unpredictable circumstances as they

” She advocated new

an age

Barnett (2003, p. 3) used the term “supercomplexity

learn to deal effectively with the emergent aspects of the change. These learning

focused approaches, where strategies need to be “made and re-made continuously”, are

at odds with centralized annual planning processes and rigid organizational structures

(Whittington and Melin, 2003, p. 37). A number of writers have explored the use of innovative project teams and how they can be assured the freedom required to innovate and learn, while remaining accountable to the organization (Sheasley, 1999; Leigh, 2003; Lester, 1998). Tushman and Smith (2004, pp. 12) described the “ambidextrous organization”, as one structured “both to learn and incrementally build on its past”. Such organizations have two structural aspects: entrepreneurial units set-up for “learning by doing” to develop or explore innovation; and more conventional units which are concerned with incremental improvement and on-going operations. How these units interact with the other parts of the organization is an important consideration because tensions arise at the interface between the formal and the informal, as the conventional organizational structures are concerned with establishing order and predictability, whereas entrepreneurial are dealing with situations which are unknown and unpredictable. There needs to be a “holistic” approach to the strategic process to address the structural flexibility and learning aspects of change. This involves the creation “strategies and structures that can continually respond to the environment,” and a culture where “managers will be more open to learning and less afraid to make changes for improvement” (Kleiner and Brown, 1997, pp. 57-58).

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The strategic planning process The strategic planning process has become synonymous with responsible and accountable management and comprises “systematic, formalized approaches to strategy formulation” (Grant, 2003, p. 491). It is in widespread use throughout all sectors of the economy and is considered vital for the sustainability and growth of organizations to enable them to “deal with changing environments”, even while “the substance of strategy remains unstructured, unprogrammed, non-routine, and non-repetitive” (Chaffee, 1985, p. 89; Crebert, 2000; Grant, 2003; Rothschild et al., 2004; Kaplan and Norton, 2001). Theoretical views on the nature of the formation of strategy fall into two distinct groups: the “rational design” approaches and “emergent” approaches (Grant, 2003; Harrington et al., 2004). They were also referred to as the “strategic choice” and the “ecological” perspectives (Stacey, 1995, p. 477). The rational approach is based on the view that organizations adjust to changes in their environment by making rational decisions and choices. In the rational strategic model “strategy consists of integrated decisions, actions or plans that will set and

achieve viable organizational goals” (Chaffee, 1985, p. 90). The assumption underlying

a rational strategic process is that the environment is relatively predictable or the

organization is “well insulated” from the effects of change. It further assumes that an organization is “tightly coupled, so that all decisions made at the top can be implemented throughout the organization” (Chaffee, 1985, p. 90). One could expect that there will be problems with this approach to strategy formation, as its underlying assumptions are clearly at odds with the volatile environment discussed earlier.

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The emergent approach is based on an ecological paradigm, in which organizations continually respond to changes by adapting, in much the same way as living organisms respond to their environments. Chaffee (1985) referred to this as the adaptive strategic model where a continual process of adjustment occurs within the organization (either reactive or proactive) aimed at “co-alignment of the organization with its environment” (Chaffee, 1985, p. 91). Chaffee (1985, p. 93) further elaborated the emergent approach to include an interpretive strategic model, which is based on a view of an organization as “a collection of social agreements entered into by individuals of free will.” The strategic aim is to “attract enough individuals to cooperate in mutually beneficial exchange,” and to deal with “attitudinal and cognitive complexity.” The interpretive approach is one in which strategy is “based on a social contract” and the assumption that reality is “socially constructed” by the interaction of the stakeholders of an organization. In this model, the organization consciously sets out to enable communication within the organization to come to a common understanding of the strategic problem. The strategic process emphasizes the importance of symbol manipulation, developing shared meaning and cooperative actions of individuals. The formation and implementation of a strategy is a complex process that “involves both conceptual as well as analytical exercises” (Chaffee, 1985, p. 89)

The strategy shortfall The literature reviewed revealed the rational planning model is in widespread use and that there are significant problems with it in practice. As alluded to above, this may be due to the underlying assumptions behind this model do not apply in the modern environment. Weitzel and Jonsson (1989, p. 98) argued that “it is clear that a stable environment, if it ever exists, is at most a temporary phenomenon”. They called for “effective reorganization” based around “less directive leadership” and greater inclusiveness for those lower in the organization who may have valuable information to add to decision making (Weitzel and Jonsson, 1989, pp. 102-103). However, in many cases the strategic planning process has become a “calendar driven ritual” (Grant, 2003 cited in Hamel, 1996, p. 70; Crebert, 2000; Na¨si and Annula, 2003; Priesmeyer, 1992). Simpson (2002, p. 690) referred to a report by Fortune magazine which revealed that less than 10 per cent of strategies are “effectively executed”, that only 5 per cent of the work force understands strategy. It also reported a significant lack of strategic alignment, as indicated by the fact that 60 per cent of organizations did not link budgets to strategy and 92 per cent did not report on lead indicators. Thus the planning process has become rigid, inflexible and an end in itself. This focus on planning “works well so long as the actual outcomes are largely in line with the assumptions”, but, once a plan is in place, management can fall into “planning traps” which limit the capability of businesses to respond to changing circumstance (Briggs, 1998, p. 216). The suitability of rational planning approaches for non-profit organizations has also come under question, as these organizations operate from a value base quite different to conventional businesses (Steane, 1999, p. 10). In the education sector, there is suspicion surrounding strategic planning, which was seen as a means of ensuring

bureaucratic control over the activities of professional staff (Crebert, 2000; Fenske, 1980; Lines, 2000; Patterson, 2001; Rae, 1997; Ramsden, 1998). Indeed Kleiner and Brown (1997, p. 505) described rational approaches as a means for managers to gain “control and domination of the workforce” and, while this might be appropriate in some contexts, such as those requiring high levels of standardization in output, it “may break down in other contexts”. Typically, organizations have responded to these problems by making modifications to the planning processes by setting difficult performance criteria, or to attempting to better “align” organizational budgets with the strategic goals, and

thus ensuring the continuation of central control (Grant, 2003; Harrington et al., 2004; Kaplan and Norton, 2001; Rothschild et al., 2004). However, there is also a consistent call for managers and staff to take on a new form of relationship within organizations in which learning from action and experience is central to the process of forming and implementing strategy. Mintzberg (1994, p. 275) called for staff to be seen as “co-strategists,” forming radical strategic change in an organization, not just passive implementors of pre-determined strategy. Combe and Botschen (2003, p. 43) also called for staff to be included in the decision making process by contributing knowledge gained through practice. He noted that knowledge flowing from the work of staff “has the capacity to enhance

decision-making and the effectiveness of organizations (but)

nature is not undertaken routinely, but in response to the need for empirically based knowledge to contribute to issues regarded as strategic”. This form of involvement goes beyond implementing a pre-determined plan or the development of a shared vision, it calls for the experience of staff to directly influence strategic decisions, “with the explicit purpose of contributing to the stock of its working knowledge” (Owen, 2003, p. 43). Combe and Botschen (2002, p. 505) acknowledged that increased autonomy and participation may raise fears in the minds of manager, leading to them resisting such changes. Tosey and Robinson (2002, p. 107) also argued that managers may restrict direct questioning of their control and power structures, which “will constrain significantly the types of action and learning that are legitimized by the change process”. Similar observations on the resistance of managers have been made by others (McNiff, 2000; Leitch et al., 1996. The dilemma is that the support of senior management has been identified as a critical success factor for strategic change and innovation (Alexander et al., 1998; McGill and Beaty, 2001; Lester, 1998; Zuber-Skerritt, 2001). Thus while managerial

this

Enquiry

of

support is vital to the change process, it can also effectively stifle it. It is little wonder that when Grant (2003, p. 515) reported on an attempt at controlled centralized

innovation, it resulted in “limited impact

little evidence that the systems of strategic planning were conducive to strategic innovation”. To De Wit and Meyer (1999, pp. 33-34) strategic problems are “wicked”, characterized by interconnectedness, complication, uncertainty, ambiguity, conflict and constraints. They argued that to effectively tackle such problems required two things: a “broad participation in the policy making process” and the use of a “wider

and

on the quality of strategic decisions

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spectrum of information from diverse sources”. Emergent strategic approaches are clearly more suited to dealing with problems of this nature.

Strategy and learning in organizations The process of learning is central to dealing with “wicked” problems, but what does it mean for an organization to learn? Senge (1990, p. 14) identified three forms of organizational learning: generative learning, survival (or adaptive) learning and incremental learning. Actenhagen et al. (2003, pp. 79-81) identified a similar set of “learning cultures”.

A generative learning culture is one committed to genuine renewal and research; an

adaptive learning culture aims to develop and adapt existing practices and ways of thinking; an incremental learning culture focuses on improvement and efficiency within the existing organizational framework. Each of these three forms of organizational learning corresponds very well with one of the three models of strategy referred to earlier: interpretive, adaptive and linear (Chaffee, 1985). This degree of correspondence can also be seen, within the psychological learning theory literature, where two major schools of learning theorists are the behaviorists (positivists) and the constructivists (Jaramillo, 1996; Knight, 2002; Quay, 2003; Swain,

2003).

Behaviorists, such as B.F. Skinner and Gagne´ (1977), considered that there is ultimate truth to which the learner can be taught using appropriately designed and planned learning activities (Swain, 2003). Traditionally, this involved transmission approaches to learning, where knowledge is passed from an expert to a student (Jaramillo, 1996). Constructivist approaches to learning, however, are characterized by experientially based activities, in which students learn by doing and reflecting on the experience. In this model, teachers act as facilitators of learning rather than transmitters of content (Jaramillo, 1996). Action research and action learning are examples of learning approaches based on this view. These two theoretical views of learning correspond well to the rational and emergent schools for strategy discussed earlier. The constructivist approach is appropriate for learning in the highly uncertain situations surrounding radical change and innovation, as, by definition, no-one knows what the solution will be: there is no expert to transmit the knowledge; it must be created by the individuals within the organization. Indeed, many of the change processes in the literature advocate learning which is clearly constructivist in nature (Laurillard, 1997; Mintzberg, 1994; Leitch et al. 1996, Rogers, 1995; Senge, 1990).

Individual learning Argyris and Scho¨n (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 inquiry is concerned only with the means, not the ends. Kemmis and McTaggart (2000) considered processes such as quality assurance to fall within this category of inquiry. Scho¨n (1987) referred to this as “single loop” learning, while Eisner (2003, p. 41) used 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 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). Scho¨n (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 organization’s 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.

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The maturity model of strategy formation In bringing together the major ideas discussed so far, it must be emphasized that, when dealing with “wicked” strategic problems, much is unknown and unpredictable at the outset and has to be learned. As opposed to the traditional rational approach to strategic planning, the strategy cannot be clearly articulated, so the initial task is to engage in learning that will enable a better understanding of the problem. As understanding grows over time, the organization is more able to define its strategic response. The formation of strategy thereby becomes a developmental process driven by learning in which the strategy can be considered to “mature” as the situation comes to be better understood.

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This process is represented in Figure 1, where the level of understanding of the

strategic problem (or alternatively the level of uncertainty associated with it) is linked

to the three models of strategy (Chaffee, 1985) and with each of the corresponding

learning approaches and learning cultures discussed earlier (Senge, 1990; Kemmis and McTaggart, 2000). In the initial stages of radical strategic change innovation, the uncertainty is very high, so an interpretive strategic approach is appropriate. The associated organizational learning model is generative, which this involves a critical or third order individual learning approach. As understanding grows, a point will be reached where a decision to implement a strategic solution can be made. By this stage, the organization should have done significant learning and have a much clearer understanding of the strategic problem it is facing. However, on making the decision to implement a strategic solution or innovation, an Adaptive strategic process then becomes appropriate. The organizational learning model at this stage is therefore adaptive, while the associated individual learning model to support this is practical or second order learning. After a period of further learning and development, the strategic problem may reach

a point where it is sufficiently well understood, and its implementation is well

underway that a Rational strategic approach may be appropriate. The organizational strategic goal at this stage focuses on continuous improvement and efficiency. It must be noted that, as learning is an individual and situational process, different parts of an organization will adjust to change according to their own unique perspectives, rates of learning and capability sets. The change is unlikely to be uniform across an organization, and different units may well be operating at different points on this continuum. The operation of the maturity model calls for judgments to be made at various stages during the formation and implementation of a strategy. The next section considers in more detail how these practicalities of the model might operate.

Operational aspects of the maturity model of strategy formation Senge (1990) viewed managers as designers of an organization, and as such they need

to be fully aware of the strategic goals at each stage so they can consciously design

suitable structures, including accountability processes, that support the strategic learning required at each stage and ensure processes to “capture” the learning are in place (Kenny, 2002, 2003). These stages in the model are outlined more fully below and also in Table I.

Figure 1. The maturity model for strategy formation and development

are outlined more fully below and also in Table I. Figure 1. The maturity model for

(continued)

performance longer term benefits of the

Adaptive/linear Looking for improvements and efficiencies Incorporating the change into normal operations

capability approach to

change

and long term

into normal

shared vision

Implementation (consolidation)

communicating

efficiencies and

continuous

capability

or technical

learning

and change goals

medium

operations

or the

uncertainty

Well understood

improvements

order staff

staff

Implementing

Evolutionary

performance

Clarifying the

on-going for

Incremental

Monitoring

Evaluating

Building

Building

Building

learning

Looking

change

First

Low

Adaptive Begin implementation process and identify and respond to unforeseen issues Clarifying the change through social interaction

Second order or practical approach to learning Monitoring internal and external environment Building organizational shared vision of

processes

processes,

the

as

progress of to processes

support

(establishment)

organization

uncertainty

vision

workable

organizational

capability

capability

model for strategy

shared

structures

Partially understood

and alignment

learning

the

change

new

high

Implementation

staff

staff

Restructuring

a

Developing

Developing

Evaluating

Adaptive to

Adjusting

Adaptive

Building

Building

Building

required

Medium

change

change

plans

Maturity

and develop

requirements

understanding

developing

uncertainty

learning

Third order or critical approach to

of strategy

learning Monitoring internal and external environment

capability

innovative

environment

facilitating

staff capability

change,

and and

reduce

learning

a common

uncertainty

understanding

evaluate

analyzing

progress

Not well understood

learning

resource

Transformational

to

and

communicating

and the

understanding

requirements

Interpretive

Developing

Monitoring

Supporting

Evaluating

Identifying

Generative

Capturing,

high

Initiation

solutions

Gauging

Explore

shared

Very

model

Individual learning model Role of management

strategy

Content of strategy

Context of goals culture

Strategy process

goals

Organizational

Learning

Strategic

learning

Stage

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Table I. Summary of the maturity model for strategy formation

Evaluation of long-term costs/benefits of the change

and

processes:

Establishment of realistic performance targets

of performance targets

normal

activities

the strategy into normal

change

Periodic evaluation of progress

Implementation (consolidation)

of change of into

organizational

of improvement

practice for efficiencies

Developing awareness

operations plans

Incorporation

Achievement

Continuous

Alignment

Building

budgets,

Looking

reports

communication, sharing of ideas Adapting or designing suitable organizational structures, budgets, work

Building staff capability through formal

and making

planning, recruitment, reward systems, etc Formative continuous evaluation and feedback. Response to formative evaluation and

structures

in change

performance

capability building

monitor progress

based on experience

through

(establishment)

feedback,

feedback data of to appropriate

Engaging and in participating

activities Looking for improvements

learning

projects

realistic

of progress

model for strategy

formal

based of on

Implementation

training learning

and processes

Development

Participating

Clarification

suggestions

Evaluation

discussion,

targets,

Action

Maturity

feedback. Identifying key success factors, risks and

pilot stakeholder

Finding creative solutions Offering critical comment and feedback

projects,

solutions

understanding

formative evaluation and

continuous evaluation and

experience and taking risks.

ideas

progress

communication, sharing of ideas

through

with a view to implementation

synthesizing

of possible

feedback,

planning,

feedback data to monitor

scenario projects,

requirements

of progress

learning,

based on capability

Evaluation formal

Recommendation

Documenting and

research, learning

consultations

implications

resources to

discussion,

Formative

Response

Initiation

Building

Action

Key learning activities

Evaluation models

Key performance

Role of staff

measures

Stage

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Table I.

The mechanism to operationalize the maturity model is based on a two stage approach for the adoption of innovation, as proposed by Rogers (1995, p. 371). This process, which involves an Initiation stage and an Implementation stage, has also been mapped onto Figure 1.

Initiation phase This is an early stage in the development of the strategic response. During the 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.

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Implementation phase (establishment) The decision to implement an organizational solution brings with it its own problems, so, in the maturity model, the implementation phase has been divided into two sub-phases: the establishment and the consolidation. During the establishment sub-phase, the strategic change is introduced to the operational environment of the organization. There is still a great deal of learning to be done as the implementation proceeds, so an adaptive strategy approach is most suitable as both the organization and the strategic solution or innovation will need to adjust to each other. The strategic learning goal at this stage is to clarify the strategic direction and develop a shared vision with a view to articulating the strategy more fully. A second order or practical approach to learning is adopted. The learning is

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concerned with the development of effective organizational processes and structures, refinement of the goals and building of staff capability to implement the change. During this phase, there are likely to be significant resource implications, so the planning process will need to become more clearly defined. However, flexibility in planning is needed to deal with unforeseen problems. It is possible that some limited realistic strategic targets may be carefully introduced at this stage, although this should be done with care. Formative evaluation processes are needed to capture the learning.

Implementation phase (consolidation) Ultimately the strategy may reach a point where it can be clearly articulated and the associated uncertainty is low. At this point, as the situation is well understood and predictable, a rational strategic approach may be appropriate, depending on the culture of the organization. The key strategic goals are to monitor the cost benefit outcomes of the change and to look for efficiencies and improved quality. A first order or technical learning approach is suitable, with the emphasis on continuous improvement. Traditional centralized planning processes and performance measurement practices may be employed effectively. During this sub-phase, the strategic change becomes an accepted part of practice within the organization, a process which Rogers (1995) referred to this as “Routinising.” Table I, outlines how the model could operate in practice at each of the stages in the development of strategy. The table summarizes many of the aspects including: the strategic goals, content and context of the strategy, the learning culture, the learning goals, the roles of management and staff, the key learning activities, the evaluation models and the key performance measures.

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 organization’s 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 increase understanding of the strategic problem, then, as understanding grows, the 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 process. At this stage, the strategic goals include developing shared visions, developing plans, building capabilities and implementing workable processes and structures across the organization. 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

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