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Isn’t that a great phrase, “Rigorous, intellectually honest, learning”.

The phrase comes from a book called Nail it, Scale it by Paul Ahlstrom and Nathan Furr. The book is designed for entrepreneurs who are developing a proposition for a market. The idea being that you nail the proposition BEFORE you start wasting good money by scaling it too full size. You nail it by rigorously testing the proposition in the market, checking that there is a pain that you are solving, that the pain is monetizable (Someone is willing to pay to have it removed) that the solution you have is actually attractive to those who have the pain, and that  the solution is the minimum product set to solve the problem.

In other words you first make sure that your proposition makes sense, then spend the least amount of money solving it.

I think this is both brilliant and blindingloy obvious.  The book is full of examples of organisations who tried to scale a good idea before rigorously testing it on the  market to see it it was wanted and solved a problem.  Many organisations that have wated lots of investors’ money scaling a company before it was ready.

Applying the  approach to how we think about strategy

Now let us think about this nail it, scale it approach in the  context of any strategy implementation.  How do we apply rigorous, intellectually honest learning to our strategies for change in our organisations?

In fact this gets to the heart of the strategic learning approach of fourth generation balanced scorecards and the development of strategy maps with a cause and effect model. These are in fact the change hypothesis of the management team.  They are the belief that needs testing.  The chain of objectives that say, for instance, if we build this capability it will improve how we do things, which will improve things for our customers and therefore will improve our financial performance.

This is a hypothesis chain that needs testing.

Yet that is not what happens in most organisations

What we see is a strategy developed in an annual planning process that is to be rolled out across the organisation.  The hypothesis is that this is the right strategy.  There is no learning – only implementation problems to be overcome.

What should happen with a learning approach.

In contrast taking a rigorous, intellectually honest learning approach, the management team would accept that their stratgey had not been tested.  They would continue to ask two separate questions:

  1. Is our strategy working and what do we need to do to ensure it works and is implemented?
  2. Is it possible that the strategy s wrong and we need to refine or revise it?

In essence, these are the two questions that are set up in the strategic and operational review meetings described in my book, “Strategy Mapping for learning organizations”.   The first question is the straight forward, common, operational and strategy implementation question.  This is single loop learning.  The second question, “Is it possible that our strategy is wrong?” is what Chris Argyris would refer to as the second loop of learning.  It is this where a management team are really questioning themselves and applying a more rigouros approach to learning about their strategy.

Deliberate vs emergent strategy and learning

The annual strategy and planning approach of most organisations assumes that it is best to set out a plan and align the organisation to follow that strategy.

In contrast, a management team that recognise “stuff happens” and “We are not always completely right” will accept that their strategy will need to change and be refined.  They accept that they need a way to capture their strategy is a light, easily changeable format, yet one that is details and rigorous.

This is where the features and techniques of strategy mapping within fourth generation balanced scorecard approach are used. The provide a way to capture and manage strategy in a much more emergent and learning culture.  It you would like to know more get in touch.

References

  1. Mail it, Scale It Paul Ahlstrom and Nathan Furr is available as an amazon Kindle e-book in the UK and physical book in the states.  There are more details on their  website http://www.nailthenscale.com/startup-book/#
  2. Chris Argyris, Double loop learning.  The best article on the web that explain this is here.  http://www.infed.org/thinkers/argyris.htm  You can read about how the principle is applied to Strategic learning and fourth generation balanced scorecards in my book, Strategy Mapping for Learning Organizations, published by Gower.
  3. Strategy Mapping for Learning Organizations, Phil Jones, 2011, Gower, London.  More details can be found here Strategy Mapping for Learning Organizations, which includes links and how to buy the  book.