Monitoring results and using that feedback to adjust goals, strategies and actions is an important operational concept for business.
Unfortunately, this process, known as single-loop learning, is poorly implemented in many organizations. Worse, a more powerful approach to improving results, called double-loop learning, is neither widely known nor practiced.
Single-loop learning derives its name from the map of the process most individuals and organizations use to adapt to reality. Goals, strategies and actions are planned. Results are measured and that information is fed back in a review of the goals, strategies and action plans. Adjustments are made based on that knowledge and the cycle repeats in a continuous single loop.
Most businesses that actually go through the strategic planning process and regularly monitor results use single-loop learning. But sometimes — even when the goals seem realistic and the strategy sound, and the action plans are on schedule — the results just don't meet expectations. Sometimes they aren't even close. That is where double-loop learning is necessary.
In double-loop learning, the individual or organization still has the single feedback loop coming back to goals, strategies and actions from the results. But there is a second feedback loop that goes back to the predecessor of goals, strategies and actions: assumptions.
All the goals, strategies and action plans that individuals and organizations produce are based on assumptions. Those assumptions may be very explicit, or they may be buried deep in an organizational or individual mythology. When goals look reasonable and strategies look sound and actions are being executed as planned, a failure to get results is a sure sign that assumptions are incomplete or incorrect.
Examples of what can happen abound, but here is one we've all witnessed. Eastman Kodak invented digital photography. But management assumed that film would always be preferred, with digital being something of a side-show. That assumption destroyed one of the 20th century's greatest companies. When is the last time you purchased a roll of film?
One would think we would learn from that, but we don't because of what is called defensive thinking. We want to believe our assumptions, and we don't react well when something rocks the boat.
Recently, I attended a meeting on the explosion of online degree offerings and massive open online courses, or MOOCs. MOOCs are online, noncredit college courses, many presented by world-class institutions and professors at no cost to the student. All forms of online education are expanding rapidly as more institutions jump in and more course offerings become available. No one knows where this will lead, but it has the look of the cutting edge of a major industry disruption for higher education.
A professor in the meeting talked about how online degrees and MOOCs are all well and good but will never be as good as the "real" classroom. He expounded on the need to be sure online offerings don't cannibalize "real" education.
Sound familiar? He not only assumes that traditional teaching will always be better than anything in the virtual world, he assumes that something can be done to guide the direction this takes going forward. That is defensive thinking.
To use double-loop learning, organizations must tease out the assumptions upon which their goals, strategies and actions are based. Most strategic plans include an analysis of strengths, weaknesses, opportunities and threats, known by the acronym SWOT. This is a good place to start.
I have disagreements with clients about SWOT, because I think it is one area where people can get carried away in defensive thinking. It is human nature to want to believe in your organization. Organizations often identify capabilities that are at best average as being superior to the competition. Frequently this is done though there is minimal intelligence available about competitors' abilities.
Like strengths, opportunities can be a source of delusion, especially when the assumptions are based on management trying to think like customers instead of seeking out and listening to customers. Dangerous assumptions can result in costly efforts that net little or no return.
My recommendation is to make planning assumptions as explicit as possible so they can be examined and tested easily. SWOT should be just one element of a section titled "Planning Assumptions." SWOT analysis should not contain laundry lists in each category but, rather, should include a handful of carefully developed items.
Also in this section should be explicit statements of assumptions about economic and market conditions, governmental and regulatory issues, changes in technology, changes in customers' preferences or strategies and the general competitive landscape. Where possible, assumptions should be backed up with some kind of research from sources that can be periodically re-checked.
Double-loop learning is not something too advanced or too exotic for even the smallest of businesses. All it takes is a different thought process and some honest soul-searching.
Richard Randall is founder and president of management-consulting firm New Level Advisors in Springettsbury Township, York County. Email him at email@example.com.