(5) Strategic Management as Organizational Learning Developing Fit and Alignment Through a Discip

Long Range Planning 38 (2005) 445e465 www.lrpjournal.com

Strategic Management asOrganizational Learning:

Developing Fit and Alignment througha Disciplined Process

Michael Beer, Sven C. Voelpel, Marius Leiboldand Eden B. Tekie

To operate effectively, organizations need to ‘fit’ or align themselves with theirenvironment, strategies, capabilities and leadership skills. To compete successfully ina highly competitive and constantly changing business environment, however, organ-izations also need to attain ‘fitness’ e the capacity to learn and change to fit newcircumstances. The concepts of fit and alignment are not new in business literature, yet therecord of change e the many failed initiatives most organizations embark on in an attemptto improve their performance e suggests that many managers do not know how to leadsystemic and fundamental change. By employing quick, superficial change programsleaders skillfully avoid learning the truth about poor coordination across vital activities inthe value chain and the fundamental organization design, cultural and leadership issuesthat are blocking organizational effectiveness. The result is cynicism, low commitment tochange and ultimate failure to align the organization with strategy. In response to theseproblems, the Strategic Fitness Process (SFP) was developed as an integrated, disciplined,leadership platform that a senior management team can utilize to create an openconversation about their organization’s fit with the strategy and environment as well astheir own leadership. SFP enables truth to speak to power, making it possible for the seniorteams to conduct a systemic diagnosis of the organization’s problems based on valid data,and to identify organizational and leadership barriers that prevent change. Research in 23organizations has shown that, when fully embraced by senior teams, SFP facilitatesdramatic and rapid changes in strategic understanding, organizational design, leadershipand the capacity for ongoing learning. This article discusses the theory and premisesunderlying SFP, describes the step-by-step process and illustrates its effects on the design,

0024-6301/$ - see front matter � 2005 Elsevier Ltd. All rights reserved.

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culture, leadership and performance of a Hewlett Packard business unit that utilized SFP tosolve strategic and organizational problems that were undermining its performance. Wepropose that honest conversations about the organization and its leadership produced bySFP enable fit as well as fitness - the capacity for continuous learning organizations requireto maintain fit as the environment changes.� 2005 Elsevier Ltd. All rights reserved

IntroductionWhat allows organizations to survive and thrive in a highly competitive environment? To competesuccessfully an organization’s strategy must be aligned with that of its environment and at the sametime the organization must have the capabilities that fit its strategy. This is to say that ‘fit’ must beachieved within the organization as well as with the business environment. To accomplish thisalignment, leaders have to be open to learning about how their decisions and behaviors fit theenvironment, strategy and organization. This suggests that effective leaders enable theirorganizations to confront the tensions that prevent alignment and, through a collaborative process,reshape alignment at several levels: between environment and strategy, strategy and organization,organization and the leadership team, and between key people.

Many organizations deploy the latest approaches to organizational efficiency in hopes ofachieving fit, but too often find that they are unable to reap the full benefits from such activities.1

One of the main reasons for this is the lack of an integrated approach that changes multipledimensions of the organizational system, particularly key organizational capabilities and leadershipbehavior. Organizations that reflect the continuous change in the environment by being able toadapt their design and behavior to changes in strategy, and do this rapidly and effectively, exhibita second order organizational capability that Beer and Eisenstat have called ‘organizational fitness’.To adapt successfully demands senior management with the courage and skill to lead a systemicorganizational learning process that will ‘rejuvenate’ the organization by fundamentally reshapingits design, culture and political landscape.2

This article reviews the organizational research and theory underlying these ideas, describes anintegrated and systemic organizational learning process called the Strategic Fitness Process (SFP)intended to overcome the difficulties inherent in a systemic change and learning process, andreports on an illustrative application of this process in one organization. We propose thata disciplined process like SFP is essential if organizations are to realign their design and behavior tofit their strategy (and thus their environment), and thereby avoid long periods of under-performance. And since the competitive environment is continually evolving, achieving fit shouldbe seen as requiring constant monitoring and regular updating, rather than intermittentinterventions. We also propose, based on our preliminary findings, that linking SFP to thestrategic planning process can enable an organization to adapt and learn continuously.

Organizational ‘fit’ and ‘fitness’The concept of ‘fit’ or ‘alignment’ has been extensively discussed in the business literature, and anarray of prominent authors has contributed significantly to developing the concept of fit inorganizational structure, environment, strategy, technology, culture and leadership. They show thatif organizations are to be effective and competitive they will need to achieve alignment in all theseelements.3 In the 21st century, continuous and turbulent change in the business environment hasadded a powerful aspect to this mix. Terms such as ‘discontinuous change,’ ‘disruptivetechnologies’ and ‘age of revolution’ describe the uncertainty and complexity that pervade thecompetitive environment.4 But how do organizations keep their companies fit to stay competitivein a constantly changing business environment? How do corporations organize themselves to

446 Strategic Management as Organizational Learning

accommodate continuous environmental and strategic changes in their efforts to achieve fit withthe external environment and fit between internal organizational levers such as structure, systems,processes, policies, practices and leadership? The answer is that organizations have to attain bothorganizational ‘fit’ and ‘fitness.’

Organizational fit suggests that for an organization to perform effectively, its business strategymust be aligned with its environment, its organizational capabilities with its strategy, itsorganizational design and culture with its capabilities, and its leadership behavior with itsorganization design. The alignment and synergy of these elements is crucial for organizationalsuccess. An organization may have the ‘right’ strategy (content) but without the appropriateorganizational structure and capabilities in place, will not be able to implement its strategysuccessfully. With its strategy unrealized, it will go on dealing with its environment and competitorsin an incoherent and unsuitable manner, and thus continue to perform poorly.

The environment is abundant with changes: changing customer demands and preferences,technological advances, global competitors, innovative strategies. This leads us to consider thatorganizations modify and adapt (and thus evolve) their designs in response to environmentaland organizational changes. In a rapidly changing environment, such as that faced by contemporaryorganizations, organizational fitness e the capacity to learn and adapt e becomes especiallyimportant. This entails fusing existing organizational capabilities with new capabilities to fit newcircumstances.5

The terms ‘fit’ and ‘fitness’ indicate, then, that success in dealing with rapidly changingenvironments is not solely about an organization aiming to align its strategy with its environment,and its design, culture and leadership with its strategy (fit), but also about its ability to learn andadapt to changing circumstances (fitness). It is about having a dynamic organizational design.

Dynamic organizational designTo examine if organizations are fit to compete, managers require an analytic framework to diagnoseand take action. One such - the ‘7-S’ Framework of interdependent ‘hard’ and ‘soft’ features forsuccessful organizing - is provided by Peters and Waterman. They point out that for decades, whilemanagers rightly paid due attention to the ‘hard’ aspects of organizing e strategy, structure andsystems (work system), the ‘soft’ ones of shared values (principles and values), style of management(leadership team), skills (capabilities and culture), and staff (human resource system) were largelyneglected. What this framework indicates is that ‘soft’ features (emotional, behavioral and culturalfactors) that used to be considered as inflexible and informal need to be engaged and modified asmuch as the ‘hard’ ones.6 The Strategic Fitness Process, adapted from this framework by Beer andEisenstat, places organizational capabilities at the centre of the analytic framework and redefine a setof organizational levers needed to develop and shape capabilities. This process was designed to helpa senior team engage both the soft and hard aspects of organizing (as described below).7

Peters and Waterman’s seven levers of organizing mentioned above describe the notion of fit orrigidity. Organizations attempt to fit their business environment and their adopted strategy withinthat environment. To achieve this alignment, organizations develop business practices that assistthem in competing successfully and in responding to the challenges they face. Normally, thesesuccessful practices become built up over the years as the culture/capabilities that becomeentrenched within the organization and, more often than not, extensive effort is used to maintain

success in dealing with changing environments is [both] about aligning

strategy with environment, and design, culture and leadership with its

strategy (fit), but also about ability to learn and adapt (fitness).

Long Range Planning, vol 38 2005 447

that culture.8 When the business environment undergoes disruptive (discontinuous) change,requiring concurrent change within the organization, the deep-rooted ‘way of doing business’(deeply held beliefs and values) of the organization can prove a constraint in adapting toenvironmental demands.

Hence, for organizations to adapt to changing environmental conditions and design themselvesto fit that environment, they must learn to review and redesign their organizational leverscontinuously to create the necessary organizational capabilities. However this requires much morethan an analytic framework, as emotional commitments to the past can often block change. Ifpeople are to let go of the past to embrace the future, the process of change must engage thememotionally; the Strategic Fitness Process was also designed to address this second order changeproblem.

Approaches to achieving organizational fit and fitnessThere are many organizations that fail to fit their strategy to their environment. Others, lacking theappropriate culture, capabilities and behavior for implementation, can have the ‘right’ strategy, butstill fail to fit their competitive environment. Research among several renowned Americancompanies, characterized by decades of success and profitability, provides evidence of decreasingrates of survival and performance of companies faced with difficulties as a result of fast changingand complex business landscapes and global and foreign competition. A handful actually continuedto perform over time, while a few survived but underperformed - many disappeared entirely.9

Coping in an ever-faster shifting competitive environment means continual strategic change, andsenior management’s response is quite often to adopt the latest management ‘fad.’ Such initiativesusually offer new insights and ideas, and thus quickly become widely popular. However, they tendonly to have a short lifecycle, leading to a sharp decline in interest and attention as each fad isreplaced by a successor.10 They produce uncoordinated change initiatives which lose theirmomentum with negligible changes in the organization’s fundamental arrangements and behavior.When abandoned, these fads can result in considerable financial and human costs, includinga demoralized and cynical workforce, and a lack of commitment and incentive for future changeprograms. For the most part they fail to deliver the required transformations in organizationalculture and effectiveness to mobilize company-wide change that are associated with ‘trans-formational renewal journeys’.11

Companies also make extensive use of external consultants to help them in formulating theirstrategies and/or redesigning their organizations. The corporate use of consultants and the growthof the management consulting industry have been considerable, and the fees involved have becomequite substantial. Yet when the anticipated outcome from a change program does not materialize,consultants and their clients criticize each other. All too often, organizations accuse consultants ofsimply profiting from selling a solution that is merely a pre-packaged management fad.Consultants, in their turn, maintain that clients are reluctant to make difficult decisions andsimply seeking ways to get stamps of approval on decisions they have already made.12

When the focus is on simply bringing outside knowledge into the organization, leaders in effectdelegate the leading of change to outsiders. This prevents them from learning how to lead change,

emotional commitments to the past can often block change.

delegating to outsiders prevents [leaders] from learning how to lead

change, and deprives employees from engaging in the process


and also deprives employees from engaging collaboratively with their leaders in the process ofchange. Predictably, the results are solutions that do not ‘take’: the organization attempts thepresumed solution e a new structure or procedure e but underlying assumptions, motives andskills remain unchanged. So the initiative fails, to be replaced by another program, and then in turnby yet another. Thus in a survey of 125 Fortune 500 companies, half the VPs of Strategy reportedthat management consulting engagements had led to little change in the company and wereconsidered failures: recommendations either failed to achieve the intended results or were not evenimplemented.13

Consultants, however, can be critical facilitators in bringing about effective change inorganizations. They can bring valuable expertise, up-to-date knowledge and fresh insights intoorganizational problems. To realize a fulfilling outcome, organizations and their mangers must beable to acknowledge the need for change and have the willingness to commit to it. Throughcollaboration and interaction, organizations and their consultants can together bring about thenecessary change.14 As Beer and Eisenstat note, a more effective role for consultants, that wouldenable organizational leaders to build their own capabilities to lead learning and change whileincreasing the commitment of organizational members, would be to help leaders engage lowerlevels in an honest conversation about the alignment of the organization with strategy and aboutthe barriers that prevent such alignment.

But if not employed cautiously, the use of consultants and change programs, while easy andquick, can avoid this kind of honest engagement between top management and lower levels aboutproblems within the organization. Achieving an integrated plan for strategic fit and fitness is not aneasy feat, especially considering that attaining fit is not a one-time, or even intermittent, procedure,but rather a continual one, achieved through constant learning (i.e. fitness).

Fit as a continual processIt is obvious that having a distinctive strategy is the first step in the right direction to organizationalsuccess. Managers spend time, energy and costs in elaborated forms of strategy formulation.However, without denying or diminishing the importance of strategy content and its formulation,an exceptional and pertinent strategy will amount to little if it is not implemented properly.15 JohnKotter claims that strategy formulation accounts for only 10 percent of success, while itsimplementation accounts for the other 90 percent. It is during the implementation process thatstrategy is adapted, molded, and changed to fit the firm’s specific circumstances.16

From an additional perspective, Mintzberg proposed the concept of crafting strategies, andsuggested that strategy cannot be cleanly separated into strategy formulation and strategyimplementation. The best strategies can simply emerge in response to changing circumstances, andnot necessarily from a rigorous strategy planning process. In these times of increasing changes inthe environment, it becomes more significant than ever to integrate organization-wide experiencesand knowledge into strategy. The skill lies in the ability to balance deliberate and emergentstrategies e i.e. not simply to preconceive specific strategies but also to identify emerging ones andintegrate them into the formal strategy.17

Plans on how to achieve strategic objectives regularly change to reflect progress and the shifts inevents that take place both internal and external to the organization. Thus the strategic processbecomes an ongoing one, continuously updated in response to changes in the environment. It istherefore crucial to have an integrated process that engages, emotionally and intellectually, both topmanagement and all the other levels of the organization. Successfully realizing strategic change isa challenge that most organizations face: we address this problem next.

Barriers to fit and fitness in organizationsEngaging an organization in an honest conversation that leads to a systemic analysis of theorganization and the formulation of an integrated plan and implementation for change ispotentially very challenging. Organizational theory in four different domains provides insights into


why most organizations consistently encounter barriers which obstruct their ability to implementstrategic change (see Figure 1).

The first challenge to strategic change implementation can be understood through the lens ofpower and politics in organizations, a subject that has been extensively researched. We know thatmost strategic management processes are influenced by politics, power and resistance. Everyorganization has certain levels of ‘political’ activity in which individuals and departments pursuetheir own interests. This is a natural by-product of hierarchical structures in which managers areimplicitly and sometimes explicitly competing with each other for resources, decision rights orpower and career advancement. When the interests of a particular department (or a member’s ormanager’s personal career) overrides that of the organization as a whole e when managers exploittheir power to pursue their own and their department’s goals - they are likely to use resources orstaff without regard to the implications for the organization as a whole. And this in turn leads to‘unhealthy’ politics.18

The role of self-interest in resource allocation decisions has shown how managers tend to commitresources too much or too quickly for schemes (projects, goals) they consider likely to improvecurrent business (and thereby their own personal performance and career interests), whileallocating inadequate resources to new opportunities and innovations that could ultimately benefitthe whole organization’s performance. When this dynamic dominates the decision-making processit becomes detrimental to the organization’s long-term effectiveness and performance.19 Ineffectiveresource allocation and unchecked politics in turn affect the general manager. He or she may bereluctant to shift decision-making power from one part or one level of the organization to anothere shifts that are inherent in all fundamental changes in organizational design e for fear of theconflict that this may create.

Second, ineffective strategic implementation can be understood through the lens of research onorganizational purpose and commitment. This research has shown that developing commitment toa central organizational strategy is an essential quality for achieving coordination and integration.Managers must therefore develop common purpose at the top and then create dialogue with allorganizational members about that purpose to instil the commitment that will translate purposeinto action.20 Even when top management has a well-articulated strategy, key functional employeeswho perform the activities that will ultimately achieve the strategy are rarely informed about thecommon purpose of the organization, let alone allowed to become involved in its formation. Oftentop management fails to communicate downward a coherent story about how the adopted strategyresponds to changing environment. In addition, (and consistent with Bower’s research on resource

Barriers to

Strategy

Implementation

‘Old’ mental models Weak/inefficientcommunication

‘Defensive routines’

Preventingorganizational learning

Lack of organizationalpurpose & commitment

Resistance to change

‘Organizational silence’

Lack of honest feedback& communication Lack of involvement

Overriding personalinterests

‘Unhealthy,power & politics

Ineffective resourceallocation

Figure 1. Barriers to Successful Strategy Implementation


allocation), insufficient vertical communication makes it difficult for employees to understand howthe firm’s organizational strategy or direction relates to the daily decisions they have to make andthe priorities they should be addressing.

Third, barriers to strategic implementation can be understood through the lens of resistance tochange. Both managers and employees will often assume ‘defensive routines’ that protect theirexisting ways of doing things and that prevent them from considering changes. A lack of‘managerial interpersonal competence’ exacerbates this problem, preventing such issues from beingraised and discussed out in the open. To protect their turf and avoid any unpleasant confrontationswith top management, employees decide to minimize voicing negative feelings in public and keeptheir thoughts and feelings to themselves. An ‘organizational silence’ descends, as concerns andviews about organizational difficulties are suppressed. This ultimately undermines organizationaldecisions and change processes because it prevents top managers from learning the underlyingcauses to the obstacles their organization is facing, i.e. blocking ‘double-loop learning.’21

Theories of organizational learning provide a fourth lens through which we can come tounderstand why organizations often face difficulties over strategic change and adaptation.Organizations in many industries face uncertain environments, and have to make decisions aboutstrategy and organizational alignment and design to which there is no clear answer. Where topmanagement lacks relevant experience, it will make decisions based on old mental models, and thelack of honest feedback and discussion will prevent learning about such models’ inadequacy. Sengehas proposed five disciplines for organizations to become ‘learning organizations’: individualshaving a good understanding of themselves; challenging the deeply entrenched mental models thatmembers bring into their activities; building a shared vision for what the organization wants toachieve; encouraging open dialogue and cooperation among groups to encourage team learning;and finally, a ‘systems thinking’ that encourages managers to step back and have an overallperspective of the organization rather than focusing on one or some aspects of it. Activities thatblock these learning disciplines will impede successful strategic change.22

Both business literature and real world organizational experiences reveal these barriers to be ofpowerful influence in strategic change implementation. Successful strategic change requires leadersto engage issues both analytically and emotionally in a way that overcomes leaders’ and employees’natural tendency to avoid difficult and threatening issues. It typically requires the help of a thirdparty consultant who him/herself has integrated the analytic/business and interpersonal/organizational dimensions of the firm into a systemic perspective.

Beer and Eisenstat developed the Strategic Fitness Process (SFP) to enable managers to engagetheir organization in a dynamic analysis of its fit with strategy and in developing a systemicintegrated solution. SFP’s effectiveness has been researched extensively across 23 organizations.23

(Later in this article we describe this process and illustrate its application in one of theseorganizations.) Because SFP enables truth to speak to power, its implementation in a cross-sectionof organizations in different industries has enabled a deeper understanding of what employeesperceive to be the underlying organizational and managerial barriers to developing organizationalalignment with strategy. We discuss these barriers in the next section before going on to illustratehow they can be overcome by SFP.

The silent killers of organizational fitnessSFP involves a Task Force of high-potential managers appointed by the senior team to interview, forexample, one hundred key people working in functional departments and activities all along the

key functional employees who ultimately achieve the strategy are rarely

informed about the organization’s common purpose


value chain of the business. Members of the Task Force then integrate their findings into a set ofthemes to be fed back to senior management. An analysis of these themes in a dozen organizations,and subsequently validated in many other organizations, revealed the following six barriers:

� Unclear strategy and/or conflicting priorities;� An ineffective top management team;� A leadership style that is too top-down or, conversely, too laissez-faire;� Poor coordination across functions, businesses, or geographic regions;� Inadequate leadership skills and development of down-the-line leaders;� Poor vertical communication.

Together these six barriers constitute a set of symptoms that prevent managers from solving theever-present problem of aligning their organizations with changes in strategy. Figure 2 illustrateshow these barriers interact in a way that makes them self-sealing. Though known to everyone in theorganization (analysis of Task Force findings across many SFP applications shows that managementand employees see similar sets of problems, albeit with different emotional intensity), they aredifficult to raise and subject to open discussion, organizational diagnosis and change plan. That iswhy they have been called the ‘Silent Killers.’24

Unclear strategy and conflicting priorities, an ineffective senior team, and a leader who is toocontrolling or too disengaged in management style, can all interact to prevent the senior team fromdeveloping a high quality business and organizational direction. Usually the leader’s style is notsufficiently effective to overcome the natural differentiation of interests in a multifunctional seniorteam that can cause them to frame strategic and organizational problems quite differently.25

Lacking a common view of strategy and a commitment to improve the performance of the wholeorganization leads to poor downward vertical communication, with the Top Team unable tocommunicate clearly and consistently with lower levels about the direction of change. This in turnprevents the development of common purpose and commitment at lower levels.

Quality of Direction

IneffectiveTop Team

Top Down orLaissez-faire SeniorManagement Style

Unclear Strategy& Priorities

Quality of Implementation

Poor CoordinationAcross Functions

& Businesses

InadequateDown the Line

Leadership Skills& Development

Poor VerticalCommunicationQuality of Learning

Figure 2. The Dynamics of an Unfit Organization (Beer, 2002)


Just as important, poor upward vertical communication prevents the senior team from beingconfronted with two other barriers identified by the Task Force, poor coordination and inadequateleadership skills among down-the-line leaders. Organizational coordination and effective lower levelleaders are essential for high quality implementation, i.e. to lead projects, integrate processes andfoster the required cooperation.

Without honest communication about all of the barriers, senior teams are unable to confront theissues that cause poor alignment and their ineffectiveness as a team, while organizational designissues are blocked from resolution by functional mental models as well as issues of power andpolitics. Without redesigning the organization and its management processes the organization isunable to plan and allocate resources effectively.

As described above, organizational learning is an essential factor in bringing about fundamentalchanges in organizational behavior. Figure 2 operationalizes the problems of learning that exist inorganizations which lack fitness, and could benefit from processes such as SFP. The senior team isunable to have the honest and fact-based dialogue needed to question mental models that havedeveloped over the years, to develop a coherent strategy, and to view the organization as a system ofwhich they are an integral part. Lack of honest upward communication from lower levels makes itimpossible for the senior team to learn about the limitations of their mental models and thecapabilities needed to accomplish strategic objectives. Thus top managers are prevented fromlearning about themselves, the organization and the environment.

In summary, we can say that the silent killers impede learning from taking place in such ‘unfit’organizations. While senior teams are generally aware of the problems of the lack of fit betweentheir strategy, the organization they have designed and the manner in which they are leading it,these barriers serve to prevent the teams from engaging with them emotionally. There are manyorganizational interventions designed to deal with these barriers individually. For example, teambuilding consultants help top teams become more effective interpersonally, but they do notnecessarily focus the conversation that emerges on strategy or organization design. Managementcoaching and 360 degree feedback are intended to change the leaders’ behavior, but the data anddiscussion about leadership behavior occur outside the context of strategy and organization.Organizational interventions that split these problems do not help the organization to developa systemic solution, one that engages head (analysis) and heart (emotions), thereby increasing thelikelihood that new arrangements will actually be implemented and sustained over time.

An integrated approach is required to provide a systemic and integrated framework to allowmanagers to conduct an organizational analysis. It would have to guide managers in leading a processof organizational change and learning from which they and others could also learn. The StrategicFitness Process developed by Beer and Eisenstat is an attempt to social-engineer a process thatintegrates systemic analysis with a leadership process for leading learning and learning how to lead.26

An integrated analytic framework of organizational fit and fitnessAs discussed above, managers can have remarkably incomplete, non-systemic mental models.Reasons for this can range from the defensive routines they maintain to time pressures that preventin-depth diagnosis. The Organizational Fitness Model (shown as Figure 3) is a framework SFP that

Lack of honest upward communication from below makes it

impossible for the senior team to learn about the limitations of their

mental models


provides managers with a diagnostic framework for analysis of their organization. The frameworkshows that the organization exists within a competitive environment, and naturally, to survive andthrive, its strategy must fit its environment. Once that alignment is acknowledged by theorganization, the next step is to successfully implement it. The focus of the process is to challengemanagers to consider what hinders the organization in its ability to implement its strategy andachieve its business and value objectives (shown on the right of the figure as the Strategic Task). Inthe centre, the model shows seven organizational capabilities that research and experience havesuggested are crucial to successful implementation of most strategies, and thus invites managers toconsider the strengths and weaknesses of their organization in these areas.

Dubbed ‘the 7Cs’, these capabilities are:

a. Coordination among teams, functions and departments ensures efficiency in working towardsa common goal;

b. Competence encompasses technical, functional, interpersonal and leadership skills that aredynamic and flexible in adapting to changes;

c. Commitment and accountability from each and every member is crucial if the organization is toachieve its strategic goal;

d. Communication (vertical, lateral and to stakeholders) enables clarity on what, why and howthings need to be done;

e. Conflict management helps to sustain healthy politics in the organization;f. Encouraging Creativity at all levels of the organization enhances novel ways of solving problems;g. Capacity management matches financial and human resources (skills, knowledge) with the

strategy.

The organizational levers needed to shape these capabilities are shown on the left side of the model.

Once fit is attained in all these elements of the model, the organization is able to competesuccessfully. However, in an ever-changing environment, fitting the organization to its strategy isa continuous learning process e i.e. achieving fitness. As the model indicates, learning can only leadto change when feedback about performance and capability gaps lead to changes in theorganizational levers. Neither organizational fit nor fitness can be seen as being in a fixed state ata particular point in time - rather they need to be continually revised and adapted to a changingbusiness environment.27 The model promotes a discussion and diagnosis that asks management toconsider all the levers, including their own leadership behavior (the single loop) as well the capacityof the organization to learn (the double loop).

THE ORGANIZATION

COMPETITIVEENVIRONMENT

COMPETITIVEENVIRONMENT

OR

GA

NIZ

AT

IO

NA

L L

EV

ER

S

Coordination Competence Commitment

Communication Conflict Management

Creativity Capacity Management

CAPABILITIES GOALS

Objectives

Strategic Tasks

LEARNING LOOPS

Leadership Team

Work System

Management Processes

Human Resource System

Principles & Culture

Corporate Context

Figure 3. Organizational Fitness Model (Beer, 2002) The comprehensive fitness model links businessstrategy and competitive environment with capabilities and enabling organizational levers.


An Integrated ProcessThe Strategic Fitness Process was developed by Beer and Eisenstat in response to the challengesfaced by Ray Gilmartin, CEO of Becton Dickinson, in 1990. Becton Dickinson’s top management,most of them with backgrounds in strategy consulting, felt that they had developed excellentstrategies but found that a number of organizational and management problems blocked theirsuccessful implementation. SFP was designed to create an honest organizational conversation aboutthe fit of the organization and its leadership with objectives and strategy articulated by topmanagement.28

SFP has since been applied by senior teams in approximately 200 organizational units within 23companies operating in several different national cultures (for example in Asia and Europe, as wellas North and South American companies) with different work values. Though the process has beenspecified in some detail to enable substantive analysis of the alignment of the organization withstrategy and learning, it has to be facilitated by consultants who have a systemic perspective andfacilitation skills. Both external and internal human resource personnel as well as strategy ororganizational effectiveness professionals have learned to implement SFP successfully.

The SFP process involves the following steps:

(1) Develop a concise ‘Statement of Strategic and Organizational Direction’;(2) Collect data about organizational barriers and strengths in implementing strategy (Task Force

interviews 100 key people in all parts of the organization);a. The senior team appoints a cross-functional Fitness Task Force of their best people to collect

the data;b. Similar data is collected by the consultants from the senior team itself (the only interviews

not conducted by the Task Force);c. Task Force develops list of key barriers and strengths from an analysis of its interview data

(one day preceding a three day meeting of senior team);(3) Task Force provides feedback to the Top Team utilizing a ‘fishbowl’ method (described later in

the article) that enables truth to speak to power (first day of a three day meeting);(4) Develop an integrated plan for change (last two days of a three day meeting)

a. Top Team conducts a systemic diagnosis of the organization utilizing the framework inFigure 3;

b. The leadership’s plan is then critiqued by the Task Force who first meet alone, and the twogroups work collaboratively to change the plan as needed;

(5) A meeting with the 100 key employees interviewed, at which the senior team presents what theyheard and their plans for change, begins the process of implementation;

(6) The process is ideally recycled annually and institutionalized as part of the strategic planningprocess.

The Case Study in Exhibit 1 illustrates how SFP was employed at Hewlett Packard’s Santa RosaSystems Division (HP’s SRSD - subsequently Agilent Technology) to overcome the ‘silent killers’discussed above, as well as a number of serious strategic alignment problems facing this fledglingdivision, charged with entering and growing the systems business market, a new market for HP.

Neither organizational fit nor fitness can be seen as being in a fixed

state at a particular point in time - rather they need to be continually

revised and adapted to a changing business environment.


Exhibit 1.Developing fit and fitness through SFP: evidence from Hewlett-Packard

SRSD was founded in 1992 from 14 systems product lines that came from HP’s differentdivisions. It was set up by HP’s top management to implement the company’s emergingstrategy in delivering systems solutions to customers, a significant departure for the companythat is involved in general-purpose instruments. Embedding these emerging businesses intoHP’s traditional functional organization created a number of problems.By 1994 top management was experiencing difficulties implementing its strategy. SRSD did

not fit the demands of the systems market, growth and profits were below expectation andmorale among employees was extremely low. It was apparent that SRSD was suffering fromtensions that were blocking fit (alignment) and fitness (learning).

Overcoming difficulties at HP’s SRSD through SFP29

SFP unfolded over a period of eight to ten weeks and was supported by two externalconsultants who facilitated discussions, ensuring that the process was followed as specified,and participating as resources in helping the Top Team shape organizational solutions.

Stage 1: developing a concise statement of strategic and organizational directionThe senior management team convened in a one-day meeting to prepare a statement of

business and organizational direction. While creating this statement, this ‘Top Team’ came torealize that they differed in their interpretations of the strategy and the roles of the businessteams. The meeting enabled a better understanding and agreement among all members ofthe Top Team about the strategy and requisite organizational capabilities. A learning processhad begun that opened up trust and better communication within the Top Team.A strategic statement was prepared that succinctly conveyed the division’s core strategy

and the strategic tasks and organizational capabilities needed to implement it. This strategicstatement was later employed by the Task Force in its inquiry into the alignment of theorganization with the strategy.

Stage 2: collecting data on barriers and strengths to implementing strategyThe Top Team selected an employee Task Force of eight middle managers from different

parts of the division to collect data about perceived strengths and barriers to implementingthe strategy. The general manager met with the Task Force personally to explain the strategystatement and asked them to report back the ‘unvarnished truth’. This personal appeal forhelp and the truth was seen by the Task Force as an opportunity to make a real difference inthe affairs of the organization.The Task Force, and not management, selected a sample of 80 employees throughout the

division to be interviewed (including several HP organizational units who supported SRSD’sbusiness). The Top Team was not involved in selecting the sample of interviewees so as toavoid the possibility of them picking out preferential (favored) employees. What the divisionneeded was honest opinions and views from various parts of the organization. It was the firsttime that lower level managers had been given the chance to speak up about problems theyhad known about for some time. They responded with long and often emotional interviewsthat painted a rich picture of the dynamics in the organization. Once the interviews werecompleted, the Task Force, with the help of the consultants, organized its data into broadthemes to present to the Top Team. The consultants interviewed the general manager and hissenior staff asking about the SRSD’s effectiveness and their own effectiveness as a senior team.

Stage 3: Task Force’s feedback to the Top Team: the three-day fitness meetingThe first day of the off-site Fitness Meeting was devoted to feedback from the Task

Force and consultants. The meeting opened with the ground rules for fact-based and


non-defensive dialogue. The ‘fishbowl’ process involved a meeting-room structure, based ontrial and error, which was carefully designed to encourage the Task Force to report theunvarnished truth safely. The Task Force sat facing each other around a table in the middle ofthe room (‘fishbowl’), while the Top Team sat around tables formed in an inverted-U roundthe top of the fishbowl. After a discussion of each theme the Top Team asked questions forclarification (ground rules prevent them from defending or denying that the information isvalid). Task Force members felt so strongly about the need for change that at the end of theirreport they requested an opportunity to express their own views.After the Task Force left the meeting, the consultants then fed back the Top Team’s own

views of the organization’s effectiveness and their own effectiveness as a team. The TopTeam’s perceptions were practically identical to the feedback they had received from the TaskForce, with the exception of greater details about the leadership team’s effectiveness andemotional intensity about the problems (Task Force feedback was more emotionally intense).The last several hours of the first day were devoted to a conversation about the leadershipteam and its effectiveness.The feedback from both the Task Force and consultants made it clear that all six ‘Silent

Killers’ were present in SRSD: a general manager who was conflict averse and preferred tomake decisions based on one-on-one meetings; competing strategies and conflictingpriorities between long- and short-term businesses which led to conflict over engineeringresources; senior management that focused on defending their functions’ decisions andactivities rather than taking a broader general management perspective of the wholebusiness; poor coordination rooted in an ineffective organization design and leadershipbehavior that threatened the development of three key new systems products; poor verticalcommunication that resulted in low trust, low morale and low commitment amongemployees; and inadequate number of managers with leadership skills who could lead anintegrated business or product team.Because the Top Team heard these problems from the company’s ‘best’ people they chose

and trusted, the meeting had a powerful impact and created a mandate for change withinthe senior team and the key employees of the division.

Stage 4: developing an integrated plan for changeThis consists of two parts:(i) Top Team’s analysis of the Task Force’s feedback and development of plans for redesigning

organizational and management processes using the organizational fitness model asa diagnostic framework (see Figure 3). Based on this diagnosis the Top Team developed a broadvision of how the organization and their behavior as a Top Team would change.The Top Team spent most of the second day performing a root cause examination of the

organization’s fit with its strategy. Based on the data, this analysis began with pinpointingwhich of the capabilities (7Cs based on the organizational fitness model) in the fitness modelwere problems and therefore needed strengthening given the business objectives and thefeedback gathered. The Top Team focused on two problems. One of these was how todesign an organization that would allow better resource allocation. The second focus ofdiscussion was the role and effectiveness of the senior team as well as the general manager’srole and style in leading it. They then identified organizational levers that needed to berealigned to produce the necessary changes in the final day of the three-day Fitness Meeting.Working through the analysis and agreeing on the changes in organizational design and

leadership team behavior was an intense process and took two twelve-hour days, but whichultimately produced some fundamental changes.Confronted by the consultants with three options for organizing the division the Top Team

chose to organize as a matrix. They defined the role of the senior team and the business andfunctional sides in a matrix organization as well as a new meeting structure that would allow


Results at HP’s SRSDHow effective was SFP in realigning the HP’s SRSD business unit? There are three ways this can bejudged. First, one can ask what changes occurred in the management processes and behavior of theorganization and its leaders; second, how did the business unit perform in the years following thisintervention and third, how did members of the organization see the process itself. Below we givebrief answers to these questions.

1. What changes occurred in management processes and organizational behavior?Since this organization continued to utilize SFP as an integral part of its strategic planning processover the next five years, there is considerable qualitative data about how behavior at all levelschanged. This data points to substantial change, though change continued to be a struggle.

All of the six silent barriers that blocked the organization from realignment and continuouslearning changed. The strategy and priorities became clearer and were managed more effectivelybecause the senior team became more effective and Scott Wright, the general manager, altered hisrole and approach to decision making. This was aided by the joint experience the leadership teamhad shared in receiving painful feedback and working together to redesign the organization.Coordination and collaboration between the functions increased as a result of a betterorganizational design e the matrix structure and the involvement in creating it. An unanticipatedby-product of SFP was management development both at the top and among Task Force members.When Hewlett Packard spun off its test and measurement business, of which SRSD was a part, fourof the managers on the senior team were appointed general managers of new divisions that hadbeen formed (the spin off resulted in a reorganization that ended the life of SRSD as a division). Atthe same time, morale in the division shot up and stayed high. Finally, there is little question thatvertical communication improved. The collective sense-making of the organization with regard to

them to examine priorities and resource requirements of each business. Additionally, theycreated a process for decision-making that specified how conflicts would be resolved. Therole of the general manager in all of this was defined.(ii) The Task Force reviewed the plans for change developed by the Top Team a week later to

determine if they were consistent with the feedback given and if the proposed organizationaldesign could be achieved. This made the Task Force active participants in the change effort.After the Top Team presented its proposed changes, the Task Force met separately to

discuss their reactions. They were concerned that the Top Team’s plan for changeoveremphasized strategy, structure, and systems and seriously discounted the ‘soft’ skills ofthe organization such as the people and existing senior team attitudes and behaviors.Additionally, the Task Force disagreed with the allocation of product lines to the four businessorganizations that would overlay the functional structure. Having spent hours on thisproblem during the Fitness Meeting, the Top Team became discouraged. The generalmanager, however, chose to engage the Task Force to re-evaluate alternatives. Within a weeka somewhat modified matrix structure was agreed to. The Task Force members realized howcomplex the problem was and that there was not one best solution.

Stage 5: implementing the plan with commitment from key managersIn the month following the meeting with the Task Force, the Top Team spent considerable

time communicating to the rest of the organization what they had heard, what changes theyplanned to introduce and why. This was an important step that enlisted organization-widesupport in the implementation process.At HP’s SRSD the senior team decided to recycle the process a year later. And they

continued to implement SFP once a year, positioning it in the calendar to coincide with thecorporation’s strategic planning process.


speaking up changed. Employees came to believe that management wanted to be told the truth, andsenior managers became more comfortable with truthful feedback, coming to see it as helpful tothem in engaging employees and solving problems. HP’s SRSD experienced changes inorganizational effectiveness and behavior, but its members also realized that fundamentalrealignment is not an overnight occurrence but a struggle that takes time.

2. How has the business performed since the SFP?In the years following the implementation of the Strategic Fitness Process, HP’s SRSD’sperformance improved significantly. Table 1 shows SRSD’s performance in 1993 e the yearpreceding the adoption of SFP e and for five successive years thereafter, during which period thecompany continued to implement the process annually. The only pause in continuousimprovement of performance occurred in 1998 when Asia, an important market for their business,underwent a major financial crisis. Of course, a general turnaround in the economy helped theinitial performance improvements as well, but management also felt that they would not have beenable to take advantage of this upturn without the honest conversation and focus on achieving theright goals achieved via SFP.

3. How did members of the organization see the process?HP’s SRSD management and organizational members saw SFP as instrumental in enabling a moreeffective organization and contributing to their effectiveness as leaders. This is confirmed by twodecisions. First, they decided to continue to utilize SFP as a strategic organizational alignment andlearning process annually. Secondly, when four of the Top Team members were promoted togeneral management positions they chose to employ SFP to help them organize effectively andcreate a climate of partnership with employees, colleagues and customers in improving effectivenessthrough a process of organizational learning.

The organizational effectiveness facilitated by SFP in Hewlett Packard’s Santa Rosa SystemsDivision has been matched in many (approximately 80% according to a study under way) otherorganizations that have employed SFP to have an honest conversation about their fit and fitness. Inthe 20% that did not make dramatic long-term progress, changes in ‘hard’ aspects of the

Table 1. HP’s SRSD Financial Performance

Orders Revenue Net Profit

FYr 1993 266.7 240.3 3.7

FYr 1994 255.3 235.0 4.2

FYr 1995 339.9 293.4 25.6

FYr 1996 357.9 365.1 37.9

FYr 1997 340.2 392.2 25.6

FYr 1998 332.1 365.7 14.8

FYr 1999 361.5 376.9 33.7

Orders in millions; Revenue and Net Profit in $Million

Employees believed management wanted to be told the truth.. senior

managers became comfortable with truthful feedback as helpful in

solving problems.


organization such as structure and systems were made but long-term changes in organizational andleadership behavior were not. In most of these organizations the leaders felt threatened andrejected the values of honest conversations and the partnership embedded in the SFP. Theyconsequently did not follow-up or recycle the process in the same way that the General Manager atHP’s SRSD did.

Organizational change processesContributions made to the organizational change literature are mostly practice-oriented, and theevidence and examples generated are prescriptive models in guiding change and change processes.Process studies are generally frowned upon in academia, as they are hard to conceptualize aboutand do not lead to easy generalizations, and require well-conducted qualitative studies and richdata. However, process studies carried out on strategic decision-making and change show thepromise of such studies.30

Most existing change processes have several ideas in common, such as the importance of topmanagement and lower levels recognizing the need for change, communicating the changethroughout the organization, motivating the change to be supported by all members of theorganization, encouraging open dialogue between and among levels, and emphasizing the need forleadership in supporting and implementing the change.31

Most organizations, though, continue to face difficulty in successfully implementing strategicchange. All kinds of organizations embark on change processes in their efforts to improve theirperformance during shifts in environments and situations. It is improbable that a change processdesigned for a specific situation can be universally applied to all firms with strategy fit/fitnessproblems without substantial modification. For this reason, a feasible process should have theflexibility to readily incorporate an organization’s type of business/industry, the problems,challenges and environment it is facing, and the resources and capabilities available to it.32

The following section discusses SFP’s contribution to strategic fit and implementation. The keysuccess factors of SFP have been found to be the presence of an urgent gap between business goalsand results and a CEO or general manager who shares the underlying values of the process, theopenness to feedback and learning, a belief in making key lower level employees partners in thestrategy formation and implementation process, and a readiness to learn from the process. Thesefactors define the boundary conditions for successful implementation of SFP. Our analysis for thepresent study of 12 applications found that while the SFP process always put the unvarnished truthon the table and senior teams always responded with a change plan that matched their diagnosis,sustained change occurred only in those organizations that met the boundary conditions above. Ina few instances the process actually changed the boundary conditions.

SFP’s contribution to strategic change processesChange processes generally encounter resistance not only during their introduction but also duringtheir implementation. Once a process is under way, top managers, their attention diverted to otherissues, may often neglect to follow up on its progress. This ultimately contributes to the failure ofthe process. SFP ensures that top management is involved throughout the process and that topmanagers provide and show continuous guidance and commitment. The starting point for

Change processes encounter resistance during [both] introduction and

implementation. . top managers’ attention is diverted and they

neglect to follow up progress.


participation in the SFP is when top management prepares a statement about the direction of theorganization, the umbrella strategy. This serves both to determine if members of the organizationare appropriately familiar with the strategy, and to get their input regarding the suitability of thestrategy with the competitive environment facing the organization, as well as their views on whatprevents the organization in realizing its strategy.

Of course, the basis for any organization that hopes to achieve success in a change program is itsrecognition that there is need for change. This entails both top management and lower levelsbreaking free from the mental models and ‘comfort zones’ that constrain them from acknowledgingbarriers to strategy implementation. In order to make the best possible sense of the complex anduncertain changes in the competitive environment, and to make informed decisions regardingthe direction of the organization, top managers should be able to embrace and integrate theinformation and knowledge that flow continuously through the organization and environment. Themost creative ideas and novel approaches to solving problems may well originate from members ofthe organization’s lower levels, who are in touch with customers and the competitive environment,and who can grasp subtle discontinuities as they take place.

SFP provides a ‘disciplined’ process that enables key people to share their expertise andknowledge that ultimately become valuable inputs for an informed decision on strategic change. Asnoted above, managers and employees alike often work in a state of resistance to change, protectingtheir turfs. Employees may also have difficulty in finding a safe and effective communicationmedium to help them to convey their ideas to someone who can actually incorporate their inputinto the change process. Because SFP engages key people in the organization in an honestconversation, one that is rare in organizations, the process enhances trust, reduces cynicism andcreates commitment to change among key managers (the 8 members of the task force and the 100who have been interviewed). Their hopes and their enthusiasm for change are raised when theyobserve senior management accepting feedback and acting on it.

Top management, in turn, is wary of uncontrollable and divergent views that could develop intoanarchy if free rein is given to employees to express their views. Another top management concerncould be the feeling of exposure and vulnerability at their abilities and effectiveness in directing theorganization being questioned.33 To offset this resistance problem, SFP provides a disciplinedmeans whereby employees participate in giving input that is related to strategy, environment andorganizational capabilities without fear of personal retribution (e.g., the explicit plea from the topto hear the whole truth from lower levels, the fishbowl setup, the ground rules for fact-based andnon-defensive dialogue). Top management comes to realize they are getting feedback that has to dowith improving the organization, its strategy and its implementation, and not personal attacks ontheir positions. Such an honest upward communication process not only enables information toflow upwards, it has had a profound affect on senior teams. Senior teams are put in touch with theemotions that their key people have about the current state of organizational and leadershipeffectiveness. The distance between the senior team and key managers below is reduced sharply,releasing the possibility of change.34

In effect, leading an organizational learning process means holding an organization-wideconversation about the strategy and the organization’s alignment with it. The more the processengages a critical mass of employees in the process of honest inquiry and action, the more likely it isthat lower levels will become committed. Such a conversation can lead not only to better fit; butalso to improved fitness since organizational members learn that ‘speaking up’ has utility andleaders learn a process and its underlying principles. An important by-product of SFP is the degreeof involvement it fosters and the belief it creates that senior management will respond to problemspreviously buried by organizational silence.

Data collected regarding the causes of gaps between strategic intent and actual implementationbecome more powerful when the data comes from the organization’s own employees. One of SFP’smost potent thrusts is in its Task Force, whose members are highly regarded and trusted by bothtop management and the rest of the organization. The team comprises individuals whose selectionis based on their excellent performance and potential, their objectivity, and the fact that they enjoy


the trust of all employees, including senior management. Thus senior management cannot denydata the Task Force reveals, and it is more likely for top managers who become sufficientlydissatisfied with the status quo to engage in thinking about needed changes.

Once top management is awakened to the need for change, and the task force and the employeesthey interview have strong expectations for improvement, there is an eager motivation for strategicchange. Consultants introduce heuristics as part of the social technology at various points to helpthe senior team clarify its strategy, consider alternative organization design solutions, and analyzeand improve its effectiveness as a senior team. The change plan generated by the Top Team issubsequently considered and reviewed by the Task Force. If there is any issue that the Task Forcefeels is not dealt with, both teams work together to come up with a better solution. By engaging thetask force in a critique of its plan for change, the senior team succeeds in making the Task Forcepartners in the change process. A sustained partnership (the senior team meets with the Task Forceseveral times a year) ensures feedback about how the organization change is progressing, and makesnecessary adjustments along the way.

Strategic directions need to be continuously adapted and honed to meet changes in theenvironment. This entails an ongoing process of evaluating and adapting the fit of strategy withenvironment and the alignment of organizational capabilities and levers in achieving strategic goals.Iterative yearly applications of SFP at Hewlett Packard’s SRSD (and other organizations) haveshown that relevant data is surfaced and continuous adaptation occurs. In effect, SFP enables seniorteams to adapt their understanding of their strategy and to continuously realign their organizationwith the emerging strategy.

Potential limitations of SFPThe Strategic Fitness Process is not about strategy content, crafting new strategy or even strategy-making. It is predominantly about strategy implementation, and this process begins with the seniorteam reaching a consensus about strategy as the first step in SFP. The process then guides seniorteams through honest organizational-wide conversations that lead to self-diagnosis and changeintended to align organizational design, commitment and behavior with strategy, thus increasing fitand fitness. It is a generic process derived from application in a diversity of corporate environments,and has given overwhelmingly positive results when appropriately implemented and, importantly,when a number of conditions we specify below exist.

First, senior management must recognize a gap between aspirations (strategy content) and theactual situation (results), and acknowledge there is a business problem.

Second, leaders must be willing to confront conflict and that exposes their vulnerabilities. This isnot easy to achieve: in our research we have found that new leaders are disposed to, and feel morecomfortable with, dialogue about barriers to organizational effectiveness, while leaders that havebeen in their positions for some time (like Hewlett Packard’s Scott Wright), find uncovering issuesthat touch on their and the organization’s capabilities more challenging. However, many have doneso successfully. The implication is that leaders can succeed with SFP only if they are open tolearning and accepting conflict. Leaders must genuinely embrace and commit to the process and itsunderlying values; superficial commitment will only lead to failure of the process and its outcomes.Leader readiness is tested at the outset by clearly describing the process and barriers - like the silentkillers - that typically emerge.

Data [about] gaps between strategic intent and actual implementation

is more powerful when it comes from the organization’s own

employees.


Third, SFP is less challenging when the culture of the company is participative and values peopleas partners. Participation, partnership, open communication, honesty and trust are some of thedescriptions that portray the kind of culture that supports processes like SFP. In the hands ofa willing leader, initiating the SFP process begins the change of culture in the organization.Conversely, organizations that are more hierarchical and control-directive have found SFP morechallenging, since it violates their culture and values.

SFP is, therefore, most appropriate in situations where there are performance gaps ororganizational problems blocking performance. Experience with SFP has shown that under thesecircumstances most managers are sufficiently motivated to engage in the honest and necessarilypainful conversations about the organization’s fit, and to learn from the process as it evolves,thereby enhancing the organization’s fitness. We suggest the process is most applicable in optimallyaligning an organization with its strategy.

ConclusionAn ever-challenging competitive environment demands that business organizations continuallyadapt their organizations to new strategic circumstances. While we have known for years that fitmust exist between strategy, the environment, the organization’s design, leadership behavior andculture, there is considerable evidence that leaders and organizational members are slow to makethese adaptations. Realignment may involve considerable losses in power, relationships, identity,sense of competence, status and rewards, security and ultimately self-esteem. This is what causesmany senior managers to avoid confronting difficult strategy alignment issues. And when they tryto engage these issues, change is likely to be piecemeal, halting and slow, resulting in failure of‘fitness’ in its environment.

This article describes a method e the Strategic Fitness Process (SFP) - and its underlying theoryby which organizations can effectively realign to fit strategy and capabilities, in a way that alsobuilds their fitness, i.e. their capacity to learn, change and adapt quickly and in advance of a crisis.The value of SFP is in the detailed step-by-step specification of a strategic learning process andboundary conditions for effective implementation, all based on theory and research in variouscorporate environments. A specified leadership platform for strategic learning can be useful tomanagers and corporate leaders interested in institutionalizing a strategic management andorganizational learning process in their multi-unit enterprise.

AcknowledgementsWe gratefully acknowledge Charles Baden-Fuller, the Editor-in-chief of Long Range Planning, andtwo anonymous reviewers for their highly valuable comments and suggestions which significantlyimproved the paper. We also wish to thank George Roth, Academy of Management Program Chairfrom MIT, and three anonymous reviewers for their constructive thoughts on an earlier version ofthis paper that was presented at the Academy of Management Conference in New Orleans, 2004.

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values; superficial commitment will only lead to failure of the process

and its outcomes.


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34. For more on how the defensive postures of senior managers inhibit strategy development, see D. Tourish,Critical upward communication: Ten commandments for improving strategy and decision making, LongRange Planning 38(5), doi:10.1016/j.lrp.2005.05.001

BiographiesMichael Beer is the Cahners-Rabb Professor of Business Administration, Emeritus at the Harvard Business School

and Chairman of the Center for Organizational Fitness. Harvard University. Harvard Business School Soldiers Field

Boston, MA 02163, USA Email: [email protected]

Sven C. Voelpel is the Director of WISE Business Research and Professor of Business Administration at the Jacobs

Center for Lifelong Learning and Institutional Development of the International University Bremen (IUB),

Germany. He is also, since 2001, a Visiting Fellow at Harvard Business School and the Graduate School of Arts and

Sciences at Harvard University. Harvard Business School, Soldiers Field, Boston, MA 02163, USA, Email:

[email protected]

Marius Leibold is Professor in Strategic International Management at Stellenbosch University (SU), South Africa,

and also Professor of Strategy at Business School Netherlands International. He holds visiting professorships in

North America and Europe. University of Stellenbosch, Private Bag X1, 7601 Matieland, South Africa Email:

[email protected]

Eden B. Tekie is Research Associate in the Department of Business Management, Stellenbosch University, South

Africa. University of Stellenbosch, Private Bag X1, 7601 Matieland, South Africa Email: [email protected]


http://dx.doi.org/doi:10.1016/j.lrp.2005.05.001

mailto:[email protected]




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