Instead of approaching business as a series of problems to be solved – say, how to cut down on spending, or how to keep employees from getting bored at work – organisations should take a more appreciative look at themselves. That’s the aim of appreciative inquiry, a change method that consultant Bill Swedish thinks can help businesses get out of a negative rut.
The problem-oriented approach limits business thinking, and companies end up being reactive instead of proactive. “We limit the scope of what we consider as real possibilities for our organisations,” said Swedish, who will speak and lead a workshop on strategic planning next week at the American Institute of CPAs CFO Conference. “Appreciative inquiry doesn’t ignore problems, but it intends to look at problems from the other side, that side being opportunity. And it intends to take the organisation out of the realm of negative thinking – thinking of scarcity, thinking of lack, thinking of problems – and move the organisation into thinking about capabilities, strengths and opportunities. And that shift – that does magic.”
Here are the four D’s of appreciative inquiry, with explanation from Swedish:
- Discovery: This phase is characterised by discipline and rigour, designed to define the “positive core” of the organisation. What are the values? What do we do when we’re at our best? Organisations must avoid looking at questions such as, “What’s wrong with us?” Swedish said. It’s not about fixing but about identifying what doesn’t need fixing and can be improved.
- Dream: In this phase, organisations explore their possibilities. “How can we create the biggest, wildest, happiest, most fulfilling future, and not just in terms of profit?” The dream phase involves thinking beyond customary boundaries. “We take the limits off and identify what these pictures of the future could be,” Swedish said. An example of a company dreaming of a new strategy: Netflix, the movie rental and streaming company that evolved from delivering DVDs to creating original content.
- Design: This is a practical phase, where the ideas and energy of the first two phases are prioritised. “What has the highest value? What is the most important thing for us to do?” This is where organisations take a focused look at systems and structures, decision-making processes and overall market strategies, Swedish said. Companies should take the best of their past, the positive core from the discovery phase, and align it with what’s possible, the dream phase, and, then, in the design phase, develop a plan.
- Destiny: This phase is “a series of inspired actions,” Swedish said. The phase is ongoing, where the emphasis on thinking beyond boundaries repeats itself. In the destiny phase, an organisation “lives its dream and its design and executes on that design to mould its future.”
The process then can repeat itself. Companies can go back and “rediscover” – expanding or sharpening their core. “The destiny phase is really about specific commitments that the organisation makes and that the personnel in the organisation make regarding this path forward, and that’s where the change actually happens,” Swedish said.
One reason strategic planning processes fail, Swedish said, is that organisations view them as an add-on. Employees think of time spent on strategic planning as something they muddle through so they can get back to their real jobs.
“The mentality that you have to go into this with is, ‘We are changing the way we think about the way we plan and execute in this organisation,’ ” he said. “It takes leadership and commitment. It takes some education. People have to understand the what and the why as well as the how about appreciative inquiry. But for it to work, the organisation needs to embrace this as the way forward, and not as a separate, side project.”
Related CGMA Magazine content:
“Strategic Planning Leads List of Finance Priorities”: Harnessing data for strategic planning, streamlining processes and bracing for heightened regulatory concerns were the top priorities for CFOs and the finance function heading into 2014, according to a Protiviti report.
“Five Critical Factors in the Design of a Strategic Plan”: Strategic planning can’t happen if a company is leadership-deficient, says executive coach Larry Bienati. This article focuses on five critical success factors in the design, accountability and execution of a strategic plan.
—Neil Amato (firstname.lastname@example.org) is a CGMA Magazine senior editor.