bands strike a groove, they are simultaneously acting and learning. Organizations, when operating in the groove (to borrow a musical phrase), are like jazz players— diverse specialists living in chaotic, turbulent environments; making fast, irre- versible decisions; highly interdependent on one another to interpret equivocal information; dedicated to innovation and the creation of novelty. Jazz players do what managers find themselves doing: fabricating and inventing novel responses without a pre-scripted plan and without certainty of outcomes; discovering the future that their action creates as it unfolds. This raises another question. If we want to create flexible, adaptive systems capable of improvisation and spontaneous transformation, how do we begin to reshape our organizations? Have our change methods kept up with the depths of strategic shifts required? Do our models and theories of strategy formation and change management allow us to reshape the entire enterprise? Our purpose in this chapter is to explore one method of strategy formulation that seeks to involve the entire system in designing the future—the Appreciative Inquiry Sum- mit. This method combines the better of two important movements in the field of organization development—large group interventions and appreciative inquiry—to forge a new format for strategy formulation in organizations. As we will show below, this is a process that involves the entire system in the evolu- tion of strategy and strategic change. It’s time to take the final step in freeing ourselves from the shackles of Taylor’s scientific management; it’s time to end the separation of thinking and doing, the gulf between planners and workers. We will begin by reviewing a few of the basic assumptions of traditional approaches to strategy and outlining the trends that are subtly undercutting this traditional approach. In the next part of this chapter we highlight five subthemes that mark this shift, drawing from a variety of fields to show a convergence that is emerging in how we approach the formulation of strategy to bridge the gulf between planners and implementers. In the final section of the chapter we dis- cuss one innovative approach to strategy formulation—the Appreciative Inquiry Summit—that seeks to embody these shifts that we outline. We will present a brief sketch of the summit design logic and flow of activities to show how these events have the potential to revitalize the strategy process in a way that is con- sistent with these five trends. A REVOLUTION IN STRATEGY: BRINGING EVERY MIND INTO THE GAME TO RESHAPE THE ENTIRE ENTERPRISE In his final letter to the stakeholders at GE, Jack Welch made an amazing state- ment. In order for GE to succeed, he wrote, the company needs to create “a cul- ture that breeds an endless search for ideas that stand or fall on their merits, BRINGING EVERY MIND INTO THE GAME TO REALIZE THE POSITIVE REVOLUTION IN STRATEGY 511 30_962384 ch22.qxd 2/3/05 12:24 AM Page 511 rather than the rank of their originator, a culture that brings every mind into the game.” We have seen a plethora of programs that have made attempts in this direction—quality of work life programs, total quality management, and re-engineering are a few examples. These are attempts to give participants a sense of contribution to and responsibility for the welfare of the whole system. While these programs have made some contributions to the way implementa- tion and quality improvements are introduced, what we have not yet witnessed is a proposal to revolutionize and democratize the way that strategy is formu- lated in organizations. Efforts to create participative decision making, employee involvement, and so on, have challenged many sectors of the firm, with the exception of one—the corporate board room. Strategy decisions continue to be the exclusive right of top management. We are hearing calls for a strategy process that invites multiple stakeholders to participate in the future destiny of the firm, to create policies and programs that benefit the entire system. What is needed is a process that invites every voice into the inner circle of strategy for- mation and promotes broader cooperation, bold idea generation, committed action planning, and rigorous execution of these ideas. In the last section of this chapter, we propose the appreciative inquiry summit as a process that takes Welch’s notion seriously—bringing every mind into the game, actively solicit- ing ideas regardless of the rank of the originator. As we explore below, we have taken seriously Marvin Weisbord’s call to “get the whole system in the room.” A few of us who have been involved with the development of appreciative inquiry were inspired by this proposal and we too began to design events that included large groups. We experimented with large group events in organizations from private and public sector, including The United Religions Initiative, GTE, Nutrimental, Roadway Trucking, and the U.S. Navy. One of the most important developments in our approaches to organiza- tional change has been the challenge to the aforementioned assumption about strategic planning. Is it possible to do strategic planning with sixty people? How about 250? 350? 1,000? While we are still in the experimental stages of the AI summits, we are witnessing the power of whole system positive change. Consider examples such as the following: • A trucking company in a highly competitive market, trying to find every possible way to save margins. And imagine a dock worker, trained in the use of the Porter Five Force Model (Porter, 1980), diagnosing the market trends and competitive forces that challenge his plant. The company has opened the financial books and disclosed the economic trends that are usually the exclusive property of top executives. This company knows that this dock worker is committed to improving the competitive advan- tage and creating value for the company. In fact, based on his analysis 512 PRACTICING ORGANIZATION DEVELOPMENT, 2ND EDITION 30_962384 ch22.qxd 2/3/05 12:24 AM Page 512 of the competitive market, he comes up with an innovative suggestion that will save millions of dollars. • The U.S. Navy is experiencing radical changes in the structure and needs of families and personnel needs of their sailors. Imagine a spouse of a sailor who is stationed overseas leading a task force that reconsiders the billeting policy for the entire Navy. • A secretary for a multinational food corporation analyzes market data and leads a focus group to consider whether the company should shift to organic foods. What do these three vignettes have in common? These three organizations— Roadway Trucking, The U.S. Navy, and Nutrimental Foods—engaged in a rev- olution: large group positive change. This revolution challenges one of the most sacred cows in management—the strategic planning books that assume only those trained in MBA programs are able to understand this esoteric, complicated world of strategy. However, our experiments in large scale positive change have led us to ask whether it is time to challenge this holy grail: Why shouldn’t a line worker have access to company balance sheets; a secretary create a process for helping to set the strategic direction of the firm; a family member of an employee help to create the family support policies of an organization? In this chapter, we will explore strategy designs that include such voices and designs in which we involve the entire system in crafting the future. CHALLENGING THE TRADITIONAL APPROACH TO STRATEGY: THE END OF D-A-D Most of the strategic management theories we have inherited start with the assumption that the strategy formulation process occurs at the strategic apex and operates like a waterfall: top managers formulate corporate goals that guide busi- ness unit strategies that then guide tactical strategies among functional units (Hamel & Prahalad, 1989). This theory assumes a dualistic framework that sep- arates planners from doers. For years there has been a widely accepted dichotomy between strategy formulation and strategy implementation: never the twain shall meet. Implementation is often distant in time and place from the site, often a boardroom, where plans were devised. The top managers have access to significant market data; they gather information, deliberate on the situation, and do a SWOT analysis. This separation of planners from implementers stems from Fredrick Winslow Taylor’s scientific management. We call this the DAD model: senior managers Decide, Advocate, and Defend. The experts decide and hand decisions down to middle levels, who are responsible for executing at lower BRINGING EVERY MIND INTO THE GAME TO REALIZE THE POSITIVE REVOLUTION IN STRATEGY 513 30_962384 ch22.qxd 2/3/05 12:24 AM Page 513 levels. Now the planners have to advocate or sell the decisions to others in the sys- tem. At this point, internal stakeholders who were not privy to the trends and financial data that the top managers deliberated on begin to question and chal- lenge the decisions. The strategists who are invested in the rationale of their own decisions then must defend the policies and the logic. The problem with the DAD model is that, at this point, when you’re in a defensive posture, learning is blocked. Education theory has demonstrated that defensiveness drives out learning. When strategists are preoccupied with defending a position, they are less open to learn- ing from new perspectives at the very moment when learning is most needed. This top-down model of strategy making is no longer appropriate for orga- nizations seeking to be competitive. We are witnessing a subtle revolution in the field of strategy that marks a shift, a model that does not rely on the dual- istic separation of strategic apex and the rest of the system, one that allows for ongoing inquiry and learning. Strategy, from this perspective, is ongoing trans- formation that involves the entire system. This subtle shift begins with the assumption that organizations are most innovative and adaptive when everyone is thinking and acting strategically. This revolution expands the leadership capacity of the whole system—everyone is connected to, and committed to, the entire enterprise. The focus of strategy, in our view, should not be the outcome—the so-called “strategic plan.” Rather, the process of reflection, con- sidering options and scenarios, deliberating on market information, dialoguing among diverse stakeholders, joining other partners in committing to courses of action—these processes are the transforming catalysts in the strategy process. With this in mind, we will explore this shift along the following dimensions: • From Deficit Orientation to Appreciative Inquiry; • From Small Groups to Whole Systems; • From Strategic Goal Setting to Strategic Visioning; • From Strategic Planning to Strategic Learning; and • From Strategic Thinking to Strategic Relating. When this shift has occurred, when all voices are included in the “inner circle” of strategy—when every mind is in the game envisioning, learning, relating strate- gically—the enterprise flows and “hits a groove,” like jazz bands improvising. FROM DEFICIT ORIENTATION TO APPRECIATION The traditional approach to organizational change has been rooted in problem solving. The basic assumption that informs diagnostic models (French & Bell, 1984) has been that, to help systems improve, it’s necessary to first diagnose 514 PRACTICING ORGANIZATION DEVELOPMENT, 2ND EDITION 30_962384 ch22.qxd 2/3/05 12:24 AM Page 514 the problems that are at the root of breakdowns. At the surface, this approach seems appropriate—to improve performance, look for the gaps, address the problem areas, and introduce solutions. Interventions, following this model, often ask members to focus on what is occurring when their department or organization is problematic, under-performing, dysfunctional. This first instinct—to ask about problems—is so automatic it barely seems to warrant questioning. (“What is the biggest problem you face around here? What has kept you from doing a good job? What is the biggest customer complaint?”) We have learned to pay attention to the kind of conversations that these questions trigger (see Ludema, Cooperrider, & Barrett, 2000). Problem-focused ques- tions invite people to elaborate further on disappointments, gaps, unmet expectations—the root causes that lead to breakdowns. Mini-theories emerge that link dysfunctional symptoms with causes; stories proliferate about trou- blemakers and problem tendencies. No wonder that often there is a tendency for people to live with diminished expectations; systems learn to foster a “learned hopelessness.” We have come to call this “low morale.” As we have argued elsewhere (Cooperrider, Barrett, & Srivastva, 1995; Cooperrider & Whitney, 2000), a problem-solving mentality is limited in fur- thering innovation. Dwelling on problems is inherently conservative, furthers a deficiency orientation, creates a social hierarchy of experts, contributes to broad cultural and organizational enfeeblement, and creates further separation between stakeholders, who become experts in smaller parts of the problem (see Barrett, 1995). Diagnosis of past problems does not unleash the creative imag- ination that would lead to innovative breakthroughs. Further, as we will address more fully in the next section, problem solving hinders holistic awareness of dynamic systems: It furthers a mechanistic approach to inquiry that hinges on the belief that problems can be isolated, broken down into parts, repaired, and then restored to wholeness. Organizational interventions that seek to cultivate innovation need to become unlocked from conventional assumptions regarding diagnosis and problem solv- ing. Appreciative inquiry is a strength-based approach to transforming human systems toward a shared image of their positive potential. Beginning with the unconditional positive question (Ludema, Cooperrider, & Barrett, 2000), through guided conversations, called “appreciative interviews,” members discover the best of their shared experiences and tap into their capacity for cooperation. The art and practice of crafting positive questions supports a system’s capacity to notice and anticipate positive potential. Efforts to discover and elaborate the positive core—the past, present, and future capacities of the system—are more likely to lead to innovation and transformation. Inquiry and change are related, integral, whole activities. When we place the word “inquiry” after the word “appreciative” we emphasize the committed, open-ended search, the mutual interdependence and collaboration in seeking BRINGING EVERY MIND INTO THE GAME TO REALIZE THE POSITIVE REVOLUTION IN STRATEGY 515 30_962384 ch22.qxd 2/3/05 12:24 AM Page 515 those lifegiving forces that we value. For many of us raised in an industrial world of problems that seem to have technological solutions, the world might seem stripped of a sense of wonder and awe. To some it might seem irrelevant or worse—absurd or naive—to pause, reflect, and open ourselves to the depth of inquiry. To appreciate the potency of “inquiry” means valuing the notion that new understanding emerges when we begin our questioning from a different starting point, one in which we welcome the unknown as an opportunity for new discovery. It means suspending our confidence in old certainties and standing in a place of wondering. This is why the two words—appreciation and inquiry— belong intimately together. When we make continuous attempts to discover the lifegiving properties of organizations, ask about the root causes of success, and what is happening when organizations are operating at their best. Then we stand open to generative possibilities that might otherwise escape notice. As we will see in the design of the summit, appreciative inquiry seeks an inclusion of a widening circle of multiple voices, creating opportunities and forums for surfacing inspirational stories, the voicing of new vocabularies of pos- sibility, new conversations, and voices of hope and inspiration. The aim of engag- ing an entire system is to break out of a problem-centered diagnostic framework and unleash a vocabulary of positive possibilities that challenge the status quo; to generate new knowledge that expands the “realm of the possible”; to help members of an organization envision a commonly desired future. Such “futures,” based on hope, a positive anticipatory image, and linked to actual experience of being at one’s best, are naturally compelling and attractive. They attract energy and mobilize intention. Taken together then, appreciative inquiry refers to: “a collaborative effort to discover that which is healthy, successful and positive in organizational life; AI involves attending to current successes and past strengths, listening for peak experiences, exceptional moments, intriguing possi- bilities with the aim of discovering what is happening when the human system is operating at its best. Beginning with the assumption that every human system already has features of health and well-being, appreciative inquiry is a deliber- ate, systematic search for those distinctive stories, metaphors, dreams, musings, wishes that embrace a spirit of vitality and potency. It involves searching for the antecedents, catalysts, and supporting factors that embolden and promote the enduring spirit, the central strengths and competencies that contribute to the exceptional potential and vitality of the whole system.” FROM SMALL GROUPS TO WHOLE SYSTEMS Throughout the 20th Century studies in social psychology have supported the notion that the ideal group size is eight to twelve. Many credit the birth of the field of organization development with the awakening to the power of small 516 PRACTICING ORGANIZATION DEVELOPMENT, 2ND EDITION 30_962384 ch22.qxd 2/3/05 12:24 AM Page 516 groups to effect change. Lewin’s (1951) groundbreaking work for the Office of Naval Research concluded that “involved participation” in small group deci- sion making was critical to changing housewives’ willingness to buy alterna- tive meat products. Later studies continued in the same vein. Baumgartel’s (1959) study at Detroit Edison concluded that “intensive, group discussion . . . can be an effective tool for introducing positive change in a business organi- zation.” Coch and French’s (1948) research in a clothing factory found that quality improved when small groups were able to discuss how to improve work methods. Taken together, these famous early studies gave birth to the field of action research and with it the unquestioned assumption that small groups are the best vehicle for supporting positive change. This assumption has been taken for granted in the field of strategy: the common sense notion is that strategy should be formulated by a small group (from ten to twelve) of top managers. Marv Weisbord (1993) claimed that deep and longlasting change is more likely if you get the whole system in the room. Not since Kurt Lewin’s fruitful contribution has a single sentence had such resonance throughout the field of organizational change. We have seen an exploding interest among change agents in experiments in large group interventions. The Search Conference (Emery & Purser, 1996), The Conference Model (Axelrod, 1992), Future Search (Weisbord & Janoff, 1995), Whole Scale Change (Danemiller Tyson Associates, 2000) are but a few of the developments in the last decade. In our experiments facilitating appreciative inquiry summits, we have worked with groups ranging from sixty to one thousand for three to four days. In our experience designing and facilitating summits, we have witnessed a transformation occur when the “whole system” is assembled in the room. Various voices are gathered together in real-time conversation; each individual is invited to share his/her perspec- tive and hear about others’ experiences and views, unleashing new action pos- sibilities that might have gone unimagined. As we will discuss below, in the design of the appreciative inquiry summit, we also encourage the inclusion of external stakeholders, such as customers and suppliers. We hypothesize that the design decision to include multiple and diverse voices is the crucial catalyst that leads to a change in mindset, because people have access to an integral image of wholeness that transcends well-learned routines. Habits are interrupted; expansive and inclusive scenar- ios are proposed. The more that we can design a process that privileges every voice, that allows participants to see the emergence of the whole relational fabric of the firm, the more participants are pulled to contribute their best think- ing. At a basic level, it is simply harder to maintain negative stereotypes of co- workers or the customer or the supplier when these parties are in the room, talking about their concerns and needs and the constraints they face. Partici- pants engaged in generative conversations that focus on what would benefit the BRINGING EVERY MIND INTO THE GAME TO REALIZE THE POSITIVE REVOLUTION IN STRATEGY 517 30_962384 ch22.qxd 2/3/05 12:24 AM Page 517 whole enterprise are able to experience directly a common sense of purpose and direction. When multiple and diverse voices are invited to participate in the ecology of the firm, they have glimpses of a holistic, integrated web, the dynamic unfold- ing of the enterprise. Our borrowing of the term “ecology” here is deliberate— it stems from “eco,” that comes from the Greek word “aikos,” meaning household. The summit dialogue is an invitation to consider the mutually shared “household.” Participants are able to consider the life-sustaining stew- ardship of the system, a perspective that inspires an expansive thinking and multiple ways of knowing—imagining, feeling, talking, and acting. It is no acci- dent that the ecology movement uses a vocabulary of “sustainability.” Seeing and living “whole systems” is a catalyst for personal and organizational trans- formation because participants ask themselves: “What is my personal relation- ship to this living system and how is it sustained?” Often people shed the biases that kept them from noticing how much they depend on one another. Unlike change programs that are rolled out, in which a few at the top inform the many at the bottom, in the AI summit change is unfolding in real time. The rationale for decisions is available to all parties because they are witnesses and partici- pants. We have seen what happens when a critical mass of people have the opportunity to make changes they feel are needed; necessary changes are now seen as everyone’s work rather than some “flavor of the month” that has caught management’s attention. FROM GOAL SETTING TO STRATEGIC VISIONING Henry Mintzberg (1994) debunks popular approaches to strategic planning as overly analytic. Too often, in fact, strategic planning becomes an exercise in fea- sibility assessment. Managers accept or reject strategies based on appraisal of resources, on how feasible a project is, how precise the metrics, or how clear the risk assessments (Hamel & Prahalad, 1989). In this sense, strategic planning is limited to what is knowable in the present. These planning methods might be appropriate for incremental improvement. However, with a feasibility orien- tation, planners do not stretch beyond what seems to be “reasonable” limits to redefine the boundaries of what they experience as constraining. Plans reflect assessments of present problems and “challenges” as future concerns are framed in terms of today’s opportunities and obstacles. Mintzberg hinted at an alter- native to rational goal setting: In order to be effective, he claims, strategy should involve intuitive glimpses of possibility. In the same light, Hamel and Prahalad (1989) have argued that it is impor- tant to bring the future back into the present; the focus is not “How will next year be different from last year?” but “What must we do differently next year 518 PRACTICING ORGANIZATION DEVELOPMENT, 2ND EDITION 30_962384 ch22.qxd 2/3/05 12:24 AM Page 518 to get closer to our strategic intent?” We have come to appreciate recently the role of imaginative competence—the capacity to create a vivid image of a hope- ful future. We call this the anticipatory principle—the development of imagina- tive capacity to form possible images of future states. In the field of psychology, motivation theorists emphasize the role of “future time perspective.” Studies of adolescent students, for example, demonstrate that those students who have positive images of a long-time horizon are more motivated and outperform those students who have a shorter time perspective and a lack of hopeful future image. (See Lens & Nuttin, 1984.) The anticipatory principle begins with what seems to be a counterintuitive hypothesis: If you want to change a human system, change the future. This sug- gests that perhaps the most potent vehicle for transforming human systems is our ongoing projection of a future image. The collective image of the future pre- selects what there is to notice in the present and guides action. The philosopher Martin Heidegger discusses how we are always already creating anticipatory futures. We are always projecting a horizon of expectations that brings possible future pathways into the present, and then we proceed to live “as if” it were already happening. Conversations at the summit are powerful because they are future-oriented and alter expectations regarding what is possible; members anticipate expansive scenarios of positive futures. Historian Frederick Polak (1972) discusses the power of entertaining positive images of the future: “At any moment, there are hundreds of images of possible futures being gener- ated within each society and thousands for the planet as a whole. In any cul- tural epoch, only certain images of the future out of that much wider pool develop enough cultural resonance to affect the course of events. There is a selective empowerment of certain images, which ‘explode’ later, like time bombs, into the realized future. The images of ideal island societies providing for the welfare of all their inhabitants, coming out of literature inspired by 15th and 16th Century voyages of discovery, created such a time bomb for modern society, producing the completely new phenomena of the welfare state in the West.” ( p. 116) Elise Boulding (1988) understood the power of future imagery and warned that a world of technocratic problem solvers may be truncating our capacity to create positive images. Often, in this age of high technology and Internet speed, for every messy problem there seems to be an eventual technological solution. We have come to over-rely on technology and have become too passive as we wait for elite experts to invent solutions. It is important that we recover our “image literacy,” our capacity to imagine positive futures. Boulding reminds us that most of us have learned to ignore this image-making capacity of strategic visioning: “Children do it all the time, but it is called daydreaming, and they are punished for it” (1988, p. 86). BRINGING EVERY MIND INTO THE GAME TO REALIZE THE POSITIVE REVOLUTION IN STRATEGY 519 30_962384 ch22.qxd 2/3/05 12:24 AM Page 519 Simply creating a strategic plan and handing it down for others to implement risks that employees will fail to identify with goals. Strategic visioning, on the other hand, involves widening the inner circle of voices to include the entire sys- tem in dialogue about possible futures. Hamel connects this to his call for ongo- ing innovation and involving the entire organization in “leading the revolution.” Perhaps, then, we should consider anticipatory imagination as a strategic resource and core competence. Continual renewal demands a method to mobi- lize all voices in envisioning and anticipating, involving all employees in enter- taining discontinuous innovations, products and services that exceed customer expectations, new business processes, and new business models. In such con- texts, when parties have a voice in suggesting positive futures, they have unusu- ally high commitment in seeing that agreed-on actions are implemented fully. Strategic visioning is a call to reclaim our image literacy, to create conversa- tions that look different from goal-setting conversations. Visioning forums are not designed to diagnose past problems or solve old conflicts. Rather, they are conversations that unleash the collective imagination to talk about pos- itive futures and innovative possibilities; they are deliberately designed to elicit ideal scenarios, to encourage parties to think beyond “more of the same,” to imagine products and services that have the power to alter customers’ expec- tations, to consider new business models, and to imagine radically new strate- gies. When engaged in strategic visioning, members notice latent customer needs and imagine ways to respond; they imagine new markets, emerging tech- nology, opportunities for profitability and growth. Creative and intuitive ideas are able to flow because the conversations are permitted to take place away from current premises. As we will explore below, creative visioning is a core activity in AI summits, particularly during the second phase, in which partici- pants are encouraged to imagine the best of possible worlds, to imagine the impossible. There is a difference between imagining the organization that one would like to see in the future as opposed to changing the one that exists today. FROM STRATEGIC PLANNING TO STRATEGIC LEARNING Most strategy books emphasize prescriptive steps in the planning process. Steps guide planners to define purpose, write values, create vision and mission state- ments, communicate goals, plan actions, provide metrics to measure progress, and so on. Often these are activities organized and led by planning departments of senior staffers, armed with tools such as SWOT analysis and Porter’s five forces model, divorced from the day-to-day operations of the organization, cranking out vinyl-bound reports outlining operational and financial details, competitive positioning, and future markets. 520 PRACTICING ORGANIZATION DEVELOPMENT, 2ND EDITION 30_962384 ch22.qxd 2/3/05 12:24 AM Page 520 . important movements in the field of organization development large group interventions and appreciative inquiry—to forge a new format for strategy formulation in organizations. As we will show below, this. no acci- dent that the ecology movement uses a vocabulary of “sustainability.” Seeing and living “whole systems” is a catalyst for personal and organizational trans- formation because participants. planning departments of senior staffers, armed with tools such as SWOT analysis and Porter’s five forces model, divorced from the day-to-day operations of the organization, cranking out vinyl-bound