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This paper examines the experience of introducing a continuous improvement tool to the management of an advance technology software engineering company. The model, Strategic Analysis, applies Appreciative Inquiry, an intervention that builds on organizational success, to the needs assessment process. The case highlights the potential of Strategic Analysis to encourage innovation.
Introduction
Surviving in today's global business environment requires that organizations have the capability to respond efficiently and effectively to continuing and emerging economic and political challenges, even those that might be extremely difficult to anticipate. They must be flexible enough to make strategic changes in response to those challenges, with no discernible lapse in productivity (15, 28). Beyond survival, success in competition demands continuous improvement of both business performance and quality of product (8).
The continuous process improvement of an organization requires its leadership to understand its history of competitive successes and failures (31). There appears to be universal agreement that a thorough needs assessment should be an integral part of all continuous improvement plans and budgets, yet the literature also acknowledges that it often is not done in organizations (15). Strategic Analysis, described below, provides the vision and direction that can promote organizational success (4). This is accomplished in two ways: by continually focusing the strategic plan and establishing the context for continuous process improvement and (8) by developing the organization's enterprise portfolio, specifying the businesses that should be included and the level of performance required, the partnerships that are likely to be most profitable and the strategies by which organizations are most likely to achieve well-defined goals and objectives (10), (16), (17).
Needs Assessment
Needs assessment is a process of identifying deficiencies between current and desired results (30). The process systematically attempts to identify gaps between needs and capabilities. The identified needs are prioritized based on such criteria as the cost of eliminating the need against the cost for ignoring it, and selecting the most important needs (problems or opportunities) for reduction or elimination (18). A needs assessment "evaluates whether there is a 'case for action' or a 'business case' for modifying, enhancing, or replacing the current system" (19, p. 13). Exhibit 1 below outlines the steps in a needs assessment.
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There are a number of reasons to undertake a needs assessment. The assessment can identify and clarify the challenges facing an organization, and the policy options available to the organization's leadership to confront these challenges. When a performance problem has emerged, the first step is to determine its exact nature. Next, data suggesting ideal performance standards are collected. From those data, the current performance can be compared to the ideal performance standards, revealing the gaps between the two. Once the causes of these gaps have been determined, appropriate strategies for closing those gaps can be identified and prioritized (19).
Appreciative Inquiry
By contrast, Appreciative Inquiry is more of a sufficiency model, focusing on what the organization is doing satisfactorily. Appreciative Inquiry uses positive dialogue as a means of uncovering stories of organizational successes (5). The process then builds upon those stories to promote future success. The model was developed in response to action research, which concentrates on finding organizational problems in need of solutions, and then proposing the development of an action plan to correct the problems that are identified (12).
Appreciative Inquiry posits that people construct reality through their social interactions, as opposed to the positivist paradigm that states social knowledge is the result of objective observation (6). The model is based on the premise that there is something already present in every organization that can be leveraged to help achieve its goals (14).
Critics of Appreciative Inquiry point out that the process is too focused on the positive, often at the expense of the organization's shortcomings (9), (11), (23) Perhaps most telling of all, Rogers and Fraser (26) argue that Appreciative Inquiry is ill suited to identifying underlying organizational problems, which can be ignored by focusing solely on building organizational strengths. Exhibit 2 shows the Appreciative Inquiry process.
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The Strategic Analysis Model
Today's highly competitive international business environment requires that organizational strategies must be deliberate and proactive (1). Anderson argues that such strategies " must be perceived as a proactive process which anticipates trends and future changes and which prepares people to meet them" (1, p.23) Needs can be identified reactively by responding to a problem, or proactively by identifying current and future needs before they develop into problems (25). Therefore, while needs assessment is a critical process to determine the cause of a problem before making a decision, it is by definition a reactive process.
The Strategic Analysis Model is a proactive continuous improvement model that combines elements of needs assessment with Appreciative Inquiry. By combining needs assessment models and Appreciative Inquiry, the Strategic Analysis model takes advantage of the positive aspects of each model and redresses shortcomings of each. In so doing, the organization can become more anticipatory, resulting in a more proactive approach to continuous process improvement. Continuous improvement entails constant enhancement of customer satisfaction, facilitated by increasing organizational efficiency and effectiveness. Strategic Analysis is a diagnostic tool that identifies those aspects of organizational behavior most in need of continuous improvement (22).
In uncertain environments, Strategic Analysis is able to provide organizations with a clear framework without getting lost in the chaos of change. This balancing act of utilizing past experiences, solving immediate problems, and preparing for the future by detecting patterns or threats requires the ability to manage strategic change (19). Leaders committed to considering a wide variety of alternative strategies for change, including those that are unconventional, have improved their chances for success (15), (19). It is therefore important to recognize that the incorporation of new technology is just a single component of an overall strategy in addressing continuous improvement.
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Appreciative Evaluation
Every organization requires a valid and reliable means of evaluating the extent to which it is meeting its specified goals (27). The evaluation must be appropriate to the context in which it is conducted. Because its focus is on positive organizational outcomes. Appreciative Evaluation was selected as the most appropriate tool for evaluating the Strategic Analysis process (24) and was included at each phase.
Closely related to Appreciative Inquiry, described earlier. Appreciative Evaluation identifies what is best about an organization (21). It is a tool used to discover what animates the organization and what it needs more of. An evaluation approach that focuses on what is working, identifies a point of departure from which to launch efforts at organizational improvement and to move the organization forward in a positive direction. The goal is to leverage the organization's strengths in order to realize the goals envisioned by its participants and stakeholders (20).
During each phase of the process, questions designed to uncover what is best in the current system are developed. Answers to these questions provide an understanding of the role each factor plays in giving life to the organization. Each question is stated affirmatively (7). Appreciative Evaluation regards those who benefit as key actors in the process. They are not seen as subjects or objects of study, but rather as participants who are involved in understanding the process, assessing what was successful and proposing solutions to overcome obstacles and challenges (13). Evaluation, then, is seen not as an activity external to the process but rather as an integral component of that process.
The evaluation of Strategic Analysis involves assessing the extent to which the continuous improvement process meets the needs and goals of all participants and stakeholders (2). The case of Visualization Inc, below, is presented and analyzed to demonstrate the application of the Strategic Analysis model. A case study approach uses a particular case to gain insight into an issue or theory. In this type of investigation, the details of the particular case being examined are important only insofar as they serve to illustrate the viability of the process being investigated, which, in this instance, is enhancing organizational efficiency and effectiveness (29). All company and individual names have been changed to preserve the privacy and confidentiality of those involved.
Case Example:
Visualization Inc. and the application of Strategic Analysis model
Based in a large city. Visualization Inc. was a small start-up software engineering technology company. The company was founded in 2000 by five engineering graduates who comprised the management team. Martin Rausch, CEO, a mechanical engineer, managed the company's overall operations. CTO Venetria Johnson led the product development team. She had been the key software architect for all product releases. Jamie Cypher, Director of Strategic Planning, was responsible for the overall operational strategy. He managed project teams, managed the company's business and financial plans and conducted the annual performance reviews. As Visualization Inc.'s technical advisor, Janet Maddox provided direction to the company on future products. Rounding out the management team was John Fang, Director of Development, who had the responsibility of attracting investments and writing grant proposals to support their research and development efforts. The company employed 44 people.
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