Strategic Clarity: Actions for Identifying and Correcting Gaps in Mental Models

Past-cast Series — Seeing relevance in earlier publications

Ritchie-Dunham, James L. and Luz María Puente. 2008. Strategic Clarity: Actions for Identifying and Correcting Gaps in Mental Models, Long Range Planning, 41(5) 509-52.

Whether you are making quick resource-allocation decisions alone or collaborating with your executive team to set organizational strategy, what you see, what you advocate, and what you ultimately decide are influenced by the map of the world you carry around inside your head. In some ways, this map or mental model is unique to you, as it was formed through your specific experiences and ways of engaging with the world. This article is based on a decade of research and fieldwork and is illustrated with multiple references to both large and small European and American organizations in the for-profit, non-profit, and governmental sectors. It presents five guiding questions that can help identify and correct gaps in managers’ mental models of their organizations. This approach enables managers to be clear about how to move their organizations in the desired direction, in order to achieve their goals. While useful for professional managers of complex systems, these questions are particularly applicable for leaders of civil society, governmental, and entrepreneurial for-profit organizations. The main contribution of this article is a framework of exercises based on the five questions that integrates traditional strategic dimensions and allows leaders to identify gaps in their mental models, resulting in more effective leadership and improved performance.

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A Simulation Exercise to Illustrate the Impact of an Enterprise System on a Service Supply Chain

Past-cast Series — Seeing relevance in earlier publications

Ritchie-Dunham, James L., Douglas J. Morrice, Edward G. Anderson, Jr., and James S. Dyer. 2007. A Simulation Exercise to Illustrate the Impact of an Enterprise System on a Service Supply Chain, INFORMS Transactions on Education, 7(3).

In this paper, we present a computer-based simulation exercise designed to help students understand the impact of an enterprise system on business performance in a service supply chain. The particular service supply chain simulated in the exercise is a wireless telecommunications firm.  In this exercise, students perform simulations to experience managing the supply chain of the telecommunications firm with and without an enterprise system. The simulator tracks their business performance. Then the results are used as the basis of discussion in a subsequent debriefing session. We describe the educational goals of the simulation exercise and how the exercise can be structured in order to achieve these goals.  The latter is illustrated by the use of the simulation exercise in a master’s level supply chain management course in the Red McCombs School of Business at the University of Texas at Austin. The simulator includes realistic details. In fact, it is based on the extensive consulting experiences of the first author with two North American telecommunications firms. We describe the simulator in detail under the various scenarios, explain how it was validated, and provide the simulator equations in system dynamics format in Appendix B.

Balanced Scorecards, Mental Models, and Organizational Performance

Past-cast Series — Seeing relevance in earlier publications

Ritchie-Dunham, James. 2002. Balanced Scorecards, Mental Models, and Organizational Performance. Unpublished PhD Dissertation, Management Science and Information Systems, University of Texas at Austin, Austin, Texas.

Organizations are heavily investing in enterprise-wide information systems and performance scorecards intended to improve strategic decision making. However, there is a need for better evidence that using these technologies systematically improves organizational performance. To overcome the lack of experimental control when studying real firms, the current study investigates decision behavior within a realistic simulation of a wireless telephone company. A controlled experiment involving 118 MBA students found significant differences between two types of scorecards (financial vs. balanced) and two types of enterprise systems (fragmented vs. integrated) regarding the simulated firm’s long-term financial performance. The balanced scorecard positively affected decision makers’ mental models of how elements of the simulated firm dynamically interrelate, which led to improved performance. The integrated enterprise system had a positive effect on performance.  Unexpectedly, the number of stakeholders taken into consideration was positively associated with firm performance and was unaffected by the type of scorecard. These findings yield new insights into the effectiveness of scorecards and enterprise systems, and shed light on the underlying mechanisms responsible for these gains.