Strategy as a process of theory-based learning: an analysis of the literature

Companies need to review their business approach when operating in today's rapidly changing, interconnected and uncertain environment. In this dynamic situation, the strategy-making process becomes critical to their success. In today's complex landscape, identifying the cause of a problem becomes increasingly challenging, making it more difficult to find effective solutions; this is due to the increasing intensification of so-called "wicked" problems. A new mindset is needed to successfully deal with them. In the first chapter, it is argued that strategists can benefit from Systems Thinking when dealing with "wicked" problems, as it drives a more comprehensive understanding of the complexity and uncertainty posed by such challenges, fostering a holistic view of the strategic environment. In the second chapter, a further conceptual step is taken by linking Systems Thinking to a more tangible approach, namely Theory-based learning. This approach suggests an iterative process by which strategists develop hypotheses, systematically test them through experiments, learn from the output, and revise their beliefs. In the third chapter, a critical analysis of the literature related to Theory-based learning is made; the discipline seems to be very recent, so some systematization is needed to bring some order. The last chapter moves to a more pragmatic level, trying to provide a concrete approach based on the quite theoretical concepts of Systems Thinking and Theory-based learning. The solution lies in the Lean strategy.