Double Loop Management

The two loops are the strategy management loop and the operational control loop. The strategy management loop is, of course, related to the strategy cycle. This is where you define your strategy, put it into a plan and budget, execute on it, review the results, and refine the plan.

The operational control loop is where you take your objectives and initiatives (or your goals and projects), which are usually funded by an annual budget, and you execute them. In other words, this is where you do what you have budgeted to do over the course of the year.

Norton and Kaplan have made a good case to say that in the past, these two loops were separate, but if you combine them through the use of the Balanced Scorecard, you will get greater alignment, and thus you will be more effective at executing your strategy.

Actually it is a rough copy (or 'adaptation'?) of the double loop learning model proposed by Chris Argyris and Donald Schön (see their book "Theory in Practice. Increasing professional effectiveness" published in 1974.

A rough analogy is to consider the behaviour of a basketball team coach. During a game he will play with tactics and substitutions to help his team win the game. That's one loop. But he will also be thinking about the coming game series, and be making decisions based on that horizon too - so he may choose to rest one or more of his star players in this game, even if it makes winning this game harder, to ensure they are available and fresh for the next game (which might be against tougher opposition). That's a second loop.

Not quite what Argyris proposed, but close enough...