Appreciative Inquiry in Business: Solving Management Problems

Appreciative Inquiry in Business: How Positive Psychology Can Solve Management Problems

The way strategy is formulated in organizations needs to be revolutionized; many companies still use deficiency-oriented models that are unable to keep up with the depths of strategic shifts required. Their problem-solving mentality limits furthering innovation.

A solution-based coaching tool can be very powerful and management teams are well-advised to dream of a miracle. Here is how appreciative inquiry may help reshape businesses and organizations.


Positive Psychology in the Workplace

It is no secret that employees who are able to use their strengths at work perform better. Highly engaged employees form stronger bonds with their workmates, experience meaning and are intrinsically motivated by self-actualization and autonomy (Money, Hillenbrand, & da Camara, 2009). As a result, engaged employees experience increased subjective well-being and have found to have higher work performance (Niemiec, 2013).

Hence, rather than aiming to employ the best employees, leaders need to ensure that every employee can do their best and work to their strengths. Here are some of the strategies leaders can use to foster a positive work culture:

  • Start meetings with an opportunity to share success stories
  • Brainstorm with your team about the impact your efforts can have on the lives of your clients

For more information on Positive Psychology in the workplace check out the following video (7 minutes):

Many companies are starting to employ a positive leadership approach. However, while it can be argued that Positive Psychology is slowly making its way into many sectors of the organizations, there is still one exception; the corporate boardroom.


What we Focus on Grows

Management and marketing gurus such as Peter Drucker and Philip Kotler have provided a remarkable number of methods and techniques for strategic planning. Tools such as SWOT analysis, BCG matrix, value chain analysis and Porter’s five forces analysis still play a major role in the strategic management process. And quite rightly so. They are vital because they support management in decision making.

“A company can outperform rivals only if it can establish a difference that it can preserve” (Porter, 1996)

However, there is a profound limit to the performance of the majority of these tools. They are deficiency oriented; hence they focus on finding and analyzing what is wrong and what needs to be improved. While it is without a doubt important to understand the company’s downfalls and to become aware of why your competitors are doing better than you, this retrospective nature can be hindering, since a problem-solving mentality can greatly limit innovation (Barrett, 1995).

Deficiency-oriented tools lack a forceful solution-oriented focus and therefore do not maximize the potential for new and innovative strategies. After all, what we focus on is what receives our energy. Hence, companies tend to develop in the direction they concentrate their attention. So how can we move from knowing our company’s downfalls to creating a clear vision for the future?


The Unconditional Positive Question

Ideally, strategic tools provide perspectives and a vision for results. This is where the use of Positive Psychology tools can be a major competitive advantage as they nicely complement common management strategy tools. Here is an example:

In order to develop a digitalization strategy, a small and medium-sized enterprise (SME) may analyze the market and its competitors, identify opportunities and threats and spot cash cows and stars in the BCG matrix. So far, this is part of its conventional annual strategic planning process.

Once the management team has a clear idea of the situation and understands the downfalls and barriers, they are ready to develop a clear vision. To catapult the team out of the deficit focus and into solution thinking, they could use a combination of Positive Psychology tools from the Toolkit: Appreciative Inquiry and the Miracle Question.

“The best was to predict the future is to create it” Peter Drucker

Appreciative Inquiry is based on the belief that every team and every organization has great resources that are to be discovered (Cooperrider & Avital, 2004). The model uses four steps (4 D):

  • Discovery (appreciating)
  • Dream (envisioning)
  • Design (constructing)
  • Destiny (sustaining)

The first two steps (“Discovery” and “Dream”) are particularly powerful and can often provide striking results. They can be combined with other tools for goal setting (replacing the “Design” and “Destiny” step). Before using this method, it is crucial to draft a core question or goal. In the case of the SME mentioned, the goal is to develop a digitalization strategy.

The first step – Discovery – is to reveal the company’s resources. What is already working well? In which areas of the business are we particularly strong?

This exercise provides participants with positive emotions such as pride, joy, and appreciation and can have a profound impact on the result of the process. Positive emotions have been found to broaden and expand the thought-action repertoire and thereby increase creativity and problem solving (Fredrickson & Losada, 2005).

Appreciative Inquiry in Business

What is more, diving wholeheartedly and unconditionally into what already works releases pressure and immediately creates a positive vibe.

This is particularly invigorating after having analyzed how far ahead (at least in our perception) our competitors are and how much there still needs to be done (and there is always a lot to be done). Realizing that many things are going well is uplifting, especially in the boardroom.


A Miracle in the Boardroom

The second stage of Appreciative Inquiry – Dream – is all about wildly imagining “what could be”. As with any brainstorm, every idea is worth noting and judgment should be deferred. This takes a bit of getting used to because we are accustomed to producing only feasible ideas. However, in the Dream stage, the opposite is desired. The crazier the idea, the better. One way to encourage big thinking and increase creativity is to inform participants that the craziest idea will be awarded.

A great way to get participants into solution-based thinking is to combine the Dream stage with Steve de Shazer’s Miracle question (Sparrer, 2001). This method is commonly used in systemic therapy and positive CBT and it is very powerful with teams as well. In order to dive straight into a possible solution, the Dream stage is started off with the following question:
“Suppose that tonight while you sleep, a miracle happens. When you wake up tomorrow morning, what will you notice? And your employees? And your customers?”

Before posing this rather unusual question it may be helpful to provide the participants with a short introduction (along the lines of “I am going to ask you a rather unusual question…”) in order to prepare the rational thinking audience for something they would not normally expect in the boardroom.

The result of the miracle question brainstorming exercise is usually revealing, insightful and valuable. With all ideas gathered, the output can be consolidated into a powerful vision statement. This can take the form of a written statement, a drawing or even illustrated in a role play. A creative and memorable delivery of the vision is likely to have a lasting impact on the organization.

There are many tools for the next steps of translating the vision into a feasible strategy (“Design” and “Destiny”). After all, at this stage, it is not so much the method used which facilitates successful strategy development but the appreciative mindset and the positive vibe gained during the “Discovery” step.

The feeling of having the desired outcome of the strategy within one’s grasp – as a result of the miracle question – is a great source of positive emotions and motivation.

For more practical AI resources, please see:


A Take Home Message

Traditional deficiency-focused tools have a “fix it” approach. They support management in their decision making, but they also limit innovation and growth. In order to develop powerful, motivating strategies, organizations need to go beyond traditional management tools.

This article encourages leaders to tap into the positive core of the organizational system for strategy formulation. By using strength-based models such as Appreciative Inquiry and the Miracle Question, the light will shine on past successes and possible solutions. This provides positive emotions which in turn increases creativity. Again, feeling that the desired strategy outcome is within one’s reach is motivation par excellence. Companies need to find new answers, therefore,  they need to ask new questions.

Next time you’re in the boardroom, be bold enough to ask some unconditionally positive questions.

  • Barrett, F. J. (1995). Creating appreciative learning cultures. Organizational Dynamics, 24(2), 36-49.
  • Cooperrider, D. L., & Avital, M. (2004). Introduction: Advances in appreciative inquiry-constructive discourse and human organization constructive discourse and human organization. D. L. Cooperrider & M. Avital (Eds.), Constructive discourse and human organization (Advances in Appreciative Inquiry, Vol. 1, pp. XI-XXXIV). Emerald Group Publishing Limited.
  • Fredrickson, B. L., & Losada, M. F. (2005). Positive affect and the complex dynamics of human flourishing. American Psychologist, 60(7), 678-686.
  • Money, K., Hillenbrand, C., & da Camara, N. (2009). Putting positive psychology to work in organisations. Journal of General Management, 34(3), 21-36.
  • Niemiec, R. M. (2013). VIA character strengths: Research and practice (The first 10 years). In H. H. Knoop & A. Delle Fave (Eds.), Well-being and cultures: Perspectives on positive psychology (pp. 11-30). Springer.
  • Porter, M. E. (1996). What is strategy? Harvard Business Review. Retrieved from
  • Sparrer, I. (2001). Wunder, lösung und system. Lösungsfokussierte systemische strukturaufstellungen für therapie und organisationsberatung. Carl-Auer-Systeme.

About the Author

Birgit Ohlin, MA, BBA, is a passionate Life Coach and Leadership Consultant who believes in the flow of life. This former Marketing Manager came across Positive Psychology during her Master’s degree and it had a profound effect on her. She since studied Coaching and has turned her focus to innovation, transformation, and change.


  1. Toyin Ademola

    Fantastic Article . Thank you very much for the insights . Will certainly recommend this article for reading to all Leaders

  2. Birgit

    Thanks Vaibhav, I appreciate your feedback and I’m pleased to hear you found the article useful 🙂
    All the best to you too.
    Warm regards,

  3. Vaibhav Negi

    Amazing Article Birgit, Motivation is one of the most important thing which is required in every field. This article really helped me a lot and i wish you all the best for your Future.


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