Strategy as a theory of change

Abstract Research Summary The theory‐based view argues that a strategist's task is to develop a theory to move the organization to an improved future state. Focusing on theorizing as a thought process of model creation, we propose a framework to specify hypothetical causal links and analyze their structure as a directed graph connecting inputs, activities, and indicators of problem resolution. We then propose a set of metrics operationalizing key theory attributes: complexity, equifinality, interdependence, and circularity. We discuss the strategic relevance of these attributes in terms of a theory's ability to promote comprehensive problem resolution as well as implement, evaluate, and replicate the proposed solution. Our work represents a step toward operationalizing model creation in the theory‐based view and informs the design of strategic theories of change. Managerial Summary Strategists often theorize how to move their organizations toward an improved performance state. Yet most strategic analysis tools describe the organization's external environment or the internal components of its business model, without precisely specifying forward‐looking interventions that might cause the desired changes. In this paper, we represent strategic theories as a chain of causal interventions—inputs and activities that address relevant problems and lead to desirable outcomes. We propose a structured framework that helps managers develop theories and measure key attributes that influence comprehensive problem resolution and the ability to implement, evaluate, and replicate the proposed interventions. In this sense, our work helps managers mentally create their strategic theories and assess their usefulness as a roadmap to superior performance.