“What distinguishes great leaders from average ones is their ability to perceive the emerging nature and rules of a game as they are playing it.” Brian Arthur
Globalization, Technology and Information overload are making organizations, their environments and their activities more and more complex. For that reason, management science has turned toward complexity science to find appropriate models to help understand the challenges faced by organizations nowadays. An early conclusion of this approach is that managing complexity or managing in a complex environment requires specific sets of skills and tools.
I recently went to a seminar by Dave Snowden who has created a framework aimed at understanding the nature of contexts based on the relation between causes and effects, so appropriate tools are used and appropriate actions taken. This sensemaking framework is called the Cynefin framework. A Welsh word for a place where a being feels it ought to live. This blog is about what I have understood and gathered during that seminar.
The framework looks like a quadrant with two vertical sections, 'ordered' and 'unordered', and two domains per section, 'simple' and 'complicated' in 'ordered', and 'complex' and 'chaotic' in 'unordered'. There is also a 5th domain in the center of the quadrant called 'disordered'.
What is the nature of my system's context?
In the 'simple' domain, problems and solutions are known. There is a one-to-one relationship between cause and effect. The connection between system components is strong and centralized.
In the 'complicated' domain, problems and solutions are knowable. Here knowable simply means that deeper investigations are needed, it is not obvious. There is a one-to-many relationship between cause and effect. The connection between system components is strong and distributed.
In the 'complex' domain, problems or solutions are unknown. There is a many-to-many relationship between causes and effects. The relationship between causes and effects can only be identified with hindsight, it is called retrospective coherence. The connection between system components is weak and distributed.
'Chaos' is the realm of the unknowable and feedback loops. Nothing makes sense.
Situations that do not fit in any of the above domains because of a lack of information or are in transition go into the disorder domain.
The above characteristics of each domain are not always easy to identify so Dave Snowden recommends the use of narrative techniques to help determine the nature of the situation.
What do I do?
In the simple domain, the right approach is 'sense the facts, categorize them and respond'. Best practices, processes and autocratic management work very well in that domain.
In the complicated domain, the decision path is 'sense the facts, analyze them and respond'. This is the realm of experts, good practice and systems thinking. Finding the right solution(s) can be time consuming in the complicated domain.
In the complex domain, solutions can only emerge, therefore the right approach is to probe first and then analyze and respond. While probing, the key is to find desirable patterns and ways to consolidate or amplify them. Iterative approaches are adapted. Rules that facilitate emergence replace processes.
In chaos, the decision model is 'act, sense, respond'. Nothing makes sense and just observing may have consequences therefore it is necessary to act until the situation moves to another domain.
If a situation is in the disorder domain, it suggests that it has to be broken down into constituents that can then be allocated to other domains.
Where do I want my system to be?
The Cynefin framework is not a categorization framework; systems or situations can overlap different domains and move from domains to others. In fact visualizing these movements thanks to the Cynefin framework helps understand changes within systems. Furthermore there is no domain deemed to be intrinsically a better place to be than the others. However depending on the type of system under study some domains might be more adapted than others.
For instance being in the simple domain is not necessarily, rather counter intuitively, the best place to be for an organization because the risk of falling into 'chaos’ due to complacency is very high. It is typically what happens when a corporate, not sufficiently aware of its environment, suddenly starts losing consequent market share because of a competitor disruptive innovation.
Organizations more often find themselves in the complicated or complex domain, or both which is perfectly fine as long as the tools used are adapted to the domain. The most common pitfall in these domains is 'entrained thinking' i.e. re-applying what has worked before, without ensuring that the ontology remains the same. The risk is particularly strong in these domains because the shift from one to the other may not be obvious although they are fundamentally different, one is ordered and the other unordered.
Finally, although corporates do not want to be 'in chaos', some Management gurus advise that organizations should try to set themselves at the edge of chaos to favor innovation. It may be a good punctual technique but probably difficult to maintain in the long run.
Logically, as the rise of complexity in organizations increases, so does the need for sensemaking capabilities. Sensemaking is now taught by the MIT Sloan School of Management as one of the four leadership capabilities alongside relating, visioning and inventing. With the Cynefin framework, Dave Snowden provides us with a tool to help us take the first step toward ‘making sense’ by understanding the nature of situations.