The majority of organisations are created around best practices learnt over the years of operating within their own domain. Naturally, organisations learn from their market and competitors in order to be similarly successful. Today, thanks to technological advancements such as 3G and online platforms like Facebook, people around the world can get in touch with each other instantly. This new worldwide connectivity has increased the complexity of markets and organisations significantly.
The complexity Dilemma
Organisations are generally overwhelmed with the transformation into components interacting with and influencing each other. In the banking sector alone there were 387.3 billion transactions throughout 2014. The events of 2008 made us aware, that just a few of these transactions can have a huge influence on full-state economies. It is impossible for only a few individuals to understand all of the effects and connections involved.
Sense Making in a world full of complexity
Dave Snowden developed the Cynefin framework in 1999 as a knowledge management or sense making model for complexity. We use Cynefin to describe problems, developments and challenges in organisations and find solutions for them.
The Cynefin framework is divided into 5 domains. The first 4 domains describe the environments an organisation potentially navigates in:
Simple / Obvious
In the simple domain the relation between cause and effect of a situational development is always obvious. Best practices therefore help us to react accordingly.
In a complicated environment the relation between the cause and effect is not obvious at first. We need to research or apply expert knowledge to make sense of the relationship. We know, what we do not know, therefore we apply good practices to react to problems, developments and challenges.
In a complex environment we do not know, what we do not know: The relationship between cause and effect is only visible for us afterwards. Even if we apply best practices or research beforehand, we can only assume our reaction to be correct. Important is that we sense before we act. Therefore, we need to learn from our actions and apply our learnings in order to have a sustainable solution: Emergent Practices.
In chaotic environments there is no relationship between cause and effect, therefore we cannot know, what we do not know. We can only react to developments, challenges and problems as soon as possible. We need to apply novel practices.
The fifth domain Disorder describes the most common state an organisation is in: Unawareness or lack of time identifying above domain. This typically leads to wrong conclusions and potentially wrong decisions. Therefore, it is important for organisations to understand which domain they are navigating in, in order to react to changes and developments in their market.