What's Going on Out There? How to Use Sensemaking to See What's Coming and Make Sound Decisions
I love puzzles. There's something very rewarding about sorting through a pile of pieces, spotting patterns, making matches and putting it all together.
A lot of families have rediscovered this pastime in the wake of the COVID-19 pandemic. Learning to sort through complexity is a great skill for leaders to develop regardless of the circumstances. This is particularly crucial during times of significant change.
It's the skill of "sensemaking," which is connecting the dots to see more clearly a picture that's not obvious.
Deborah Ancona, Thomas W. Malone, Wanda J. Orlikowski, and Peter M. Senge brought this concept to light in a powerful way back in 2007 in their HBR article, "In Praise of the Incomplete Leader." Their research found that effective leadership involves four capabilities—sensemaking, relating, visioning, and inventing. Sensemaking, according to Ancona, is one of the two most neglected of those capabilities (inventing is the other).
Making better decisions
It's our jobs as leaders to understand our businesses and the marketplaces at broad and deep levels, to make sense of it, and then to help those around us make sense of it.
Why this is so crucial in times of change? Because so much is riding on the decisions we make during moments like this. Yet we're usually hampered by too little information and too little time.
Sensemaking is the leadership ability that involves understanding changes in the world around us and interpreting the ramifications so we can make better decisions. It allows us to answer two all-important questions:
- What the heck is really going on out there?
- What does it mean for our industry and our company?
When you can answer these questions, you're thinking more strategically and you're more likely to make the right decisions that can move your business forward.
Especially now, it's important that you understand how things are shifting in the business environment, in politics, in the culture, and with customer/client expectations and needs. There are plenty of challenges as well as opportunities you need to sort out.
Here are three ways you can develop stronger sensemaking abilities so you can make better decisions.
Gather and analyze the right data
A lot of leaders are drawn to data – facts and figures from trusted sources that are relevant to your business and industry. The key is to focus on the right data to spot trends early on and, more importantly, to identify when they are getting real traction and are more than a passing fad.
In moments of unexpected change, determine what are the most important things for you to know right now that can help you make the best decision. Be sure to verify the accuracy and timeliness of your data so you're capturing the most relevant information.
For ongoing change, consider creating a dashboard that includes just five or six of the most important metrics – preferably leading indicators -- for a specific part of your business. By studying these numbers consistently, you'll spot any changes that could signal a coming change, and still have time to take action.
Monitor the environment
This is a timeless skill you need as a leader – the ability to constantly scan your environment to identify shifts in the marketplace, potential opportunity as well as emerging disruptors. But if you're in an echo chamber, you're not going to see and hear things that will balance your thinking.
Challenge yourself to consider where you're getting your information. Is it time to broaden your inputs?
Consider subscribing to some new sources – many of these are free or available at a reasonable cost:
- Futurist blogs and podcasts
- Newsletters from research services
- Business insights from one or more of the major consulting groups
- Political and social analysis from a balanced source
You can also pick two or three of your best competitors and study their websites and blogs – not to copy what they're doing, but to observe and learn from their approaches. What new things are they trying? How can you differentiate your products/services? Is there an opportunity for a strategic alliance?
Seek diverse perspectives
The first perspective a leader needs to understand is her own. Look at things through the lens of your personal experiences, wisdom and expertise. Then get the perspectives of others you trust.
You must cement this second step into your decision-making process so you're not getting a skewed view of reality. Make sure you hear from your team who can play devil's advocate and bring forward the voice of your customer, your employees and other important stakeholders such as your investors or your community.
You also want to be sure you're not unwittingly becoming your own worst enemy. This happens when you succumb to your own biases, such as confirmation bias, which is trying to prove what you already think. Hearing diverse perspectives will help you stay accountable to being fair and balanced in your thinking.
It's important to remember that sensemaking is less about being accurate and more about being plausible – i.e. having a reasonable idea of what makes sense to try. So don't expect to be right every time. But when you implement these three steps, you'll increase your chances of making better decisions that can help move your business forward – even in challenging times like these.