Complexity Science based Decision Making
The framework defines five contexts. Simple, complicated, complex, chaotic & disorder. People who understand that the world is often irrational and unpredictable will find this framework useful.
1.1. Introduction
Not all leaders achieve the desired results when they face situations that require a variety of decisions and responses. All too often, managers rely on common leadership approaches that work well in one set of circumstances but fall short in others. Good leadership is not a one-size-fits-all proposition.
Leaders assume that certain level of predictability and order exists in the world, an assumption based on Newtonian Science. However when the situations become increasingly complex, simplification can fail.
Cynefin framework is a decision making approach based on Complexity Science. This new framework allows executives to see things from new viewpoints, assimilate complex concepts, and address real-world problems and opportunities.
1.2. Understanding Complexity
A complex system has the following characteristics:
It involves large numbers of interacting elements.
The interactions are nonlinear.
A minor change can produce disproportionately major consequences.
The system is dynamic, the whole is greater than the sum of its parts.
Solutions can’t be imposed; rather, they arise from the circumstances. This is frequently referred to as emergence.
The system has a history, and the past is integrated with the present; the elements evolve with one another and with the environment; and evolution is irreversible.
Hindsight does not lead to foresight because the external conditions and systems constantly change.
Unlike in ordered systems (where the system constrains the agents), or chaotic systems (where there are no constraints), in a complex system the agents and the system constrain one another, especially over time. This means that we cannot forecast or predict what will happen.
Leaders who want to apply the principles of complexity science to their organizations will need to think and act differently than they have in the past. This may not be easy, but it is essential in complex contexts. Human complex systems are very different from those in nature and cannot be modeled in the same ways because of human unpredictability and intellect.
They have multiple identities and can fluidly switch between them without conscious thought. (For example, a person can be a respected member of the community as well as a terrorist.)
They make decisions based on past patterns of success and failure, rather than on logical, definable rules.
1.3. Five contexts for decision making
The framework defines five contexts. Four of these—simple, complicated, complex, and chaotic—require leaders to diagnose situations and to act in contextually appropriate ways. The fifth—disorder—applies when it is unclear which of the other four contexts is predominant. People who understand that the world is often irrational and unpredictable will find the Cynefin framework particularly useful.
Simple and complicated contexts assume an ordered universe, where cause-and-effect relationships are perceptible, and right answers can be determined based on the facts. Complex and chaotic contexts are unordered—there is no immediately apparent relationship between cause and effect, and the way forward is determined based on emerging patterns. The ordered world is the world of fact-based management; the unordered world represents pattern-based management.
The very nature of the fifth context—disorder—makes it particularly difficult to recognize when one is in it. The way out of this realm is to break down the situation into constituent parts and assign each to one of the other four realms.
1.4. Simple Contexts: The Domain of Best Practice
Simple contexts are characterized by stability and clear cause and effect relationships that are easily discernible by everyone. Often, the right answer is self-evident and undisputed. In this realm of “known knowns, ” decisions are unquestioned because all parties share an understanding.
Here, leaders sense, categorize, and respond. That is, they assess the facts of the situation, categorize them, and then base their response on established practice. Decisions can be easily delegated, and functions are automated. Adhering to best practices makes sense. Exhaustive communication among managers and employees is not usually required because disagreement about what needs to be done is rare.
However, problems can arise in simple contexts.
First, issues may be incorrectly classified within this domain because they have been oversimplified.
Second, leaders are susceptible to a conditioned response that occurs when people are blinded to new ways of thinking.
Third, when things appear to be going smoothly, leaders often become complacent. If the context changes at that point, a leader is likely to miss what is happening and react too late.
In the exhibit “The Cynefin Framework, ” the simple domain lies adjacent to the chaotic— and for good reason.
1.5. Complicated Contexts: The Domain of Experts
Complicated contexts, unlike simple ones, may contain multiple right answers, and though there is a clear relationship between cause and effect, not everyone can see it. This is the realm of “known unknowns. ” While leaders in a simple context must sense, categorize, and respond to a situation, those in a complicated context must sense, analyze, and respond. This approach is not easy and often requires expertise: A motorist may know that something is wrong with his car because the engine is knocking, but he has to take it to a mechanic to diagnose the problem.
One example is the search for oil or mineral deposits. The effort usually requires a team of experts, more than one place will potentially produce results and involves complicated analysis and understanding of consequences at multiple levels.
Entrained thinking is a danger in complicated contexts but it is the experts who are prone to it, and they tend to dominate the domain. When this problem occurs, innovative suggestions by non-experts may be overlooked or dismissed, resulting in lost opportunities. To get around this issue, a leader must listen to the experts while simultaneously welcoming novel thoughts and solutions from others.
Executives at one shoe manufacturer did this by opening up the brainstorming process for new shoe styles to the entire company. As a result, a security guard submitted a design for a shoe that became one of their best sellers.
Working in unfamiliar environments can help leaders and experts approach decision making more creatively. Games, too, can encourage novel thinking. When researchers created a game played on a fictional planet that was based on the culture of a real client organization. When the executives “landed” on the alien planet, they were asked to address problems and opportunities facing the inhabitants. Players found it much easier to come up with fresh ideas than they otherwise might have done.
Playing a metaphorical game increases managers’ willingness to experiment, allows them to resolve issues or problems more easily and creatively, and broadens the range of options in their decision-making processes.
Reaching decisions in the complicated domain can often take a lot of time, and there is always a trade-off between finding the right answer and simply making a decision. When the right answer is elusive, however, and you must base your decision on incomplete data, your situation is probably complex rather than complicated.
1.6. Complex Contexts: The Domain of Emergence
In a complicated context, at least one right answer exists. In a complex context, however, right answers can’t be found by searching. It’s like the difference between, say, a Ferrari and the Brazilian rainforest. Ferraris are complicated machines, but an expert mechanic can take one apart and reassemble it without changing a thing. The car is static, and the whole is the sum of its parts. The rainforest, on the other hand, is in constant flux—a species becomes extinct, weather patterns change, an agricultural project reroutes a water source—and the whole is far more than the sum of its parts. This is the realm of “unknown unknowns, ” and it is the domain to which much of contemporary business has shifted.
Most situations and decisions in organizations are complex because some major change—a bad quarter, a shift in management, a merger or acquisition—introduces unpredictability and flux. In this domain, we can understand why things happen only in retrospect. In this environment, leaders are encouraged to conduct experiments that are safe to fail. Instead of attempting to impose a course of action, leaders must patiently allow the path forward to reveal itself. They need to probe first, then sense, and then respond.
The YouTube founders could not possibly have predicted all the applications for streaming video technology that now exists. Once people started using YouTube creatively, however, the company could support and augment the emerging patterns of use. YouTube has become a popular platform for expressing political views, for example. The company built on this pattern by sponsoring a debate for presidential hopefuls with video feeds from the site.
As in the other contexts, leaders face several challenges in the complex domain. Of primary concern is the temptation to fall back into traditional command-and-control management styles—to demand fail-safe business plans with defined outcomes. In these situations, it is required to have more experimental mode of management & tolerance to failure. If they try to over-control the organization, they will preempt the opportunity for informative patterns to emerge.
Leaders who try to impose order in a complex context will fail, but those who set the stage, step back a bit, allow patterns to emerge, and determine which ones are desirable will succeed. They will find out many opportunities for innovation, creativity, and new business models.
1.7. Chaotic Contexts: The Domain of Rapid Response
In a chaotic context, searching for right answers would be pointless: The relationships between cause and effect are impossible to determine because they shift constantly and no patterns exist. This is the realm of unknowables. The events of September 11, 2001, fall into this category.
In the chaotic domain, a leader’s immediate job is not to discover patterns but to stop the bleeding. A leader must first act to establish order, then sense where stability is present and then respond by working to transform the situation from chaos to complexity, where the identification of emerging patterns can both help prevent future crises and discern new opportunities. Communication of the most direct top-down or broadcast kind is imperative; there’s simply no time to ask for input.
The events of September 11 were not immediately comprehensible, the crisis demanded decisive action. New York’s mayor at the time, Rudy Giuliani, demonstrated exceptional effectiveness under chaotic conditions by issuing directives and taking action to reestablish order. However, in his role as mayor—certainly one of the most complex jobs in the world—he was widely criticized for the same top-down leadership style that proved so enormously effective during the catastrophe. Indeed, a specific danger for leaders following a crisis is that some of them become less successful when the context shifts because they are not able to switch styles to match it.
Moreover, leaders who are highly successful in chaotic contexts can develop an overinflated self-image, becoming legends in their own minds. When they generate cultlike adoration, leading actually becomes harder for them because a circle of admiring supporters cuts them off from accurate information. Yet the chaotic domain is nearly always the best place for leaders to move towards innovation. People are more open to novelty and directive leadership in these situations than they would be in other contexts.
1.8. Leadership Across Contexts
Good leadership requires openness to change on an individual level. Truly adept leaders will know not only how to identify the context they’re working in at any given time but also how to change their behavior and their decisions to match that context. They also prepare their organization to understand the different contexts and the conditions for transition between them. Many leaders lead effectively —though usually in only one or two domains (not in all of them) and few, if any, prepare their organizations for diverse contexts.
A deep understanding of context, the ability to embrace complexity and paradox, and a willingness to flexibly change leadership style will be required for leaders who want to make things happen in a time of increasing uncertainty.
Reference: Summary of A Leader’s Framework for Decision Making