Sense making is the process by which groups, departments, and businesses as a whole create and orient themselves around a shared understanding of a situation. This shared understanding brings coherency to a complex environment. Sense making is key to alignment because it helps establish boundaries and because it provides a rationale and logic that facilitates trade-off decisions. Sense making is a constant battle against the muddying forces at play in a Covid & VUCA world – and we could add a D here for Disruptable and make it a VUDCA world.

For an example, a leadership team goes into a strategy retreat to galvanize their competitive strategy for the next 5 years. Based on research from rapid global demographic trends, they discover significant opportunities in pivoting their focus and offering to meet a new market segment. This new strategy contemplates several costly initiatives which bear little resemblance to the business as usual activities that have made the organization so successful. How these opportunities are made sense of is critical to effectively seizing them. Internal debate surfaces multiple different interpretations of the organization’s position; the leaders here are required to find, create, or synthesize a lens that connects the facts in such a way that the priority and the direction of the organization are clear to all. This ensures that the strategy proposes actions in alignment with the way opportunities are perceived.

Frameworks are an example of sense making tools but frameworks alone do not create alignment. Frameworks themselves do not dictate decisions or establish plans; they do, however, make it easy and logical for certain decisions and plans to be made. When you talk about ‘our strategic pillars’ or ‘our must win battles’, you are proposing a way of making sense of the complex environment that exists both within and beyond your business.  The degree to which your organization can own and truly resonate with that way of perceiving the situation, the easier it is to drive decisions, make usable plans, and effectively steer execution — three key ingredients for strategy execution.

 

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Sense making lives in visual metaphors, relative differences, and figures of speech. Sense making which is overly literal becomes dogmatic; this is methodology which, while important, should follow rather than lead strategy. 

Sense making is unique to each context; there is no right or wrong way to make sense of a situation. However, if that sense making is not shared, it is useless. 

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Ultimate responsibility for sense making comes down to the leader. The ability to inspire a shared perspective, and to keep it alive, is a key leadership skill. While secondary layers of leadership — both formal and informal — within an organization can deepen and translate this shared perspective, these second layer leaders cannot take primary responsibility for sense making. This would almost certainly undermine the leader’s effectiveness in decision making or plan making. That said, sense making does not always require the leader to address the entire organization frequently or directly; rather, they need only understand and steer the people and mechanisms that do reach the whole organization.

Decision making is the process of arriving at a resolution. In the context of strategy execution, however, decision making has a double relevance, because every decision either builds or dissolves coherency. Decisions happen within the frame created by sense making activities, and they either adhere to, deviate from, or redefine the internal logic of a strategy. They either are in alignment, or not in alignment.

For example, a producer of natural health solutions is considering whether or not expand into a new market. Within the remit of their mission — to spread better health far and wide — the decision to expand is logical. The business opportunity is attractive and the existing operational model is capable of capturing the opportunity. However, the skills and culture in the organization are focused on building close supplier relationships, being ‘deep’ in their existing markets, and leveraging establish market position with a product driven strategy. If taken, the decision to expand to the new market at this moment in time would challenge the team’s understanding of their role within the business’ identity. Decisions can either immediately align with existing understanding, in which case they will likely be rapidly adopted and acted upon, or they can challenge that understanding and require new sensemaking.

 

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In the context of strategy execution, however, decision making has a double relevance, because every decision either builds or dissolves coherency.

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Decisions which on the surface challenge the logic proposed by sense making may actually further deepen and clarify that logic. This is the case when a Non-Profit must chase opportunistically after a commercial prize in the short term in order to broaden their ability to pursue more mission-relevant prize. The decision to go after the short-term gain requires more sense making activity from leadership. Without it, the broader organization can easily harbor confusion, disagreement, or resistance to the decision, and fail to perform and operate effectively.

Finally, decisions need to be embodied in plans. These plans serve as the bones of agreement for the structure of strategy execution. They at once strengthen and reinform sense making and decision making activities, as they surface new complexity that needs to be accounted for and provide operational clarity where only conceptual clarity might have existed before.

 

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Iterative planning implies iterative sense making and decision making, too.

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Plan making activities rely on an organization’s known and accepted disciplines. Every organization has its own way of making plans, but a few principles apply to all disciplines:

1. Plans require accountability

Plans are essentially mechanisms by which groups form an agreement.  The activity of reaching agreement is valuable for building conceptual and operational clarity, but it is insufficient to drive execution. For that, clear accountability mechanisms are required.

Leaders benefit from seeing plans formulate because they aid managerial oversight. It should be easy when reviewing a plan to see what is on track, and what is not. But leaders — beyond the CEO — must model this type of accountability in their daily work. They must sign up for accountability as well, typically in the role of sponsors of key parts of the strategy execution plan.

2. Changes to plans should occur, but they must be explicit and agreed

It is now common wisdom that plans should be iterative. Plan making is not a one-off activity but rather a cyclical activity which integrates the latest business intelligence.  It can be easy however for operations to ‘unspool’ the sense making and decision making which has been done. Iterative planning implies iterative sense making and decision making, too.

For example, a large University looks at trends in consumer media and seeks to digitalize the delivery of their education. This entails the large scale creation and distribution of educational content through novel channels. In making the plan to execute, the program team discovers that digital education carries a deep seated stigma of lesser quality with their employees. Alterations to the plan need to be made, and these may be major. However, if the changes to the plan are not managed with explicit dialog and new agreements, the plan loses momentum, decisions lose their binding power, and the shared understanding erodes and crumbles.

3. Planning should include culture and organizational change

Plans need accountability and discipline to become effective parts of your strategy execution approach. However, organizations have different levels of comfort with the level of scrutiny that accountability demands. The level of accountability needed to benefit from plan making might not exist in the organization as it stands. For that reason, to be effective, planning should always include culture and organizational change as an overlay.