Is your business situation complicated or complex? Hopefully not chaotic…

Summary:

The current crisis driven by the spread of coronavirus demands for agile reactions from business leaders at any level. Regular assessments of the situation are indispensable. Our following actions may or even will alter the situation as does the environment, which demands for re-assessments again. Getting to a “more stable” situation is the goal. Using guidance like for example the Cynefin framework can help us to sort things out and take the right type of actions.

The situation is grave, but not without hope

Coming back to the question above: “Is your business situation complicated or complex? Or even chaotic?” Why does that matter?

It does matter, because your actions and measures depend on that answer!

In my opinion the Cynefin framework helps us to ask the right questions and … hopefully ... to give better answers (than without). The Cynefin model has been introduced in the late 90ies by Dave Snowden.  Together with Mary Boone they describe it later as “a framework for decision making”. I will briefly review some basics (those I understood!) in this article. See here for a more in-depth explanation.

The Cynefin framework categorizes situations and issues into

• simple (or obvious)
• complicated
• complex
• chaotic

Depending on the situation your measures ought to differ:

Simple situations are … simple. This means, you understand the situation, know what to do (if trained properly) and act accordingly. They describe it as “the domain of best practice”, since there a known problem categories and solutions

In my words: Assemble some smart people, ask them: “Do you know the solution?”, if they agree on a “yes”, you are fine off!

Unfortunately, even before the corona crisis not many of us enjoyed being with their business in that domain.

In complicated environments it gets … complicated. That means that you need to do more than categorizing the situation, you need to analyze - you need to start thinking. The relationship between cause and effect requires analysis or expertise; there is not a single correct answer, but good answers are known.

In my words: Assemble some smart people, ask them: “do you know the solution?”, if they say “not yet, but we can find one by analyzing the facts.”, let them analyze it (if not: find some other folks….)!

Complex situations are characterized by 'unknown unknowns". Cause and effect can only be deduced in retrospect, and there are no right answers. You got to find YOUR answer by probing first and analyzing the results then. Here your actions may or will alter the situation (sounds like Heisenberg cat, but that's a different story).

In my words: Assemble some smart people, ask them: “do you know the solution?”, if they say “not yet, but we can define experiments to better understand the setting”, let them run the experiments and probe results in an agile way!

In the chaotic domain issues are "too confusing to wait for a knowledge-based response and a leader’s immediate job is not to discover patterns but to staunch the bleeding”. I am imagining here a busy emergency room or, in todays terms, a swamped ICU (intensive care unit).

In my words: Assemble “hands-on” people, don’t ask, but act and make them act, too. After a short while: Check, if the mess gets better!

What is your situation today?

Let’s walk through the different possible settings.

Obviously (ha ha, so funny), the situation is not *obvious or simple* for most of us.

Complicated would mean, that there are good solutions and we can know some of them, since we experienced something similar before. Just, that we didn’t!

Thus, I believe that many of us are in a complex situation. We can still run experiments, e.g. decide on the level of shutdown of a country or also of a business site and see the results and react accordingly. Furthermore, I am sure, that in larger organizations, like for us at #siemens there is not “the one” situation: While for many it might be complex,  there can be chaotic settings, too (“Where is the protective gear for the service people?”, “How to staff already thinned out shifts, when many need to stay home for quarantine or child care?”) .

And: It is important to know that complex situations may become chaotic quickly, if we don’t probe and assess.

So, what does that mean?

Assuming the situation is complex we need to act and test the outcome in an agile approach, see here for a discussion of that. We need to be prepared to change our actions depending on the results and to test and probe results again. That's painful and mistakes will occur, but over time you can develop your path if you are acting in short and prudent sprints....

A current example may mean to impose shutdown measures in a country for a limited time, measure how much it helps, e.g. via infection rates and adapt measures (extend shutdown or ease some measures or …). Still, that is much better that than sliding into a chaotic situation where responses are emergency driven only.

My conclusion: we need to assess our state continuously, act in an agile manner, measure outcomes quickly and adapt accordingly to avoid getting into a chaotic situation with lots of fatalities and / or losses.

What do you think? In which situation is your business or your organization?