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A Leader's Framework for Decision Making

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David J Snowden
David J Snowden
M.E. Boone
M.E. Boone
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Abstract

Many executives are surprised when previously successful leadership approaches fail in new situations, but different contexts call for different kinds of responses. Before addressing a situation, leaders need to recognize which context governs it -and tailor their actions accordingly. Snowden and Boone have formed a new perspective on leadership and decision making that's based on complexity science. The result is the Cynefin framework, which helps executives sort issues into five contexts: Simple contexts are characterized by stability and cause-and-effect relationships that are clear to everyone. Often, the right answer is self-evident. In this realm of "known knowns," leaders must first assess the facts of a situation -that is, "sense" it -then categorize and respond to it. Complicated contexts 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." Here, leaders must sense, analyze, and respond. In a complex context, right answers can't be ferreted out at all; rather, instructive patterns emerge if the leader conducts experiments that can safely fail. This is the realm of "unknown unknowns," where much of contemporary business operates. Leaders in this context need to probe first, then sense, and then respond. In a chaotic context, searching for right answers is pointless. The relationships between cause and effect are impossible to determine because they shift constantly and no manageable patterns exist. This is the realm of unknowables (the events of September 11, 2001, fall into this category). In this domain, a leader must first act to establish order, sense where stability is present, and then work to transform the situation from chaos to complexity. The fifth context, disorder, applies when it is unclear which of the other four contexts is predominant. The way out is to break the situation into its constituent parts and assign each to one of the other four realms. Leaders can then make decisions and intervene in contextually appropriate ways.
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... Organisational theory and practice promote simplifications for ordered circumstances on the grounds of a fundamental assumption that states that "a certain level of predictability and order exists in the world" (Snowden & Boone, 2007). Such simplifications can be revealed in analysing approaches, such as taking complex systems into parts and processes in isolation. ...
... However, since the complexity and the frequency of changes in systems and situations are increasing faster than ever before, the predictability of complex organisational systems is decreasing substantially. Therefore, conventional leadership, management, and simplification approaches increasingly fail (Sanchez, 1997;Snowden & Boone, 2007). Therefore, complementary to the analysis approach, there is a need for a synthesis approach that examines systems and their parts as a whole in order to deal with complex challenges (Ackoff, 1994(Ackoff, , 2005. ...
... The advanced diagnostic, predictive and prescriptive analysis potentials of simulation tools enhance the management and engineering competencies of the DT-based VF concept to analyse and synthesise complex systems. Thus, the DT-based VF concept can enhance the experimental mode of management required by complex organisational domains (Snowden & Boone, 2007). ...
Virtual Factory: a systemic approach to building smart factories
Thesis
  • May 2022
Constant evolution in the global manufacturing resulting from various forces like innovation, changing demands, competition, and regulations is forcing manufacturing enterprises towards more digital and smarter operations to stay competitive in their respective markets. This evolution of manufacturing towards digitalisation led to a new paradigm in the last decade, which has been called the “fourth industrial revolution” or “Industry 4.0”. Yet, it is not a trivial matter for manufacturing organisations to deal with the accelerating frequency of radical changes by means of new strategies, methods, and technologies. Evolving dynamic forces have immense impacts on the digital transformation of manufacturing operations as well as the priorities of scholarly works. Nowadays, it is more apparent and easier to comprehend the relation between evolving market dynamics and their reciprocal consequences on products, processes, and manufacturing systems. Accordingly, manufacturing organisations must handle the initiation of change as well as its propagation, which triggers a multitude of unpredictable and complex modifications in production. This challenge is characterised as the concurrent/coordinated evolution of products, processes, and systems, in other words, “co-evolution” in scholarly works. The Virtual Factory (VF), as “an immersive virtual environment wherein digital twins of all factory entities can be created, related, simulated, manipulated, and communicate with each other in an intelligent way”, enables data integration across the manufacturing value chain as well as the integrated use of technologies and methodologies. Therefore, VF is recognised by scholars as a useful and effective solution to deal with the co-evolution paradigm. However, there are still significant gaps in the knowledge domain as well as empirical challenges in the application domain in terms of designing, developing, and utilising the VF concept. Therefore, the purpose of VF research work is to address such gaps and challenges by designing and developing artefacts and frameworks together with empirical evaluations of designed artefacts in the industrial cases. The VF research work presented in this thesis is the final outcome of a three-year- long PhD study conducted as part of a comprehensive research collaboration project named Smart Factories. The thesis on hand is the final effort to frame the three-year-long research aiming to establish a systemic design and development approach for DT-based VF, employing a collaborative virtual reality capability that can integrate product, process, and system models to support the manufacturing enterprises for handling co-evolution problems during their adaptation to evolving environments. Thus, with this final effort, this thesis is aiming to: Establish comprehensive and methodical foundations for the empirical, conceptual, and philosophical discussions supporting the previously discovered and disseminated knowledge on DT-based VF employing a collaborative virtual reality capability that can integrate product, process, and system models.
... A more solid conceptual model popular with both military practitioners and management academics is the Cynefin framework (Snowden 2002, Snowden andBoone 2007), which distinguishes between known knowns, known unknowns, unknown unknowns, and unknowables -most famously alluded to by US Defence Secretary Rumsfeld in the aftermath of the attack on New York in the 11 th of September 2001. The Cynefin framework is a sensemaking meta-model (a model of models), distinguishing ordered, hence stable and so known or knowable decision situations (labelled the simple and complicated domains), with those that are unordered, hence unstable, unknowable, or only retrospectively knowable (labelled chaotic and complex domains). ...
... How to manage in the age of the 'new normal' is to be more responsive to whatever the context isrespond to the chaotic and complex, seek to move towards the stable and predictable, where control is possible, but ready to let go of it to allow emergence. Snowden and Boone (2007) specifically discuss the management responses for each of the four domains. For the structured and simple domain where everything is known, it is bureaucracy. ...
... Al Hassan and Micheli (2022) and Harper (2022) both reflect the nature of mindset in how to respond to external context, echoing Snowden and Boone (2007) as well as prior work on framing as a way to resolve contradiction and paradox (typically to benefit one's position) (Kaplan 2008, Reinecke andAnsari 2015). Chae et al. (2022) considers heterogeneity versus homogeneity in supply networks in the context of M&A, highlighting the significance of the wider context in the value that such takeovers or partnerships might generate. ...
Managing the 'new normal': The future of Operations and Supply Chain Management in unprecedented times
Article
Full-text available
Purpose – The purpose of this article is to discuss the theme of managing operations and supply chains in the so-called ‘new normal’. It reflects the themes emerging from recent research and how these might be conceptualised. Design/methodology/approach – The article reviews research presented at the EurOMA 2021 conference and eight papers subsequently developed into full journal papers, and considers conceptual themes contained in these papers and how they reflect recent turbulent events in the external business environment. Findings – The article notes the themes of resilience in relation to the Covid-19 pandemic, and environmental sustainability, especially climate change, are strongly represented. Additional themes relating to inter-organisational relationships and manager cognition are also considered. In order to provide useful insights for future disruptions, general concepts on epistemology and responsiveness are described. Originality/value – The article notes general principles across cutting edge research in operations and supply chain management, able to support improved performance to add economic and social value.
... Although there are various approaches proposed to evaluate the complexity of a system [48], a complex system can be defined simply as "a system made up of a large number of parts that interact in a nonsimple way" [47]. A fundamental assumption of organisational theory and practice states that "a certain level of predictability and order exists in the world" and, thus, encourages simplifications for ordered circumstances [49]. When circumstances change more frequently than ever before and complexity increases, however, predictability decreases significantly. ...
... When circumstances change more frequently than ever before and complexity increases, however, predictability decreases significantly. As a result, simplification and conventional management and leadership approaches increasingly start to fail [49,50]. Therefore, as a complementary approach to analysis which is simply taking parts and processes in isolation, a synthesis which is considering systems and their parts as a whole is required to deal with problems in complex domains [45,46]. ...
... Thus, the DT-based VF concept promises a potential for the analysis and synthesis approaches while redesigning a complex organisation, its subsystems, or its environment [12]. Accordingly, the experimental mode of management, which is demanded by a complex domain [49], can be facilitated by the DT-based VF concept. ...
Conceptual foundations and extension of digital twin-based virtual factory to virtual enterprise
Article
Full-text available
Manufacturing organisations must compete with each other while adapting to the ever-changing conditions by building and strengthening their chains of competencies to survive. Therefore, companies are challenged to reform and reconstruct their product, process, and system models as well as to define new goals conforming to evolving complex and dynamic environments. Recent advancements in technologies such as modelling and simulation (M&S), digital twin (DT) and virtual reality (VR) promise new ways for remodelling organisations’ resources, processes, and architectures. Moreover, comprehensive concepts like DT-based virtual factory (VF) exploit the potential for utilising such technological concepts in the application domain by enabling the integration of various tools, methods, and processes. There are a variety of empirical studies focusing either on the distinct use of technologies, methods and processes or very generic concepts and approaches. However, studies focusing on both conceptual and practical aspects for such comprehensive and integrated solutions to handle co-evolution in the complex manufacturing domain are limited for defining, designing and utilising novel technologies. In this paper, therefore, we attempt to close this gap by (1) framing and discussing the conceptual and theoretical foundations of DT-based VF, (2) introducing and discussing the extension of the DT-based VF to virtual enterprise and (3) generalising and interpreting the prescriptive knowledge discovered during the previous VF demonstrations performed at Vestas Wind Systems A/S. Systems and complexity theories, concepts of business cycles and competence-based strategic management are discussed to frame descriptive knowledge as a language for depicting the internal and external nature of complex manufacturing enterprise operations. Furthermore, design principles of the DT-based VF concept are examined based on framed concepts and theories as well as its potential implications and deviations into different application contexts to provide managerial guidelines for utilising such a concept.
... Dabei ist das Zitat von DAVID J. SNOWDEN & MARY E. BOONE (s. Kapitel 6) zu berücksichtigen, das deutlich macht, dass kluge Führungskräfte -wie v. a. auch Komplexitätsingenieure -ihren Ansatz an die Komplexität der Umstände anpassen, mit denen sie konfrontiert sind[514]. ...
Komplexitätsmanagement in der Produktentwicklung : Holistische Modellierung, Analyse, Visualisierung und Bewertung komplexer Systeme
Thesis
Full-text available
  • Jan 2022
Komplexität ist eine der großen Herausforderungen unserer Zeit. Daher müssen Ingenieure besonders in der Entwicklung die stetig steigende Komplexität in diversen Domänen beherrschen, um den Produkt- und damit Unternehmenserfolg zu realisieren. Für die zweckmäßige Modellierung der vielen verschiedenen Elemente und Relationen komplexer Systeme sind domänenübergreifende, integrative und damit holistische Modellierungsansätze erforderlich, welche jeweils kontextbezogen nützliche, mathematische Analyse- sowie Visualisierungsmöglichkeiten erlauben um Entwicklern eine multikriterielle Bewertung bestimmter Handlungsalternativen zu ermöglichen. Derzeit bestehende Ansätze eignen sich hierfür jedoch unter anderem aufgrund methodischer Defizite, ihres hohen Modellierungsaufwands, eingeschränkter Analyse- und Visualisierungsmöglichkeiten oder ihrer geringen Unterstützung bei der multikriteriellen Bewertung nur eingeschränkt. Daher wird in der vorliegenden Arbeit ein Konzept vorgestellt, mit dem Entwickler beim holistischen Komplexitätsmanagement in der Produktentwicklung unterstützt werden, indem kontextbezogen jeweils geeignete Methoden für die integrierte Modellierung, Analyse, Visualisierung und Bewertung komplexer Systeme für eine zielgerichtete Entscheidungsfindung zur Verfügung gestellt werden. Zur effektiven und effizienten Anwendung der Methodik wird ein IT-Werkzeug präsentiert, das Entwickler bei deren Aufgaben im Rahmen des holistischen Komplexitätsmanagements unterstützt.
... The difference between Complicated and Complex is discussed in, for example, Snowden and Boone (2007), and the INCOSE Complexity Primer (INCOSE, 2015). Complicated systems can be viewed as knowable and deterministic, and once developed their configuration can be "frozen"; whereas complex systems are not fully knowable or deterministic, may be dynamically reconfigurable, and continue to co-evolve with their environment throughout their life cycle. ...
Systems Engineering and System Definitions
Technical Report
Full-text available
  • Jul 2019
New INCOSE web and technical report content for updated definitions of Systems Engineering and System. The output of two years' work by the INCOSE Fellows' Working group July 2016 - January 2019. All outputs freely available on INCOSE website here: https://www.incose.org/about-systems-engineering/system-and-se-definition
... The PAA incentivisation clauses force participants to adopt shared mental models of achieving a best-for-project outcome through cultural-cognitive sense-making, reconciling workplace and professional cultural norms with the stipulated project regulatory framework. TOC IV-3 stated: Complexity theory discusses how best to deal with known unknowns, unknown unknowns, and unknowable unknowns (Snowden and Boone, 2007;Snowden and Rancati, 2021). Teams that collaborate and are integrated can freely raise awkward relevant questions to address uncertainty and best cope with complexity or highly ambiguous/complicated situations (Browning and Ramasesh, 2015). ...
Improved reliability in planning large-scale infrastructure project delivery through Alliancing
Article
Full-text available
  • Jun 2022
Purpose Price reliability for complex and highly complicated infrastructure projects is problematic. Traditional project delivery approaches generally fail in achieving targeted end cost reliability. However, integrated project delivery (and particularly Alliancing), develop a far more reliable and robust project delivery plan and outturn time-cost targets. This paper aims to explore why this may be the case. Design/methodology/approach This case study investigated the project design, planning, cost/time estimation approach and how risk/uncertainty was dealt with. Five senior project delivery experts from an organisation that delivers multi-billion-dollar infrastructure projects in Australia were interviewed. These five experts collectively had 100+ cross-disciplinary experience years delivering complex infrastructure projects. Findings Alliancing adopts a radically different approach to project design, time/cost planning and risk assessment and management to traditional project delivery approaches. Key findings explain how the project alliance agreement designs-in processes that maximises team integration and collaboration. Analysis concludes that design thinking is used to craft and shape collaborative behaviours and project governance. Additionally, including project owner and facilities operator representatives in the project team adds valuable insights, expertise and knowledge contributing to planning reliability. Research limitations/implications This study is exploratory and focussed on complex infrastructure projects so findings cannot be generalised. Practical implications We unpack Alliancing processes that develop the target outturn cost plan, comprising a holistic and realistic plan to design a project to meet expected project outcomes. This case study may serve as an exemplar for complex project delivery. Social implications This paper illustrates how Alliancing more effectively delivers best value than traditional procurement approaches through its TOC-TAE processes. Originality/value The paper contributes to the scant existing academic literature analysing these processes. Its novel contribution is explaining how Alliancing treats unexpected events that in traditional delivery forms trigger expensive and time-energy-wasting disputation. This case study may serve as an exemplar for complex project delivery.
... In explaining the influence of the environment on organizations, the complexity theory and complex systems theory also apply. This approach draws attention to the characteristics of complexity of organizations and their environment, and manage-ment activities are determined depending on the degree of orderliness and complexity of conditions [Stacey 1996;Snowden, Boone 2007;Smith, Graetz 2006]. ...
Współpraca pomiędzy uczelniami jako element rozwoju potencjału konkurencyjnego
Article
  • May 2018
The purpose of this article was to analyze the benefits, barriers and perspectives for the development of inter-school cooperation in Poland. A review of the literature on various forms of cooperation, competition and coopetition in the environment of higher educa- tion institutions as well as challenges connected with them were presented. Subsequently, pilot in-depth interviews with decision-makers from universities educating in social sciences were conducted and analyzed. The main conclusion is that cooperation between universities, in particular cooperation with a stronger partner, is considered to be beneficial. In practice, however, there are numerous barriers that make this cooperation very limited, mainly due to operating in conditions of competition for students and funds for scientific and research activities. Therefore, cooperation with a reputable foreign partner seems to be nowadays the most desirable form of cooperation.
A survey comparative analysis of cartesian and complexity science frameworks adoption in financial risk management of Zimbabwean banks
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Traditionally, financial risk management is examined with cartesian and interpretivist frameworks. However, the emergence of complexity science provides a different perspective. Using a structured questionnaire completed by 120 Risk Managers, this paper pioneers a comparative analysis of cartesian and complexity science theoretical frameworks adoption in sixteen Zimbabwean banks, in unique settings of a developing country. Data are analysed with descriptive statistics. The paper finds that overally banks in Zimbabwe are adopting cartesian and complexity science theories regardless of bank size, in the same direction and trajectory. However, adoption of cartesian modeling is more comprehensive and deeper than complexity science. Furthermore, due to information asymmetries, there is diverging modeling priorities between the regulator and supervisor. The regulator places strategic thrust on Knightian risks modeling whereas banks prioritise ontological, ambiguous and Knightian uncertainty measurement. Finally, it is found that complexity science and cartesianism intersect on market discipline. From these findings, it is concluded that complexity science provides an additional dimension to quantitative risk management, hence an integration of these two perspectives is beneficial. This paper makes three contributions to knowledge. First, it adds valuable insights to theoretical perspectives on Quantitative Risk Management. Second, it provides empirical evidence on adoption of two theories from developing country perspective. Third, it offers recommendations to improve Quantitative Risk Management policy formulation and practice.
Chaos: International Sourcing of PPE and the Covid-19 Pandemic
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The ‘need for speed’: Towards circular disruption—What it is, how to make it happen and how to know it's happening
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The environmental, social and economic limits and shortcomings of the current linear model of production and consumption highlight the necessity of a rapid transition towards a sustainable paradigm. The concept of a circular economy has recently gained traction among scholars, policy‐makers and businesses as a promising alternative. Yet our understanding of how to speed up the systemic transition from a linear economy paradigm towards a circular economy paradigm is lacking. In this paper, we address this research gap by introducing the concept of ‘circular disruption’ and by describing how such a disruption may unfold. To do so, we build on S‐curve thinking and the concept of panarchy. Based on the resulting synthesis, we propose three phases that constitute the core of the disruption process: (1) the release phase, (2) the reorganisation phase and (3) the eruption phase. We then operationalise these three phases for different enabling innovation system functions and illustrate our observations with examples for the textile and fashion sector. We discuss how each of the three disruption phases can be accelerated to quickly create an opening for the new circular paradigm. The proposed circular disruption framework offers novel insights on socio‐technical transitions and changes and contributes to strengthening a systemic and theoretically grounded approach to circular economy research. Scholars and practitioners alike may take advantage of this work to focus circular economy efforts on speed and scale—an urgently needed focus to start tackling the sustainability challenges humankind is currently facing.
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