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Articles April 24, 2020

Innovation: A Silver Lining Amidst Chaos

Mark Fitzgerald
Author
Mark Fitzgerald

During uncertain times – like the COVID-19 pandemic – it can feel like the world around us is changing hour-by-hour, if not minute-by-minute. Amidst this chaos, it can be challenging not to become fully consumed by immediate-term tactical decisions or to resort to approaches that were successful in the past. Sensemaking frameworks provide a construct through which both individuals and companies can better understand uncertain and ambiguous situations and chart an appropriate path forward.

The Cynefin framework, a decision-making framework developed by David Snowden and Mary Boone, allows leaders to see things from new viewpoints, assimilate complex concepts, address real-world challenges, and seize opportunities. The framework features four key domains – Simple, Complicated, Complex, and Chaotic.

Simple

The domain of “known knowns.” Calls for discerning cause and effect relationships to determine the right answer. Organizations leverage codified best practices to operate successfully. The appropriate approach in this context is Sense > Categorize > Respond. Examples of the Simple domain include payment processing and warehouse management workflows.

Complicated

The domain of “known unknowns.” Calls for investigating several viable options to determine the best answer. Organizations leverage experts to shape good practice. The appropriate approach in this context is Sense > Analyze > Respond. Examples of the Complicated domain include product design and clinical care delivery.

Complex

The domain of “unknown unknowns.” Calls for a test and response approach to identify instructive patterns that inform a go-forward solution. Organizations leverage experimentation to better understand the relevant factors. The appropriate approach in this context is Probe > Sense > Respond. Examples of the Complex domain include the human genome project and the evolution of the Internet.

Chaotic


The domain where “no manageable patterns exist.” Calls for immediate action to establish order. Organizations leverage rapid response to create enough stability to navigate to another context. The appropriate approach in this context is Act > Sense > Respond. Examples of the Chaotic domain include COVID-19 and 9/11.

While we currently find ourselves in a Chaotic context, there is a silver lining. Chaotic domains aren’t only ripe for innovation, they require it to successfully move to a more sustainable context. To create order, leaders can leverage emerging and modern technologies to realize some of their most pressing needs – operational efficiency, cost reduction, customer engagement, and/or revenue generation.

In addition to allowing us to classify our broad context, Cynefin also offers us a lens through which we can better understand the factors that impact emerging and modern technologies. Leveraging the expertise of CapTech’s technical leaders, we evaluated the difficulty to implement and achieve meaningful value (within 3-6 months) of several technologies and delivery methodologies. For this analysis, we scoped the four Cynefin domains as follows:

  • Simple: The technology/methodology is well understood; not much is changing with the technology/methodology; following best practice can lead to successful outcomes as there is a clear relationship between cause and effect.
  • Complicated: Multiple “right answers” likely exist on approach to this technology/methodology, but when expertise is engaged, the optimal path forward can be determined; it may take a fair amount of time to complete the necessary analysis to identify the “right answer,” but it’s possible.
  • Complex: This technology/methodology does not have a “right answer” at present and the value is often understood only in retrospect; testing and probing is required for an appropriate path forward to be identified.
  • Chaotic: So much is changing with this technology that searching for the “right answer” is pointless; the relationships between cause and effect are impossible to determine due to a constantly shifting landscape.


When assessing the difficulty of implementation, the overall results are encouraging. Despite our holistic context falling into the Chaotic domain, our experts believe many technologies and delivery methodologies remain in the Complex or Complicated domains. Yes, it remains true that many of these technologies are difficult to successfully implement, but the Cynefin framework offers us a valuable execution approach in both the Complex (Probe > Sense > Respond) and Complicated (Sense > Analyze > Respond) domains.


In addition to evaluating the challenge of implementing a new technology, it’s critical to also understand the difficulty of realizing value from a specific technology. When assessed through the Cynefin framework, our experts again believe opportunities exist to realize value from specific technologies in a 3- to 6-month timeframe even though we’re broadly in a Chaotic context. You’ll notice in this graphic that the context is different for several technologies compared to the implementation. When utilizing Cynefin to assess the potential for value realization for your own organization, it’s important to align on the specific type of value you desire (i.e., cost reduction, revenue generation, customer engagement, operational efficiency, etc.).

A very important caveat to our analysis is that we recognize that every organization is unique and faces its own set of factors. Our work is meant to be a launching point for further exploration as opposed to a definitive answer that’s “right” for every organization.

While executives take necessary steps to navigate their organizations out of a broad Chaotic context, parallel path innovation efforts driven by technical leaders can realize near-term value from technologies in the Complex and Complicated contexts. Following the prescribed approach, based upon the specific context where the technology resides, leaders can leverage emerging and modern technologies to help address current challenges and position their organization for a successful future.

References:
A Leader’s Framework for Decision Making, HBR, November 2007 - https://hbr.org/2007/11/a-leaders-framework-for-decision-making

Mark Fitzgerald

Mark Fitzgerald

Principal, Industrial & Resources Portfolio

As a Portfolio Group Lead, Mark partners with Energy, Logistics & Transportation, and Manufacturing & Materials industry clients and CapTech teams to create measurable business value through technology-centered solutions. In non-consulting speak, he makes sure the money clients spend on technology is worth it.

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