David J. Teece, Paul G. Raspin, and David R. Cox
Organizations can never be fully prepared for an unanticipated shock. But the most resilient ones learn to expect the unexpected. They can rebound quickly and take advantage of opportunities that emerge.
A framework developed by the authors offers four sets of activities for companies that want to go beyond traditional forecasting and risk-assessment exercises. First, companies need to develop a set of processes to actively sense new insights that could affect the business. Second, they need to organize in response to those threats or opportunities by reallocating resources where necessary and revamping processes. Third, they must capture value by restructuring their business models and relationships with other players in their ecosystems. And fourth, they need to renew the organizational capabilities that will allow them to continue to monitor and make adjustments over time.
These four sets of activities and capabilities — sensing, organizing, capturing, and renewing — allow organizations to nurture their dynamic capabilities. The activities are not meant to be implemented sequentially. Instead, they are interlinked and allow behaviors and processes to continually adjust.
Deborah Ancona, Michele Williams, and Gisela Gerlach
Vision, honesty, and the ability to execute changes are commonly cited traits of great leaders. Less acknowledged but equally critical is sensemaking: the ability to create and update maps of a complex environment in order to act more effectively in it. Sensemaking involves pulling together disparate views to create a plausible understanding of the complexity around us — and then testing, refining, and abandoning that understanding, if necessary, to start again.
Research by the authors shows that while sensemaking is a predictor of leadership success, few leaders model or implement it in their organizations. Less than 4% even recognize it as a key attribute. Undervaluing this practice is a particular problem in turbulent times, when it’s critically needed to plan in the face of uncertainty.
To be more effective at gathering information that points to better solutions, organizations need to plant sensemaking in the minds of leaders and employees, and formalize the practice in the organization. The authors provide examples of teaching, role-modeling, and shaping culture that include sensemaking and recommend including sensemaking activities in organizational processes, and in hiring and performance-management criteria.