Decision-making and sense-making
While much of our focus is on problem-solving and decision-making when we reflect on non-profit governance, without effective sense-making, boards will be likely to make poor decisions. Good decision-making could therefore be considered somewhat dependent on good sense-making.
Individual or personal sensemaking
When we engage in sense-making we are “structuring the unknown” (Waterman 1990, p.41), making sense of events, data, environments, systems, and relationships, in ways that improve our agency. Human agency is defined as “an individual’s capacity to determine and make meaning from their environment through purposive consciousness and reflective and creative action” (Houston, 2010). We need to be able to organise data in such a way that it enables us “to comprehend, explain, attribute, extrapolate and predict” (Ancona 2012).
Vernon Howard Snr’s paper, Sensemaking as Leadership, describes the individual leader’s use of sense-making as follows:
“Leaders naturally formulate answers to the problems broached by crises through the generation of sensemaking characteristics such as exploring the wider system, creating a map of the current situation, and interacting with the system to learn more about it. … It is the meaning that leaders and followers make of situations that inform their actions.”
Collective (shared) sensemaking
The Centre for Public Impact offers this definition of collective sensemaking:
“Sensemaking is about creating space for listening, reflection and the exploration of meaning beyond the usual boundaries, allowing different framings, stories and viewpoints to be shared and collectively explored.”
Each of us makes sense of the world by referencing a framework of understanding that we have developed based on our life experiences. Each director and senior manager arrives at the board table with their own unique personal ‘schemas’ or reference frames to consider the issues or matters on the agenda.
When extended to organisations, we may not wish to use the term ‘agency’ to describe the collective ‘capacity to act’. Agency Theory was superseded by Stakeholder Theory and Stewardship Theory many years ago, in the light of concerns about keeping managers faithful to the interests of the members/clients/stakeholders.
The evolution of sensemaking models
Brenda Dervin‘s original conception of sense-making was conceived as a way of shifting away from a library-centric approach to information seeking, to one focused more on individual people and the way they perceived their experiences and information needs. Her 1980s diagrammatic representation of the concept used three main elements in both triangular and linear layouts to help librarians think differently about their role in helping people to connect with the information they required.
Subsequently, sensemaking theory has evolved in numerous fields and there are many models and frameworks available for those wishing to explore the theme. For an informative and entertaining examination of sensemaking in many of its nuanced forms, readers may wish to visit the Grey Swan Guild, and their Global League of Sensemakers. Use this link to read articles on critical thinking and sensemaking.
When board deliberations occur, directors and senior managers respond to situations, trigger events, and data provided in reports or monitoring systems to identify circumstances warranting a response or intervention. This has often been described as sorting the signal from the noise. (See header image above).
My recent posts on data quality and validity referred to this of course, and the chart below offers another perspective on the importance of ensuring that decisions are informed by valid signals rather than data that is obscure, vague, or which is derived from a ‘one-off’ event.
For a board to be able to agree on a course of action, a shared schema or framework is required. This was the focus of a 2007 journal article by US business academics Stern Neill, Daryl McKee, and Gregory Rose, titled Developing the organization’s sensemaking capability: Precursor to an adaptive strategic marketing response. While their paper tended to focus on the marketing implications of sensemaking, for me (given my personal schema) the more significant points offered relate to strategic deliberations.
“Decisionmakers scan their environment and choose strategies based upon their preexisting schema (Hambrick, 1982). Schemas act as information-seeking structures that accept information and guide action (Neisser, 1976). In sensemaking, schemas function to label stimuli in such ways as to suggest possible actions (Weick et al., 2005). At the organizational level, strategic orientations act as schemas by selecting and actively modifying experience in effect, shaping perceptions of the strategic situation. The particular strategic orientation employed influences which salient environmental aspects the organization believes will lead to a competitive advantage (Day & Nedungadi, 1994).”
This development of a shared schema, and its product, shared sense-making, is undertaken by every board. Some support enhancement of this decision-making skill through director development programs and strategic workshops which invite openness to each other’s schemas. This allows the shared schema that ultimately evolves to be more nuanced, and reflective of diverse perspectives. Others, regrettably, pay little heed to such developmental work and consequently suffer from short-sighted or transactional decision-making, and strategic impotence.
The chart below seeks to distill some of the key stages in sensemaking by both individuals and groups involved in non-profit and for-purpose organisations.
Ancona, D.: Framing and acting in the unknown. S. Snook, N. Nohria, & R. Khurana, The Handbook for Teaching Leadership (2012)
Houston S. (2010) ‘Further reflections on Habermas’s contribution to discourse in child protection: An examination of power in social life’, British Journal of Social Work, 406, pp. 1736–53.
Waterman, R. H., Jr. (1990). Adhocracy: The power to change. Memphis, TN: Whittle Direct Books