In a previous post on this blog I argued that one of the reasons why people are becoming a source of competitive advantage for more and more companies is because of the capacity of humans to act as sensors of the many changes happening around them: one strand of organizational sensemaking.
However this is not the only reason for the increasing strategic relevance of people in organizations. Today’s business world is way too complex for an executive elite to interpret all situations and to take all initiatives. Consequently, beyond sensing the environment, organizations also need to mobilize the minds and hearts of a larger proportion of their people to make sense of complex situations, decide the actions that need to be taken, and make them happen.
As Hamel and Prahalad anticipated in their book “Competing for the Future” (1994):
However lean and fit an organization, it still needs a brain. But the brain we have in mind is not the brain of the CEO or strategic planner. Instead it is an amalgamation of the collective intelligence and imagination of managers and employees throughout the company…”
This collective brain is in charge of a critical process not all companies pay enough attention to, but which is critical under change and uncertainty: organizational sensemaking.
Organizational sensemaking can be defined as the process of creating situational awareness and understanding in situations of high complexity or uncertainty in order to make decisions: i.e. “a motivated, continuous effort to understand connections (which can be among people, places, and events) in order to anticipate their trajectories and act effectively” (Klein et al., 2006).
Through this process, people in organizations create rational accounts of their environment, and develop meaning of disparities between what they expect and what they experience, producing interpretations that influence not only the way they perceive the world, but also the decisions and actions they take based on those perceptions (Weick, 1993).
Which is something 100% human: during uncertainty and change we want to clarify what is going on by interpreting cues from the environment as the basis for a plausible explanation that “make sense” of the changes we perceive.
In search of alignment with their objectives, leaders try to influence employee sensemaking through a variety of sensegiving actions (Goia and Chittipeddi, 1991), but often forget that employees are not mere passive recipients of those sensegiving initiatives, since they can construct their own interpretations and may develop subversive, supportive, or championing responses to the inputs they receive (Sonenshein, 2010).
Executives also tend to forget that organizational sensemaking is not an individual process, but a social one, as organizational actors interpret their environment through interactions with others, constructing accounts that allow them to comprehend the world and act collectively (Maitlis, 2005).
Today we know that the interpretations people make of change, and what they should do in regards to that change arise primarily from lateral, informal social interactions between themselves (Balogun and Johnson, 2005). When people face a change they move to a conscious sensemaking mode to interpret the differences they see between their expectations and what they actually experience, typically by sharing their experiences with others (Balogun, 2006).
It is then that their perceptions of the actions and behaviors of other managers, collectively constructed stories (Bird, 2007), conversations, jokes, and the gossip they share with their colleagues, shape their interpretation of what they should do before they act.
Yet, leaders frequently engage in a variety of activities with the members of the organization to facilitate an “aligned” interpretation of the change intent, and negotiate how the change needs to be taken forward, unaware that aligning interpretations is a two-way process of sharing and developing meanings, and that most of those interpretations are constructed through lateral, informal everyday conversational and social interactions.
Consequently, they don’t take into account that to facilitate the development of those shared understandings, they should be more attentive to people’s concerns and interpretations. They need to invest time and resources in both formal and informal communication activities, including conversations, discussions, and storytelling,gathering feedback about how people are interpreting the changes. Andthey have to be prepared to provide rapid responses to the issues and questions they may arise (Balogun, 2006).
Thus, since this process of organizational sensemaking is not under the full control of company executives, managing change today should be less about directing and controlling and more about facilitating the development of aligned interpretations, for which they need to put in place mechanisms to monitor and understand how interpretations of change develop and evolve over time, why these interpretations arise, and how they affect managers’ and employees’ behavior.
Last but not least, leaders should also pay special attention to people’s emotions, because they largely influence how people experience the changes they face, and condition their interpretations. In this regard, recent research (Liu and Maitlis, 2014) shows that positive emotional dynamics enable discussions in which members engage in deeper sensemaking and greater agreement about an appropriate course of action, while emotional dynamics that are mixed or negative are associated with more superficial sensemaking and a failure to act collectively.