Sensemaking, Complexity and Organisational Knowledge - A Note from the Author
This is a preprint of an article published in Volume 8, Issue 4 (Oct-Dec 2001) of The Journal of Knowledge and Process Management, copyright © 2001 John Wiley & Sons, Ltd.
My main motivation in writing this paper was to offer alternative concepts and frameworks for the KM community to the notions of tacit and explicit knowledge (and knowledge conversion) that Nonaka and Takeuchi popularised in their book "The Knowledge Creating Company" (1995).
To my thinking these concepts gloss over a number of important issues of organisational life - politics and tradition for example, while favouring the individual over the social and concern for knowledge over language. Innovation is not simply the creation of new knowledge, but also the creation of new language, practices and meaning i.e. a paradigm shift. Also, it is often impossible to articulate one's "tacit knowledge", so the idea that tacit knowledge may be converted into explicit forms is not always true. These are the central ideas I am trying to convey in this paper.
I also wanted to draw upon ideas from complexity theory and think about organisations more in terms of self-organisation and emergence. There has been much interesting thinking done in this area in recent years by management thinkers such as Ralph Stacey. I hope my paper makes a useful contribution to this discussion.
It was written for a largely academic audience, so some practitioners may find it a hard read. I do however include a case study, which I hope illustrates some of the paper's concerns and illustrates some of the issues that complex software development projects may entail. For more information, contact me at: markwmoss@yahoo.com
Sensemaking, Complexity and Organisational Knowledge
Abstract
As forces of globalisation and innovation have raised the levels of cultural and technological diversity within and between firms, their ability to adapt to changing environments and the ability of individuals and groups to make good sense of the situations that they participate in has become increasingly important. Such sensemaking (Weick, 1995; Blackler, 1995) requires an appreciation of the highly tacit and distributed nature of organisational knowledge as well as the complex, social practices through which such knowledge develops. In this paper the sensemaking perspective is developed in terms of an activity framework that views organisations as emergent phenomena or complex, adaptive systems (Cohen and Stewart, 1994; Gell-Mann, 1994; Goodwin, 1994; Stacey, 1996) that may evolve or learn in conjunction with environments that they in part create. The characteristics that Weick and Blackler use to analyse sensemaking in organisations are further explored in terms of the following themes:
Indeterminacy. Building upon the ancient ideas of Yin and Yang, the Heraclitan idea of flux and Heidegger’s phenomenology, sensemaking is viewed in terms of a continual interplay between knowing and being, or between a variety of resources and capabilities that either close down or open up conversation and human interaction.
Complexity. Acknowledging a focus on practice as opposed to more static conceptions of knowledge (Blackler, 1995), eight dimensions are offered for analysing self-organising patterns of activity within organisations in terms of interrelationships between personal, cultural, technological and strategic kinds of knowledge. Collectively these dimensions are argued to correspond to a “phase space” (Cohen and Stewart, 1994, p. 200) in which the details of such patterns may be explored.
Identity. While the meaning of language is viewed as fundamentally indeterminate, organisational members may nonetheless organise themselves into stable patterns of activity and communication that provide them with a common frame of reference or paradigm (Kuhn, 1962). Such patterns are argued to be equivalent to the idea of the stable equilibrium attractor.
Diversity. Following Weick (1979), attention is paid to the capability of groups to develop new interpretations of their actions that enable them to absorb the variety that they are confronted with as a result of interaction with their environment. Such capabilities, it is argued, imply particular interrelationships between a number of “tacit and explicit dimensions of practice”, which are useful for investigating the phenomena of paradigm shifts and power relations.
Morality. Drawing upon Aristotle's idea of practical wisdom and Heidegger’s notion of authenticity, it is argued that sensemaking requires an ethical dimension as people judge whether their actual interaction reconciled the kinds of knowledge that are held to be generally true within "legitimate networks" (Stacey, 1996, p.24) with the need to act in particular situations through more informal kinds of interaction or by choosing courses of action that deviate from the norm.
It is argued that the final two themes provide organisational members with a number of avenues for exploring the emergence of “strange attractors” (Stacey, 1996, p.57) within their practices as they inquire into the nature of their joint capabilities and relationships.
Management, Sensemaking and Organisational Knowledge
Traditionally management has been viewed as the rational design of organisational structure in order to achieve a formal and explicitly articulated strategy (Chandler, 1962). Following such a perspective, many discourses within management theory (such as business process reengineering) have often appeared to "locate" managers outside of their organisations in the sense that they encourage mechanical views of organising that rely upon abstract representations of knowledge (e.g. as provided by information technology). Such mechanistic ontologies have presumed the primacy of managerial knowledge and that the activities of management largely comprise of ensuring that organisations achieve a good level of fit with their environment through the efficient and effective allocation of resources (Tsoukas, 1996). Increasingly though, management is viewed as a dynamic, participatory and interactive process of sensemaking (Weick, 1995) as managers try to find meaning in the actions that their organisations have performed and develop detailed understandings of their organisations' capabilities in order to facilitate strategic learning (Mintzberg and Waters, 1985). Such a perspective favours reflective, narrative analyses of group processes, stresses the links between cognition and action, while acknowledging the unintended consequences of managerial action and the problems that may result from over-reliance upon information technology and representational knowing. Influenced by ideas from complexity theory, an increasing number of management theorists (Nonaka and Takeuchi, 1995; Mitleton-Kelly, 1997; Stacey, 1995) have argued that sensemaking within organisations is facilitated as much by instability as stability and by reflective action.
Karl Weick has been one of the main advocates of the sensemaking perspective within organisation theory. Weick describes sensemaking in terms of a number of properties that stress its dynamic, social and retrospective nature. Weick also argues that sensemaking involves improvisation, identity construction and the construction of plausible narratives as individuals cope with ambiguity in interpretation. Developing a view of organisations as activity systems, Blackler (1995) argues that research into sensemaking within organisations should recognise that processes of knowing are increasingly mediated by information technologies, contested in the sense that managerial and professional expertise may come into conflict as well as being situated within communities-of-practice.
Blackler has been critical of many popular conceptions of organisational knowledge e.g. the ideas of tacit and explicit knowledge (Nonaka and Takeuchi, 1995) which he views as being too static. Noting that knowledge is "multifaceted and complex, being both situated and abstract, implicit and explicit, distributed and individual, physical and mental, developing and static, verbal and encoded" (1995, p.1030) and arguing for a focus on practice and on the "culturally-located systems within which people achieve their knowing" (1995, p.1021), Blackler has argued for a shift in theorising about organisational knowledge from "theories of knowledge" to "theories of knowing" (1995, p.1033).
In this paper, these concerns for practice, the complex nature of knowledge and sensemaking are heeded. The predominantly cognitivist assumptions of much IT-driven knowledge management are questioned and the social, political and moral aspects to knowing and practice are acknowledged. Viewing organisations as complex adaptive systems, an analytical framework is proposed which builds upon the key complexity concepts of attractors, non-linear processes, feedback, self-organisation and emergence. This framework is argued to be a useful tool for analyses of practices and learning within organisations.
In Chinese philosophy, the dynamic of all change in the universe derives from the interaction or continual interplay between two forces that are known as Yin and Yang (Dalzell-Payne, 2000; Lao Tzu, 1992). Where Yin tends to be the more passive and destructive force, stressing stillness and the spatial, Yang tends to be more active and constructive, stressing movement and the temporal. Unlike the tendency to view events in terms of binary oppositions (e.g. good/bad, true/false) that Western culture inherited from Greek philosophy, the ideas of Yin and Yang do not represent opposites. Instead they are viewed as complementary, both creating and controlling each other. Their duality and continual intermingling is viewed to be the only constant in a universe of change: nothing is wholly Yin and similarly nothing is wholly Yang. Paradoxically each contains elements of the other.
Similar views were espoused by Heraclitus. To him the universe existed in a paradoxical state of flux, "embodying characteristics of both permanence and change" (Morgan, 1986, p.251). One could never step into the same river twice for it was always changing and it was only in such change that one could find constancy. More recently the post-structuralist philosopher, Derrida, has argued that much western thinking is limited by reliance upon binary oppositions. Proposing that meaning of a term in any binary opposition exists only in relation to its other term, and that in a sense the individual terms may be considered united and part of each other, Derrida stresses the ineradicable equivocality in human communication. Derrida argues that while human desires to reduce such ambiguity are important factors in driving processes of organising, indeterminacy may never be completely removed and simple explanations made in terms of binary oppositions may always be subverted (Cooper, 1989). Similar positions have been articulated by a number of organisation theorists (Alvesson, 1993; March and Olsen, 1976), all of whom have stressed the centrality of ambiguity in organisational analysis.
In this paper, a view of sensemaking (and its relationship to knowledge and practice) is articulated out with reference to the ideas described above. Meaning is viewed as being produced out of a continual interplay between forces that either close down or open up conversation or human interaction, or between knowing and being or the human capabilities to create knowledge and to reproduce certain cultural patterns of interaction over time. In effect, knowledge is viewed both as a dynamic process (e.g. routines or "know-how") as well as a static product (e.g. theoretical, codified knowledge). More formally, a view of meaning is developed as always existing in a state of flux between the resources (which tend to be more static or Yin in nature) and capabilities (which tend to be more dynamic or Yang) employed in practice.
Furthermore, as individuals link together activities in order to achieve outcomes that reduce the amount of uncertainty or equivocality that has to be dealt with (Weick, 1979), the knowledge (personal, social) that is drawn upon is considered to be always undergoing change. For example, in order to make sense of their "information resources" (data contained within formal information systems), individuals within organisations generally require certain background, non-intentional (Searle, 1983) capabilities (cognitive and social) that allow them to make sense of such data. Where such background capabilities do not exist, activities may need to be performed which either use or develop informal networks and allow the development of such capabilities.
The diagram in figure 1 illustrates these views in terms of an activity framework. Like Heidegger’s concept of Dasein (1962), which stresses the situated character of human beings within social and purposeful contexts and the temporal nature of being itself, this model of practice views learning and knowledge creation not simply in terms of the subjects and objects of knowledge involved, but also in terms of their history of interaction and their capability to speculate about their potential interaction and express their intentions. Also, following ideas from complexity theory, this framework places the variations within actual interaction as a key focus of organisational analysis since they are the source of creativity and novelty within human practices. The resources employed in practice are viewed in terms of interaction between subject and object. The capabilities employed are viewed in terms of how actual capabilities may emerge from the historic capabilities that individuals have established in their prior practice in addition to the potential capabilities that they may wish to develop. The framework argues that analyses of practices (including patterns of associated communication) within organisations may be made in terms of the interplay between the following four kinds of resource or capability (which are, like the ideas of Yin and Yang, not to be considered as mutually exclusive but rather as constantly intermingling with each other):
Figure 1 - The Activity Framework
1. Personal. The cognitive processes or subjective knowledge used by individuals participating in activity e.g. values and beliefs that may be used but at the same time modified through reflective action.
2. Cultural. Historical knowledge or capabilities e.g. norms and routines, which presupposes some degree of shared experience between participants in a practice. Such capabilities may play key roles in the development of personal knowledge and shared identities.
3. Technological. Objective knowledge employed in activity e.g. theoretical knowledge and tools within which a very limited kind of "intelligence" may be embedded (e.g. in software), which may be considered to persist independently of practice within objects.
4. Strategic. Potential courses of action that emerge from actual interaction e.g. the particular plans and scenarios that people construct in order to give direction to their activity.
In the next section, the complexity involved in this intermingling or interplay is explored in terms of a number dimensions and their interrelationships over time and space.
Inquiry into organising means that people must retrospectively try to make sense of complex, self-regulating patterns of human interaction within organisations (Weick, 1995). Such patterns, argues Weick, are characterised by circularity and complex interdependence over time and are responsible for managing uncertainty and determining stability or change (1979). They arise out of processes of habitualisation as people recognise routine actions in their interaction and classify them more formally in terms of roles (Berger and Luckmann, 1966). Weick goes on to state that insensitivity to such self-regulating patterns and managerial desires for control based upon purely linear conceptions of causality may often be frustrated. Such patterns of interaction may contain, as Argyris and Schön (1978) have illustrated, defensive routines that repeatedly prevent collective learning from taking place and governing rules (or theories-in-use) that lead to such routines. By contrast, as Mintzberg has argued, such patterns may be more valuable to an organisation if they realise coherent action despite, or in the absence of, formal organisational intentions and deliberate planning (Mintzberg and Waters, 1985). Mintzberg argues that strategists in firms may undergo strategic learning by recognising such emergent strategies and modifying their intentions as a result.
Within the activity framework, eight dimensions are offered for analysing the nature of such complex, self-organising patterns as they develop over time and space. These are:
1. Participation. The ability of individuals to apply their personal knowledge (e.g. values and beliefs) in practice.
2. Acquisition. The individual learning that results from such participation, which may result in the modification of existing beliefs or values.
3. Tradition. The operation of norms and routines as individuals interact with each other in their practice.
4. Socialisation. The ability of individuals to produce new (or simply reproduce existing) norms and routines in their social interaction.
5. Codification. The production of formal, rule-based knowledge e.g. in the form of concepts or artefacts (e.g. software).
6. Representation. The structuring of activity through the use of such formal knowledge (e.g. through use of formal information systems and concepts).
7. Speculation. The ability of individuals to develop new plans and scenarios that express potential courses of interaction.
8. Intention. The operation of such plans and scenarios on their actual practice (e.g. through processes of scenario-planning).
Drawing upon the theories of complexity and structuration (Giddens, 1984), it is argued that collectively these dimensions can be considered to represent the idea of a phase space within which the variations within self-organising patterns of practice (or attractors) and the “time-space distanciation” of such practices (i.e. their stretching across time and space) may be explored. Of particular interest is the emergent order that may arise out of the interplay between various kinds of resources and capabilities (expressed in terms of interrelationships between the above dimensions) and the factors that may either enable or constrain the actual interaction of organisational actors. Viewing organisations as complex, adaptive systems, the following archetypal kinds of pattern might be expected.
Organisations or groups with particularly strong cultures that place great emphasis on socialising new employees into their existing routines may be considered in terms of this kind of attractor, since it is associated with regular predictable patterns that are sustained through negative feedback. Thus where newcomers propose strategies or participate in activities that break with existing traditions, they may be encouraged by colleagues to fall back into line with their organisation's accepted norms and routines. When newcomers conform to such requests, the stability of the existing pattern will be maintained.
Organisations or groups that favour control through the production and use of information technology to the detriment of trust-building activities (and the development of organisational culture more generally) may be considered in terms of this attractor, which is associated with movement towards an explosive, unstable equilibrium characterised by positive feedback. When such circumstances lead to the development of formal information systems that are highly complex and costly to maintain, chaos rather than order may result as organisations fail to implement enhancements to such systems, which may then fall into disuse.
While meaning has previously been viewed in terms of indeterminacy and instability, needs for ontological security (Giddens, 1984) and for reduction in uncertainty remain within any form of human activity. As Kuhn (1962) has shown, such “closure” occurs through the emergence of paradigms that illustrate (via shared narratives or examples) the kinds of activities that group members should be committed to and the language in which such commitments should be expressed. Through facilitating the reconciliation of formal and informal knowledge and by enabling reasoning in terms of values (Tsoukas, 1992), narratives help people to make sense of their practice and allow the development of a shared identity.
In terms of complexity, paradigms may be considered as stable equilibrium attractors where the intersubjectively shared meanings deriving from the interplay of traditions, shared values and beliefs in communication processes play key roles in facilitating the reproduction of routine patterns of activity through negative feedback. Thus socialisation may largely reproduce the same kinds of norms and routines as those that have previously structured activities and may prevent the development of new practices and language (which may not be perceived as necessary). The representations employed in activities may strictly determine codification (e.g. categories within information systems that are used to define the data to be recorded in business transactions). Also, the intentions that structure interaction may reduce speculation to a level congruent with the accepted paradigm (e.g. so that methods which have been accepted as offering acceptable solutions to common problems continue to be used, thereby preventing any search for new problem-solving approaches). Within a paradigm, any change and innovation is incremental. The paradigm provides a stable “knowledge-base” and vocabulary that organisational or community members may exploit while any learning may be largely single-loop in nature, involving adaptation but little change in underlying norms and values. Managers may generally view their organisation's relationship with its environment in terms of managing (or reducing) uncertainty in accordance with the methods for problem-solving contained within their accepted paradigm.
Within the activity framework, the paradigms that provide coherence and stability to human interaction may be explored in terms of the patterns generated by the interplay of personal, cultural, technological and strategic kinds of knowledge as its participants reproduce their activities across time and space. Its construction (in terms of eight dimensions) suggests numerous avenues for exploring how intersubjective agreement may emerge in practice, and how the development and use of strategies and technologies employed within work groups and communities-of-practice (Lave and Wenger, 1991) may be maintained over time.
Such exploration may be valuable since much managerial work (particularly in Western contexts) involves abstraction, representational knowing (relying on data from formal information systems) and the measurement of organisational activities that may be far removed from managers' immediate experience. Managers may have a particularly poor appreciation of the complexity of the actual practices enacted by the people that they manage (in terms of how learning often takes place "on the job" and how stable patterns of activity that resist change tend to be reproduced through informal networks), the value of such practices (whether good or bad), and the impact of their decisions on such practices.
The impact of culture on collective learning in innovation processes is acknowledged by Leonard-Barton (1995) in her research into the management of innovation in US organisations. Arguing that an organisation's “core capabilities” may easily become “core rigidities”, she described numerous cases where individuals in organisations remained committed to strategies and technologies even though the circumstances in which they were originally valuable had changed. Values and norms were often shown as inhibiting the development of new practices and innovation more generally. While in more stable business environments such stable patterns of activity represented a core capability for these organisations, when their environment changed such practices often became core rigidities. The development of a new paradigm (and the abandonment of the old one) was shown to be a difficult task for many organisational members.
Such difficulties were acknowledged by Kuhn, who argued that paradigm shifts were not just concerned with changes in ideas, but also with changes in institutions, human relations and the strategies that should guide the activities of such institutions. Issues of such strategic importance tended to involve power and resistance (to the new paradigm) from community members who remain committed to the old one. Kuhn noted that “the transfer of allegiance from paradigm to paradigm” was akin to a “conversion experience” (1962, p.151) that could not be forced or a gestalt switch. By way of explaining this, Kuhn argued that a paradigm was “prerequisite to perception itself” (1962, p.113) and that practitioners often chose to continue to see their subject in terms of an old paradigm, even though evidence might have cast serious doubt on such judgement.
The themes of paradigm shifts and power relations within processes of collective learning are explored in more detail in the next section. While the contextualist approach favoured by the activity framework offers few prescriptions, it is argued that in order to facilitate such paradigm shifts, managers should pay particular attention to the management of requisite variety within collective learning processes.
Under conditions of environmental change or in response to demands for innovation, organisations must draw upon diverse beliefs and traditions in order to generate the necessary variety of problem definition and problem solving activity. Under such circumstances, the establishment of more dynamic organisational forms (such as informal networks and cross-functional teams) and attention to both the building of trust and the political nature of organising may be important concerns to managers as they try to facilitate sufficient levels of collective learning within groups.
Such concerns may be neatly summarised by the law of requisite variety (Ashby, 1956). This law states "that the variety within a system must be at least as great as the environmental variety against which it is attempting to regulate itself" (Buckley, 1968, p.495). In other words, only the variety generated in collective learning processes (within and between organisations) can absorb the variety generated by environmental uncertainty. Or in simpler terms, if a group of people can engage in activities that allow them to reflect upon their norms and routines and develop new beliefs about them and perform new actions as a result, then they may increase their collective variety of potential interaction.
This idea is implicit within Burns and Stalker's (1961) distinction between mechanistic and organic forms of organisation. Mechanistic organisations which are based upon hierarchical means of control (using propositional knowledge contained within procedures as a means to control risk) were found to be generally less competent in adapting to dynamic business environments than organic ones, which are based upon networks (and trust as a means to control risk), since their rigid organisational structures tended to reduce the variety of their members' collective practice. Karl Weick (1979) uses the idea to explain the degree to which individuals may make sensible interpretations of equivocal information in organisational events. Weick argues that where interpretation processes contain sufficient variety (through the assembly of interdependent actions by people and the imposition of schemes of interpretation that have been built up from their prior experience) so as to absorb the variety in the equivocal information that is received, sensible interpretations may result. Where this is not the case, the information may remain confusing. Weick (1987) also argues that sensible interpretations and reliable organisational action may be more likely within organisational cultures that value story-telling as a means of ensuring effective communication.
Within the activity framework, the idea of requisite variety is developed with reference to a number of “tacit and explicit dimensions of practice”, as shown in figure 2. These distinctions try to acknowledge the broadness of meaning that the terms “tacit” and “explicit” embody, and propose that interrelationships between certain dimensions within the framework may best be described in these terms (e.g. the traditions within which the individual acquisition of knowledge occurs may be termed tacit, the intentions which may influence codification may be termed explicit). As both Spender (1996) and Boisot (1998) have argued, tacit is a wide-ranging term that that is used to convey a variety of meanings and not all tacit knowledge may be made fully explicit. Also, the recent, popular idea of tacit knowledge in management theory (Nonaka and Takeuchi, 1995) seems to only view beliefs as being tacit. As Argyris and Schön have argued, many actions or defensive routines may be considered tacit too and the activity framework tries to acknowledge this diversity in meaning, whilst moving away from the implicit cognitivist viewpoint taken by much contemporary thinking on organisational knowledge e.g. Nonaka and Takeuchi's work on knowledge creation.
Figure 2 - The Activity Framework viewed
in terms of Requisite Variety
The activity framework proposes one fairly broad prescription in terms of the law of requisite variety. As they reflect upon their group dynamics, participants should ask themselves whether their communication allowed the development of sufficient cultural or background (Searle, 1983) capabilities in terms of new norms and routines to enable them to enact their articulated strategies for working with each other and with the objects that they use. In their practice, group members need to ensure that they build sufficient diversity with their tacit dimensions of practice (through developing sufficient trust and commonality in their ongoing interpretations) so as to absorb the variety that is generated within their explicit dimensions of practice (through the uncertainty or risk produced in their articulation and use of artefacts).
Situations which produce significantly high degrees of risk may require greater emphasis on trust relationships as a means to manage such risk (Giddens, 1991), and on language and media of communication which enable the necessary richness and variety (Daft and Wiginton, 1979) to be conveyed in communication (e.g. narrative and face-to-face communication as opposed to electronically mediated communication). Such situations where such variety is repeatedly generated and absorbed by groups may be considered to be equivalent to the strange attractor states in complexity theory or the phenomenon of paradigm shift. Under such circumstances, much group learning would be double-loop in nature (allowing values and norms to be challenged) and patterns of activity would be expected to display the kind of bounded instability of strange attractor states where patterns of positive and negative feedback combine to produce novelty (new meanings) and emergent order (new forms of practice).
One might expect such groups to oscillate between order (and the minimisation of risk) and chaos (and the deliberate production of risk) through the frequent production of:
· new values and beliefs through their participation (that are then drawn upon in future practice),
· new norms and routines through socialisation (that serve as new traditions in future practice),
· new concepts and artefacts (such as rules) through codification (that serve as new representations structuring future practice) and
· new plans and scenarios through speculation (that serve as new intentions structuring future practice).
However such dynamic patterns, whose characteristics may involve the repeated creative destruction of much existing organisational knowledge, may have significant potential for breaking existing trust relationships and violating the legitimate representations of activity within an organisation's formal systems. With this in mind, it is towards concerns for power relations and ethical considerations more generally that this paper now turns.
In this section, an ethical dimension to sensemaking is explored in terms of the Aristotlean idea of phronesis or practical wisdom. As the highly rationalistic theories that have traditionally held sway in organisation theory have lost favour, this idea has increasingly been recognised by a number of organisation and IT theorists (Tsoukas and Cummings, 1997; Introna, 1997) as being highly relevant for managerial action today. To Aristotle, practical wisdom represented the highest intellectual virtue. It could not be taught like scientific knowledge, but instead grew out of experience and deliberation upon such experience. While it is a kind of practical knowledge, it differs from craft knowledge in that the sense that it views events in terms of the moral standards used to evaluate human action as opposed to the standards governing the production of objects.
Aristotle called a person with practical wisdom a phronimos, and argued in his Nicomachean Ethics that the development of such wisdom and well-being more generally (eudaimonia) required that people follow his doctrine of the golden mean in trying to steer a path course between excess and deficiency in their actions. For example, being courageous involved finding a mean state between feelings of confidence and fear, while the wise use of money involved finding a mean state between being prodigal and being mean.
Unlike formal or scientific knowledge, practical wisdom deals with both universals and particulars, and involves "knowing what is good for human beings in general as well as having the ability to apply such knowledge to particular situations" (Tsoukas and Cummings, 1997, p.665). It is therefore concerned not only with the formal, codified knowledge that all organisations develop (in their policies and procedures), but also with the details of the particular circumstances that they confront and the ways in which people facilitate interaction that reconcile these two perspectives. It also expresses a concern for personal well-being and development that other ethical (e.g. deontological or Kantian) approaches lack.
Within the activity framework, the idea of practical wisdom is developed through arguing that people in organisations should reflect upon their practice with a view to asking themselves whether their interaction successfully reconciled the kinds of knowledge that are held to be good in general i.e. their criteria for truth or dominant logic, with the resources and capabilities that were actually employed, perhaps in order to challenge such criteria i.e. the speculation that people engage in, which may comprise more of rhetorical strategies and claims of knowledge (Alvesson, 1993) than expressions of technical rationality.
Where the former generally resides within an organisation's "legitimate network", the latter often emerges from the more informal organisation or "shadow network" (Stacey, 1996). Many writers have argued that effective innovation requires that these complementary aspects of organisations work with and not against each other (Brown and Duguid, 1991; Moss-Kanter, 1984). Thus it is argued that participants should ask themselves whether the balance that they struck between being wanting to be revolutionary (and increasing variety and risk through exercising power and initiating change e.g. through the use of their shadow networks) and being dogmatic (and wanting to maintain or reduce variety by resisting change and holding with truths expressed within their organisation's legitimate network) was successful in the particular situation that they faced. Codification and the development of useful generalisations are necessary but ultimately insufficient for sensemaking if divorced from a consideration of human emotions and the contested nature of knowing (Blackler, 1995).
The activity framework suggests that cultural and technological kinds of knowledge may come to be viewed as being knowledge that is good for people in general. The traditions which illustrate peoples’ “thrownness” (Heidegger, 1962) and their shared history serve to legitimate activities, providing people with knowledge of the kinds of activity that are acceptable through historical precedent and influencing the kinds of socialisation processes within organisations. The representations that technology (e.g. information technology) offers may provide coherence to experience by giving people concepts or artefacts for use in codification.
However the routine use of such codified knowledge may be insufficient in more dynamic environments, and organisations may need to modify or their routines and procedures as a result. Such actions may require that they develop capabilities for putting their generalisations into practice under new circumstances or authentically (Heidegger, 1962) choosing new courses of action by recognising that all generalisations are only valid in particular times and places and do not represent timeless laws, divorced from a context. Within the activity framework it is argued that such capabilities may be thought of in terms of the interplay between personal participation, learning and the ability of individuals to develop new strategies through their actual interaction, and these views are expressed in figure 3.
In summary, it is argued that the management of requisite variety must be accompanied by attention to power relations and the development of practical wisdom, since diversity inevitably means differences in belief and opinion within groups and potential increases in anxiety, which while necessary for innovation may often work against the building of high levels of trust and shared understanding that may be required for such innovation. These concerns are summarised in figure 4, and in the next section they are illustrated with reference to a case study of innovation in a complex, software development project.
Figure 3 - The Activity Framework viewed
in terms of Legitimate and Shadow Networks
Figure 4 - Tensions between Identity, Diversity and Morality
In this section, this paper’s concerns are illustrated with reference to a complex software development project (Moss, 1999) that took place in a medium-sized supplier of Enterprise Resource Planning (ERP) Software, JBA, during 1998 and 1999. This case study illustrates that the complexity associated with some product development projects (in terms of the technologies used, customer needs and the strategies required to need such needs) can only be absorbed through allowing product development experts to work with a high degree of autonomy in a climate of open communication (which is necessary to generate the requisite levels of diversity and sensemaking), and by ensuring that skilled facilitators are available to mediate when disputes arise or to propose potential courses of action in uncertain situations.
The purpose of this project was to develop software that would allow customers to migrate their ERP systems (which typically comprised of a combination of JBA’s Financial, Distribution and Manufacturing applications) to be compliant with European Monetary Union (EMU), during the three year transition period from 1999 to 2002. Although this migration could be done manually, this would be a very labour-intensive process. As a result, the project’s goal was to design cost-effective conversion software that would remove some, but not all, of the manual work whilst highlighting the procedures that had to be done manually in accompanying documentation. Despite the simple, mainly batch-processing nature of the software applications that would be coded, the project itself was particularly challenging since the requirement from the Business and Accounting Software Developers Association, the UK industry body liasing with the European Commission in order to establish the consequences of EMU on financial software systems, was still evolving during early 1998 and was open to interpretation. Other factors that increased the project’s complexity included the following:
1. The requirement had significant “cross-application” implications between JBA software packages that stored currency values. Complex task interdependencies between different product development departments existed and understanding these required careful consideration since this knowledge was of a kind not usually used in development work. While most product development was undertaken at the company’s main UK development centre in England, product development had become increasingly globally distributed in the 1990s. The Euro project involved software developers in the development centres in Canada, Ireland and Sri Lanka, a fact that created significant project management challenges.
3. In the late 1990s, JBA introduced versions of its software for an increasing number of markets (e.g. apparel, automotive and drinks industries) using a variety of technologies (e.g. Windows as well as the IBM platforms that company historically developed software on). The “niche versions” of the software had varying degrees of commonality with the company’s generic product. As a result, the project tended to have different impacts on different departments and these differences had to be taken into account.
The project required a particularly high degree of sensemaking on account of its complexity. Less formal forms of organising and brainstorming turned out to be more effective in addressing this complexity than bureaucratic forms since they allowed greater opportunities for responding quickly to unexpected problems and for the generation of shared understanding. Technologies such as e-mail and discussion forums were vital in assisting communication on account of complex network structures and high volume of basic information flows. Figure 5 summarises some of the key factors that either generated or absorbed complexity within the project with reference to the activity framework.
Figure 5 - Managing Requisite Variety in the Euro Project
In the next two sections, these processes are described in more detail with reference to tensions between identity and diversity in the project and the role of moral actions in bridging these tensions.
The tensions between identity and diversity that existed within the Euro project are described here in terms of the mix of formal and informal organisational processes used, the local and global aspects of product development and the balance between cooperation and competition.
Traditionally, software
development in the UK development centre had taken place within a
functional organisational structure with each department (e.g. Finance,
Distribution, Manufacturing) enjoying significant autonomy over work that fell
within its remit. However the complexity of the Euro project meant that
significant team working across product development functions would be
necessary, and JBA’s development director realised that the company’s
traditional paradigm of software development might well be insufficient in this
circumstance. While the company’s traditional systems (e.g. for testing
software) and ISO 9000 procedures for controlling software production would
still be employed, he realised that sole reliance upon such formal codes and
mechanisms would need to be supplemented by much informal networking and
guidance from experienced employees with broad company and product knowledge. As
a result he appointed an experienced consultant to the role of Euro project
coordinator. Her responsibilities included: ensuring that the core
cross-functional group of a dozen application experts worked together closely;
pulling together plans from the various departments into one consolidated plan
whilst making sure that no area “fell through the cracks”; ensuring that
Euro development had priority over other work; encouraging a largely
self-managing group; and identifying and escalating any significant project
management and HR issues. In addition her responsibilities involved liasing with
Marketing and customers to collate new requirements and organising training in
the new software within JBA more generally. Through these kinds of activity she
was able to increase the diversity of the group’s problem definition and
solving behaviour, and pay attention to cross-functional issues that individual
departments might miss.
The project was
characterised by a complex mix of formal and informal meetings and patterns of
face-to-face and e-mail communication. The formal meetings were notable for
their use of brainstorming and speculation, which helped to highlight
differences in perspective or basic assumptions between different departments
and generate diversity in response to the complex requirements while the more
informal meetings often helped to tackle and solve issues that arose from the
regular, formal meetings. However all meetings were especially notable for
candid exchanges as individuals questioned each other’s assumptions and
proposed solutions. Generally individuals were prepared to argue their case in a
forthright manner, using their “professional values” and expertise to judge
the value of solutions raised when they related to areas where the BASDA
specification contained ambiguity.
Technology was also
important in supporting the variety of communication that needed to take place.
In between meetings there tended to be a particularly large volume of ad-hoc
e-mails in which consultants would ask colleagues (whether in the UK or at one
of the other product development centres around the world) or the group as a
whole if they had a solution for a problem for which they could think of no
solution, or had a solution to a problem but wanted to make sure that all others
agreed with it. However the reliance on more informal forms of organisation did
create problems. The complex networks utilised by the project posed greater
project management challenges than usual while the product consultant
representing the Distribution department tended to be at the centre of many
networks and conversations (on account of the centrality of the Distribution
software within JBA’s product suite, his knowledge of it and other
employees’ need for his advice) and tended to be under some pressure and
stress, being overloaded with requests for communication, which involved much
dissemination of information via e-mail.
He tended to be involved
in a wide of variety of activities: supporting the specification and development
work of colleagues (either face-to-face or by phone) who were less experienced
in either business and technical areas, advising other departments which were
responsible for the niche Distribution applications and working with financial
consultants to determine the complexity of the algorithms controlling the
currency conversion process. While his expertise was a significant resource for
the project, his wide involvement tended to put constraints on many other
employees’ activities since whenever he altered his specifications, there
tended to be knock-on effects on other consultants’ work. These complex,
inter-application interdependencies had served to make the project more
difficult than usual.
Most of the employees
involved in the Euro project knew each other well since with a few exceptions
they had all worked at the UK development centre for a number of years
and had all been socialised into similar software development practices. They
had considerable business, product and technical expertise and most of their
careers had progressed through a variety of roles, through programming,
technical and project management roles to their current positions as senior
consultants or product managers. As a result of this and the general tendency
within the product development organisation to relax organisational structures
as required, they tended to be more comfortable with flexible, network and
cross-functional norms of working, had a
willingness to share to knowledge in order to ensure consistency of approach and
more generally had high levels of trust in each others’ capabilities. This
trust also meant that the non-routine specifications being generated could
receive critical peer review since individuals were not afraid to question
assumptions and query whether project risks were being adequately addressed.
However as is often the
case with global software development, the shared understandings and identity
resulting from such “local” cultures tended to lose their meaning when
communication was largely mediated by e-mail and phone i.e. through processes of
codification and representation where no (or little) prior face-to-face
interaction had occurred. On the Euro project, many of the product development
departments worked with analysts and software developers in Canada, Ireland and
Sri Lanka and were either sending their specifications to these centres (where
the software would be developed) or having to work with analysts abroad who were
themselves specifying parts of the Euro conversion software. In general the
distance made sensemaking by employees abroad more difficult and a number of
strategies were adopted to try and overcome these problems.
Where software was being
developed remotely, analysts at the UK centre took care to include a
greater number of examples in their functional specifications than usual to try
and stress the context behind the abstract rules that the specifications
contained. Also, as face-to-face handover meetings between analysts and
developers were ruled out by distance, analysts specifically made time to field
more questions from developers via e-mail and phone and worked hard to develop
relationships and norms that would facilitate knowledge transfer.
In another case, the
development manager at the Canadian development centre (where some of the work
on the version of the software for the Automotive Industry was being done)
increasingly felt that reliance on e-mail for progress reports on work
undertaken in the UK that he was dependent upon was insufficient (i.e. he felt
that background knowledge supporting decision-making in the UK was hard to
understand from e-mail alone) and that he needed a presence in the UK who could
follow how decisions were being made and contribute an automotive perspective
from time to time. As a result, he requested that the UK automotive product
manager attend the cross-departmental meetings in England in order to gain
a richer understanding of the decision-making processes taking place than could
be obtained through e-mail alone and exert influence when necessary.
While the complexity of
the project encouraged team members to share knowledge and seek commonality in
software design, differences of opinion sometimes emerged as different
departments viewed different problems from different perspectives and used their
personal or professional values to argue for different strategies. The project
had different impacts on the different departments: while the Manufacturing
department had a relatively straightforward requirement that could be developed
without much liaison with order departments, the Finance and Distribution
departments had more interdependent requirements that required coordinated
action. This fact contributed to typically greater levels of debate between
these two departments than between any other groupings in order to such
coordination.
Where the Finance
representatives were often keen to provide more straightforward solutions that
largely met Finance’s own particular needs, the Distribution representatives
were keen to provide flexible functionality in the software to meet what they
felt was the wide variety of ways in which customers used JBA’s Distribution
software (e.g. with or without the Financials applications). Financial
consultants often queried the degree to which such flexibility made commercial
sense, while Distribution often felt that Finance were unaware of their
particular issues - since they weren’t dependent on anyone else they tended to
approach the task in a different way.
However despite the initial, limited understanding of each other’s particular situations, both sides realised only the importance of a negotiated solution for the project as a whole. The overall attitude was cooperative and cross-functional meetings helped to raise awareness of individual department’s particular issues. These tensions, which required significant facilitation by the project coordinator, are illustrated in figure 6 and described further in the next section.
Figure 6 - Tensions between Legitimate and Shadow Networks
While the project coordinator had no formal control over the content of individual departments’ specifications, she played an important role in facilitating debate e.g. between the Finance and Distribution departments and reconciling the tensions between the company’s traditional ways of working and the diverse needs of the Euro project itself. Where problems arose in the interface between Finance and Distribution, the project coordinator often took an interest (although she had no formal responsibility to do so) and persuaded colleagues in both areas of the value of particular solutions where initially there had been resistance to these solutions from one of the parties involved.
She also paid particular attention to the heavy demands being made upon the Distribution consultant, suggesting ways in which his workload might be reduced through reassigning his other non-Euro project work. She recognised the emergence and the value of his expertise and more informal leadership, and was keen to ensure that the project benefited from his continued, productive participation in moving the project forward. To this end she displayed a moral and authentic concern that went beyond the immediate technical needs of the project, which ultimately contributed to its success.
In summary, this case study has illustrated that complex product development projects require flexible organisational networks and open communication so as to generate sufficient levels of sensemaking for innovation. While technologies such as e-mail may assist the dissemination of information, greater mutual understanding is often only enabled by face-to-face communication and the development of trust and practical wisdom within organisational networks. Also project managers and facilitators must pay careful attention to the social, political and moral aspects of actual interaction, and to the tensions that develop between these aspects since resolution of such tensions may be required for effective innovation.
In this paper a conception of organisations as complex, adaptive systems has been developed in terms of an activity framework. This framework embodies a number of concerns that have been identified as important aspects of sensemaking in organisations. It has also been argued that this framework represents a useful tool for helping organisational members with their sensemaking as they reflect upon the complex streams of interactions that they have experienced in innovation projects (particularly involving information technology) and knowledge-intensive work more generally. Two broad prescriptions for action, relating to the management of requisite variety and the development of practical wisdom have been offered.
Finally, this framework has drawn together a number of ideas that are currently fashionable within organisational learning: namely the view of organisations as complex adaptive systems; the management of requisite variety within organising processes; the development of practical wisdom through encouraging narrative rationality within communities-of-practice; and a structurationist concern for the factors that may either enable or constrain practices within organisations. It has also been argued that this approach is congruent with aspects of Stacey's views of organising in terms of legitimate and shadow networks, Searle's concept of background, Aristotle's idea of practical wisdom and Heidegger’s notions of thrownness and authentic being.
Copyright © 2001 John Wiley & Sons, Ltd.
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