A Leader’s Framework for Decision Making

DECISION MAKING

by David J. Snowden and Mary E. Boone

From the November 2007 Issue

I n January 1993, a gunman murdered seven people in a fast-food restaurant in Palatine, a suburb of Chicago.
In his dual roles as an administrative executive and spokesperson for the police department, Deputy Chief
Walter Gasior suddenly had to cope with several different situations at once. He had to deal with the
grieving families and a frightened community, help direct the operations of an extremely busy police
department, and take questions from the media, which inundated the town with reporters and film crews. “There
would literally be four people coming at me with logistics and media issues all at once,” he recalls. “And in the
midst of all this, we still had a department that had to keep running on a routine basis.”

Though Gasior was ultimately successful in juggling multiple demands, not all leaders achieve the desired results
when they face situations that require a variety of decisions and responses. All too often, managers rely on
common leadership approaches that work well in one set of circumstances but fall short in others. Why do these
approaches fail even when logic indicates they should prevail? The answer lies in a fundamental assumption of
organizational theory and practice: that a certain level of predictability and order exists in the world. This
assumption, grounded in the Newtonian science that underlies scientific management, encourages simplifications
that are useful in ordered circumstances. Circumstances change, however, and as they become more complex, the
simplifications can fail. Good leadership is not a one-size-fits-all proposition.

We believe the time has come to broaden the traditional approach to leadership and decision making and form a
new perspective based on complexity science. (For more on this, see the sidebar “Understanding Complexity.”)
Over the past ten years, we have applied the principles of that science to governments and a broad range of
industries. Working with other contributors, we developed the Cynefin framework, which allows executives to
see things from new viewpoints, assimilate complex concepts, and address real-world problems and
opportunities. (Cynefin, pronounced ku-nev-in, is a Welsh word that signifies the multiple factors in our
environment and our experience that influence us in ways we can never understand.) Using this approach, leaders
learn to define the framework with examples from their own organization’s history and scenarios of its possible
future. This enhances communication and helps executives rapidly understand the context in which they are
operating.

The U.S. Defense Advanced Research Projects Agency

Understanding Complexity has applied the framework to counterterrorism, and it is
Complexity is more a way of thinking about the world currently a key component of Singapore’s Risk
than a new way of working with mathematical Assessment and Horizon Scanning program. Over time,
models. Over a century ago, Frederick Winslow the framework has evolved through hundreds of
Taylor, the father of scientific management, applications, from helping a pharmaceutical company
revolutionized leadership. Today, advances in develop a new product strategy to assisting a Canadian
complexity science, combined with knowledge from provincial government in its efforts to engage employees
the cognitive sciences, are transforming the field in policy making.
once again. Complexity is poised to help current and
future leaders make sense of advanced technology,
globalization, intricate markets, cultural change, and The framework sorts the issues facing leaders into five
much more. In short, the science of complexity can contexts defined by the nature of the relationship
help all of us address the challenges and between cause and effect. Four of these—simple,
opportunities we face in a new epoch of human complicated, complex, and chaotic—require leaders to
history. diagnose situations and to act in contextually
A complex system has the following characteristics: appropriate ways. The fifth—disorder—applies when it is
unclear which of the other four contexts is predominant.
It involves large numbers of interacting elements.
Using the Cynefin framework can help executives sense
The interactions are nonlinear, and minor changes which context they are in so that they can not only make
can produce disproportionately major better decisions but also avoid the problems that arise
consequences. when their preferred management style causes them to
make mistakes. In this article, we focus on the first four
The system is dynamic, the whole is greater than contexts, offering examples and suggestions about how
the sum of its parts, and solutions can’t be to lead and make appropriate decisions in each of them.
 imposed; rather, they arise from the circumstances. Since the complex domain is much more prevalent in the
This is frequently referred to as business world than most leaders realize—and requires
different, often counterintuitive, responses—we
emergence concentrate particularly on that context. Leaders who
understand that the world is often irrational and
. unpredictable will find the Cynefin framework
particularly useful.
The system has a history, and the past is
integrated with the present; the elements evolve
with one another and with the environment; and Simple Contexts:
Practice The Domain of Best
evolution is irreversible.
Simple contexts are characterized by stability and clear
Though a complex system may, in retrospect, cause-and-effect relationships that are easily discernible
appear to be ordered and predictable, hindsight by everyone. Often, the right answer is self-evident and
does not lead to foresight because the external undisputed. In this realm of “known knowns,” decisions
conditions and systems constantly change. are unquestioned because all parties share an
understanding. Areas that are little subject to change,
Unlike in ordered systems (where the system such as problems with order processing and fulfillment,
constrains the agents), or chaotic systems (where usually belong here.
there are no constraints), in a complex system the
agents and the system constrain one another,
especially over time. This means that we cannot Simple contexts, properly assessed, require
forecast or predict what will happen. straightforward management and monitoring. Here,
leaders sense, categorize, and respond. That is, they assess
One of the early theories of complexity is that the facts of the situation, categorize them, and then base
complex phenomena arise from simple rules. their response on established practice. Heavily process-
Consider the rules for the flocking behavior of birds: oriented situations, such as loan payment processing,
Fly to the center of the flock, match speed, and avoid are often simple contexts. If something goes awry, an
collision. This simple-rule theory was applied to
industrial modeling and production early on, and it employee can usually identify the problem (when, say, a
promised much; but it did not deliver in isolation. borrower pays less than is required), categorize it
More recently, some thinkers and practitioners have (review the loan documents to see how partial payments
started to argue that human complex systems are must be processed), and respond appropriately (either
very different from those in nature and cannot be not accept the payment or apply the funds according to
modeled in the same ways because of human the terms of the note). Since both managers and
unpredictability and intellect. Consider the following employees have access to the information necessary for
ways in which humans are distinct from other
animals: dealing with the situation in this domain, a command-
and-control style for setting parameters works best.
They have multiple identities and can fluidly switch Directives are straightforward, decisions can be easily
between them without conscious thought. (For delegated, and functions are automated. Adhering to
example, a person can be a respected member of best practices or process reengineering makes sense.
the community as well as a terrorist.) Exhaustive communication among managers and
employees is not usually required because disagreement
about what needs to be done is rare.
 They make decisions based on past patterns of Nevertheless, problems can arise in simple contexts.
success and failure, rather than on logical, First, issues may be incorrectly classified within this
definable rules. domain because they have been oversimplified. Leaders
who constantly ask for condensed information,
They can, in certain circumstances, purposefully regardless of the complexity of the situation, particularly
change the systems in which they operate to run this risk.
equilibrium states (think of a Six Sigma project) in
order to create predictable outcomes.
Second, leaders are susceptible to entrained thinking, a
Leaders who want to apply the principles of conditioned response that occurs when people are
complexity science to their organizations will need to blinded to new ways of thinking by the perspectives they
think and act differently than they have in the past. acquired through past experience, training, and success.
This may not be easy, but it is essential in complex
contexts. Third, when things appear to be going smoothly, leaders
often become complacent. If the context changes at that
point, a leader is likely to miss what is happening and
react too late. In the exhibit “The Cynefin Framework,” the simple domain lies adjacent to the chaotic—and for
good reason. The most frequent collapses into chaos occur because success has bred complacency. This shift can
bring about catastrophic failure—think of the many previously dominant technologies that were suddenly
disrupted by more dynamic alternatives.

Leaders need to avoid micromanaging and stay

The Cynefin Framework connected to what is happening in order to spot a
The Cynefin framework helps leaders determine the change in context. By and large, line workers in a simple
prevailing operative context so that they can make situation are more than capable of independently
appropriate choices. Each domain requires different handling any issues that may arise. Indeed, those with
actions. Simple and complicated contexts assume an years of experience also have deep insight into how the
ordered universe, where cause-and-effect work should be done. Leaders should create a
relationships are perceptible, and right answers can communication channel—an anonymous one, if
be determined based on the facts. Complex and necessary—that allows dissenters to provide early
chaotic contexts are unordered—there is no
immediately apparent relationship between cause warnings about complacency.
and effect, and the way forward is determined based
on emerging patterns. The ordered world is the world Finally, it’s important to remember that best practice is,
of fact-based management; the unordered world by definition, past practice. Using best practices is
represents pattern-based management. common, and often appropriate, in simple contexts.
Difficulties arise, however, if staff members are
The very nature of the fifth context—disorder—makes discouraged from bucking the process even when it’s not
it particularly difficult to recognize when one is in it.
Here, multiple perspectives jostle for prominence, working anymore. Since hindsight no longer leads to
factional leaders argue with one another, and foresight after a shift in context, a corresponding change
cacophony rules. The way out of this realm is to in management style may be called for.
break down the situation into constituent parts and
 assign each to one of the other four realms. Leaders Complicated
Experts Contexts: The Domain of
can then make decisions and intervene in
contextually appropriate ways. Complicated contexts, unlike simple ones, may contain
multiple right answers, and though there is a clear
relationship between cause and effect, not everyone can
see it. This is the realm of “known unknowns.” While
leaders in a simple context must sense, categorize, and
respond to a situation, those in a complicated context
must sense, analyze, and respond. This approach is not
easy and often requires expertise: A motorist may know
that something is wrong with his car because the engine
is knocking, but he has to take it to a mechanic to
diagnose the problem.

Because the complicated context calls for investigating

several options—many of which may be excellent—good
practice, as opposed to best practice, is more
appropriate. For example, the customary approach to
engineering a new cell phone might emphasize feature A over feature B, but an alternative plan—emphasizing
feature C—might be equally valuable.

Another example is the search for oil or mineral deposits. The effort usually requires a team of experts, more than
one place will potentially produce results, and the location of the right spots for drilling or mining involves
complicated analysis and understanding of consequences at multiple levels.

Entrained thinking is a danger in complicated contexts, too, but it is the experts (rather than the leaders) who are
prone to it, and they tend to dominate the domain. When this problem occurs, innovative suggestions by
nonexperts may be overlooked or dismissed, resulting in lost opportunities. The experts have, after all, invested in
building their knowledge, and they are unlikely to tolerate controversial ideas. If the context has shifted, however,
the leader may need access to those maverick concepts. To get around this issue, a leader must listen to the
experts while simultaneously welcoming novel thoughts and solutions from others. Executives at one shoe
manufacturer did this by opening up the brainstorming process for new shoe styles to the entire company. As a
result, a security guard submitted a design for a shoe that became one of their best sellers.

Another potential obstacle is “analysis paralysis,” where a group of experts hits a stalemate, unable to agree on
any answers because of each individual’s entrained thinking—or ego.

Working in unfamiliar environments can help leaders and experts approach decision making more creatively. For
instance, we put retail marketing professionals in several military research environments for two weeks. The
settings were unfamiliar and challenging, but they shared a primary similarity with the retail environment: In
both cases, the marketers had to work with large volumes of data from which it was critical to identify small
trends or weak signals. They discovered that there was little difference between, say, handling outgoing
disaffected customers and anticipating incoming ballistic missiles. The exercise helped the marketing group learn
how to detect a potential loss of loyalty and take action before a valued customer switched to a competitor. By
improving their strategy, the marketers were able to retain far more high-volume business.

Games, too, can encourage novel thinking. We created a game played on a fictional planet that was based on the
culture of a real client organization. When the executives “landed” on the alien planet, they were asked to address
problems and opportunities facing the inhabitants. The issues they encountered were disguised but designed to
mirror real situations, many of which were controversial or sensitive. Because the environment seemed so foreign
and remote, however, the players found it much easier to come up with fresh ideas than they otherwise might
have done. Playing a metaphorical game increases managers’ willingness to experiment, allows them to resolve
issues or problems more easily and creatively, and broadens the range of options in their decision-making
processes. The goal of such games is to get as many perspectives as possible to promote unfettered analysis.

Reaching decisions in the complicated domain can often take a lot of time, and there is always a trade-off between
finding the right answer and simply making a decision. When the right answer is elusive, however, and you must
base your decision on incomplete data, your situation is probably complex rather than complicated.

Complex Contexts: The Domain of Emergence

In a complicated context, at least one right answer exists. In a complex context, however, right answers can’t be
ferreted out. It’s like the difference between, say, a Ferrari and the Brazilian rainforest. Ferraris are complicated
machines, but an expert mechanic can take one apart and reassemble it without changing a thing. The car is
static, and the whole is the sum of its parts. The rainforest, on the other hand, is in constant flux—a species
becomes extinct, weather patterns change, an agricultural project reroutes a water source—and the whole is far
more than the sum of its parts. This is the realm of “unknown unknowns,” and it is the domain to which much of
contemporary business has shifted.

Most situations and decisions in organizations are complex because some major change—a bad quarter, a shift in
management, a merger or acquisition—introduces unpredictability and flux. In this domain, we can understand
why things happen only in retrospect. Instructive patterns, however, can emerge if the leader conducts
experiments that are safe to fail. That is why, instead of attempting to impose a course of action, leaders must
patiently allow the path forward to reveal itself. They need to probe first, then sense, and then respond.

There is a scene in the film Apollo 13 when the astronauts encounter a crisis (“Houston, we have a problem”) that
moves the situation into a complex domain. A group of experts is put in a room with a mishmash of materials—
bits of plastic and odds and ends that mirror the resources available to the astronauts in flight. Leaders tell the
team: This is what you have; find a solution or the astronauts will die. None of those experts knew a priori what
would work. Instead, they had to let a solution emerge from the materials at hand. And they succeeded.
(Conditions of scarcity often produce more creative results than conditions of abundance.)
Another example comes from YouTube. The founders could not possibly have predicted all the applications for
streaming video technology that now exist. Once people started using YouTube creatively, however, the company
could support and augment the emerging patterns of use. YouTube has become a popular platform for expressing
political views, for example. The company built on this pattern by sponsoring a debate for presidential hopefuls
with video feeds from the site.

As in the other contexts, leaders face several challenges in the complex domain. Of primary concern is the
temptation to fall back into traditional command-and-control management styles—to demand fail-safe business
plans with defined outcomes. Leaders who don’t recognize that a complex domain requires a more experimental
mode of management may become impatient when they don’t seem to be achieving the results they were aiming
for. They may also find it difficult to tolerate failure, which is an essential aspect of experimental understanding.
If they try to overcontrol the organization, they will preempt the opportunity for informative patterns to emerge.
Leaders who try to impose order in a complex context will fail, but those who set the stage, step back a bit, allow
patterns to emerge, and determine which ones are desirable will succeed. (See the sidebar “Tools for Managing in
a Complex Context.”) They will discern many opportunities for innovation, creativity, and new business models.

Chaotic
ResponseContexts: The Domain of Rapid
Tools for Managing in a Complex
Context In a chaotic context, searching for right answers would
Given the ambiguities of the complex domain, how be pointless: The relationships between cause and effect
can leaders lead effectively? are impossible to determine because they shift
constantly and no manageable patterns exist—only
Open up the discussion. turbulence. This is the realm of unknowables. The events
of September 11, 2001, fall into this category.
Complex contexts require more interactive
communication than any of the other domains. In the chaotic domain, a leader’s immediate job is not to
Large group methods (LGMs), for instance, are discover patterns but to stanch the bleeding. A leader
efficient approaches to initiating democratic,
interactive, multidirectional discussion sessions. must first act to establish order, then sense where
Here, people generate innovative ideas that help stability is present and from where it is absent, and then
leaders with development and execution of respond by working to transform the situation from
complex decisions and strategies. For example, chaos to complexity, where the identification of
“positive deviance” is a type of LGM that allows emerging patterns can both help prevent future crises
people to discuss solutions that are already and discern new opportunities. Communication of the
working within the organization itself, rather than most direct top-down or broadcast kind is imperative;
looking to outside best practices for clues about
how to proceed. The Plexus Institute used this there’s simply no time to ask for input.
approach to address the complex problem of
hospital-acquired infections, resulting in behavior Unfortunately, most leadership “recipes” arise from
change that lowered the incidence by as much as examples of good crisis management. This is a mistake,
50%. and not only because chaotic situations are mercifully
rare. Though the events of September 11 were not
Set barriers. immediately comprehensible, the crisis demanded
 Barriers limit or delineate behavior. Once the decisive action. New York’s mayor at the time, Rudy
barriers are set, the system can self-regulate within Giuliani, demonstrated exceptional effectiveness under
those boundaries. The founders of eBay, for chaotic conditions by issuing directives and taking
example, created barriers by establishing a simple action to reestablish order. However, in his role as mayor
set of rules. Among them are pay on time, deliver —certainly one of the most complex jobs in the world—
merchandise quickly, and provide full disclosure
on the condition of the merchandise. Participants he was widely criticized for the same top-down
police themselves by rating one another on the leadership style that proved so enormously effective
quality of their behavior. during the catastrophe. He was also criticized afterward
for suggesting that elections be postponed so he could
Stimulate attractors. maintain order and stability. Indeed, a specific danger
for leaders following a crisis is that some of them
Attractors are phenomena that arise when small become less successful when the context shifts because
stimuli and probes (whether from leaders or they are not able to switch styles to match it.
others) resonate with people. As attractors gain
momentum, they provide structure and coherence.
EBay again provides an illustrative example. In Moreover, leaders who are highly successful in chaotic
1995, founder Pierre Omidyar launched an offering contexts can develop an overinflated self-image,
called Auction Web on his personal website. His becoming legends in their own minds. When they
probe, the first item for sale, quickly morphed into generate cultlike adoration, leading actually becomes
eBay, a remarkable attractor for people who want harder for them because a circle of admiring supporters
to buy and sell things. Today, sellers on eBay cuts them off from accurate information.
continue to provide experimental probes that
create attractors of various types. One such probe,
selling a car on the site, resonated with buyers, Yet the chaotic domain is nearly always the best place for
and soon automobile sales became a popular leaders to impel innovation. People are more open to
attractor. novelty and directive leadership in these situations than
they would be in other contexts. One excellent technique
Encourage dissent and diversity. is to manage chaos and innovation in parallel: The
minute you encounter a crisis, appoint a reliable
Dissent and formal debate are valuable manager or crisis management team to resolve the issue.
communication assets in complex contexts At the same time, pick out a separate team and focus its
because they encourage the emergence of well-
forged patterns and ideas. A “ritual dissent” members on the opportunities for doing things
approach, for instance, puts parallel teams to work differently. If you wait until the crisis is over, the chance
on the same problem in a large group meeting will be gone.
environment. Each team appoints a spokesperson
who moves from that team’s table to another
team’s table. The spokesperson presents the first
Leadership Across Contexts
group’s conclusions while the second group listens Good leadership requires openness to change on an
in silence. The spokesperson then turns around to individual level. Truly adept leaders will know not only
face away from the second team, which rips into how to identify the context they’re working in at any
the presentation, no holds barred, while the given time but also how to change their behavior and
spokesperson listens quietly. Each team’s their decisions to match that context. They also prepare
spokesperson visits other tables in turn; by the end their organization to understand the different contexts
of the session, all the ideas have been well
 dissected and honed. Taking turns listening in and the conditions for transition between them. Many
silence helps everyone understand the value of leaders lead effectively—though usually in only one or
listening carefully, speaking openly, and not taking two domains (not in all of them) and few, if any, prepare
criticism personally. their organizations for diverse contexts.
Manage starting conditions and monitor for
emergence.
Decisions in Multiple Contexts: A
Because outcomes are unpredictable in a complex Leader’s Guide
context, leaders need to focus on creating an Effective leaders learn to shift their decision-making
environment from which good things can emerge, styles to match changing business environments.
rather than trying to bring about predetermined Simple, complicated, complex, and chaotic contexts
results and possibly missing opportunities that each call for different managerial responses. By
arise unexpectedly. Many years ago, for instance, correctly identifying the governing context, staying
3M instituted a rule allowing its researchers to aware of danger signals, and avoiding inappropriate
spend 15% of their time on any project that reactions, managers can lead effectively in a variety
interested them. One result was a runaway of situations.
success: the Post-it Note.

During the Palatine murders of 1993, Deputy Chief Gasior faced four contexts at once. He had to take immediate
action via the media to stem the tide of initial panic by keeping the community informed (chaotic); he had to help
keep the department running routinely and according to established procedure (simple); he had to call in experts
(complicated); and he had to continue to calm the community in the days and weeks following the crime
(complex). That last situation proved the most challenging. Parents were afraid to let their children go to school,
and employees were concerned about safety in their workplaces. Had Gasior misread the context as simple, he
might just have said, “Carry on,” which would have done nothing to reassure the community. Had he misread it as
complicated, he might have called in experts to say it was safe—risking a loss of credibility and trust. Instead,
Gasior set up a forum for business owners, high school students, teachers, and parents to share concerns and hear
the facts. It was the right approach for a complex context: He allowed solutions to emerge from the community
itself rather than trying to impose them.• • •

Business schools and organizations equip leaders to operate in ordered domains (simple and complicated), but
most leaders usually must rely on their natural capabilities when operating in unordered contexts (complex and
chaotic). In the face of greater complexity today, however, intuition, intellect, and charisma are no longer enough.
Leaders need tools and approaches to guide their firms through less familiar waters.

In the complex environment of the current business world, leaders often will be called upon to act against their
instincts. They will need to know when to share power and when to wield it alone, when to look to the wisdom of
the group and when to take their own counsel. A deep understanding of context, the ability to embrace
complexity and paradox, and a willingness to flexibly change leadership style will be required for leaders who
want to make things happen in a time of increasing uncertainty.

A version of this article appeared in the November 2007 issue of Harvard Business Review.

David J. Snowden ([email protected]) is the founder and chief scientific officer of Cognitive Edge, an international research network. He is
based primarily in Lockeridge, England.

Mary E. Boone ([email protected]) is the president of Boone Associates, a consulting firm in Essex, Connecticut, and the author of numerous
books and articles, including Managing Interactively (McGraw-Hill, 2001).

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Michael Schreider 2 years ago