The Four Sisters of Understanding

Looking for better tools, we find four related concepts: Situation Awareness, Sensemaking, Weak Signal Detection and Attention Economy. We them them the four sisters of understanding. Togeher, they provide us with the necessary tools to navigate in complex times.

• Attention Economy is  based on the idea that human attention is a finite resource, and as information becomes increasingly abundant, attention becomes the limiting factor in consuming that information. It reminds us to design situations and processes in which we can focus on the right things and put effort into avoiding obvious errors in our perception.
• Situational awareness is the ability to perceive and comprehend the environment, including elements such as people, objects, and conditions, in order to anticipate and respond to potential threats or opportunities. In essence, it’s about understanding where you are, what’s happening around you, and what might happen next.
• Sensemaking is the cognitive process of interpreting and understanding information, often in complex or ambiguous situations. It’s a vital human skill that allows us to make meaning out of the world around us.
• Weak signal detection is an important prerequisite for situation awareness and sensemaking, and, unassuming it looks like, it takes profound consideration to build the social and technological structures to make it work.

 Sensemaking and situational awareness deal both with understanding complex environments; they are distinct concepts with different focuses and processes. Situational awareness focuses on the ability to act meaningfully, while sensemaking aims to uncover the underlying structures and relationships that govern system behavior and guide us to a deeper understanding.

Key Differences & Relationships include

• Sensemaking & Situation Awareness: Sensemaking often contributes to situation awareness. You can’t understand the situation (awareness) without making sense of the information within it. However, situation awareness is more immediate and focused on the present, while sensemaking can be more retrospective and focused on constructing a coherent narrative.
• Weak Signal Detection & Sensemaking: Weak signals are the raw material for sensemaking. Detecting these signals is the first step, but sensemaking is necessary to understand their meaning and implications.
• Weak Signal Detection & Situation Awareness: Weak signals can enhance situation awareness by providing clues about future changes in the environment. However, they can also be easily missed if individuals are overly focused on the dominant signals and current state.

First, I want to introduce each of the sisters. Then, I will continue with a dicsussions of consequences, conclusions and open questions.

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Understand the challenge

When we talk about leadership, we distinguish between four traits:

• As a manager, I create and protect structures in which people can have specific experiences.
• As a leader, I work with people, help them to develop, find meaning and make sense of their experiences.
• As an entrepreneur, I decide on direction, take risks and execute tough decisions.
• As a domain expert, I understand and shape the business and the products

For a given position, I have an appropriate mix of responsibilities and I need an appropriate mix of skills and talents.

Understand where you stand

Situational awareness is the perception of environmental elements and events in relation to time or space, the understanding of their meaning and the projection of their future status.

As leaders we need to adapt to complex environments – this applies to every level, personal, team, strategy and product decisions and understanding the situation is the essential first step.

Situational awareness is a crucial basis for successful decision-making. A lack of situational awareness is one of the most important factors in bad decisions, some of which have serious consequences.

Focus on the goal

Focusing on the goal sounds so simple and yet is so often neglected.

Start with Why is Simon Sinek’s mission to help and inspire others at work.

He has three lessons on how they communicate and how you can adapt your mindset to inspire yourself and others.
3 lessons you should take away from Start with Why:

• If you want to inspire and excite others, always communicate your why first, the Why.
• Enthusiastic employees are the best resource for any company.
• You don’t need questionable sales tactics when you Start with Why.

Trust people

Trust is often demanded – but it’s not a one-way street.
Trust – or the absence of trust – has an immense impact on the way we work together.
People are treated like children in the company – at home they raise children and build houses.
They are expected to think like entrepreneurs and are not trusted to order books on their own.
If you want to build trust, there are clear conditions and behaviors that need to be in place for this to happen successfully.

Be authentic

Authentic leaders are positive people with realistic concepts about themselves. They encourage openness. Authentic leaders are able to improve the performance of individuals and teams by building trust and gaining enthusiastic support from their subordinates and colleagues.
Here are some concepts to help you assess yourself and better understand what you need to work on.

How to act as a Leader

Create a safe environment

The need for a psychologically safe environment is based on three key ideas:

• The brain treats many social threats and rewards with the same intensity as physical threats and rewards.
• The ability to be creative, make decisions, solve problems and collaborate with others is generally diminished by a response to a threat.
• The threat response is more intense and frequent and often needs to be carefully minimized in social interactions

Become a catalyst

As a leader, I often have the reflex to take things into my own hands or to determine exactly how they should be implemented – after all, especially in technology companies, the fact that I am good at this is often the reason for my promotion. So nothing could be more obvious.

But there’s a catch: it doesn’t scale and ignores the essential reason why I’m a manager: I don’t lead.

In this chapter, we talk about ways out of this trap. How do I do the best for the effectiveness of the overall system? How do I best develop my employees? How do I become a catalyst for them and my area of responsibility?

Drive relevant and purposeful interactions

If I want to fulfill my role as a catalyst, the most important element is that I engage with people. Develop empathy and – as we have seen – be authentic and consistent.

The next question is what my target image is: I want to focus everyone on further development and help them to deal constructively with obstacles and mistakes. In English, we also talk about a “growth mindset”.

Finally, I need tools for the most important interaction: the conversation. We will discuss one technique (“ORID”) here as an example.

Understand your influence

How do I make an impact? It is helpful to visualize the ways in which my actions (and, as a basis, my thoughts) have an impact.

Certain aspects are general: people have experiences, they adjust their behavior accordingly. In the long term, this influences the opinion of what is “normal” – as a collective opinion, we call this culture.

Of course, things are not so simple and unidirectional, but interactive and cyclical, so there is plenty of material for discussion here. In the team context, the focus is on interactions (and some structures, such as the aforementioned safe space), in the corporate context the focus shifts to structures, policies, governance etc.

Actively use feedback

The whole idea of agility revolves around shortening feedback cycles in order to better adapt to new circumstances or: to gain a basis for future decisions from the past.

We talk about empirical management, situational awareness, situational leadership and adaptive strategy – it’s always the same basic idea.

The active use of feedback is, if you like, one of the cornerstones of good agile leadership.

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Fit for Purpose ensures that the organization is set up in such a way that it can adequately implement the strategy in the current environment. It is a litmus test for the organization’s design.

Structures, processes, workflows raises the question of hierarchies and networks that dominate the organization, including the relationship between hierarchy and network.

Flow-oriented organizational design makes specific suggestions for an adaptive organization: a buy-oriented organization before a build-oriented organization, and specific suggestions for design.

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Bureaucracy as a service: Bureaucracy has few friends, but a dominant position in most organizations. What is the necessary core? What can be done to counter the power of bureaucracy?

Organizing for people means making organizations a good working environment. At the same time, you will gain in effectiveness and flexibility.

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A hierarchy ensures that the organization is coherent and pursues a common goal.

The flow of information in a hierarchy is typically slow.

The structuring of an organization as a hierarchy or as a network is often treated as a contradiction. In fact, both networks and hierarchies are necessary. The trick is to find the balance between the two.

A network is fast in communication, can adapt and reconfigure itself.

It is not easy for a network to maintain a coherent direction.

Kotter on hierarchy and network

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The reason for the emphasis on the organizational structure is that it is focused on utilizing resources effectively.

The process organization focuses on a fast flow of information and products. It “stumbles” at departmental and divisional boundaries and thus slows down.

To the extent that speed becomes more important than stability, the process organization also becomes more important.

For the vast majority of today’s organizations, it can be summarized as: process over structure; this has far-reaching effects on decision-making structures and power distribution.

Tools

• Reinertsen’s heuristics for flow

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Empirical management means drawing conclusions from the past about the future, i.e. systematically evaluating and using the available information.

Empirical management requires the management of knowledge, systems and artifacts and the active participation of employees as knowledge carriers in order to collect verifiable information. It also means following a process such as Lean or Scrum that systematically and continuously integrates these insights.

This improves the quality of decision-making by utilizing practical experience and treating people with respect.

Keep your options open

There is another compelling reason for managers to grasp the insights behind real options. While option-pricing models are indeed a superior valuation tool—the usual use of the theory—we believe that real options can also provide a systematic framework serving as a strategic tool and that the real power of real options lies in this strategic application. This article seeks to provide such a framework.

The real power of real options. Mc Kinsey & Company, June 2000[1]

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The Last Responsible Moment

It is usually a good idea to never leave a decision to the last responsible moment. Keeping your options open until the LRM – when the cost of not deciding is higher than the cost of deciding – increases your flexibility and the empirical basis, i.e. the quality of the decision.

A decision-making process for maximum options

• For each decision, the available options must be determined.
• Determine the latest point in time at which a decision can be made, i.e. the conditions that must be met in order to enter into a commitment. Decision time = deadline – option implementation time. The first decision is made before the first option expires.
• Until this deadline expires, the search for new options continues and existing options are refined or expanded
• Identify options for each contingency and know in advance which option to exercise under a given condition.
• Try to delay the decision point. Often this is free or has a very low cost. To do this, we must be able to implement the option as quickly as possible. During the slack period, work on how to speed up the process.
• Be aware that optimizing costs does not equal optimizing returns or minimizing risk. Sometimes it pays to invest in more than one option, even if it costs a little more. After all, options have value.
• Wait to decide… and wait… and wait… until the conditions are right.
• When you need to commit and act, do so as quickly as possible. And you can move forward with confidence, knowing you’ve made the best decision possible.

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One of the most striking statements on motivation is Daniel Pink’s Youtube video about the three most important factors of motivation:

• Autonomy (independence)
• Mastery (control over a subject)
• Purpose (objective)

What makes a good working environment?

Translated to the company side, this results in some necessary conditions for employees to be motivated, committed and effective:

An environment of trust and respect

For trust and respect to develop, it needs

• a safe environment in which one can act without fear
• trustworthy and authentic leaders who guarantee a large part of this safe environment

decentralized decisions

An environment in which autonomy and responsibility can arise requires decentralized decision-making authority.

Leveraging diversity

Diversity helps to adapt to new developments. A diversity of perspectives leads to the ability to deliver better solutions and more flexible work in diverse working groups.

What else

This is a selection of factors that we consider to be central to an organization. Other factors, some of which are almost synonyms for the ones above, are

• meritocracy – the fair recognition of performance
• openness – it’s hard to imagine trust without openness
• community – working and setting goals together
• ownership – having authority over one’s own area
• a culture of discipline – the requirement to also justify the trust placed in you

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