Definition of sense-making

A process of understanding and explicitly connecting the impact of current decisions and actions on future outcomes in order to select a best course of action.

Often, business situations are highly complex and there may be little guidance to be gleaned from past experience. Usually managers are faced with situations that present a choice from among several options.  The decision process calls for an analysis of each these options to determine which, if any, best achieves the goals of the organisation.  The process requires an understanding of the options, an assessment of the range of outcomes that might be expected under each option and an ability to compare and select when, as is often the case, multiple objectives are to be accomplished.

Because sense-making deals with the unknowable future, it will be necessary to develop and use expectations (assumptions) about the future business environment, legislative initiatives, technical advances and a host of other factors that affect the success of business initiatives. These expectations must be grounded in logic, shared with and explained to others, and be subject to revision as appropriate.  

Examples

Hiring decisions must make sense in light of the future responsibilities and potential accomplishments of the new hire.  Product decisions require making sense of how future customer buying decisions will affect product success.  Capacity expansion choices need a sense of future growth possibilities to help decide the nature of today’s investment.

Sense making is an essential capability of successful management of any type of organisation. [1]

FT Articles & Analysis

No articles are associated with this term

Discussion