The intersection between operations and strategy
When most people hear “incident management”, something operational comes to mind. Like restoring IT services after a glitch in a business process due to an IT outage or malfunction. Although annoying, the glitch is ‘just one of those things’ that happen from time to time. So we have a process to manage incidents, comprising steps such as detection and recording, classification and initial support, analysis, resolution, evaluation and structural improvement.
On the other end of the scale we have strategic planning in which business demigods define a mission and vision, do SWOT analyses, capture stakeholder needs, and create policies and plans for the longer term.
The trouble is that things just happen. Unexpected things. Unexpected non-trivial things. Do you think that Angela Merkel had a strategic plan for handling the Greek bailout or the refugee crisis? Increasingly, or so it seems, businesses are becoming disrupted. In other words, unexpected, non-trivial things have to be dealt with. But how?
Chaos and the Cynefin framework
The word crisis triggers the association with chaos. And chaos leads us to one of the five domains of David Snowden’s Cynefin framework. To quote the Wikipedia entry, the Cynefin framework provides a typology of contexts that guides what sort of explanations or solutions might apply. It draws on research into complex adaptive systems theory, cognitive science, anthropology, and narrative patterns, as well as evolutionary psychology, to describe problems, situations, and systems. It explores the relationship between man, experience, and context and proposes new approaches to communication, decision-making, policy-making, and knowledge management in complex social environments.
The Cynefin framework has five domains:
- Obvious, in which the relationship between cause and effect is obvious to all, the approach is to Sense – Categorise – Respond and we can apply best practice.
- Complicated, in which the relationship between cause and effect requires analysis or some other form of investigation and/or the application of expert knowledge, the approach is to Sense – Analyse – Respond and we can apply good practice.
- Complex, in which the relationship between cause and effect can only be perceived in retrospect, but not in advance, the approach is to Probe – Sense – Respond and we can sense emergent practice.
- Chaotic, in which there is no relationship between cause and effect at systems level, the approach is to Act – Sense – Respond and we can discover novel practice.
- Disorder, which is the state of not knowing what type of causality exists.
Opportunity to Innovate
In 2008, Snowden and co-author Mary Boone won an Academy of Management award for their Harvard Business Review article A Leader’s Framework for Decision Making. They offer guidance for action in the five domains. In the chaotic domain “a leader’s immediate job is not to discover patterns but to stanch the bleeding. A leader must first act to establish order, then sense where stability is present and from where it is absent, and then respond by working to transform the situation from chaos to complexity, where the identification of emerging patterns can both help prevent future crises and discern new opportunities.”
They also suggest using crises as opportunities to innovate: “People are more open to novelty and directive leadership in these situations than they would be in other contexts. The minute you encounter a crisis, appoint a reliable manager or crisis team to resolve the issue. At the same time, pick out a separate team and focus its members on the opportunities for doing things differently. If you wait until the crisis is over, the chance will be gone.”
Disruptive innovation and the innovator’s dilemma
Speaking of innovation, other ‘strategic incident management’ topics that comes to mind are disruptive innovation and the innovator’s dilemma, as formulated by Clayton Christensen. Christensen suggests that successful companies can put too much emphasis on customers’ current needs, and fail to adopt new technology or business models that will meet their customers’ unstated or future needs. He argues that such companies will eventually fall behind. Christensen calls the anticipation of future needs “disruptive innovation” and gives examples involving the personal computer industry, earth movers, and steel minimills. The innovator’s ‘dilemma’ comes from the idea that businesses or organizations will reject innovations based on the fact that they are not attractive to their current customers, thus allowing these ideas with great potential to go to waste. It goes into great detail the way in which ‘successful’ companies adhered to customer needs, adopted new technologies and took rivals into consideration, but still ended up losing dominance in their market.
Make worse products that none of your customers would buy
So where does this leave us? Probably with a heightened awareness that we should be prepared for ‘strategic incidents’ and have a toolbox with various approaches, depending on the nature of the circumstances. The Cynefin framework really helps in making sense of where we are and giving pointers as to how to act effectively. The concept of disruptive innovation makes us aware of the need to frequently assess the competitive landscape, and to seriously consider making worse products that none of your customers would buy, and that would ruin your margins…
