Sense-Making - a New Strategic Planning Approach

Manila Bulletin, May 13, 2020 | Go to article overview

Sense-Making - a New Strategic Planning Approach


COVID-19 is now the biggest disruptor in business and society since World War 2. Not only is it disrupting traditional businesses such but also the so-called tech disruptors.

For instance, Airbnb, the disruptor of the hospitality industry, has announced that its revenue this year will be less than half of what it earned in 2019. "COVID-19 is having a more severe and sudden impact on our business than 9/11 and the 2009 financial crisis combined," said Brian Chesky, Airbnb's chief executive, as reported in Euronews.

Uber Technologies Inc, another disruptor in the transport industry, said it expects an impairment charge of up to $2.2 billion in the first quarter due to the coronavirus outbreak and revenue to decline by $17 million to $22 million in the quarter, as reported by Reuters.

If these disruptors are trying to weather the storm, what more for traditional industries and businesses like travel, retail, and entertainment, which are facing grave threats during the pandemic? Business executives, entrepreneurs, and professionals are trying to make sense of what's happening and what's in store.

But despite the proliferation of free webinars on how to deal with the pandemic, the prescriptions of supposedly experts remain incohesive and largely opinion-based. Why? It's because humanity hasn't experienced this magnitude of a crisis in a hundred years. Furthermore, the traditional approach to strategic planning, which is linear or sequential in nature, is oftentimes not applicable. Hence, a new approach to strategic planning is requisite to account for the chaos and uncertainties that are happening all over.

One approach which we have been using in our consulting work is 'sense-making', a new approach to strategic planning. It "refers to how we structure the unknown so as to be able to act in it," according to Prof. Deborah Ancona of the MIT Sloan School of Management.It draws from the collective wisdom of the leadership team of an organization by "coming up with a plausible understanding -- a map -- of a shifting world; testing this map with others through data collection, action, and conversation; and then refining, or abandoning, the map depending on how credible it is." Sensemaking enables leaders to have a better grasp of what is going on in their environments, thus facilitating other leadership activities such as visioning, relating, and inventing.' It involves three major steps - explore the wider system, create a map of that system, and act in the system to learn from it.

Explore the wider system. The key to this step is to work with others to observe what is going on, may it be using external consultants or involving other leaders in the organization. This involves identifying drivers of change, such as the pandemic, new emerging technologies and competitors, and evolving customer personas. The latter is especially important, as the crisis we are facing will result in new consumer segments with different set of needs and wants. …

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