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Transcript: Business leaders and 'sense making'

Corporate leadership.

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KARL MOORE: This is Karl Moore of the Desautels Faculty of Management at McGill University, Talking Management for The Globe and Mail. Today I am delighted to be speaking with Deborah Ancona who is a professor at the Sloan School, MIT.

Good afternoon, Deborah.

DEBORAH ANCONA: Good afternoon, Karl.

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KM: For years now I have seen companies have a set of leadership capabilities that they are wanting their leaders to be measured by, trained in, and so on. I understand that you are studying that and seen a bit of a scene change in terms of the leadership capabilities organizations are looking for.

DA: There is a difference and we have a different kind of world right now. We have been saying that forever and it's true and it's been changing forever. It's more volatile, it's more global and so companies have been shifting the way that they think about the leadership capabilities that are needed in this shifted and changing world. At Sloan School of Management and MIT we also have been looking at leadership capabilities and what has come out is a differentiator, if you will or something that is not typically in our old models of leadership capabilities, is sense making. Sense making is a term coined by Karl Weick at the University of Michigan and it means what it sounds like – making sense of the context in which you are operating. So how do you understand what is changing "out there" because out there is changing all the time? What we have discovered is that sense making has become a primary predictor of leadership effectiveness and that the influence of sense making is growing over time so it is becoming more important in this current moment.

KM: Deborah, this sense making sounds like a critical thing we should have as a capability – what exactly is sense making?

DA: Sense making, as I said, is making sense of the context in which you are operating. For us, we have found three different components of sense making that help us understand what to do and what it is.

Those three components are, first of all, exploring the external systems. So part of what you have to do if you are a good sense maker is get out there; don't just rely on computer screens and analytics and so on but go out there and go see what customers are buying, go figure out what is going on at universities, go and understanding what is going on in the shop floor, not just what you hear in economic analysis. So, lots of different data, lots of different perspectives, and first-hand interactions with the environment along with those other analytics.

The second is what Karl Weick refers to as mapping. It is not enough to collect a lot of data, what is really important is that you are able to take that complexity and map it in a simple way that can be communicated and shared so that a team or an organization can have a shared view of what the environment is like right now. That enables them to act, it enables them to have a sense of control over that environment even if it is complex, it helps them to co-ordinate and act in the environment. A map of some kind – what is really important here? What are some of the priorities? What are trends that are most important for us? So first is explore, second is mapping.

The third component is action – acting in the external system in order to check the map that you have because we as human being, particularly in stressful times, tend to hold on to the models of the world that we have, the assumptions that we have. So part of what you have to do is go out and test those assumptions to see if the worldview that you have, if the mental models that you work on, are still legitimate or if you need to begin to change them. So that requires acting on those assumptions in order to see if whether or not your map is correct.

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