Sense and respond
Sense and respond has been used in control theory for several decades, primarily in closed systems such as refineries where comparisons are made between measurements and desired values, and system settings are adjusted to narrow the gap between the two. Since at least the early 1980s, sense and respond has also been used to describe the behavior of certain open systems called complex adaptive systems, or CAS. These are chemical, biological, ecological and cybernetic systems for which the functions, rules and strategies of the system emerge. Hurricanes, butterfly migrations, and chemical clocks are examples. The Santa Fe Institute has been a leader in studying such systems, and described sense and respond behavior as an iterative Sense–Interpret-Decide-Act cycle. Continued iteration through this cycle is a survival constraint for any system of any type. (“Decide” includes reflexive choices, programmed choices, learned and instinctual responses, and conscious choices). Sense and Respond is based on Lean principles and follows URSLIMM - U - understand customer value R - remove waste S - standardize L - learn by doing I - involve everyone M - measure what matters M - manage performance visually
Sense and respond as a business concept
A business organization is a human system. It differs from the complex adaptive systems found in nature in a fundamental way: the agents in it can and do make conscious decisions to establish purpose, bounds, structure, governance mechanisms - and they can decide whether or not to accept the purpose, or follow the rules or act within the structure. Bees, daisies, hurricanes, cells and automata cannot make such conscious decisions. The term Sense and Respond as a business concept first appeared in a 1992 American Management Association Management Review article by Stephan H. Haeckel. Originally a label describing a desirable type of organizational behavior, it evolved over the next six years into a post-industrial managerial paradigm, incorporating a set of concepts, principles, prescriptions, and tools for creating and managing an adaptive enterprise. Developed by Haeckel at IBM’s Advanced Business Institute, it became a comprehensive, scalable and internally consistent recasting of industrial age strategy, structure and governance to cope with the post-industrial environment of unpredictable change.
Sense and respond and adaptive enterprise are now in the business vernacular. It has been variously used it as a generic synonym for "agile," "lean," "flexible," "resilient," "near real-time," or to characterize adaptive technologies used in organizations (e.g. agent-based modeling, autonomic computing). But Haeckel holds that a post-industrial managerial paradigm is required to leverage and exploit such capabilities systematically and coherently, and that without the Sense and Respond managerial paradigm, the impact of sense and respond tools and methods will be limited and operational, rather than transformational and strategic.
Sense and respond competences
An organization that does not trust its ability to predict what needs doing can no longer rely on planning, process designs, hierarchies of authority, and command and control. Instead of focusing on operational excellence to efficiently make and sell products and services that customers were predicted to want, an adaptive enterprise must be designed to sense and respond effectively to what is actually happening.
An adaptive management paradigm is the missing element in current attempts to transform businesses into adaptive organizations. Because adaptive behavior is typically unplanned—often ad hoc– it is intrinsically inefficient and therefore persistently undermined by the existing efficiency-centric management paradigm. The metrics and practices fostered by this industrial age model frustrate attempts to empower people, instill a customer orientation, leverage adaptive technologies, and respond to unanticipated change.
Sense & Respond is a robust replacement of the legacy managerial paradigm. It is a fundamentally different framework of purpose, strategy, structure and governance that systematically leverages adaptive individuals, technologies and infrastructures to produce and scale adaptive organizational behavior:
- Purpose is defined as an effect on something or someone external to the organization (rather than an internal goal or objective).
- Strategy is expressed as a modular system design of roles and accountabilities (rather than as a plan of action).
- Structure is an architecture of modular roles that shows where strategic investments are to be made. (“Structure is strategy” in S&R organizations.)
- Governance is the systematic propagation and assurance of global policy constraints to all roles in the organization.
The Transformational Foundations of Sense & Respond
Three essential requirements for dealing systematically with high levels of unpredictability are:
- knowing earlier the meaning of what is happening now;
- rapid and effective reconfiguration of modular response capabilities; and
- a major reduction in the number of elements that must be predicted in advance by organizational leadership.
The Sense & Respond model uniquely incorporates and leverages three theoretical foundations to address these issues: system design principles, extended to deal with the specific nature of social systems; a universal and general commitment management protocol; and the “sense and respond” adaptive loop of complexity theory: sense-interpret-decide-act.
• The properties intrinsic to any rigorous system design literally dissolve the perennial managerial problems associated with ensuring alignment, coherent empowerment, scalability, and customer-back behavior. • The properties of the commitment management protocol enable rapid reconfiguration of organizational roles. The dynamic linkages between roles are codified as commitments negotiated between ‘provider’ and ‘customer’ roles. • Use of the adaptive loop to design role-specific information support systems substantially enhances the “knowing earlier” capacity –- and thus the speed and performance — of people occupying those roles.
Seen through the lens of a system designer, S&R is not only a prescription for adaptability, it is a remedy for all–too familiar managerial problems that persist and worsen as organizations get larger. Anti-systemic behavior happens all the time in business, leading to unnecessary redundancy and fostering non-productive, very expensive (though rarely measured) internal conflict. In one case where it was measured, sub-optimization in a large, multiple product global firm resulted in hundreds of millions of dollars per year in lost opportunity costs as well as significant internal transaction costs.
Note that systems are radically different from networks and processes. Networks guarantee connection, but not interoperability or coherency; systems do. Processes produce internal results called outputs….such as products, advice, diagnoses and appendectomies. Systems produce effects on someone or something external to the system…such as the patient, the taxpayer, the family, the customer.
Applying Sense & Respond principles to organizations is a new, post-industrial leadership competence. Why? In any enterprise, leadership is accountable for unambiguous declarations of purpose, strategy, structure and governance. But uniquely to Sense & Respond organizations, purpose, structure and strategy are expressed as a modular system design of roles and accountabilities. This means that policy executives must acquire competence as system designers. Done right, the implementation of S&R designs results in synergy, alignment, coherent empowerment, customer centricity, role and accountability clarity, and intrinsic adaptability..
Publications
- 2010 “The Post-Industrial Manager,” Marketing Management Magazine, Fall, 2010, pp 24–32.
- 2003 “Leading On Demand Businesses – Executives as Architects,” IBM Systems Journal, Vol 42, No 3, 2003, pp 405–413
- 2003 “Making Meaning Out of Apparent Noise,” in Long Range Planning, April, 2004, Special Issue of articles from May 4, 2003 Wharton Conference “Peripheral Vision: Sensing and Acting on Weak Signals,” Vol 37/2 pp 181–189
- 2000 “Managing Knowledge in Adaptive Enterprises,” Chapter in Knowledge Horizons: The Present and the Promise of Knowledge Management, edited by C. Despres and D. Chauvel, Butterworth-Heinemann
- 1999 Adaptive Enterprise: Creating and Leading Sense-and-Respond Organizations, Harvard Business School Press
- 1993 “Managing By Wire,” Harvard Business Review: Vol. 71, No. 5, September–October (with R.L. Nolan)
- 1992 “From ‘Make and Sell’ to ‘Sense and Respond,’” Management Review, American Management Association, October
References
Ackoff, Russell. The Democratic Corporation New York. Oxford University Press, 1994. Argyris, Chris. "Empowerment: The Emperor's New Clothes." Harvard Business Review76, no. 3 (May–June 1998). Bell, Daniel. The Coming of Post-Industrial Society. New York: Basic Books, 1973. Drucker, Peter. "How to Be Competitive Though Big." The Wall Street Journal, 7 February 1991. Glazer, Rashi. "Marketing in an Information-Intensive Environment." Journal of Marketing 55 (October, 1991). Haeckel, Stephan H. Adaptive Enterprise: Creating and Leading Sense-and-Respond Organizations. Cambridge: Harvard Business School Press, 1999. Lloyd, Seth. "Learning How to Control Complex Systems." The Bulletin of the Santa Fe Institute (Spring 1995). Weick, Karl E. Sensemaking in Organizations. Newbury Park, CA: Sage Publications, 1995