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Context is Everything

A very important part of effective decision making is understanding the context or situation of decision making . According to the English philosopher Gregory Bateson;

Nothing Exists Without Context

Gregory Bateson

Unfortunately, a lot of decisions are made in companies today without taking cognizance of the underlying contexts and this has resulted in poor decisions; for example, there is an erroneous belief that all business process can be codified in the form of standard operating procedures without considering some complex situations that will require the us of tacit knowledge. Procedures are typically useful in ordered systems that are highly constrained and behaviour is predictable.

According to Dave Snowden, the founder of the Cynefin framework; there are four contexts defined by the nature of the relationship between cause and effect

Using the image above from James Durno as an example, A car moved from the obvious context (a flat tyre) ) to complicated (needs a mechanic) to complex(driving the vehicle in fog) and chaotic( encountering a bull).

Obvious(Simple) Context (Known, Knowns)

This is the domain of “Best Practice”. Simple contexts are characterized by stability and clear cause-and-effect relationships that are easily discernible by everyone. Often, the right answer is self-evident and undisputed. Controls such as four eyed principles( maker-checker), segregation of duties , Standard Operating Procedures(SOPs).The decision making approach is “Sense – Categorize – Respond”, put simply, you should assess the situation, categorize its type, and then base your response on best practice.

Complicated Context( Known Unknowns)

This is the domain of “Good Practice”.”Complicated” problems might have several “correct” solutions. Here, there is a clear relationship between cause and effect, but it may not be visible to everyone. For example, you might see several symptoms of a problem on credit management in your company but not know how to fix it.The decision-making approach here is to “Sense – Analyze – Respond.” In other words, you need to assess the situation, analyze what is known (often with the help of experts), and decide on the best response, using good practice.

Complex Context( Unknown Unknown)

This is the domain of “Emergence”. It might be impossible to identify one “correct” solution, or spot cause-and-effect relationships, in “complex” and many situations fall into this category. Complex contexts are often unpredictable, and the best approach here is to “Probe – Sense – Respond.” Rather than trying to control the situation or insisting on a plan of action, it’s often best to be patient, look for patterns, and encourage a solution to emerge. Many change management initiatives fall into this space.

Chaotic Context ( Unknowable unknowns)

This is the domain of “Rapid Response”. In “chaotic” situations, no relationship between cause and effect exists, so your primary goal is to establish order and stability. Crisis and emergency scenarios often fall into this domain. The decision-making approach here is to “Act – Sense – Respond.” You need to act decisively to address the most pressing issues, sense where there is stability and where there isn’t, and then respond to move the situation from chaos to complexity.

Understanding these different contexts will go a long away in making sense of situations and improve our decision making capabilities.

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