Think about the last time you struggled to make a decision. Maybe it was something as small as what to have for breakfast or as important as whether to quit your job. To make the best decision possible, you would need to think critically about the problem and all the factors involved, including how each option would play out in the future. But we know this isn’t possible because there are always unknown variables that we cannot hope to understand or predict.
This is one of the reasons why it is so important to learn how to navigate uncertainty. From less terrible breakfasts to new chapters in your future, this can concretely improve our lives. The good news is that sense-making is a skill that can be learned, and DAOs stand to gain a lot from it right now. Without sensemaking, DAOs can easily make decisions that are driven by emotion or biased in favor of certain outcomes.
These kinds of decisions can lead to significant losses, both financial and reputational. Based on previous research, this post offers an overview of sense-making, why it's important, and how DAOs can get started. Stick around. By the end of your reading, I hope you'll be ready to start making better decisions in your DAO!
Sense-making or sensemaking “is the process through which individuals work to understand novel, unexpected or confusing events” or experiences. In other words, It’s how we structure the unknown so we can act on it. Rather than a body of knowledge or plan of action, sense-making is about developing insights into patterns and possibilities. It challenges the notion that one way of thinking can be enough to understand the world's complexities and helps us break out of narrow or simplistic framing.
Sensemaking is about creating space for listening, reflection and the exploration of meaning beyond the usual boundaries, allowing different framings, stories and viewpoints to be shared and collectively explored.
Additionally, sense-making is a pluralist field of study, from organizational studies to leadership theory, communication and social psychology. Decentralized organizations can use it to see areas of agreement and conflict, especially at a cultural level. Sense-making allows individuals and groups to understand their prevailing beliefs, thoughts, and actions.
The early maps cartographers made differed depending on what they experienced. In this context of sense-making, the map does not need to be ‘precise’ or even ‘correct’ in detail at the start. More importantly, a shared map only needs to be relevant to a particular circumstance.
At its most basic level, sense-making is about map-making. This "sense-mapping" has three basic steps: 1) creating an emerging understanding or picture, 2) testing this picture with others, and 3) refining or abandoning the picture in favor of one that better explains a shifting reality.
Sense-making at the collective level can involve several different methods of practice. From understanding and facilitating deep listening to building communities of practice. From understanding drivers of systemic inequity to surfacing emerging insights that may amplify the voices of changemakers. This need for awareness brings us to why adopting sense-making frameworks is so important for DAOs.
When we meet someone new, we engage in sense-making by trying to understand who they are, what they do and what they're like. We want to know how they fit into our lives and whether or not we can trust them.
When we're presented with a problem, we use sense-making to try to find a solution. We gather information, consider different options and use our previous experiences to guide our decision-making.
When something unexpected happens, we once again turn to sense-making to understand the situation. We ask questions, look for patterns and try to find meaning in what has happened.
Sense-making is the cognitive process of giving meaning to experiences. In a DAO, it is the activity of making interpreted judgments about data to support decision-making. There are three primary drivers of why sense-making is so important for DAOs: 1) the need for alignment, 2) avoiding groupthink, and 3) creating a learning model.
The first driver of its importance is the need for alignment. In a DAO, members are dispersed, and no centralized authority exists. Therefore, it is essential to have a shared understanding of the information to make proposals that align with the organization's goals.
Sense-making creates alignment by providing a framework for interpretation that all members can use. Removing central authorities isn't enough. Sense-making needs to be built into the very fabric of DAOs so that we can all work together to make sense of the challenges around us.
The second driver is avoiding groupthink. Groupthink occurs when members of a group agree without critically evaluating the available information. Sense-making can help avoid groupthink by encouraging critical thinking and allowing different interpretations of information.
For example, sensemaking can facilitate conversations and debates around a topic. This can help surface multiple perspectives and challenge the assumptions held within the group. In such conversations, sensemaking can help ensure that all DAO members feel heard and have their contributions valued.
Creating models for learning is the third driver of why sense-making is so important for DAOs. It provides a way for members to learn from each other and develop new skills while also helping identify decision-making errors so they can be corrected in the future. When complexity and interdependence seem to be the game's name, sense-making helps you navigate unchartered terrain – like a map that acts as a collectively understood guide.
Without sense-making, DAOs are far less effective in their decision-making and governance and can’t truly reach their full potential as decentralized organizations.
When a DAO community is considering a new product or service, sense-making helps them understand their stakeholders' needs and design a solution that meets those needs.
Whenever a change affects the DAO, like a new subDAO or even regulations, sense-making helps us understand the implications of the change and adapt accordingly.
Sense-making is also important when things go wrong, be it a hack or a coordination failure like voter apathy or even collusion. By understanding what went wrong and why, DAOs can take steps to prevent similar problems in the future.
Beware of your biases and embrace disagreements. Seek out many types of data sources from diverse perspectives on the issue or opportunity and involve others. Sense-making isn’t an individual pursuit; it’s a team sport. Combine empirical data with more qualitative information like conversations. Your mental model of the story should be tested with others, particularly those with diverse perspectives different from yours. Listen deeply and actively.
Do little experiments and look for patterns. Reflect, learn and then apply those learnings in another experiment. You don’t have to go all in, all at once. What if an experiment ‘fails’? Good. Consider: what have you learned? What will you do differently next time? Where do things seem to be repeating? How often are we seeing this? Does this resemble anything else we have seen before? Where are the connections? What are the outliers? What are these outliers and connections telling us?
Use stories and metaphors with others to explore and make sense of what the data is telling you. Information needs unpacking to become insights. Stories and visual representation can be powerful tools to communicate an idea or metaphor to your team, as a picture is worth more than a thousand words. A whiteboard or flipchart is often hugely effective in sparking creativity and fresh perspectives; it can offer insights that would otherwise remain hidden.
You probably don't think about your ‘sense-making muscles’ very often. But as you can see in this blog post, these are some of the most important muscles you can ever build.Previous Studies have shown that sensemaking is highly correlated with effectiveness because it gives us a better grasp of what is going on, thus facilitating other helpful practices such as visioning, relating, and inventing. Consider the following three questions to help warm up your sense-making muscles:
How can you know who you are until you see what you do? What are your passions? To understand how you make decisions, you first need to understand your identity. This can be done in a number of ways, such as by exploring your sense of self through tools like journaling or meditation. Journaling is an effective tool for sensemaking. It allows you to take a step back and look at the bigger picture of the issue or opportunity you’re sensemaking. Writing out your thoughts, feelings and observations, can help to make sense of complex situations and discover new insights. Meditation is also useful for sensemaking, as it allows you to explore your innermost thoughts and feelings. Through meditation, you can gain a sense of clarity about who you are and what decisions you want to make in the future.
When was the last time you questioned your basic assumptions? The act of sense-making means that we test our interpretations of the world against other views to refine our understanding. We then concretize our thoughts or abandon them in favor of clearer views.One way to test our basic assumptions and help with sensemaking is to practice active listening. Active listening involves fully focusing on what the other person is saying without internal monologue or judgment. This technique can help us gain insight into our own beliefs and those of others by allowing us to be present in the conversation to clarify and interrogate our own sensemaking efforts.
When faced with multiple paths, how do you decide which one to take? Given that most of work in DAOs takes place in complex environments, when is enough information enough? You have to move beyond accuracy and completeness because you will not know all the variables that influence your decision. Instead, you are better off considering plausibility and sufficiency. Do you have enough credible information to justify your beliefs and, therefore, for your decision to seem plausible? Yes, proceed. No, gather more information.
The essence of sense-making is grounded in a desire to create sophisticated simplicity.
Sophisticated simplicity occurs when you act to bring meaning to your world by labeling and identifying plausible patterns in the information you receive. In other words, you interpret the information presented, enabling you to make more thoughtful decisions. Sophisticated simplicity results from this sensemaking practice; it's about finding meaning through embracing complexity - knowing what questions to ask, breaking it down into simpler parts for easier comprehension, and making sense of it all to drive success.
Sense-making uses both intuition and logic. It’s not about finding the correct answer. It means staying curious about the unknowns and being comfortable with the discomfort of not knowing. As Deborah Ancona summarized, ‘The things that stand in the way of sense-making are rigidity and leader dependence.’
Sensemaking is a powerful tool for decentralized governance. Decentralized governance requires sensemaking to help participants stay focused and make decisions collectively, without needing an overarching leader or centralized authority. By applying sensemaking, DAOs can maximize their collective intelligence and decision-making power in order to make data-driven decisions that are rooted in a deep understanding of their complex environment. This sensemaking process involves asking questions, gathering information from multiple sources, and synthesizing this information to identify patterns and emerging trends.
I want to hear about what sense-making means to you. I’d also love to hear how you already apply sense-making in your DAO, or if you choose to give a try to any of the 3 tips and 3 questions presented here.
Sense-making is a growing area of research, with more than 125,000 research papers published on the topic.
Karl Weick is credited for introducing this concept. Many authors have contributed to the body of research, including founder of the MIT Leadership Center Deborah Ancona and David Snowden, who came up with theCynefin framework.
The dangers of avoiding proper sensemaking and critical thinking before decision-making are immense. When decision-makers fail to think critically, they can easily make decisions that are not informed by evidence, context or underlying assumptions. Furthermore, sensemaking is inherently collaborative and requires input from different stakeholders to build a nuanced understanding of the situation at hand. Without this sensemaking, it is easy for decision-makers to become entrenched in their own biases and opinions, leading to poor decisions that can have far-reaching consequences.
Without taking the necessary steps of sensemaking, what started as a health crisis with an "easy solution" spiraled into disastrous results requiring extreme measures — such as parachuting thousands of cats. So before your DAO makes an important decision, consider sharing this article there. Who knows, maybe it can save many cats from a lot of trouble!