Getting Better at Sensemaking

Citation

Rich, M.K. (2000), "Getting Better at Sensemaking", Journal of Business & Industrial Marketing, Vol. 15 No. 7, pp. 525-529. https://doi.org/10.1108/jbim.2000.15.7.525.1

This is one of those collection books consisting of 16 authors, almost exclusively academics, looking into ways to make today’s executive more effective in accomplishing what needs to be done. The target audience for this effort is the practicing executive. The good news with books of this type is that a reader can digest 30‐40 pages and have an entire concept under control since that volume represents the entire contribution of that author or authors. The bad news is that continuity of thinking is not necessarily a given since the contributions were prepared independent of any author’s awareness as to other works that would be included with theirs. That said, it is worth stating that the editor has done an excellent job in linking the various articles and providing a framework for the reader to then select specific works of interest for assimilation. According to the editor, the 16 contributions fill the mind with knowledge, skills, and insights useful for improving the executive’s ability to do what needs to be done in order to achieve success. The collection includes approaches to assist with the following challenges facing today’s executive:

1. 1.

   (1) Assist with the process of scanning the environment to find the weak signals on breakthrough technologies; shifts in customers’ attitudes and behaviors; changes in behaviors of suppliers, governments, and other stakeholder groups.

2. 2.

   (2) Frame problems/opportunities better by deepening our understanding on how we go about making sense of what is happening and how we can make things happen.

3. 3.

   (3) Making better decisions by gaining a deeper knowledge on how decisions are actually made and how they can be improved by systems thinking and simulating system operations to uncover powerful levers previously unrecognized.

4. 4.

   (4) Being more effective by applying new tools to learn what is really happening when planned strategies are converted into realized strategies.

The editor is another voice pointing out that the biggest obstacle in the way of personally improving the executive’s scanning, framing, deciding and doing abilities is overconfidence (or, being more blunt, arrogance) in believing what we know that isn’t true, for any executive that believes that the characteristic of overconfidence does not apply to them becomes a prime suspect for being particularly afflicted with that problem. The scientific evidence is overwhelming that both experts and novices are overconfident not only in their abilities to make decisions, but also in their beliefs that they know how and why others think and act as they do. Westrum refers to this overconfidence problem as “the fallacy of centrality”. The fallacy includes the following thinking process: because I don’t know about this event, it must not be going on. He states:

This fallacy is all the more damaging in that it not only discourages curiosity on the part of the person making it but also frequently creates in him or her an antagonistic stance toward the events in question.

What do we know that is and isn’t so about business marketing strategy is the focus of the contributions in this latest volume in the series edited by Woodside. Improving your ability to scan environments, frame questions, use helpful rules in making decisions, mapping what is happening, and simulating what could happen in playing “what if” scenarios are the main the main benefits to be gained from reading these contributions. Two obvious propositions are cornerstones of this volume: quality of personal and group thinking has profound influences on performance in strategic business units and quality of thinking can be improved from study and doing practice exercises. Implicit in these two propositions is the assumption that wide variance exists in the quality of thinking and resulting “mental models” of executives within the same SBU and between competing SBUs. Mental models are our views of reality. Usually we do not think consciously about, nor do we question the validity of, our mental models. They are retrieved and followed automatically – they are implicit to our business existence.

From this discussion, it follows that our mental models are too simple and that they need to be made explicit and tested under differing conditions. Senge advocates systems thinking to overcome the biases of oversimplifying, thinking in straight lines of causes and effects, thinking without feedback loops and delayed outcomes. Systems thinking includes several steps:

1. 1.

   (1) Making our mental models explicit in the form of causal maps.

2. 2.

   (2) Seeing the complexity necessary to see what is ignored by our implicit mental models.

3. 3.

   (3) Building simulation models with many more variables than we now see as well as delayed effects and feedback loops.

4. 4.

   (4) Playing “what if” exercises, mentally changing one variable and projecting possible changes in the dependent variable.

Similar to the previous 15 volumes in this series, this volume’s contributions are compiled in alphabetical order of the author’s names, therefore the reader should scan the table of contents to determine the order of reading based on interest and need. The first paper, “Building competence‐based business processes within industrial networks”, by Alajoutsijärvi and Tikkanen, builds on core propositions offered in the previous paragraphs. They focus on increases in quality of thinking includes identifying your SBU’s core competencies and doing systems thinking about industrial network relationships. The authors provide a very insightful review of the literature on how networks of industrial firms work.

Andersson addresses the issue of how do SBUs and networks of firms change their existing structure to create new relationships, while simultaneously living within the stability of the old structure in the second article, “Studying industrial marketing change processes”. Andersson constructs a theoretical model of how industrial networks work and continually evolve. Reading the first two papers together serves to gain knowledge of the literature on industrial marketing networks.

In the third paper, “Managing the market research and client firm relationship”, Brennan addresses formal scanning and using information by SBUs. How to do it better is Brennan’s focus as he addresses the need to adopt a long‐term relationship approach to scanning relationships – a scanning approach used by only a few SBUs.

In the fourth paper, “Qualitative methods in business studies”, Damgaard, Freytag, and Darmer provide a primer on qualitative methods in business studies. According to the editor, if you are serious about increasing your skills in scanning environments (customers, competitors, suppliers, alternative technologies), read this paper. The paper includes a useful review of the literature on the case study method applied to business marketing research.

Relationships between SBUs always include communicating and negotiating as covered in, “Negotiating international industrial projects”, by Ghauri. He provides nitty‐gritty details in two case studies on real‐life negotiations between Swedish firms and firms in India and Nigeria. His contribution is particularly useful reading because of the long time frames covered. The paper describes the critical nature of revisions in the mental models of the participants in the negotiations.

In the sixth paper, Horwitch Grupp, Miatal, Dopelt and Sobel provide a detailed case study on linking scanning, framing, and deciding on how to embrace new technologies. The case study in, “Global integration of marketing and R&D”, is the use of IBM technology, “WebbCutter”, for building visual maps for Internet sites. How to go about integrating the thinking and behaviors among marketing and R&D executives is the issue.

In the seventh contribution, “Using case studies for theory testing in business‐to‐business research”, Johnston, Leach, and Liu describe theory development and empirical testing in case study research. The authors focus on making explicit our mental models in business marketing within interorganizational contexts. For the reader wanting an in‐depth introduction to the literature on case study research applied to business marketing, this is it.

Customers’ beliefs about the value of the product received may be more important to measure than customer satisfaction and intentions to buy after purchase. Jozée Lapierre provides a useful and nitty‐gritty approach to measuring customer perceptions of delivered value in “Developing measures to assess customer perceived value”. The author describes 13 value drivers related to customer requirements and high customer satisfaction.

In the ninth contribution, Levy and Yoon create and apply a three‐stage mental frame for market‐entry decision. In “Assessing country risk for international market‐entry decisions”, the authors introduce rule‐based nondiscrete empirical methods that include fuzzy logic to evaluate country risk for market‐entry decisions. Without applying such formal assessing procedures, we may be doomed to repeating the extremely high‐risk international market‐entries that often occurred in the 1990s.

Liang and Stump in, “Meta‐thinking about overseas vendor search and evaluation”, ask how should we go about thinking about creating decision rules in searching and evaluating international vendors. The authors make explicit the implicit decision rules used by importers. This contribution provides an excellent introduction to the tendency to favor automatic thinking in making decisions and the low quality decisions resulting from this tendency. The authors also provide detailed suggestions that are helpful in overcoming this bias in favor of doing it without thinking hard about it.

Business‐to‐business bartering often is the dominant transaction paradigm in international marketing. The next paper, “Deepening knowledge about bartering behavior”, by Liesch and Birch, explains how bartering is done. Firms in developing countries usually do not have convertible currency available for monetary transactions. These same firms can achieve high profit goals from transactions in some countries only via bartering. The authors focus on bartering in Australia that offers insights to both developing as well as industrialized nations.

In the twelfth contribution, Mandják describes the recovery process in “Business‐to‐business buying processes in recovering nations”. The author provides an inductive based model that describes seven decision styles to business‐to‐business buying. He demonstrates a useful empirical method for sub typing buying processes.

How politics affects vendor selection in business‐to‐business purchases is documented in, “Business buying and marketing as politics”, by Moller. The author provides diagnostic tools useful for marketers in scanning customer firms for political nuances in buying decisions. This paper is all about deepening understanding about what is really happening inside customer firms and learning appropriate marketing responses to political moves of buying participants.

If you read the previous contribution in association with this contribution, “Portfolio analysis of supplier‐customer relationships”, it becomes an extension to product portfolio theory to increase understanding of supplier‐customer relationships. Salle, Cova, and Pardo advocate that the basic unit of analysis in business marketing is the state/quality of the relationship with the marketer and each customer firm.

Ingredient branding is a powerful strategy that has not received much attention prior to this work by Theile and Burr. “Intel inside” is a particularly well‐known example of ingredient branding of a supplier’s product that is a trademarked component part to a customer’s product. The authors describe the advantages and strategies for implementing ingredient branding.

The final contribution, “Integrating qualitative and quantitative research approaches”, by Wuhrer and Werani, demonstrates how to integrate these two research forms for evaluating the performance of marketing programs and for scanning environments. They provide a detailed case history of applying a dual data collection strategy.

The bottom line is that this collection of works is comprehensive in nature and offers empirical insights into improved problem framing for today’s executive. The articles are definitely international in flavor, with the vast majority of the writings being written by scholars from all over the world about firms and situations from an equally diverse base of influence. This is not to be considered an easy read, with each work taking on the telltale characteristics of academic research, yet comprehension and adoption of these findings will enhance the skill level of executives and support their effort to become more effective in the competitive global business community.