Strategy in the context of uncertainty

This paper challenges the assumption of discoverable order inherent in most approaches to strategy. A false dichotomy between order and chaos is removed by the introduction of a third system type, namely a complex system. It is argued that different types of systems require different ways of knowing and acting, and a set of rules for decision making. Organizational structure is identified for each domain or system type. Understanding boundary movements between domains allows us to gain new insight into a variety of subjects such as crisis management and innovation. The use of complexity thinking to provide theoretical rooting for the common‐sense actions of strategists is then summarized. For some years the Cynefin Centre has been engaged in an emergent, action research program around strategic and operational decision making. Originating in knowledge management, the applications have now extended to various application areas including organizational change, market intelligence, innovation and strategy. The subjects (and funding) have come principally from the defense and pharmaceutical sectors, but more recently we have seen the involvement of finance, manufacturing and health; indicating a wider acceptance of the ideas and concepts involved. The work has been fundamentally influenced by a variety of sources, but principally complexity theory, narrative and recent thinking about the nature of human decision theory. This paper describes the basic assumptions behind the research, the Cynefin Sense Making framework that has emerged and the implications for strategy in organizations.