Somebody recently asked me why I am so interested in linking the humanities to business. Why not concentrate more on societal impact through policy, non-profits, and community engagement? My answer? It is precisely because thinking about humanities and business together is so uncomfortable on both sides of the equation that I believe it needs more attention.
“Sensemaking” is a concept that has been widely used to study companies and other organizations from a cultural perspective. According to one source, it refers to “research that is interpretive, social constructionist, processual and phenomenological”. It is interpretation raised to the second power (so to speak), implying that when we make sense of our world, we in fact make our world.
Sensemaking is also a book by Christian Madsbjerg, co-founder of the Danish consulting firm ReD Associates, who has also been teaching something called the applied humanities at the New School in New York. The book falls into an area of interest that has been gaining traction for the past decade or so, namely business ethnography – also known as corporate ethnography, business anthropology, and innovation anthropology.
ReD Associates seems to be a bit of a celebrity what comes to the use of knowledge from the humanities in business contexts. They are reputed to be behind Lego’s comeback from the brink of oblivion – and bankruptcy – to one of the world’s largest toymakers. Their method? Watching children play.
In Sensemaking, Madsbjerg sheds light on the methodology behind the firm’s success. And what’s unique about it in our numerical era, is precisely its foundations in the humanities and the use of qualitative data. The book reads very much like a celebration of the humanities even if it is, to all intents and purposes, a business book. As Madsbjerg writes, “[w]e dismiss [the] cultural knowledge – cultivated through humanities thinking – at great risk to our future”.
In Madsbjerg’s use, “sensemaking” is a form of synthetic inquiry that seeks to tease out meaningful differences from data that is nonlinear and collected from various sources. Meaningful differences are those that matter – but what matters varies from place to place, from time to time, from people to people. This is self-evident to anyone trained in even a little bit of the humanities, but not necessarily so for anyone else – and in a business book it may be nothing short of revolutionary.
There are five basic principles to sensemaking that Madjsberg draws from the humanities and presents in opposition to the assumptions that underlie algorithmic analysis.
#1, Sensemaking has its focus on culture – not individuals. The humanities approach people as they are embedded in their social contexts and cultural realities. Knowledge in philosophy, history, literature, and anthropology (just to name a few) can help companies understand the worlds of their customers, their competitors, and their employees – and that of the company itself.
Marketing surveys may reveal how individuals think, but sensemaking seeks to decipher the shared cultural logic behind their thinking. In a globalizing, ever more complex and unpredictable world, this is the kind of knowledge that companies need to make forward-looking strategic decisions.
#2, Interpretation of social contexts and cultural realities demands thick data – not just thin data.
Companies do nowadays collect masses of data on their customers and crunch all kinds of numbers in terms of analysis. But however many correlations you draw from your numbers, they are of little use, says Madsbjerg, if you don’t have the tools to interpret what the correlations actually mean. And this is what sensemaking does, as do the humanities in general. They give you the tools to understand worlds that hold individual data points together. In Madsbjerg’s words:
“[W]e can’t have a meaningful insight into culture if we don’t embrace a rigorous and sustained engagement with it. When I use the words “rigorous” and “engagement,” I don’t mean market research numbers or data analytics. I mean a study of culture that involves the humanities: reading a culture’s seminal texts, understanding its languages, getting a firsthand feel for how its people live. Not ’76 percent of 21- to 35-year-olds living in urban areas in Brazil buy premium coffee.’ This kind of data tells us nothing about culture.”
Madsbjerg, Christian: Sensemaking (2017), p. 4
Literature, newspapers, photos, videos, and historical texts together with personal engagement with actual people may not reveal universal facts. What they do provide, however, are context specific truths. Besides objective knowledge, thick data lends itself to other kinds of knowledge – the subjective, the shared, even the sensory.
To continue with coffee, sole reliance on numbers eclipses information on the power of coffee to shape social relationships, raise cultural controversies, and form a chain of connections from its farmers in tropical climates to its consumers in coffee shops around the world. All of this is relevant information, for instance, for a chain of coffee shops planning to enter a new market.
#3. To tease out the myriad ways that coffee – or food in general – is woven into the fabric of our everyday lives, requires a form of analysis that is akin to observing the savannah – not the zoo. This third principle of sensemaking insists on reframing problems as phenomena. It entails an analysis capable of taking in real life as it unfolds in all its complexity. In practice, it means looking beyond the obvious – behind the scenes, so to speak.
Madsbjerg’s example is the phenomenon of cooking behind the seemingly mundane act of shopping for groceries. Shopping is a different experience if we are just trying to get food on the table in the middle of a busy working week, or if we are planning on a leisurely dinner with friends or family. Add to this middle-class scenario some variance in, let’s say, living conditions, family arrangements, and ethnic background, and it becomes clear that the decisions we make in the aisles of a grocery store are packed with meaningful differences and heavily informed by the contexts we are in – and that seeking to understand them makes for sound business sense.
#4. Framing and interpreting phenomena is work that is akin to creativity – not manufacturing which, to Madjsberg, means abductive reasoning and non-linear problem solving. In contrast to the tenets of design thinking (Madjsberg’s obvious pet peeve), this kind of problem solving takes time, knowledge, and expertise, and cannot be transcribed into a universal step-by-step procedure. Innovative ideas are those that have relevance in the context of people’s actual lives.
Understanding what’s relevant takes knowledge – including that of history, art, literature, philosophy, geography, and language – and serious engagement on-site, something that cannot be achieved in a mere afternoon workshop. The reward from such a messy, time-consuming, and – from a business perspective – expensive exercise, are ideas and solutions that stand out against competition because they are not constrained by a set hypothesis or too narrow a definition of the problem at hand.
The rewards of sensemaking to business are demonstrated throughout the book in the examples from (I believe) the ReD Associates’ portfolio. Reframing cars as a culturally specific phenomenon of driving inside the car opened new markets for a car manufacturer. A holistic understanding of aging allowed an insurance company to redirect their marketing efforts and help their customers cope with their anxieties in the proess. And an immersion into building sites’ cultural, social, economic, and environmental realities made a Danish architecture firm a global success.
#5. The non-linear problem solving of sensemaking needs the guidance of the north star – not the gps. This is to say that interpreting cultural and social complexity requires making use of all available data, whatever form it comes in. But it also requires cultivating a perspective to know what, exactly, we should pay attention to. Without such a perspective of meaningful differences, it is impossible to see the forest for the trees – with the risk that you end up cutting down trees for the sake of “optimization” until there is no forest left.
Madsbjerg’s approach is part of a growing interest in the use of humanities for business. In Finland, for example, already in 2011 anthropologist Minna Ruckenstein and her colleagues wrote a treatise on the use of anthropology to rethink value creation for business purposes. Their argument, much like Madsbjerg’s, is that economic value builds on the social and cultural dimensions of value. In the words of Ruckenstein and colleagues, “innovations are successful if they help users in their daily pursuits”.
While Christian Madsbjerg may be advertising his own company, in Sensemaking he is also making a convincing case for the use of the humanities in the business world. To what extent the humanities need to serve business purposes is a different discussion. What is clear, however, is that the humanities can serve – and make sense in – business.
Original photo by Andrew Martin via Pixabay