Businesses, according to an IBM global study of 1500 CEOs, are facing a rapid escalation of complexity. Capitalizing on complexity and customer intimacy to create innovative ways of delivering value are business’ significant challenges. The study further revealed that “enterprises today are not equipped to cope effectively with this complexity in the global environment.” To help address this problem, we advocate drawing insights from anthropological thinking. Increasingly, traditional business practices are proving not fully adequate to identify, interpret and robustly understand implications of emerging developments. This is due to our tendency, whether we are trying to make sense of consumer markets, design products or lead a corporate culture, to often try to understand problems we face based on what we already know, instead of seeking that which we truly do not. The value-add of drawing insights from anthropological thinking is found in its ability to help uncover unknown unknowns that exist and explain the “why.” To more effectively address the most pressing business problems and make better strategic decisions, we need to build sensemaking capacity to “make the strange familiar and the familiar strange” while developing empathy to understand humans and giving them a voice. This paper provides examples of successful corporate breakthroughs aided by insights drawn from anthropological thinking. It highlights how theories and methods of anthropology, particularly ethnography and phenomenology, can be applied to help develop a rich understanding of complex business situations. The paper also provides some suggestions for incorporating anthropological thinking towards building our sensemaking capacity. Lead Author: Dr. Uldarico Rex Dumdum, Marywood University Co-author: Matt Artz, Azimuth Labs

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SENSEMAKING
BUILDING
Drawing Insights from Anthropological
Thinking
CAPACITY:
Presented by Dr. Uldarico Rex Dumdum & Matt Artz

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MARYWOOD UNIV
Dr. Uldarico Rex Dumdum
M.E., M.S., M.B.A., Ph.D
Dr. Uldarico REX Dumdum is an Associate Professor of Information Systems and Leadership in the
School of Business and Global Innovation at Marywood University.
His research interests include problem formulation in ill-structured complex situations, sensemaking,
requirements engineering, contextual intelligence, innovation, convergence of technology, strategy and
leadership, leadership development, and leadership in face-to-face and virtual settings.

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AZIMUTH LABS
Matt Artz
M.B.A., M.S.
Matt Artz is the founder and principal researcher at Azimuth Labs, an ethnographic research company
offering product development, organizational culture, and corporate strategy consulting. Using
ethnography, he helps organizations unlock hidden insights with users, employees, data, markets, and
products.
Matt has led research, design, and agile product management efforts to ship and scale web and mobile
products in the enterprise and consumer space. He has experience working in energy, biotechnology,
healthcare, financial services, telecommunications, entertainment, fashion, broadcasting, and nonprofit.

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“The new environment is one of perpetual white water.”
Roland Smith, Center for Creative Leadership
Institute for the Future (Future Work Skills 2020)
TOP SKILL IDENTIFIED WAS SENSEMAKING
“Today’s leaders need the ability to make sense of complex
environments.”
Deborah Ancona, Director of the MIT Leadership Center
MIT Sloan School of Management
IMPORTANT PREDICTOR OF LEADERSHIP SUCCESS
MotivationWhy this Study is Important

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“Such situations can be characterized by volatility, uncertainty,
complexity, ambiguity, confusion and feelings of disorientation.”
Maitlis & Sonenshein, 2010
VITAL IN A VUCA WORLD WE LIVE IN
“(Sensemaking) isn’t just for innovation anymore,
it informs strategy and long-range planning.”
Ken Anderson
Intel Corporation, 2009
CENTRAL TO UNDERSTANDING CUSTOMERS & THE BUSINESS
MotivationWhy this Study is Important

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“To understand what makes your customers
tick, you have to observe them in their natural
habitats.”
— Christian Madsbjerg & Mikkel B. Rasmussen
ReD Associates, 2014

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The future cannot be
predicted with any
precision.
UNCERTAIN
Challenges are complicated
by many factors & there are
few single causes or
solutions.
COMPLEX
Change happens rapidly
and on a large scale.
VOLATILE
There is little clarity on
what events mean &
what effect they may
have.
AMBIGUOUS
What is VUCA?The Army’s Lens of Complex Environments

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Capitalizing on ComplexityIBM Global Study of Over 1500 CEOs
- The rapid escalation of complexity of their environments.
- Majority of CEOs say their organizations are not equipped to
cope with this complexity.
CEO'S NUMBER ONE CONCERN
- How to capitalize on complexity.
CEO’S KEY CHALLENGE
- Customer Intimacy.
CEO’S NUMBER ONE PRIORITY
01
03
02

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Many CEOs shared the view that incremental changes
are no longer sufficient in a world that is operating in
fundamentally and substantially different ways.
INCREMENTAL CHANGES ARE NO LONGER SUFFICIENT
A Black Hole Between Data and Knowledge – This
happens when information does not tell us what we
want to know or need to know
LACK OF DEEP UNDERSTANDING
Today’s complexity, volatility, and uncertainty is only
expected to rise, and more than half of CEOs doubt
their ability to manage it.
VUCA ON THE RISE
Escalation of complexity caught us Ill-Prepared and
Anxious along with feelings of disorientation and
confusion
FEELING UNEASY ABOUT THE FUTURE
79% of CEOs anticipate even greater complexity
ahead.
DRASTICALLY INCREASING COMPLEXITY
An ever-widening gap between what we understand
and what we think we should understand.
INCREASING LEVELS OF DOUBT
Complexity AnxietyIBM Global Study of 1,541 CEOs & Other Leaders, Wurman

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We are inundated with facts but starved for facts
LACKING ANSWERS
The increasing inadequacy of our conventional
methods and tools for coping with complex
problematic situations.
NOT KEEPING PACE WITH THE CHANGES
A lag in the development of methods and tools to cope
with complex problematic situations
WE NEED NEW TOOLS FOR NEW PROBLEMS
Not only are we overwhelmed by the sheer amount of
information, most of us are also hampered by an
education that inadequately trains us to process it.
NOT EQUIPPED TO OPERATE IN THE NEW ENVIRONMENT
Complexity AnxietyIBM Global Study of 1,541 CEOs & Other Leaders, Wurman, Dumdum

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Complexity GapA Growing Business Problem
EVER-WIDENING COMPLEXITY GAP
COMPLEXITY
BUSINESS METHODS & TOOLS
TO DEAL WITH ESCALATION OF COMPLEXITY
TIME
COMPLEXITY
T1 T2 T3

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The Human ExperienceDrawing Insights from Anthropological Thinking
The process by which
insights are derived from
a richer understanding of
the customers.
Meaning-Making
The goal is to understand the complex, subtle, often unconscious way in
which people interact with their surroundings.
The Goal
The conceptual shift
required to see the
problem from the
customers' perspective.
Reframe
Begin to examine phenomena
from customers’ perspective
within their context.
Research
Using phenomenology
study how people
experience life.
Social Theory
SOC IA L
TH EORY
R ESEA R C H
R EFR A ME
MEA N IN G
MA K IN G
Leveraging
Anthropological
Thinking

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Reframing ExamplesBusiness Problems as a Phenomenon
BUSINESS PROBLEM AS A PHENOMENON
How can our Bank reduce churn?
How do our customers experience
banking?
Why are our customers leaving?
How can we create a premium
offering in coffee?
What is a good coffee experience?
What should be our go-to-market
approach for toys in China
What is the role of play in China?

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Level 1: KnownsWhen Best to Use Sensemaking
EXAMPLE
Sales are below target because of weather-related low volume in
stores. If we boost TV advertising & discount by Y, sales will
rebound.
CLEAR PATH TO FIX A KNOWN PROBLEM
USE CASE
04 Conventional data and analytics
can help you solve it.
DATA IS USEFUL
USE CASE
03 You know exactly what the
business problem is.
KNOWN PROBLEM
USE CASE
01 You have high degree of familiarity
with the customers and the
market.
KNOW THE CONTEXT USE CASE
02 You have a clear view of the
future.
HAVE FORESIGHT

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Using SensemakingWhen Best to Use Sensemaking

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Level 2: HypotheticalsWhen Best to Use Sensemaking
EXAMPLE
Our per-store sales are down even though we have invested in more
salespeople. There are possible explanations, and we can test them.
TESTABLE HYPOTHESES FOR A SOLUTION
USE CASE
04 You can frame a set of hypotheses
to test.
HAVE A HYPOTHESES
USE CASE
05 Familiar with the sources of data &
the analytical model for the
solution.
FAMILIAR WITH DATA
USE CASE
03 You have a feel for the problem &
have seen something like it before.
FAMILIAR PROBLEM
USE CASE
01 You are moderately familiar with
the customers and the market.
SOME CONTEXT
USE CASE
02 You can envision a range of
possible outcomes.
POSSIBLE SOLUTIONS

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Using SensemakingWhen Best to Use Sensemaking

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Level 3: Big UnknownsWhen Best to Use Sensemaking
EXAMPLE
Our innovation pipeline is full, but our launches are not creating
growth.
INNOVATION BUT NO GROWTH
USE CASE
04 You have no hypotheses to test.
NO HYPOTHESES
USE CASE
05 Usual sources of data & analytics
not helping to find a solution.
DATA NOT HELPING
USE CASE
03 You have not seen this type of
problem before..
NEW PROBLEM
USE CASE
01 You are highly unfamiliar with the
customers and the market.
UNFAMILIAR CONTEXT
USE CASE
02 You have little sense of likely
outcomes.
LACKING FORESIGHT

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Using SensemakingWhen Best to Use Sensemaking

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Using SensemakingWhen Best to Use Sensemaking

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Big unknowns, in contrast, are highly
unfamiliar business problems. The less
familiar you are with a given type of
problem, the market, and the customers,
the less relevant the conventional
research toolbox becomes and the more
relevant sensemaking become.
UNKNOWN
Sensemaking has particular value when
you want to understand unfamiliar social
or cultural contexts – new geographical
markets, for example, or new generations
of consumers – or when your
assumptions about your current
customers seem to be misguiding you.
SENSEMAKING
Many business problems are technically
complex, but managers fully understand
them, know what data they need to
address them, and have a well-defined
process for moving forward.
KNOWN
Diagnostic PrinciplesRelevancy & Applicability of Sensemaking

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Leverage SensemakingUsing Research in the Service of People
2
3
4
5
1
6 YOUR
GREAT
TITLE
LISTEN
REFRAME
STRATEGY
INSIGHTS
RESEARCH
MINING
Strategy
Use the insights to inform a
business strategy.
Insights
Synthesize the patterns to
generate actionable insights.
Reframe
Reframe the business problem
from the customer perspective.
Listen
Listen with empathy to the
business problem.
Mining
Mine the data for patterns that tell
a story.
Research
Conduct the research and collect
the data.

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- ASSUMPTION: Kids were too busy to engage with old-fashioned Lego bricks.
- ACTION: Leveraged the Brand and branched into action figures and video games and
new markets.
- RESULT: Customers lost their connection with the brand. Lego was bleeding cash.
- REFRAME: Understand the phenomenon of play: What do customers – young
builders and parents – really wanted from play with its products; children’s experience
when they play; How well Lego could serve that need?
- KEY INSIGHTS VITAL FOR TURNAROUND
- Exposed false assumption: children play to escape their overly orchestrated lives and
to hone a skill
- Strategic Decision: “We’re going to start making Legos for people who like Legos for
what Legos are.”
LEGO TurnaroundA Case Study in Sensemaking
2006 LEGO ON A DOWNWARD CYCLE & BLEEDING
CASH

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- BIG UNKNOWN: None of its sophisticated innovation was driving growth.
Product pipeline full; product launches not getting traction.
- KEY ASSUMPTIONS ABOUT CUSTOMERS AND NEEDS:
- Within 2 years of leaving hospital, ostomy care under control and living
essentially normal lives.
- Problem of leakage was largely solved. Product innovation should focus
on features of ostomy bag.
- REFRAME: From “How do we capture new sources of growth” to “What is
the experience of living with ostomy?”
- KEY INSIGHTS VITAL FOR TURNAROUND
- Leakage is formidable, life-altering challenge; people adapted lifestyle to
avoid risk of accidents.
- “Fit to Real Bodies” – Adhesives worked perfectly well on a perfectly fit
and uniform body. The problem was not the type of stoma a patient had, it
was the type of body the patient had.
Coloplast’s RevelationA Case Study in Sensemaking
2008 OSTOMY DIVISION STAGNATING IN SPITE OF HEAVY
INVESTMENT IN INNOVATION AND SALES

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- CONFUSING: Consumers found newly redesigned, higher horsepower,
modernized Ford Mustang less powerful than prior reincarnations.
- DESIGN ASSUMPTIONS:
- An aging target market will dilute the Brand’s equity
- Car performance is a matter of objective statistics
- REFRAME: What is the lived experience of owners and enthusiasts?
- INSIGHTS THAT SENT ENGINEERS BACK TO DRAWING BOARD:
- Car performance fundamentally a sensory, bodily experience.
- An iconic car fuels fantasies of youth, emotional high, irresponsible
pleasure and assertiveness much like the original mustang
- Embrace the Brand’s heritage and nostalgia rather than ‘modernize’ it.
Ford MustangA Case Study in Sensemaking
LATE 1990s NEWLY REDESIGNED FORD MUSTANG A DUD

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COULDN’T FGURE OUT WHY: Customers liked core product. Store sales up but bar
and pub sales down despite muscular market research, competitive analysis, and
aggressive promotions.
ASSUMPTIONS:
- Bar owners valued promotional material
- Servers as primary channel for sales
REFRAME: What was the waitstaff’s lived experience like?
FINDINGS INFORMING STRATEGY
- Bar Promotional material were at best underused, at worst treated with derision
- Female servers felt trapped in their jobs and resented having to be flirtatious.
- Female servers knew very little about BeerCo’s products and did not want to know
any more.
RESULTANT ACTION PLAN:
- Instead of one-size-fits-all promotional materials, customize items for different
types of bars and pubs.
- Created in-workplace academies to train waitstaff about its brands
- Provided taxi service for employees who worked late
European BeerCoA Case Study in Sensemaking
2006 EUROPEAN BEERCO FALLING BAR AND PUB SALES

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