#Reflection 2: From Observation to Understanding

Why it helps to know the difference before you take action

We started our journey from observation to action and growth in #REFLECTION 1 by looking at the need for unbiased observations as the basis for our thinking and learning. Particularly the difficulty of looking at well-known things, problems and people every now and then with renewed curiosity was discussed from a practical perspective.
In this seven-minute-read we look at the transfor-mation of data into learning and understanding. Only when we understand what our observations and our data really mean for us, we should go on to taking action. This is particularly important in times of crisis, transformation, or irritation because we may find ourselves forced to act fast on the basis of very little data. Acting quickly should not be equat-ed to activism. If we base our decisions on the understanding of existing data and a rough calcula-tion of their consequences, we will not run out of resources before we see the positive results we urgently need.

Stories we heard from colleagues

Jorge sits in the library and reads for his exam on his specialisation as a lawyer. Before he started, he made a plan detailing what material he wanted to have covered by when. By the end of his conscientious preparation time, he is convinced that he knows all the laws on the one hand and all the related court decisions on the other hand. On the day of the exam, he turns over the questionnaire, reads through the test cases and realises he has not given enough attention to how to apply his theoretical knowledge to new legal problems he has never heard of. Despite his intensive preparation, he barely passes the exam.
Maria was hired to organize the knowledge manage-ment in her company. Her task is to support her colleagues with documenting their implicit and explicit knowledge in a way that allows all members of the organization to profit from the ensuing catego-risation. She started her job with great enthusiasm and quickly won the esteem of the management and her colleagues. Now, after five years on the job, her enthusiasm has given way to the sobriety of what she can achieve. She now talks about information man-agement and no longer about knowledge manage-ment. Knowledge, she finds, is a very personal thing. For many colleagues sharing their information and knowledge is too time-consuming and prevents them from doing their work. For some, sharing their knowledge seems to be a threat to their expert status. As a consequence, she concentrates on the technical tools for information management and particularly the information retrieval processes for all her col-leagues.
Manuel is the legal advisor of a publishing house in Madrid. His client has outlets in Germany and France which they opened up two years ago on the initiative of a big customer. Now this customer cuts down his international activities and wants to close the offices outside Spain. Manuel is responsible for all the legal work of this project. He travels to the subsidiaries and quickly notices that there is a serious language and mentality problem to start with. There is no real common understanding of how executives should communicate with each other and find acceptable solutions for problems they share. In a similar vein, he was unaware of the substantial differences between the three countries’ labour laws. It is obvious he needs assistance from local specialists and that, as a conse-quence, the whole project may last longer and cost more than the company can save over the next two years by closing down the subsidiaries. He wonders whether it might be cheaper to keep the outlets and win new customers. Manuel faces a complex problem – one that has multiple variables and not one correct and simple solution. He has never thought of how difficult it can be to explain the complexity and interdependence of the options to his client. Manuel decides to get himself a coach.

Why do we learn?

Learning is a fundamental capability of our brain. It is the process of storing information and transforming it into knowledge, so that we can quickly retrieve and apply it when we need to solve problems and make decisions.
Like good leadership, knowledge reduces ambiguity in the environment of those who own and practice it. This is one of the reasons why a lot of people value competent leaders and knowledge so much.
Learning allows us to adapt to new challenges. If our existing knowledge is enough to solve a problem, our brain does not learn anything new. Consequently, crisis and change are natural opportunities for learn-ing – all depends on our attitude towards them.
We learn primarily for the selfish reason of our own wellbeing. There are areas in the world where learning is still a matter of survival. At the same time, we are social beings and learn for the sake of the social group we belong to – our skill contributes to the strength of our social system and at the same time secures our position within it’s hierarchy. This is one of the reasons why knowledge management projects like that of Maria so often fail. Most members of an organization put their own career before the ad-vancement of their department or company.

What is understanding?

Learning is not enough for solving problems and making decisions. It is “understanding” that counts. Understanding normally happens in moments when we recognise the relationship between different bits of information for the first time. One such relationship is cause and effect. Our brain is constantly looking for explanations for why things are as they are. We do not like loose ends.
Consequently, “to understand something” means that we construct our own explanatory models for the world around us. We apply them to new questions and situations. Understanding enables us to scrutinize existing structures and leads to new ideas. Before we make decisions, our brain automatically tries to calculate the consequences.
We all feel a deep-rooted desire to be competent. Competence gives us the feeling that we run the show. Competence comes with and from the learning and understanding which we apply to problems we have to solve – either for ourselves or for others.

Understanding and solving complex problems

Complex problems are a special type of challenge. In complex situations, there is no clear relationship between cause and effect. Many organisations pay their managers higher salaries because they expect them to perform better in situations with complex problems than the average employee. The problem is we can recognize that competence of executives only if we run into such a situation.
Manuel is confronted with such a situation. He cannot transfer any learning from previous projects to this challenge. Neither can the management of his client. A classical situation in which you hire external experts. Alternatively, the executives and Manuel form a real team and start learning and understanding together through trial and error. That is, according to the conviction of a lot of experts, a sensible strategy for dissolving complex situations which are new to us.

From understanding to decisions

Another conclusion of Manuel and his client’s execu-tives could be the realization that it is not the com-plexity of the problem but the lack of data that prevents them from understanding the puzzle and making clear decisions. It takes courage to own up and agree on a suboptimal preparation or to resist premature decision making. It should be a compe-tence of executives to know how much data is need-ed for a good decision and when too many are confusing.
In other situations, executive teams have enough data, understand the problem, would theoretically know what good decisions are like, but nobody pushes to a solution. That may be because the indi-vidual decision makers are afraid of the price they might have to pay for their decisions – responsibility and its consequences. That is either a problem of bad managers or the atmosphere in the company. There is no quick solution to that. And so, this too, is the hour of external consultants. Bad consultants will just do their job and bring about the decisions which are obvious and which the executives did not dare to make. Good consultants will go to the real problem and help executives solve such a problem on their own. They give them the opportunity to learn.
By far the most frequent situation is that executive teams collected enough data, made the necessary plans but cannot execute them due to the lack of resources. Typically, the digital transformation of processes or products is that type of problem. There is not enough internal know-how within the team for staffing such projects. Thus, projects are postponed and finally disappear from the agenda. The data and learnings that led to the decisions grow old and lose their value.
This is when external market irritations hit particularly hard. Those who survive the ensuing crisis will tell everybody who asks that curious observation, learn-ing and understanding laid the groundwork of their survival.