Making Sense of Innovation in an Uncertain World

In 2026, as AI reshapes management and volatility defines markets, innovation demands more than data or disruption – it’s about perceiving possibilities and acting on them amid chaos. Four concepts – sensemaking, predictive processing, affordances, and emergence – offer managers a practical framework to navigate this reality.

Perception Shapes Reality

Sensemaking, pioneered by the late Karl Weick, reminds us that reality isn’t just observed; it’s enacted through ongoing interpretation. Managers don’t analyze like detached scientists – they weave order from ambiguity using experiences, emotions, and context. This contrasts with the rationalist bias in business schools and explains why rigid planning often fails in dynamic environments.

Cognitive psychologist Gary Klein has shown how experienced practitioners make decisions under time pressure, uncertainty, unclear goals, high stakes, poorly defined procedures, dynamic conditions, etc. Under these circumstances they do not use the mainstream Rational Choice Model. Instead, they use what Klein calls the Naturalistic or Recognition-primed Decision Model. It’s about recognizing patterns derived from long and varied experiences to create expectancies, trigger sensitivity to cues, and suggest plausible goals and possible actions. The focus is on the way they assess the situation and judge it familiar, not on comparing options.

Fast Evaluations

Courses of action can be quickly evaluated by imagining how they will be carried out, not by formal analysis. Decision makers usually look for the first workable option they can find, not the best option. Since the first option they consider is usually workable, they do not have to generate a large set of options to be sure they get a good one. They generate and evaluate options, one at a time, and do not bother comparing advantages and disadvantages of alternatives. By imagining the option being carried out, they can spot weaknesses thereby making the option stronger. While conventional models select the best, without seeing how it can be improved., the emphasis is on being poised to act rather than being paralyzed until all evaluations have been completed.

Brains and Bodies Predict Ahead

This recognition-primed approach aligns with how our brains and bodies cope with the world. Neuroscientist Andy Clark’s predictive processing suggests that we constantly forecast outcomes, blending top-down models with bottom-up feedback to minimize surprise. In the realm of necessity (where AI excels with precise answers), we refine predictions. But in the domain of contingency – where judgment rules – we act to bend reality. This demands embodied experience that LLM AIs lack. From this activity action possibilities emerge

Action and Perception are tightly coupled

A good example of how action and perception are connected is from baseball. Outfielders in professional baseball (or cricket) catch most fly balls successfully. From the perspective of a physicist, it is ‘as-if’ they can calculate the velocity of the ball off the bat, predict its trajectory and run to the spot where it will land. We know they don’t actually do this. Instead, they use a gaze heuristic, maintaining a constant angle of gaze between their eyes and the ball. If the ball rises in their field of view, they run away from it, if it’s dropping, they run toward it. The constant process of adjustment, weaving together error detection through perception and error reduction through action allows them to be at the right place by the time the ball becomes catchable. That’s what innovative organizations do: they put themselves in the right place at the right time.

Seizing Action Opportunities

Ecologist J.J. Gibson’s affordances frame environments as landscapes of possibilities tailored to our goals. Innovation thrives on spotting these “adjacent possibles”—opportunities for bricolage or improvisation. Leaders who expand choices, rather than narrowing them, turn constraints into breakthroughs, much like startups pivoting amid scarcity.

When I ran a North American steel distribution company (traditionally regarded as a price-taking commodity business), I occasionally got up at 4:30 a.m. to ride in delivery trucks making their morning rounds with customers. It soon became apparent that the customers’ yards in the early morning were places and occasions when threats and opportunities became most visible. It was clear that our drivers were a valuable resource. From their unique vantage points, they could see how busy our customers were, what kinds of materials they were buying and from who. We could get early warning of strikes and slowdowns and by cultivating relations with yard bosses our drivers could get our trucks in and out faster. The solution was to treat the drivers, not as hired hands, but as the valuable sources of information that they were and engage them in the company conversation. Weekly lunchtime debriefs and the occasional distribution of football tickets via the drivers made all the difference. Affordances – action possibilities – emerge continually from processes like these.

Orchestrating Emergence

Emergence can’t be commanded, only fostered. New ventures start in passion and trust, scaling through repeatable models into power structures that risk stifling creativity. Discerning managers dwell in an “adaptive space”: oscillating in a yin-yang dynamic between abstraction and action, necessity and contingency, to avoid competency traps and sustain vitality.

For Drucker Forum leaders, this means redesigning organizations as porous ecosystems—decentralized, experimental, and purpose-driven. Ditch top-down control for facilitated emergence: empower frontline sensemaking, hunt affordances daily, and measure success by adaptive capacity, not just outputs. Consultants, Neel Doshi and Lindsay McGregor describe a yin-yang tension between tactical performance and adaptive performance. Tactical performance, assessed by conventional metrics, is often overused, suppressing initiative and curiosity, especially when performance reviews are tied to compensation. Adaptive performance is all about how well people respond when plans break down. It’s about experimentation and their ability to improvise under pressure. It’s about learning goals in a culture that encourages exploration and develops peripheral vision and resilience. It turns out that tech companies can learn from hotels and florists, financial service companies from barber shops and tattoo parlours.

In 2026’s unpredictable terrain, innovative managers don’t predict the future—they can shape it, moment by moment.

Snakes and Ladders: Making Ecological Sense of Liberal Democracy

A Multi-dimensional Game of Snakes and Ladders

There is a contradiction at the heart of liberal democracy: while democracy requires social equality, the engine of capitalism creates both wealth and inequality. While direct democracy – the purest form – thrives only in small-scale, face-to-face communities, the interaction of capitalism and technology systematically produces large-scale enterprises and institutions, where people are separated in space and time. Coordination now takes rules and hierarchy, which, together with the accumulation of wealth, leads to the emergence of elites. Over time the interests of these elites will turn to rent-seeking and value extraction at the expense of value creation. Many will strive to retain power by blocking all efforts at its redistribution.

Add to this behavior of the elites the ‘creative destruction’ of technological change and the result is that the relationship between democracy and capitalism changes constantly as technology both creates and destroys, value creation morphs into value extraction and elites accumulate wealth and power. Social inequality grows. The constant dilemma for proponents of liberal democracy is how to harness the productive power of capitalism, while ensuring that its benefits are spread widely enough to maintain a sense of political participation and shared citizenship.  It’s a bit like trying to design and manage a multi-dimensional game of snakes and ladders.

Addressing this tension, between democratic responsiveness and institutional stability, was the primary concern of the framers of the U.S. Constitution. They knew, as modern Americans are rediscovering, that when this effort succeeds the result is a resilient society and a robust middle class with a shared narrative of who they are. When the process fails the middle-class fragments and societies become unstable. Oligopolies flourish and elites become entrenched, while many members of the erstwhile middle-class join the ‘invisible class’, losing their stories and their identities: for them the game seems to become all snakes and no ladders.  They will then turn to populist politicians and anyone else who promises to restore their lost narratives.

To continue reading this article go to Medium: Snakes and Ladders

Making Sense of Management: Theory and Practice

Plato and Aristotle in detail from Raphael’s School of Athens (1511). Plato points upward toward universal truths and his Theory of Forms, while his student Aristotle indicates that true reality lies lower in the particulars of practice and experience

What’s the relationship between management theory and management practice? Today I published a 3,000-word essay on the topic on Medium. Here’s a brief introduction:

The relationship between theory and practice has vexed management academics and practitioners alike for decades. Traditionally the Anglo-American approach has been to address it as a knowledge transfer problem. This approach was helped by making no distinction between the natural and human sciences. The assumption was that reality was ‘out there’ to be studied objectively and that the goal of knowledge, via the scientific method, was to learn more and more about its true nature. This perspective assigns a superior position to formal-technical ‘scientific’ knowledge and sees practical knowledge as an inferior derivative of it. This was a triumph for Plato’s views over those of Aristotle. Plato had contended that the knowledge of forms or universals was sufficient to understand reality. Aristotle, on the other hand, had argued that, while knowledge of forms was necessary, it was not sufficient: one also needed experience with particulars. He said that this explained why experienced practitioners with little theoretical knowledge often performed better than those who knew a lot of theory but had little experience.

Ever since the Enlightenment Plato’s ideas have dominated Anglo-American management thought but in recent years Aristotle’s views have been making a comeback. Management theory and management practice are increasingly seen as different types of knowledge, with different philosophical assumptions about reality and how we apprehend it. Theory and practice may appear to be in opposition and even as substitutes for each other, but their relationship is best seen as complementary. This complementary relationship becomes clear if one takes a sensemaking perspective which is where my Medium article begins….

Restoring Humanity to Management: the Power of Context

My blog on this topic has just been published on the Drucker Forum here.

My biggest beef with mainstream Anglo-American management (‘Cartesian’ management, as I call it) is that it ignores context. It treats management as an amoral, technical practice, modelled on the natural sciences and often based on what John Dewey called the spectator theory of knowledge. This myth, that we are passive observers who can view the world objectively, lies at the root of our impoverished models of what it means to be human.

Cartesian management sanctions the stripping of apparently successful methodologies from the human contexts that made them successful and presenting them as abstract, context-free ‘principles’ that can be ‘applied’ by anybody in any situation. This disregards the importance of initial conditions and path-dependent nature of whatever happens in practice and perpetuates an illusion of rationality, predictability and control. Many academics and consultants like this approach, but it is anathema to effective managers.

Effective managers know that abstract principles cannot be applied to humans in the same way that they are in the natural sciences. If people are treated as objects – assets and resources – they respond badly. The best management frameworks are those that help managers make sense of the contexts that they are in. The frames direct their attentions and guide their conversations in their search for affordances, the action possibilities afforded by the particular situations in which they find themselves.

It is the ability of managers (a practical wisdom developed through experience) to find these affordances that makes or breaks their efforts. Context matters! This may be why many managers prefer to read history, biography and even fiction to management books. The former offer quasi-experiences that illustrate how other humans discovered action possibilities in the situations in which they found themselves.

Management academics and consultants persist with the Cartesian approach for at least two major reasons. Apart from allowing them to wrap themselves in the mantle of ‘science’, ignoring context broadens the markets and industries that they can address – one size fits all! The second advantage is that the Cartesian approach leaves the current power structure of the organization (and society) unchallenged. This allows a servants-of-power approach, especially in the business schools: “In other words, they say given your ends, whatever they may be, the study of administration will help you to achieve them. We offer you tools. Into the foundations of your choices we shall not inquire, for that would make us moralists rather than scientists.” Philip Selznick Leadership in Administration P 80.

Once again, this is anathema to effective managers trying to enable significant organizational change. They know that power structures that perpetuate the status quo and allow only incremental efficiency innovations are barriers to more radical experimentation. This does not imply a need for wholesale revolution, only continual renewal, as power is spread more widely and moves around the organization. This allows people to exercise responsibility and take action in the areas where they are best suited to do so.

Management cannot be treated as an amoral technical practice that deals only with means and leaves ends unaddressed. Rather, it is also a human inquiry, a moral practice that questions chosen ends and their good for both business and society. People are ends-in-themselves.

The Scientific and the Humanistic Modes of Inquiry

The core of the blog is the diagram, which captures some of my intellectual journey over the last forty years, as I tried to make sense of a major organizational transformation experience:

The contrast between the scientific and humanistic modes of inquiry has many precedents. Among my inspirations were the writings of psychologist Jerome Bruner, psychiatrist/philosopher Iain McGilchrist and many dual process theorists of cognition and emotion. Underpinning it all is the taijitu, the yin-yang symbol of complementary yet opposing forces that form a self-perpetuating cycle of the kinds found in complex ecosystems like forests and estuaries.

The “Cartesian Search for Truth” and the “Goethean Quest for Meaning” titles were inspired by the long debate on multiple topics between Anglo-American and Continental philosophers, particularly on the contrast between naturwissenschaft (natural sciences) and geisteswissenschaft (human sciences) (e.g. Dilthey).

The left column is effectively a summary of the current mainstream Anglo-American management canon. The right column is a ‘both…and’ addition to the left. Together they outline my conception of the next management canon. It is not a movement from one canon to a new one but a dynamic synthesis of the old and the new, the conservative and the radical. The dynamic has been described as a dance, but the ‘both…and’ nature of the humanistic perspective, means that it must always embrace and contain the ‘either/or’ scientific view.

In short, the Next Management Canon regards organizations as constantly emerging processes fashioned by humans: creatures of nature, with bodies and intentions, situated in time and space, culture and society, searching for identity and meaning and struggling for credibility and authority.

Life is the ultimate context.

Toggling Between Two Worlds: Making Sense of Organizational Change (abridged)

“And twofold always. May God us keep

From single vision and Newton’s sleep.”

William Blake

This is a summary of a longer article I have just posted on Medium to mark forty years since the publication of my first (and only) article in the Harvard Business Review. That article, Of Boxes, Bubbles and Effective Management, outlined the transformational experience our corporation had been through after it had been acquired in a wildly overleveraged buyout on the eve of a steep recession. We had gone insolvent almost overnight, but owed the bank so much money that it was their problem, not just ours.

I told the detailed story of what had happened, how we had muddled through, dealing with our challenges and what the implications of our eventual survival and success were for management. I approached this task by balancing a then-popular ‘hard’ management model with a ‘soft’ counterpart. This allowed a Taoist ‘yin-yang’ interpretation of our experience. For to me it seemed as if we had switched from a hard, ‘yang’ structure to a softer ‘yin’ process, although not in any unilateral, unconditional way. It had been like a figure-ground reversal with crisis as the catalyst. It was as if the conventional organizational hierarchy had been turned upside down:

The Taoist yin-yang symbol suggests that the ‘yang’ component never went away. Rather, it was held in abeyance for use only in situations that demanded it[1]. Whether you would need it or not all depended on the context.

My opening proposition in the article was, “Two models are better than one.” The bottom line after another four decades of experience, reading and research since then is that I don’t think that we can make much headway in management (or politics and the social sciences for that matter) unless we find a way to reconcile science with the humanities in a new synthesis. In the longer article I suggest that an ecological sensemaking framework shows the way ahead.

Why We Need Two Models

In The Witch Doctors: Making Sense of the Management Gurus (1996)[2] John Micklethwait (former editor-in-chief of The Economist, now of Bloomberg News) and Adrian Wooldridge (Former Schumpeter columnist for The Economist, now Bagehot columnist) identified four defects in management theory:

1. That it was constitutionally incapable of self-criticism.
2. Its terminology confuses rather than educates.
3. It rarely rises above common sense.
4. It is faddish and bedeviled by contradictions.

After declaring management theory “guilty” on all charges in various degrees, they went on to identify the root cause of the problem as an “intellectual confusion at the heart of management theory; it has become not so much a coherent discipline as a battleground between two radically opposed philosophies. Management theorists usually belong to one of two rival schools. Each of which is inspired by a different philosophy of nature; and management practice has oscillated wildly between these two positions.” They went on to identify the two schools as scientific management on the one hand and humanistic management on the other, concluding that, “This, in essence, is the debate between “hard” and “soft” management.”

We Are the Battleground

It’s time to identify this “intellectual confusion” as a feature of both humans and organizations, not a ‘bug’. It’s time to recognize that our fundamentally divided nature is the essence of our humanity and that it is the practical weaving together of apparently irreconcilable opposites that is the very warp and woof of our existence. The roots of this split are in the need for living creatures to be able, in real time, both to focus on a task at hand and to remain aware of peripheral threats, to live simultaneously in two ‘worlds’[i]. These two tasks must be performed together, yet they demand different kinds of attention and different contexts (the one individual and the other collective). The result is an asymmetrical split-brain architecture that goes a long way down the tree of phylogeny. This suggests that it must have significant survival benefits.

This split, this fundamental duality, spirals through our existence as individuals, families, communities, organizations and societies and throughout our history as a species. It has grown in complexity as our languages, cultures and institutions have grown more complex. Like the twin arms of a double helix it also coils through philosophy in general and the history of management thought in particular. Here the dualities are familiar: exploitation and exploration, calculation and judgement, individual and team, performance and learning, detachment and immersion, mechanical and organic and so on and on.

That’s why we need two models in a Taoist yin-yang relationship to understand organizational change and make sense of our experience.

Reconciliation in Ecology

There will always be a tension between the scientific and the humanistic, but there need not be a battle. We can render the tension creative rather than destructive if we can frame it in a higher-level understanding of the dynamics of life in a real world.

This will mean challenging the assumptions of mainstream Anglo-American management about the nature of reality and what is means to be human. These aren’t ‘wrong’ but have been pushed too far and taken into areas where they don’t belong. They claim to be universal when everything is dependent on context. They appeal to our systemizing mind, while ignoring the empathizing one.[ii] The mainstream doesn’t care. This is where a dual-process theory of cognition and emotion helps with its both…and approach, rather than either/or. It can embrace and contain the mainstream and keep it in its proper place.

This is how we can connect management practice, which is always singular and unique, with theory, which describes the world in terms of rules, generalizations and universals. It is how to approach the debate between ‘relevance’ and ‘rigour’ that has plagued the management academics for so long.  It is to handle paradoxes and dilemmas like these that evolution has equipped us with bicameral minds, minds that can focus while still retaining peripheral awareness and ‘toggle’ rapidly between the two modes of perception. In management we can think of it is as instrumental search for truth (to earn a living) conducted within the quest for purpose (to live our lives).

Forty years ago I called the two worlds ‘boxes’ and ‘bubbles’. My recommendation to managers then was that “You have to find the bubble in the box and put the box in the bubble”. That is still good advice.

The table, “A Dual-Process, Ecological View of Management”, expands on this idea by showing some of the key management polarities in a different format: an individual, instrumental search for explanation (right side) conducted within a collective, existential quest for purpose (left side). The central barrier between the left and righthand columns is permeable with infinity loop/adaptive cycle connectors to emphasize the nature of the ‘dancing’ ecological balance between the two that plays out in space and time. At the organizational level the challenge for managers is to toggle between the two modes as the situation demands, keeping the enterprise in the adaptive space, the ‘Goldilocks Zone’, between the extremes.

The journey continues….

[1] People at Gore & Associates call this ‘hierarchy-on-demand’, when the formal hierarchy, instead of being permanent, becomes contingent on the situation.

[2] The Witch Doctors was updated by Adrian Wooldridge in Masters of Management (2011). The major conclusions were unchanged.

[i] McGilchrist, I., (2009), The Master and his Emissary: The Divided Brain and the Making of the Western World, Yale University Press, New Haven, CT.

[ii] Baron-Cohen, S., (2009), “Autism: The Empathizing-Systemizing (E-S) Theory” The Year in Cognitive Science, Ann. N.Y. Acad. Sci. 1156: 68-80.