Cynefin 101 – Portfolio Management

| Posted by Greg Brougham Follow 0 Followers on Dec 26, 2014. Estimated reading time: 19 minutes |

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One of the core ideas of Cynefin is the use of safe-to-fail experiments to determine how you want to evolve the system. This needs to be done within the context of the direction that you want to develop, which is the subject of the third paper. As Seneca the Younger said “If one does not know to which port one is sailing, no wind is favourable”. This approach supports the use of the scientific method (ref Popper) to determine what works and has value.

Since another of Cynefin key tenets is that you need to explore multi-hypotheses there will be a number of experiments and the portfolio could be considered to be the control forms. The term portfolio is well understood and used in organisations and they typically have processes for organising and managing them. There are different templates for the complicated and complex domains as they these needs to be treated differently as one is the domain of good practice and the other the domain of emergent practice.

There is also an alternative view that these small experiments should be seen as pre-qualification of the portfolio options and should be used to ensure that there is a balance to the portfolio. This has a number of advantages; the first being that it ensures that initiatives are validated before there is any large commitment or expenditure. It also supports clarification of what constitutes success and also allows for multiple ideas to be explored where traditionally this could not be accommodated. Additionally it allows for the development of a balanced portfolio that can delivery some business value and one that is not just focused on hygiene driven change such as system maintenance, upgrades, regulatory or legislative change.

Cynefin also includes a practice for rigorous review of the proposals before being presented to the senior management (here the term is used to refer to managers with budget approval). This ensures that the ideas are well development and the success criteria are well understood.

This is a lightly facilitated process which means that the process is outlined and then the participant are left to effectively get on with it, fostering shared learning. The idea of multiple small parallel safe-to-fail experiments is intended to maximise organisational learning. The main thing is that the facilitator must ensure is that they leave the people to learn by doing and only providing as little guidance as possible so the views expressed are those of the people and the outcomes are not biased by the facilitator. As noted in the conclusion once a number of people have exposure to these practices they can be used without any external facilitation which means that they can be used on an on-going basis by any organisation.


First of all we need to draw a differentiation between ideas and options. Ideas are what Martin, in Playing to Win refers to as possibilities and he stresses the need to explore all the possibilities to establish the options. In Cynefin we talk of hypotheses which are basically ideas and the exploration of these as long there is messy coherence, that is someone can make a coherent argument for a particular hypothesis. We are not trying to establish if a hypothesis is right or wrong, only that there is a degree of coherency that supports running an experiment. The implications are that we remove the need for there to be a formal justification for an idea as we are looking to validate them as part of establishing the options.

The key to the validation process is that application of the scientific method as advocated by Popper. What he said was:

“We never argue from facts to theories, unless by way of refutation or ‘falsification’. This view of science may be described as selective, as Darwinian. By contrast, theories of method which assert that we proceed by induction, or which stress verification (rather than falsification) … are typically Lamarckian*: they stress instruction by the environment rather than selection by the environment.”

What we are looking to do is maximise learning and invalidate an idea, not substantiate an idea. In this way what we are doing is in fact similar to what Lean Startup does but unlike it we are looking at multiple ideas to accelerate learning. If you are struggling for ideas then a future backwards or contextualisation exercise may be worth running but typically most organisation have a list of ideas or problems that they would benefit from addressing.

You will recall from the first paper that systems that are complex are dispositional in nature, that is they are disposed to move, or evolve in a certain direction, but causality is not determinable therefore the only way we can manage this type of system is by probing, sensing and responding. That is we run a series of experiments to see if we can move the system in a direction that is desirable or beneficial to us.

In the complicated domain, in comparison we manage by sensing, analysing and responding. Here we are looking or someone or a group of people who could determine what would is desirable based on sensing and analysing the environment. The sensing may be based on existing data or we may need to undertake an experiment to collect the data to support analysis.

For each of the ideas we are looking at outlining an experiment that will invalidate the proposal as quickly and as cheaply as possible. As the management approach to the two domains are different then there are two templates reflecting the originating domain. Note that there are no templates for the obvious domain as it just a case of getting on and doing it (conventional project management approaches can be used) and in the case of the chaotic domain action is needed (the action is novel in nature). Since the complex domain is non-linear we also need to consider what would be an appropriate dampening behaviour as stopping the experiment may not be sufficient. There is also the domain of disorder which provides a place holder for items that we are yet to determine where they belong.

In summary this is how you approach the initiatives in each of the domains once they are identified:

Obvious – just do it as you’ve seen it before and it should be obvious that what needs to be done (this is after all the criteria of it being classified as obvious). It should just be a case of what resources are needed and do you have them.

Complicated – you need to involve a group of experts or knowable individuals to undertake the analysis. Remember to engage some ‘related’ experts so that principle of requisite diversity is honoured and naïve views are brought to bear to avoid group think.

Complex – what are the viable, that is coherent hypotheses and therefore what are the experiments that we are proposing to undertake. Remember this is the domain of messy coherence and therefore we can’t predict the outcome so what we need to do is to undertake a series of experiments to see if we can move in a desired direction (this being where you want to move or at least start to progress towards).

Chaotic – not encountered very often in terms of planning as this is normally a dynamic state that doesn’t exist for very long. What we want to do is something with a view of moving the problem into the complex or complicated domain so that we can start to get a hand on it. Remember you approach this domain based on act-sense-respond, so someone just needs to propose an action and then go from there.

We then need to rigorously review these safe-to-fail experiments to ensure that the ideas are fully development before presentation to the senior management for sponsorship and funding. As noted in the introduction really any idea for which there is a coherent argument should be explored as the ideas are not necessarily mutually exclusive and there may be value to gained from progressing more than one. This can be thought of as establishing the options as an option is something that provides a choice.

The Cynefin practice of ritualised dissent is used here to review and validate the initiatives and this is something that most organisations are not good at. It is all too common, due to the siloed structure of most organisations, for an initiative to be proposed from an individual or small group of people without wide review and support. This technique ensures that a wide review is undertaken and therefore when it presented it is more likely to be complete and supported.

The idea behind the practice are similar to UCL’s Vincent Walsh idea of ‘trashing’. Again the idea is that a proposal is reviewed in a rigorous manner to ensure that it fully formed. This practice ensures an objective review of the idea and removes the subjectively.

It should also be noted that this leads to more centralised control than is typically within most organisation. Some people will not see this as desirable but it has the benefit of breaking down barriers both horizontally and vertically within an organisation.

Complicated Portfolio Templates

This is the domain of experts so the focus is on establishing who needs to be engaged but with a twist. To improve information scanning we want to ensure requisite diversity through engaging some people who are not familiar with the domain. This brings a degree of naivety and ensures that different views are brought to bear (before execution and not as an afterthought!) so also consider other groups that may have value in addition to the traditional groups that exist. These can be acknowledged experts from other areas of the organisation that would typically not be engaged or they could be external agents. What they should not be are other people in the function/department as there may be a conflict of interest and you are not increased diversity. They do not need to have to have any knowledge of the area but should be knowable in the area that they work. It is worth noting that Franklin D Roosevelt dragged people from one meeting to another if they were bright and he believed that they would provide an interesting point of view [Decisive].

The complicated portfolio form is composed of 4 sections – the three boxes on the left that describe the initiative, the top two boxes on the right which cover the approach that will be taken, the middle two boxes on the rights cover the resourcing and the bottom two boxes cover expected completion date and formally review (sign off).

Name – this should be something that describes the initiative in a distinct manner and is similar to what is done in the use of A3 Reports.

Summary – needs to detail the problem or opportunity that has been found. This needs to be written as complete sentences that are standalone. Remember you are trying to establish the problem and not the solution here.

Evidence – this is a sense check to indicate why we think that this problem is resolvable. If you can’t answer this it may be that you are operating in the complex domain and you may need to take a different approach. This should also not be tautological in nature such as “the sky is blue because it is blue” and may need some thought.

Research approach – since this is the domain of the experts how are they expected to undertake the necessary analysis to determine causality? It may be necessary to talk to some people with related knowledge to establish what the approach could be.

Research justification – in addition to outlining the approach we need to provide justification for this to ensure that we are being realistic. For what reason do we believe that the approach is valid?

Experts required – remember what we want some diversity in the people engaged so we need to not only consider which experts we would typically involve but also who else could provide a naïve or interesting view. They can be experts in associated fields to ensure that group think does not become dominant.

Experts justification – this is the reasons why we think the people we have suggested are appropriate and should be involved.

Anticipated date – this is the date by which the proposal will be completed. You may want to think about the prerequisites and the associated lead time when determining this. Note it doesn’t say expected or planned as this is intended to be indicative as this is a portfolio and not a project document. When you get into the detailed planning then this may need to be revised.

Reviewer details – who will review the outcomes and approve the subsequent steps. This may be the management team or head of department who will approve the funding for implementation of the initiative.

Complex Portfolio Template

This is the domain of multi-hypothesis so we would expect there to be more than one of these by the nature of the domain. Remember if an idea appears at face value to be coherent then it may have value and should be evaluated. The idea is not to determine what should be done but what ‘probes’ (experiments) would help clarify the situation.

The structure is similar to the complicated portfolio template with four sets of boxes – the three on the left define the initiative, the top two on the right the signs of success, the middle two signs of failure and the bottom two list additional attributes that should to be considered. Note that there is no date on the form but you should have a view of how long the experiment will take.

These sections are:

Name – again this should be something that accurately describes what is proposed

Action – this is a description of the ‘probe’ or the experiment that is being proposed.

Why is it Coherent – this is the justification of why we think this makes sense. We are not trying to say that it right but just explaining why we think it makes sense. If you can’t then you don’t really have a basis for the proposal.

Signs of success – these are the things that we would consider indicative of success. It may be expressed as some impact that we believe we would see, such as less defection of clients.

Amplification actions – what are the actions that you would take if you started to see signs of success and want to increase the benefits?

Signs of failure – these are potential signs that the probe is not successful and this may not just be the opposite of the signs of success.

Dampening action – how would we dampen the action if we detect a failure. Remember as this is complex domain stopping the experiment may not be enough and there may be actions that we need to undertake to achieve this.

Obliqueness - have we considered the obliqueness of the probe and how have we exploited it?

Naivety – if naivety is being embraced how is it being levered.

These last two are just to remind you that these aspects should be considered. Note the actions are necessary but should be seen as an adjunct to the act of portfolio management itself. Portfolio management is about determining what experiments you are willing to fund while the actions are related to the management of the items themselves.

Portfolio Initiatives Review

What is one of the most useful simple practices is that of ritualised dissent which is used to review and refine the proposals. If you do want to use this practice to review proposals you can do it as part of a workshop or establish a review body with members drawn from each of the teams or functions to ensure diversity.

It is quite amazing the quality of ideas that can come out of such a session and also the buy in that is garnered. It can be quite often be some of the more difficult people, who are always questioning proposals that can provide some very useful comments. It also means that these people are engaged and therefore will not be standing on the side line throwing rocks at a later stage which fosters what Ackoff referred to agreement in practice and not just agreement in principle. If you have the opportunity what you can ask people is what would need to be true to support the hypothesis. This moves them away from thinking of barriers and allows you to start looking at what would be needed to invalidate an idea as these are just of the opposites of what would need to be true. This also brings focus to the discussions.

In this practice one person from each of the teams, or the person who is making the proposal, will present it to an alternative team, or a panel of reviewers. If the review is be undertaken by a panel of reviews then you need to ensure that a wide range of interests are represented. You may want to consider one person from each of the different functions and rotating the membership on a regular basis.

The practice is based on one person presenting the initiative to other teams or a panel. They are given a short period of time to outline the initiative (this only needs to be a few minutes) and while the initiative is being outlined no other person is allowed to speak. They can take notes of points that they would like to address but they must allow the person to speak without interruption. Once the person has completed outlining the initiative then they disengage with the group. The disengagement can be by donning a mask, if available, so their is face is not visible or by turning their chair around so that their back is facing the group. This idea is not to involve personality in the review to ensure that focus is on the idea that is being presented and the person doesn’t feel that they are being personally criticised.

The group is now allowed express their views of the idea, particularly what is wrong with it and they should not hold back as this is about ensuring that all aspects are covered – there are no guidelines here but you could consider the value of the idea itself, the clarity of details, the value proposition, has dampening been considered etc. Again, this is not a debating forum so one person should speak at a time until all their concerns have been voiced. People may find that comments made by others raise more concerns which in turn should be voiced. During this time the presenter is taking notes of the points raised for consideration in revision of the initiative. What you are trying to ensure is that the idea/initiative is reviewed objectively and not at the personal level.

When the group has finished expressing their concerns the presenter takes the ideas back to the original group or goes away to revise the proposal to address the points that have been made. If done in a workshop setting a series of cycles can be done to refine the initiatives that have been documented.

This simple practice ensures that the expertise and knowledge of the organisation is leveraged to ensure that any initiative is well formed and has been objectively reviewed before it is presented to management for sponsorship. This ensures that ideas are well formed but it is not the function of the reviewers to reject proposals, which is the prerogative of management. It is quite interesting when you see this done how quickly an idea can be substantiated and formed. As noted above it is similar to the idea of ‘trashing’ that Vincent Walsh of UCL advocates.

Portfolio Management

The outcome of the above is likely to be a series of initiatives that are well formed and that should be considered for implementation. It’s down to management to approve and fund these but it unlikely that all of them can be supported due to resource and cost constraints. Therefore before the workshops, or before presentation of idea some thought should be given to the decision criteria for funding.

There may be a series of strategic themes to address business priorities and to also ensure that the initiatives are balanced and not biased towards one particular area. You also want to ensure that if there you are dealing with complex issues that there are multiple initiatives. In the complicated domain it may be more straight forward as there is likely to be only single initiatives within a theme but there may be multiple competing ideas from different teams or areas of the business and these should be explored. These are only considerations that need to be considered as part of each organisations approach to exploiting Cynefin.

Closing Comments

The practices are simple in nature but allow you to start to embrace complexity and not avoid it. Once you had the experience of running one of these types of engagements it is something that can be run by anyone. This means that once an organisation has experience they can use them internally for other initiatives without external facilitation. This is one of the strengths of Cynefin in that the practices are simple and easy to exploit once you the basic knowledge of the techniques and you don’t need a deep understanding of the underlying theory of complex systems.

Note: these practices are the registered property of Cognitive Edge and are covered by the following user agreement - If you register as a member of the Cognitive Edge Network they can be used for personal use, or within an organisation but if they are used commercially you need a ‘rights to use licence’ which is obtain by becoming a premium membership of the network – see


  • Cynefin - A Leaders Guide to Decision Making, Harvard Business Review, 2007
  • Playing to Win: How Strategy Really Works, A.G. Lafley and Roger L. Martin, 2013
  • Neuroscience of Creativity, an interview with Prof Vincent Walsh of UCL,
  • Decisive: How to Make Better Choices in Life and Work, Chip Heath and Dan Heath, 2013
  • Cynefin 101 - An Introduction
  • Ackoff,

About the Author

Greg Brougham is an experienced systems and technical architect specialising in card and payments system. He has worked on the renewal of the main UK domestic clearing and settlement system and also a similar system for one of the major card companies. It was while working on the later in the mid 0’s that he thought that there must be more effective means of delivery than the prevailing approaches that were preoccupied with utilisation. This led to a review of the prevailing management literature and an interest in Theory of Constraints, Systems Thinking, Toyota and more recently complexity (in particular Cynefin) and the cognitive sciences.

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Complex Space by Anthony Green

I take issue with the notion of an idealised end state implicit in the phrase "to see if we can move in a desired direction", I much prefer the concepts embodied by Cognitive Edge's Fitness Landscapes where c o-evolutionary experiments in the Complex Space modify the narrative terrain of the Fitness Landscape in beneficial and meaningful ways.

Re: Complex Space by Anthony Green

Dave has published a paper on the advantages of sense-making in managing CAS

Re: Complex Space by Greg Brougham

Anthony, direction doesn't imply an idealised end state but only that we can quantify the success of an experiment use to validate a hypothesis. This supports a co-evolutionary approach as we want to run a number of these. If the domain is truely complex then there should be competed hypotheses that form the basis of these experiments.



Re: Complex Space by Greg Brougham

Anthony, thanks for the link. I sent Dave some notes on the article a few weeks ago. One of the things I'm not sure about is the use of 'dispositional states'. I believe that the system is dispositional in nature but not sure that term applies to the current state.


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