Eidi Cruz-Valdivieso, Patrick Humphreys and Manuel Riveros Organizational Research Group,

1. Sense-making in Collaborative Decision Processes among Small and Medium Enterprises: Flow Model and Case Study Eidi Cruz-Valdivieso, Patrick Humphreys and Manuel Riveros Organizational Research Group, London School of Economics and Political Science. Presentation for IFIP WG8.3 workshop on Learning from Case Studies in Decision Making London, 2-3 April 2009

2. Theoretical Context • The study of organisations and, in particular, organisational collaborative decision making processes, has been moving away from the deterministic and unrealistic utopia of control. • Reality is a subjective terminology that responds to a rational understanding of what we are able to understand through our own relationship with the world, and within the world. • The process of Sense-making and the necessary constant adaptation and change is at the core of contemporary organisational decision-making • Management of objectives against events and outcomes needs to make way for a broader, flexible and fluid form of decision-making model.

3. Three SME Contexts: 1. Experience and insights acquired in the 25 SMEs (in France, Germany, Poland, Slovenia, Spain) who implemented the InCaS process, through two annual cycles. 2 A case study developed in one of these SMEs, an engineering company in Barcelona, Spain, called SIDASA: allowed a comprehensive analysis of the flow processes in collaborative decision making, • an ecological flow model of Intellectual Capital management. 3. Continuing implementation of this model in SMEs across Europe • insights for sense making in organizational decision-making processes.

4. Intellectual Capital in Organizations “A company's 'Intellectual Capital (IC) comprises all intangible assets that the company uses to develop, produce and sell its particular products and services, i.e. • the staff's qualification and motivation, • leadership and management structures, • organisational capacities and knowledge transfer • relations with the market, etc.” • www.incas-europe.org

5. However.. Intellectual Capital is a human product of knowledge (Human Capital) that needs to be shared at an individual, organisational and social levels (Relational Capital). • In order to provide effective decision support in the short term, and SME sustainability in the long term, this knowledge needs to flow through pathways to value that provide an infrastructure for multiple and simultaneous processes, at the meso-level of organisations (Structural Capital). Taking on board, this understanding of the complexity of intellectual capital flows, InCaS goes a step further: • A new means of organising and activating intellectual capital in support of SMEs’ innovative and sustainable development.

6. The InCaS approach in practice: Utilising intellectual capital is all about facilitating individuals to realise their capabilities and potentials. • In doing so, we need some means of engaging the owners of intellectual capital in as many ways as possible, through their own collective efforts and communication processes, and bring these into organisational decision making on a day-to-day basis.

7. The InCaS approach in practice: Traditional intellectual capital management approaches (Balanced Scorecard, Intangible Asset Monitor, etc.) do very well in measuring and leveraging different factors of intellectual capital on an individual basis. • They are, however, unable to be sufficiently incorporated into an enterprise’s development strategy because none of these approaches is able to run though the whole organisational decision making process.

8. The InCaS approach in practice: • Is designed to enable SMs to become aware and responsible for the whole InCaS process. • Makes the most of a firm’s interior resources, • Gradually expands its exploration of resources and market opportunities by enabling networking across the enterprise’s organisational boundaries. • Implemetation is designed to promote the collective development of an enterprise’s strategy, as well as the subsequent execution of that strategy • as a continuous process of making collaborative decisions

9. The InCaS implementation process(www.incas-europe.org)

10. Through Pathways to Value

11. Imagine a terrain

12. IC flowing through pathways to value

13. You can see this through the InCaS Case Study in SIDASA

14. What happened? • A flowing infrastructural model was implemented for IC management. This nurtured and enhanced the complexity and richness of the organization, by: • Creating possibilities that emerged through collaboration. • Co-creating a platform for innovation through a Sensemaking and Collaborative Decision Making process.

15. SIDASA co-creates their products with their clients and partners. Things continued changing when they: * Aligned possibilities: The actions needed were aligned with their IC (Human, Relational Structural). * Fostered trust among those involved, including their staff. * They created ownership through this inclusion. * Increased their motivation. These actions as well as a process of enhanced communication fertilized their terrain and opened possibilities for cross-fertilization with other SMEs.

18. The process of renewing their communication and experiencing participation evolved into: * The staff participating in strategic decision making for the company (alongside suppliers, partners and clients). * Decisions becoming actions. * Better products becoming better profit. * Old lessons becoming new fertilizers. * They began to systematize their know-how. • Sensemaking and a flexible and fluid form of Decision Making took place, these enhanced motivation.

19. These are the elements of a Thematic Analysis of this process:

20. When you view the Sidasa Case Study video at www.incas-europe.org,20What else do you see?

21. Discussion points: • The video shows how the pathways to value traversed as a result of unfolding collaborative decision making within the organization nurture the terrain to “grow” new possibilities and results • Within the context of Collaborative decision making in SMEs, both collaboration and competition take place, not only inside the SMEs, but also between them. • The Incas implementation in SIDASA encourages the use of a new IC process-oriented collaborative language as the basis for communication (both formal and informal) in this context .

22. Resolving the ‘co-petition dilemma’ This language, used to inform and describe flow processes within and between organizations, may be able to resolves the ‘co-petion dilemma’ in relations between SME’s (Pince and Humphreys, 2008) in favour of collaboration, and identify the inter-organizational reframed possibilities that this fosters. • Collaboration between SMEs then becomes possible, as a process of sense-making through flows of language and actions, and in that way expands the terrain of their sector

23. In conclusion: In the realm of organizational decision making: • Structure and control are re-considered and re-defined as infrastructure and monitoring processes supporting collaborative organizational decision making within a flowing ecological and sense-making system: • An ecological and evolutionary flowing model generates pathways of value that work towards expanding the terrain of possibilities and outcomes for creative collaborative decision-making. • This process generates a model for action and organizational improvement through an ongoing development of generative language, which doesn’t only interpret reality, but also manages transformational processes, founded in collaborative decision-making, and enhances the organisational abilities of productivity, collaboration and co-petition among SMEs.

24. References Cruz-Valdivieso, E. (2008), Intellectual Capital in a Spanish SME: Collaboration, Language and the Flowing Process. InCaS Project Research Report Csikszentmihalyi, M. (1990). Flow: The Psychology of Optimal Experience. New York: Harper and Row. Pince, A. and Humphreys, P. (2008). How efficient networking can support collaborative decision making in Enterprises. In P. Zarate, J-P Belaud, G. Camilleri and F. Ravat (Eds.) Collaborative decision making: Perspectives and Challenges. Amsterdam: IOS Press, 2008, pp. 187-198 Weick, K., Sutcliffe, K. and Obstefeld, (2005). Organizing and the process of Sensemaking. Organization Science. Vol. 16, No. 4. July-August, 2005, pp. 409-421. Yu, A. and Humphreys P., (2008). Intellectual Capital and Support for Collaborative Decision Making in Small and Medium Enterprises. Journal of Decision Systems, 2008, Vol. 17, pp. 41-61