State of Effectuation 2016

The Arctic Circle was a hotspot for Effectuation this week. The 4th Effectuation Conference was held in BodØ, Norway, June 6 & 7, 2016. Participants included academics and practitioners of Effectuation from all over the world.

Future Research Questions

Dr. Sarasvathy, the “founder” of Effectuation, was there to offer her insights on where the field is going and what she will be focused on for the coming year. A core area of interest for her is understanding what is at the “core” of Effectuation. The current hypothesis is that the Ask is the foundation for effectual competence.

Insights Ignited is partnering with Dr. Sarasvathy to research how Asking varies between novices and expert entrepreneurs and what we can learn from these entrepreneurs to facilitate entrepreneurial expertise in others. We have collaborated with her on data collection and are now in the analysis phase. Check back for more information. We’ll be writing about this in future blogs.

Assets to Action Model

Sara Whiffen, of Insights Ignited, presented our Assets to Action Model for applying Effectuation. It is a simple, tactile way to walk through the effectual process with teams, and a great way to figure out how to respond to a “VUCA” environment – volatile, uncertain, complex, and ambiguous. The outcomes are specific next steps the team can take as well as a tracking tool to monitor progress.

Participants called the Assets to Action Model a “business model canvas for Effectuation” and expressed a desire to apply it with their teams for both venture creation and as a general problem solving methodology to manage uncertainty. They commented favorably on how it engaged the team in broader discussions, ensured goal convergence, and by driving to concrete action steps, took some of the risk out of innovation.

Large Organizations Seeking Effectuation

We also heard from other Effectuation practitioners who are working with Procter & Gamble, BMW, Boehringer Ingleheim, and even the Catholic Church to solve problems using effectual thinking. It’s amazing to see how this method is taking off with organizations around the world. As things become more complex and uncertain, and traditional predictive tools don’t work as well as they used to, organizations are turning to Effectuation to manage their uncertainty.

Effectuation Increases Employee Contributions

Sara Whiffen was also featured on a panel discussing the opportunities and challenges for Effectuation. One of the questions asked was about the “cash value” of Effectuation. The discussion centered on not just venture creation, but broader societal value. Insights Ignited firmly believes that Effectuation increases the ability to control outcomes in an uncertain world by loosening control over individuals. Instead of requiring others to co-opt an existing vision, Effectuation requires that the vision be shaped by others willing to commit to participating in bringing it into the world.

This idea of loosening control to gain greater control is something that the researchers are exploring in more detail. On a societal level, it heightens the dignity of workers by restoring creative freedom and individual contributions even within highly structured company environments. We are working with companies to help them achieve this while at the same time address corporate shareholder and governance needs. The result: more innovative outcomes, stronger working teams, greater problem solving creativity and ownership, and the accompanying financial metrics to support this.

Public Policy Benefits

Applying Effectuation to public policy was also a topic of discussion. Our view is that focusing Effectuation training on a narrow segment of the population limits its effectiveness.  Effectuation is by its nature an exercise among multiple parties. It is not something to be done in isolation. Therefore, training should be open to anyone who is interested. This creates more potential partners as a wider array of people are comfortable interacting in this way, multiplying the cumulative impact.

This was of particular interest to policy makers looking at how immigration is impacting their community and how they can maximize in tandem the opportunities for both newcomers as well as existing members of the community.

For this same reason we encourage companies not to limit Effectuation training to their new product development or innovation teams. While it is possible for these teams to effectively apply Effectuation, the impact is much more powerful when dispersed throughout the organization. We have great examples of how innovation has arrived in some unexpected ways through broader Effectuation exposure.

These were just some of the highlights of 36 hours of Effectuation discussions and non-stop sunlight in the Arctic Circle. Keep checking in. We’ll be writing about these and other specific examples in the weeks to come. And if you have any questions or topics you’d like us to expand on, comment here and let us know.  

--Written by Sara Whiffen, Founder & Managing Partner, Insights Ignited LLC