Returns management with its numerous factors of influence is complicated. Solution models help to understand the complexity and to adequately manage it. The concept of these models is essential in this regard in order to select the suitable solution approach in the respective context.
Based upon the Cynefin framework from David Snowden, https://hbr.org/2007/11/a-leaders-framework-for-decision-making
Simple contexts are characterized by clear cause-effect relationships which are easy to recognize.
Example: Work areas which are rarely subject to changes, e.g. problems during order processing and order fulfilment.
Action Patterns: sense, categorize, respond
Best practice for the respective application case as the suitable solution model.
The obvious relationship between cause and effect generally permits only a sensible approach.
All participants typically have a common understanding of the situation.
The guidelines are uncomplicated.
Decisions can be easily delegated.
Functions can be automated.
Problems can be incorrectly categorized because the approach has been simplified too much.
Managers who demand greatly-condensed information even when confronted with complex situations run the risk of incorrectly categorizing the problem.
Limited thought patterns, which people have acquired as the result of their experiences, training and successes, can make them blind to new mind-sets and approaches.
The simplicity of the solution can devolve into carelessness so that any change in the context is noticed too late and the reaction to it is also too late.
Complicated Contexts or Systems likewise have cause-effect relationships, but they are not so obvious. Special knowledge and analyses are required in order to recognize the correlations. Generally, several diverse paths exist for the mastery of tasks in complicated systems.
Example: The integration of a new transport management system for the management of carriers with the existing ERP system.
Action Patterns: sense, analyze, respond
Complex contexts and/or systems are the domain of the respective specialists.
Because multiple paths exist, one speaks of good practices instead of best practices. These are the solution approaches customarily utilized by experts.
Non-experts can show a lack of understanding for the path indicated by the expert.
Opportunities for innovative approaches can thus be missed.
A lack of consensus among the experts during the analysis can block the implementation of a solution.
To make decisions in a complicated context can take a lot of time. Often, there has to be a compromise between finding the “right” answer and making the suitable decision.
Complex Contexts or Systems do not show any obvious relationships between cause(s) and effect(s). This can be attributable owing to the fact that an analysis would take too long or because the correlations are ambiguous or can change dynamically. Many themes in company contexts are situated in this domain.
Example: The development of a new market – regardless of whether it encompasses the development and marketing of a new product or the expansion with new target groups.
Action Patterns: probe, sense, respond
Understanding oftentimes only then sets in with the benefit of hindsight.
The approach is characterized by a reaction to what has happened.
Testing new approaches with an open-mindedness to the results and new paths is an effective method.
The approach can be adjusted as necessary.
The risk exists of falling back into rigid command and control management styles which require business plans with defined results in advance.
Impatience can be generated if results aren’t immediately obtained.
It can be difficult to tolerate failures which are an essential aspect of the experimental approach.
In chaotic contexts, no cause-effect relationships exist anymore. This typically applies to emergencies and catastrophes.
Example: A spontaneous strike by the long-distance truck drivers which paralyzes the logistics and sections of the supply chains.
Action Patterns: act, sense, respond
Fast action in order to create order is the highest premise.
Stabilization of the system / the situation is the top priority.
Observing what happens and reacting to it with the goal of transforming the chaos into complexity.
The mastery of chaos is a good foundation for the introduction of innovations.
The transformation into a complex situation can be achieved only if the change to the suitable approaches is successful – the path from crisis management to testing and step-by-step implementation.