Chapter 1
When the Numbers Don't Add Up: Finding Humanity in a Data-Driven World
In a sleek boardroom high above Manhattan, a healthcare executive stares blankly at market research that cost millions but tells her nothing about why customers are leaving. In the Midwest, a Senate candidate with impeccable policy positions watches in bewilderment as voters connect emotionally with his less-qualified opponent. In California, a solar entrepreneur with superior technology loses clients to inferior competitors. What's happening? Christian Madsbjerg's "Sensemaking" offers a provocative diagnosis: we've become so obsessed with algorithms, big data, and STEM-based knowledge that we've lost our ability to understand human behavior. The book, which has become required reading at companies like Ford and Coca-Cola, argues that our technological fixation has blinded us to the cultural contexts that shape decision-making. As physicist Neil deGrasse Tyson observed, "In science, when human behavior enters the equation, things go nonlinear. That's why physics is easy and sociology is hard." Madsbjerg's solution? A return to humanities thinking-not as a luxury, but as an essential business practice for the 21st century.
Chapter 2
The Human Element in a World of Algorithms
Humanity has fallen from grace in our technological era. We've become defined by our flaws-our irrationality, inefficiency, and emotional baggage-compared to our sleek silicon counterparts. In engineering circles, "the human factor" simply means "capacity for error." We're told robots will soon take our jobs-not just factory workers but pharmacists, lawyers, and even caregivers.
The solution seems to be submission to algorithms, with "data scientist" becoming America's top job. Universities are decimating humanities departments while STEM fields flourish; Japan has even ordered universities to shut down social science and humanities departments that don't "serve society's needs." We're abandoning cultural knowledge in favor of big data, believing algorithms can read all books and provide objective analysis.
True genius, however, lies in evaluating uncertain, hazardous, and conflicting information. Consider Ford CEO Mark Fields, who faces the impossible challenge of processing information from 199,000 employees while making decisions affecting $150 billion in annual revenue. Traditionally, Ford succeeded by developing engineering innovations that appealed to American drivers who shared the company's middle-class values. But this model falters when entering markets like China, India, and Brazil, where cultural differences render Ford's technological innovations irrelevant or even detrimental. Lane Assist technology means nothing in Chinese cities without clearly marked lanes; driverless car development misses the mark in New Delhi, where having a driver signifies status.
When executives expand globally, they often say, "I've lost my intuition"-they can no longer rely on instinct alone to guide decisions about customers whose worlds differ fundamentally from their own. What's needed is sensemaking-the antithesis of algorithmic thinking-grounded in concrete reality while algorithms exist in an abstract realm stripped of specificity.
Chapter 3
Five Principles for Understanding Human Experience
Sensemaking stands as the antithesis of algorithmic thinking-it's grounded in concrete reality while algorithms exist in an abstract realm stripped of specificity. Algorithms process vast quantities of data, but only sensemaking provides depth. Rooted in Aristotle's concept of phronesis (practical wisdom), sensemaking represents not just knowledge of principles but an artful synthesis of knowledge and experience.
The five principles of sensemaking directly challenge prevailing algorithmic thinking:
First, culture over individuals. Nobel Prize winner Alice Munro observed that our seemingly private tendencies arrive "as spores on the prevailing wind." Despite our belief in individual autonomy, our notions of appropriateness come through social context. Philosopher Martin Heidegger revolutionized Western thought by arguing that unspoken assumptions-which he called "Being"-form the foundation of our reality. Unlike Descartes' "I think, therefore I am," Heidegger showed that social context determines how reality appears meaningful.
Second, thick data over thin data. While thin data tracks our actions through devices like Fitbits or browser cookies, thick data seeks to understand how we relate to the many worlds we inhabit. This includes our ability to sense moods in an office, feel collective emotions at events, or recognize when an organization isn't ready for change. Corporate executives often live surrounded by layers of abstraction, receiving sanitized reports rather than experiencing their customers' reality. Many shoe company executives never shop at retail stores; car executives haven't purchased vehicles in years. Their imaginations starve on a diet of desiccated facts stripped of organic life.
Third, the savannah over the zoo. To gather thick data, we must study humanity in its natural complexity rather than in artificial isolation. This approach, called phenomenology, observes behavior in social contexts rather than as abstract numbers. It's like watching lions hunt on the savannah versus seeing them fed in a zoo-technically the same activity, but vastly different in truth. True understanding requires engaging at eye level-doing what people do, seeing what they see, and recognizing the cultural ghosts that shape their world.
Fourth, creativity over manufacturing. After field research, how do we achieve insights? Philosopher Charles Sanders Peirce defined three reasoning methods: deduction (applying general laws to specific instances), induction (building theories from specific observations), and abduction (making educated guesses when no logical explanation exists). Only abductive reasoning generates truly new ideas through nonlinear problem solving. This creative process is messy and uncomfortable-we prefer certainty to doubt-but this discomfort is necessary for unexpected breakthroughs.
Fifth, the North Star over GPS. Despite claims that we live in an era of unprecedented complexity, our world is no more complex than previous generations experienced. Today's world feels overwhelming because we're obsessed with organizing it as an assembly of facts, believing big data can and should know everything. Rather than trying to know everything, we work to make sense of something meaningful. While algorithmic thinking offers the illusion of objectivity, sensemaking helps us determine where we are and where we're headed.
Chapter 4
Silicon Valley: A Mindset Beyond Geography
Mark Zuckerberg's 2013 declaration that Facebook was committed to "understanding the world" through collecting "billions of pieces of content" represents a new ideology that has spread far beyond California's tech hub. Silicon Valley has become a mindset that values hard sciences above all other forms of knowledge, a perspective that has permeated business, education, healthcare, media, and government.
This mindset reveals itself through several key assumptions. First, the obsession with "disruption" reveals a core belief in clean breaks between "before" and "after"-a scientific mindset that treats knowledge as temporary hypotheses to be replaced. This stands in stark contrast to humanities traditions that don't discard past experience as outdated. The Valley celebrates youth and inexperience precisely because they enable risk-taking unburdened by accumulated wisdom. As one analyst told The New Yorker, "If you're an engineer in Silicon Valley, you have no incentive to read The Economist."
Second, big data focuses on correlation rather than causation, offering information without explanations. The failure of Google Flu Trends demonstrates this limitation-despite initial success predicting outbreaks, it later missed the H1N1 pandemic and overestimated subsequent outbreaks by mistaking seasonal search terms for actual flu indicators. Despite such failures, Silicon Valley's data evangelists continue promoting Chris Anderson's "End of Theory" vision, where "massive amounts of data and applied mathematics replace every other tool."
Third, Silicon Valley pursues "frictionless" technology-systems that operate without requiring human thought or emotion. Google's Eric Schmidt revealed this mindset when stating people "don't want Google to answer their questions... they want Google to tell them what they should be doing next." This algorithmic curation creates what Eli Pariser calls "filter bubbles" that reinforce existing views rather than challenging them. The danger isn't what technology can do for us, but how it shapes our thinking, leading to a "post-truth era" where feeling affirmed matters more than seeking truth.
Chapter 5
Cultural Context: The Hidden Force Behind Success
Despite Silicon Valley's confidence in predicting human behavior through data, organizations often find themselves in a fog when navigating moments of great change. Many major corporations experience what Germans call "Scheue" (the moment a horse is stung by a wasp)-a paralysis amid overwhelming data that resembles how individuals respond to crises like climate change: anxious but unable to take meaningful action.
Consider Ford's Lincoln brand. Despite Lincoln's storied history-from Edsel Ford's 1938 "continental" vision to its 1960s heyday when celebrities from Elvis to Elizabeth Taylor owned Lincolns-the brand had fallen dramatically by the 2010s, holding just 5.5% of the luxury market with an average customer age of 65. To revitalize Lincoln, Ford partnered with Madsbjerg's team on an ethnographic study examining the driving experience across the US, China, India, and Russia.
The research revealed that Ford's engineering-driven culture focused on driving features, while luxury car owners barely drove their cars-vehicles sat unused 95% of the time, with much of the remaining time spent in traffic. The study uncovered that luxury meant different things to different drivers: private self-expression for a Moscow man blasting hip-hop, bonding experiences for a woman in Bombay enjoying nighttime drives with loved ones, or a mobile office for a Mumbai jeweler. These insights helped Ford understand that luxury experiences, not just engineering features, needed to drive design-a complete transformation in how they conceived the car.
Cultural context shapes not just purchasing decisions but even our most fundamental abilities. When poet Nicole Pollentier suffered a traumatic brain injury that severely damaged her working memory, she couldn't remember favorite poetry or song lyrics, describing the sensation as "trapped in nothing... a wide expanse of nothingness." Months later, while making tamales-a Christmas tradition for her-the combination of sensory experiences triggered something profound. She spontaneously began writing poetry again-her first poem since the injury three years earlier. This recovery through cultural context and embodied experience contradicts Silicon Valley's computational theory of mind, which would suggest her brain functions like a computer that could simply have memories "uploaded" back into it.
This example illustrates how we learn through immersion in worlds of meaning rather than computational processes. Philosopher Hubert Dreyfus outlined five stages of mastery: Novices follow context-free rules, Advanced Beginners recognize patterns based on experience, Competent learners adopt hierarchical decision-making, Proficient learners engage with situations holistically, and Experts operate with such deep involvement that conscious analysis disappears-their skill becomes embodied, like Bill Bradley's basketball intuition or Judy Garland's transcendent Carnegie Hall performance.
Chapter 6
The Power of Thick Data: Beyond Numbers to Meaning
In September 1992, George Soros, Stanley Druckenmiller and Robert Johnson gathered in their modest New York hedge fund office to analyze not spreadsheets but the psychological dynamics between European central bankers. They interpreted the conflict between Germany's Bundesbank head Helmut Schlesinger and British finance minister Norman Lamont following the Maastricht Treaty.
The Germans, historically traumatized by post-WWI hyperinflation, prioritized controlling inflation through high interest rates, which conflicted with Britain's needs in the European exchange rate mechanism. After witnessing Schlesinger's wounded pride from Lamont's demands and hearing him privately admit he only wanted the Deutschmark as Europe's currency, the traders recognized the inevitable: Germany would choose its anti-inflation policy over saving the British pound.
They bet "three times capital"-$15 billion-shorting the pound. When "Black Wednesday" arrived and Britain withdrew from the exchange rate mechanism, Soros became "the man who broke the Bank of England," personally gaining $650 million while his fund made over a billion. This extraordinary insight stemmed from Soros's humanities background and philosophical training under Karl Popper, whose concept of "falsifiability" taught him to constantly challenge his own assumptions rather than seeking confirmation.
How do we know what we know? Philosophers have debated this for millennia, and their insights reveal four distinct types of knowledge that illuminate the difference between thick and thin data:
Objective knowledge forms the basis of natural sciences-measurable, repeatable facts like "water contains two hydrogen atoms and one oxygen atom." This knowledge type, championed by 19th century positivism during the Industrial Revolution, still dominates management science and big data analytics today.
Subjective knowledge encompasses personal opinions and sensations-"my neck hurts" or "I am hungry"-the domain of cognitive psychology.
Shared knowledge represents our collective cultural understanding-the Jewish experience, what it means to be a working woman in America, or the German monetary policy mindset post-WWII.
Finally, sensory knowledge manifests as bodily intuition-how soldiers "feel" booby traps or how Soros himself made investment decisions based on physical sensations like back pain or sleeplessness.
While traditional firms rely exclusively on objective knowledge through mathematical models, the Soros team's success came from artfully synthesizing all four knowledge types without privileging any single perspective. By extracting more contextual knowledge and using benchmarks and modeling only as guideposts, they accessed significantly more information than competitors.
During "Black Monday" in 1987, when the Dow Jones plunged 22.6%, Soros initially misread market signals, losing $840 million. While other legendary investors remained paralyzed-Michael Steinhardt literally curled into the fetal position at a party-Soros maintained his discipline. Recognizing that Fed Chairman Greenspan would ease credit, Soros boldly shorted the dollar in the Foreign Exchange Market despite his recent losses. By year's end, his Quantum Fund was up 13%.
Chapter 7
Immersive Understanding: The Savannah Approach
Phenomenology calls us to return to the real world-to go back "to the thing itself." Instead of studying lions eating from bowls in cages, we must observe them hunting on the savannah. Our modern "zoos"-offices with glass windows high above cities, conference rooms filled with numerical representations, corporate strategy sessions with empty mantras-keep us from experiencing life's complexity.
Phenomenology reveals not the essence of things themselves, but our relationship to them. It helps distinguish between what's merely "correct" (corresponding to observable facts) and what's "true" (revealing meaningful human experience). A biological classification of sex as male or female might be correct but tells us little about experiencing masculinity or femininity. Similarly, while champagne might chemically be identical whether served in a plastic cup at a party or by a white-gloved waiter in a fine restaurant, the experiences differ profoundly.
In 2015, Madsbjerg's company partnered with Scandinavia's largest life insurance and annuity fund, which was losing 10% of customers annually, particularly valuable older clients around age 55. Through sensemaking research, they uncovered two competing realities: the company's internal banking culture referred to customers as "PSNs" (Personal Security Numbers) and focused on numerical representations rather than actual people, while their marketing portrayed aging uniformly with images of gray-haired people enjoying freedom activities-a representation just as alienating as the financial jargon.
When they reframed the problem as "what is the experience of aging?" and conducted ethnographic research with subjects across Scandinavia, they discovered that around age 55, many people experienced a profound loss of control over their lives. These customers were actively reorganizing their finances based on how long they thought they'd live-precisely when the company was ignoring them while focusing 95% of resources on acquiring 22-year-old customers who found annuities irrelevant. By redirecting resources to engage with older clients and digitizing interfaces for younger ones, the company reduced customer attrition by 80% within two years without increasing service costs.
Similarly, reframing grocery shopping as the experience of cooking transformed a European grocery chain's approach. After implementing sensemaking insights, the store became "a stage setting for the theater of food," with innovations like personalized text messages from store managers offering reserved items with recipes for busy customers. Most significantly, they shifted from segmenting stores by price points to organizing around shopper moods, consolidating brands and closing stores targeting similar moods.
Sensemaking requires practitioners to bring their whole selves-emotions, intellect, and spirit-to the work, particularly through empathy. There are three levels of empathy: First-level empathy operates below awareness as we unconsciously adjust to social environments. Second-level empathy activates when something seems amiss, like noticing a friend's unusual behavior. Third-level empathy, or analytical empathy, involves systematic understanding supported by theory, frameworks, and humanities engagement-this is true sensemaking.
Chapter 8
The Creative Process: Beyond Design Thinking
Creativity emerges not through force of will but through receptivity to the world around us. Our language reveals this truth: we say ideas "come to us" or "dawn on us" rather than claiming we "make" them. After the necessary training and practice, insights arrive as gifts from our engagement with the world.
Grace characterizes us when we're both active and receptive to our worlds. Creative insights don't come "from us" but travel "through us" from our social sphere. Heidegger calls this revealing "phainesthai"-neither entirely active nor passive, but occurring in our engagement with the world. When we misunderstand creativity, we lose sight of the holistic thinking that characterizes sensemaking.
Many mistakenly associate creativity with "will"-treating ideas as products of a mental assembly line manufactured through rigid processes. This Cartesian approach sees us as detached from our worlds, cranking out discrete ideas apart from context. This misconception is exemplified by our current fixation with design thinking, which despite positioning itself as creative and artsy, operates with an equally corrosive ideology of willful creativity.
Over twenty years, designers have transformed from craftsmen focused on materials and aesthetics to self-proclaimed oracles offering solutions for everything from social security to malaria eradication. Design thinking claims that lack of expertise is actually beneficial, allowing designers to create "user-friendly" products unencumbered by contextual knowledge. Even complex issues like education reform are reduced to "design problems" with standardized solutions.
David Kelley of IDEO claims his process works universally: "We don't care if you give us a toothbrush, a toothpaste tube, a tractor, a space shuttle, a chair... it's all the same to us." This approach treats ideas as modular pieces divorced from social context, where having ideas is free and killing them carries no risk. But this fundamentally misunderstands how humans exist in worlds layered with meaning. A space shuttle cannot be extracted from the culture of space travel, just as tractors belong to farming communities with specific needs.
Design thinking celebrates ignorance as a virtue. IDEO throws "doctors, opera singers, and engineers into a room" for brainstorming, believing expertise hinders innovation. Their sacred mantra "Defer judgment" means someone rings a bell when criticism emerges during ideation. This approach prioritizes wild ideas and diversity of perspectives over actual knowledge of contexts where products will be used.
Despite claiming to be "customer-centric" and emphasizing empathy, design thinkers rarely leave their hip urban studios. Their approach resembles "drive-by anthropology"-brief observations with predetermined goals to "improve" specific objects. This shallow engagement never allows true immersion in subjects' worlds, resulting in homogeneous designs-"soft shapes in varying shades of white" reflecting San Francisco designers' aesthetic rather than diverse human needs.
Design thinking obsessively maps "pain points" in consumer experiences-from finding yogurt in supermarkets to opening packages without mess. The goal is to anesthetize all friction through technological solutions: yogurt with sensors findable via apps, personalized packaging with profile pictures, or polymer scrims to eliminate mess. This approach promises to eliminate pain from all social structures-government, economy, mass transit-through better design, as if life's complexities could be solved with the right polymer scrim.
Chapter 9
The North Star: Finding Direction in a Complex World
In 2015, the U.S. Naval Academy reversed its late-1990s decision to eliminate celestial navigation training, reintroducing star-based navigation alongside GPS technology in response to hacking threats. Navigation expert Frank Reed explained this wasn't about nostalgia but about using "all available information"-a perfect metaphor for effective leadership. Rather than reacting to one type of data, leaders must interpret facts from multiple sources, both technical and human, to develop strategy.
Sheila Heen, a master teacher in negotiation and conflict resolution at Harvard Law School, possesses extraordinary sensitivity in reading rooms. During a Fortune 500 session on feedback, she navigated a complex moment when an executive complained about his wife's unclear feedback. Sensing the room's dynamics, Heen gently exposed his blind spot: "It sounds like you only want perfectly delivered feedback... It's kind of a clever way to ensure she can never actually give you feedback, no?" The room erupted in laughter as understanding dawned.
As European Commissioner for Competition, Margrethe Vestager balances enforcing EU antitrust rules with deep contextual understanding. "It's dangerous to just enforce rules without an understanding of consequences and opportunities," she explains. When investigating Italian state support for steelmaker Ilva, she looked beyond the clear rule violation to consider the human impact of closing a plant with 15,000 workers. Vestager fights against bureaucratic distance-she rearranged her office to remove the "gulf of veneer" between herself and visitors, placing her desk sideways to create equality in conversations.
Chris Voss, the FBI's former lead international kidnapping negotiator, demonstrated cultural sensemaking during journalist Jill Carroll's 2006 kidnapping in Baghdad. When her captors released a video showing Carroll with masked gunmen, Voss recognized they weren't negotiating with the West but speaking to "the undecided in the Middle East." Working with Carroll's family, Voss crafted a culturally resonant message, coaching her father Jim to deliver an "inarguable truth" on CNN that would be sent to Al Jazeera: "Jill Carroll is not your enemy." This approach respected Middle Eastern cultural values where "all honor flows through the father."
True sensemaking masters become connoisseurs in their fields-returning to the French origin of the word connaitre, meaning "to be acquainted with." As they gain experience, their analytical categories multiply exponentially. Their perspective ultimately leads to aesthetic judgment-the ability to determine not just what works, but what path is most beautiful, compelling, or powerful.
Winemaker Cathy Corison exemplifies sensemaking mastery in Napa Valley. Her journey led to a profound revelation: "There was a wine inside me that needed to get out... both powerful and elegant." While Napa Valley trended toward bold, high-alcohol "fruit bombs" with technically sound numbers, Corison understood that true ripeness transcends measurements: "Ripeness happens at different numbers every year. If you're not out in the vineyard, seeing it, you don't really know."
Chapter 10
What Are People For? The Essence of Humanity
Drawing on Wendell Berry's essay "What Are People For?", Madsbjerg examines how we've devalued human knowledge in favor of technology and optimization. Just as agricultural economists once deemed farmers "permanently unemployable," today's white-collar workers face similar technological displacement. Yet there's irreplaceable wisdom in human experience that algorithms can never replicate.
A global healthcare equipment provider conducted a sensemaking study across 33 institutions in four countries to understand the future of elderly care. The research revealed how financial pressures were driving the industry toward efficiency-focused models where caregivers viewed residents primarily through bodily needs-bathing, toileting, moving-with standardized, optimized care. As one caregiver admitted, "I don't want to say we are robots, but we do have a job to do... there simply isn't time getting to know them."
At an assisted living facility in California, 87-year-old "Randall" becomes agitated during the daily 3 PM shift change. His dementia triggers confusion as the commotion reminds him of his past as a schoolteacher. His caregiver Barbara expertly manages his distress by clearing other residents from the dining room, addressing him as "Mr. Johnson," and using personalized strategies based on understanding his life history. The staff has developed specific approaches-from using different voice tones to offering Montessori blocks that connect to his woodworking background.
This personalized caregiving proves more efficient than standardized care, creating a calmer environment that reduces incidents and ultimately costs less. The facility discovered that knowing each patient as an individual within their social context is the most effective approach to dementia care.
The humanities-art, literature, philosophy-aren't luxuries but practical tools for understanding meaning and context. They develop the sensemaking muscles that provide competitive advantage in business and life. We must demote technology from master to assistant, recognizing that while it can scale solutions, it cannot interpret culture or care about outcomes.
People are uniquely equipped for making and interpreting meaning. From George Soros's embodied market knowledge to a caregiver's gentle touch with Randall, human mastery deserves our wonder. While algorithms can process data, only people can truly care.
