It might help to think of organizational learning as an ongoing journey (see “Organizational Learning Journey: A Roadmap”). Although each company’s path will look slightly different, assessing your organization’s knowledge base and learning skills is a good place to start. This information provides a baseline against which you can measure your progress toward becoming a learning organization.

Learning Serves the Business Vision

Planning your organizational learning journey begins with knowing where you want to go. Articulating a vision for both the business and the organization will help define your destination — the higher purposes you want to serve through the specific learning initiatives. Starting with an organizational vision ensures that the learning needs of the company are driven by business and organization goals.

Organizational Learning Journey: A Roadmap

The stages of the organizational learning journey include an articulation of the business and organizational vision, an evaluation of the company’s learning needs. and the development of a learning strategy that will achieve the firm’s learning objectives

Different learning needs call for different learning styles and practices. For example, at Electricite de France, safety concerns do not allow nuclear power plant operators to experiment or to take risks on the job, so their learning takes the form of incremental improvements based on TQM techniques. By contrast, Kodak is experimenting with electronic imaging products that go well beyond its traditional lines of chemical-based films — a change that may require the firm to learn how to redesign key processes. Because of this need, Kodak fosters a creative and relatively high-risk environment aimed at rethinking its business over the long term. Although they differ in style, the learning practices at each company match its particular learning needs.

Once you have articulated your company’s business vision and defined its learning needs, you will want to get a better sense of the organization’s current learning condition. To assess this, there are three key areas to consider:

• Knowledge Base: the strengths and weaknesses of your organization’s knowledge base and the knowledge areas to be reinforced
• Learning Practices: the management and operating practices that foster or hinder learning
• Learning Climate: the work culture and its effect on learning

Knowledge Base

In today’s economy, knowledge, not capital assets, is the primary source of wealth. While there are some exciting new methods for measuring and valuing knowledge capital, few organizations have studied how they themselves create, store, and use that capital. You can start your learning assessment by mapping your organization’s business processes in terms of knowledge generated and used.

This is exactly what one European company did five years ago. The company faced increasing pressures from global competitors in the baby-diaper business, as a recent result of product innovations. Company personnel began a Knowledge Base Assessment by defining what the company knew how to do in all its business processes, and then assessed their knowledge position versus what they viewed as world-class practices. Then they unbundled the knowledge base into precisely defined areas of know-how, determined the competitive impact of each area, rated their own performance versus that of the competition, identified gaps in the knowledge base, and designed corrective actions (see “Strategic Knowledge Map”).

The results prompted a wake-up call. Company employees recognized that they needed to reinforce the company’s knowledge base. They defined the areas of collaboration needed to fill the gaps in the base and entered several strategic alliances with other firms. The collaborative partners found the approach so helpful that they, in turn, initiated Strategic Knowledge Mapping in their own companies.

When you assess your firm’s knowledge base, it’s important to remember that knowledge comes in many forms, not just in databases and procedure manuals. Tacit knowledge — based on experience and practice — can be as important as explicit knowledge. For example, Matsushita developed a bread-making machine in the late 19:30s. When early prototypes could not replicate the art of high-quality bread-making, developers apprenticed themselves to master bread-makers to discover the tacit knowledge that these experts could not communicate explicitly. Your knowledge map should show the strategic importance of both tacit and explicit knowledge.

Learning Practices

Successful learning does not happen by accident. One hallmark of a learning organization is a purposeful learning approach designed to create knowledge and translate it into effective action. How can you create learning practices?

You can begin by looking for learning cycles. Successful learning typically follows a sequence:

1. Shared awareness of a need for learning
2. A common understanding of the situation
3. Aligned actions, with measured results
4. Joint review and communication of results
5. Collective reflection about the learning process

(For examples of these steps in action, see “Supporting the Learning Cycle” on page 5.)

A summary way to view your company’s existing learning practices is to compile an inventory of your organization’s use of specific learning practices. This profile will provide a sense of where the organization perceives gaps between current conditions and the desired future reality, and can indicate priority areas for attention.

Learning Climate

In order to foster organizational learning, you should focus on enhancing individual and group skills, designing support structures for ongoing learning, and creating an overall organizational attitude that encourages learning. All of these aspects make up an organization’s “learning climate.”

A learning climate has both “soft” and “hard” components. On the soft side, cultural norms can either support or hinder learning. The hard side of a learning climate includes the structures and technologies that support open communication, knowledge management, and teamwork. One way to sense your organization’s learning climate is to look for evidence of the following conditions:

Curiosity. A culture that values curiosity and inquiry adopts learning behaviors naturally. Simulations and experiments follow from “what if” questions. Questions about what customers think and what competitors are doing lead to environmental scanning and targeted studies of the outside world.

For example, Sharp defines its product development vision as “optoelectronics,” a grand but undefined term. The breadth and open-endedness of the term spurs the curiosity of employees, who ask, “What does that mean? How can this term fit my work?” The creation of Sharp’s overhead projection computer display is one result of the creative tension prompted by such purposeful ambiguity.

Recognition of Conflict and Errors. Learning requires openness to new ideas, even when they generate controversy. Conflict should be welcomed as the means to develop common understanding, rather than suppressed for the sake of harmony.

Organizations that celebrate the discovery of errors, rather than search for blame, will learn from their mistakes. A good example of this comes from a team that writes documentation for electronics products. Each month the team celebrates the discovery of documentation errors with a bonfire of obsolete manuals — the bigger the better!

Leadership. The leader of a learning organization is not the traditional hero, individually responsible for tough decisions. Instead, he or she is the designer of corporate culture who accepts the uncertainty implied by experimentation. This is a very different model of leadership, and if it is embraced by top management, it is likely to be diffused to all management levels. Those being led can tell you which model of leadership is prevalent in your firm.

Staff Development. The implicit employment contract between a firm and its employees has changed. Long-term employment guarantees are being replaced by employer-supplied opportunities to maintain and expand knowledge and skills. Look for learning opportunities not just in the training department, but in job experiences that broaden responsibilities across functions.

Information and Communication Systems. Technological solutions to the challenges of creating, storing, and sharing knowledge include groupware, corporate knowledge bases, and videoconferencing. As you trace the flow of knowledge through your organization, look for how well these technologies are used.

Team-Based Work. Some work environments encourage learning efforts by single individuals, while others foster collective work. Learning organizations tend to encourage interaction and problem solving by teams. To assess whether your organization values individuals or teams, look at the recognition and reward systems. Is performance measured individually or in groups? Do rewards go to stars or to stellar team efforts? Are major initiatives personalized (as when a project takes on the name of its leader, such as the Grace Commission) or do they remain the responsibility of teams?

Some artifacts are subtle. For example, when we visited the offices of a construction equipment producer, a manager explained that coffee stations were placed in such a way that the design staff and customer service staff were forced to share stations. This set-up guarantees that design staff have at least informal opportunities to learn from the voice of the customer.

Incomplete Learning Cycles. Your search for learning practices should include problems as well as successes. One way to diagnose learning problems is to look for patterns of consistently broken learning cycles (see “Incomplete Learning Cycles”). If your organization has many stories of fact-finding and analysis, but few examples of taking action, it may be trying to learn vicariously (“analysis paralysis”). If there is lots of action but little analysis and planning, your learning may be accidental at best (the “ready, fire, aim” approach). If your firm regularly progresses to aligned action but can’t seem to learn from results, you may not have adequate measurement, review, and feedback systems in place. You “reinvent wheels” because the results from past wheel designs were never internalized.

Guidelines for Assessing Learning

Once you know what to look for as you assess your company’s learning efforts — knowledge management processes, learning practices, and the learning climate — you need to know how to find them. The following activities can provide guidelines for assessing your company’s progress:

Self-Assessment. Because learning is embedded in day-to-day activities and organizational culture, guided self-assessment can yield valid results. Train a member of each group in the principles of organizational learning and have these people lead structured interviews that identify learning practices and climate factors. This training also prepares selected process members to facilitate the learning action plan that should follow an assessment.

Group Interviews. Interviews that are intended to tease out learning practices are better done in groups rather than one-on-one. This is because learning practices at the team and company level depend on group dynamics, such as communications and coordinated efforts. Participants who describe both sides of knowledge transfers can offer more complete perspectives than those who relate to just one side.

Stories. Clinical questions about learning lead to abstract answers, bur stories and anecdotes can help people vividly recall their learning practices. Ask interviewees to remember incidents when change took place rapidly and effectively, when they mastered new processes, or when a good practice was diffused rapidly throughout the organization.

Artifacts. Anthropologists search for artifacts that offer tangible clues of how a society behaved. What artifacts might a learning assessment find? For example, publicly displayed performance scorecards, often seen in production facilities, show a concern for measurement and feedback.

Ongoing Assessment

The assessment process can provide a wonderful opportunity to train staff members in learning principles. Scientists from Hawthorne to Heisenberg have discovered that measuring a process inevitably causes it to be altered. In the same way, when learning is measured, learning processes are altered. With this in mind, you can design assessment interviews to serve as training in the principles of organizational learning, and improve your learning state even as you measure it.

Above all, it is important to continue to measure your company’s learning activities over time. Conducting an initial learning assessment can provide a valuable baseline of learning practices against which to evaluate progress, but overall assessment should become an ongoing part of the organizational learning process. This is especially important because the learning needs of a company will change as it revises its vision and strategy. Making progress on the journey toward creating a learning organization requires a continual realignment between the goals of the company and its chosen learning path.

Edited from “Measuring Learning: Assessing and Valuing Progress.” Reprinted with permission from the Third Quarter 1995 issue of Prism. The quarterly journal for senior managers, published by Arthur D. Little. Inc.

Nils Bohlin is a vice president of Arthur D. Little International and coordinator of Its global Pharmaceutical Industry Practice, based In Stockholm. He is also the leader of Arthur D. Little’s learning organization project in Europe.

Paul Brenner Is president of Arthur D. Little Program Systems Management Company. specializing in information and program management services to government and Industry.

The post The Learning Organization Journey: Assessing and Valuing Progress appeared first on The Systems Thinker.

Perhaps there is an element of self-protection at work — the comfort of being able to hold someone else (namely, top management) responsible for the lack of effective leadership. There is no doubt that a CEO who is opposed to fundamental change can make life difficult for internal innovators, but this hardly proves that only the CEO can bring about significant change.

Two Views on Leadership

Let’s consider some different statements about leadership and change: “Little significant change can occur if it is driven from the top.” “CEO proclamations and programs rolled out from corporate headquarters are a good way to undermine deeper changes.” “Top-management ‘buy-in’ is a poor substitute for genuine commitment at many levels in an organization.”

These statements are supported by the experiences of two innovative leaders, Phil Carroll of Shell Oil and Rich Teerlink of Harley-Davidson.

Phil Carroll recalls, “When I first came in as CEO, everyone thought, ‘Phil will tell us what he wants us to do.’ But I didn’t have a clue, and if I had, it would have been a disaster.” Likewise, Rich Teerlink says, “Anyone who thinks the CEO can drive this kind of change is wrong.”

There are several reasons why leaders like Carroll and Teerlink have come to a more humble view of the power of top management. First is the cynicism that exists in most organizations after years of management fads. When the CEO preaches about “becoming a learning organization,” people roll their eyes and think to themselves, “Here we go again. I wonder what seminar s/he went to last weekend.” Most corporations have had so many “flavor-of-the-month” initiatives from management that people immediately discount any new pronouncement as more “executive cheer-leading” or, as they say at Harley-Davidson, “another fine program.”

A second reason has to do with the difference between compliance and commitment. Hierarchical authority is much more effective at securing compliance than it is in fostering genuine commitment. “It seemed that every year someone pressured us to change our promotion review process to incorporate our values,” reflects former Hanover Insurance CEO Bill O’Brien. “But we never caved in to this pressure. A value is only a value if it is voluntarily chosen. No reward system has ever been invented that people in an organization haven’t learned how to ‘game.’ We didn’t want just new behaviors. We wanted new behaviors for the right reasons” (“Moral Formation for Managers: Closing the Gap Between Intention and Practice,” in Character and the Corporation, MIT Center for Organizational Learning Research Monograph, 1994). There is simply no substitute for commitment in bringing about deep change. No one can force another person to learn, especially if that learning involves deep changes in beliefs and attitudes or fundamentally new ways of thinking and acting.

A third reason a different type of leadership is needed is that top-management initiatives often end up moving organizations backward, not forward. This can occur in obvious ways, such as top-management downsizings and reorganizations that have the side-effect of increasing internal competitiveness, which ends up undermining collaboration and, ultimately, economic performance. But it can also occur more subtly, even in changes explicitly designed to improve learning. For example, a mandated “360-degree feedback” process not only reinforces a compliance mentality, but it also lessens the likelihood of people surfacing what Harvard’s Chris Argyris calls the “potentially embarrassing information” that might “produce real change” (“Good Communication That Blocks Real Learning,” Harvard Business Review, July/August 1994). This kind of information will come into the open only when people have genuine trust, curiosity, and shared responsibility — conditions not usually fostered by mandated programs.

Even so, it must be acknowledged that many large-scale change programs — reorganizations, downsizing, corporate-wide cost reduction programs, or re-engineering programs — can be implemented only from top-management levels. But such changes will not affect the corporate culture if it is based on fear and defensiveness. Nor will they unleash people’s imagination and passions and enhance their ability to form genuinely shared visions. They will not change the quality of thinking in the organization, or increase intelligence at the front lines, where people con-front increasingly complex and dynamic business environments. And they will do nothing to foster the trust and skills needed by teams at all levels if they are to reflect on hidden assumptions and to inquire into the reasoning behind their own actions.

Types of Leadership

For the past 20 years, many colleagues and I have been working with managers and teams to develop enhanced learning capabilities that center around five related disciplines: systems thinking, surfacing and improving mental models, fostering dialogue, nurturing personal vision, and building shared visions. Four years ago, a group of us at MIT began to form a consortium of corporations with two main objectives: to advance the theory and method underlying this work; and to demonstrate what is possible when organizations begin working together toward integrating new learning capabilities into important work settings. The MIT Center for Organizational Learning currently involves about 20 corporations, mostly Fortune 100 firms.

Within these companies, we regularly confront the dilemmas posed by the conflicting views of leadership described above. Resolving these dilemmas requires fundamental shifts in our traditional thinking about leadership.

These shifts start with the simple view of leaders as those people who “walk ahead,” people who are genuinely committed to deep change in themselves and in their organizations and who demonstrate their commitment through their actions. They lead through developing new understandings, new skills, and new capabilities for individual and collective learning. And they come from many places within an organization.

In particular, we have identified three essential types of leaders in building learning organizations, roughly corresponding to three different organizational positions:

1. Local line leaders, who can undertake meaningful experiments to test whether new learning capabilities actually lead to improved business results.

2. Executive leaders, who provide support for line leaders, develop learning infrastructures, and lead by example in the gradual process of evolving the norms and behaviors of a learning culture.

3. Internal networkers, or community builders, who can move freely about the organization to find those who are predisposed to bringing about change, to help out in organizational experiments, and to aid in the diffusion of new learning.

Local Line Leaders

Nothing can start without committed local line leaders: individuals with significant business responsibility and “bottom-line” focus. They head organizational units that are microcosms of the larger organization, and yet have enough autonomy to be able to undertake meaningful change independent of the larger organization. To create useful experiments, they must confront the same issues and business challenges that are occurring within the larger organization. For example, a unique cross-functional task force may be less useful for a learning experiment than a team that manages a process that is ongoing, generic, and vital for future competitiveness, such as a product development team, a sales team, or a business division.

The key role played by local line leaders is to sanction significant practical experiments and to lead through active participation in those experiments. Without serious experiments aimed at connecting new learning capabilities to business results, there is no way to assess whether enhancing learning capabilities is just an intellectually appealing idea or if it can really make a difference. Typically, a Learning Center project will begin with a core team composed of line leaders who might initially work together for six to twelve months. During this time, they work on developing their own skills in systems thinking, collaborative inquiry, and building shared vision, and then begin applying those skills to their own issues. Only then will they be able to begin designing learning processes that might spread such skills throughout their organization and become embedded in how work is done.

For example, a team of sales managers and sales representatives at Federal Express worked together for over a year before they began to develop what eventually became the Global Customer Learning Laboratory “We felt we needed new tools for working with our key corporate customers as learning partners,” says Cathy Stopcynski of Federal Express. “That’s why the Global Customer Learning Laboratory is important. It gives us a whole new way to work together with customers to improve our collective thinking and come up with completely new solutions to complex logistics problems. “At Electronic Data Systems (EDS), a growing network of local line leaders is bringing learning organization principles and methods into work with customers through EDS’s “Leading Learning Communities” program.

Most corporations have had so many “flavor-of-the-month” initiatives from management that people immediately discount any new pronouncement as more “executive cheerleading” or, as they say at Harley-Davidson, “another fine program.”

In addition to playing a key role in the design and implementation of new learning processes, local line leaders often become teachers once these learning processes become established. In fact, the most effective facilitators in learning processes such as the Global Customer Learning Laboratory are usually not professional trainers but the line managers themselves. Their substantive knowledge and practical experience give them unique credibility. Facilitating others’ learning also becomes a powerful, ongoing way for line leaders to deepen their own understanding and capabilities.

However, engaging local line leaders may be difficult. As pragmatists, they often find ideas like systems thinking, mental models, and dialogue intangible and “hard to get their hands around.” “When I was first exposed to the MIT work,” says Fred Simon, former head of the Lincoln Continental program at Ford Motor Company, “I was highly skeptical. I had heard so many ‘academic’ theories that made sense but never produced for us. But I was also not happy with our team’s ability to work together. I knew there must be a better way, and my business planning manager was convinced this could make a difference’

Simon’s view is typical of many line leaders at the outset: he was skeptical, but he recognized that he had problems that he could not solve. He also had a trusted colleague who was willing to engage with him. Again and again, we have found that healthy, open-minded skeptics can become the most effective leaders and, eventually, champions of this work. They keep the horse in front of the cart by focusing first and foremost on business results. Such people invariably have more staying power than the “fans” who get excited about new ideas but whose excitement wanes once the newness wears off.

Because line leaders are focused primarily on their business unit, however, they may not think much about learning within the larger organization, and typically they have little time to devote to diffusion of their efforts. They may also be unaware of—and relatively inept at dealing with—the anti-learning forces in the larger organization. They become impatient when the larger organization does not change to match their new ideas, and may start to feel misunderstood and unappreciated. They can easily develop an “us against the world” mentality, which will make them especially ineffective in communicating their ideas to others.

Innovative local line managers are often more at risk than they realize. They typically believe, “My bosses will leave me alone as long as I produce results, regardless of the methods I use.” But the “better mousetrap” theory may not apply in large institutions. Improved results are often threatening to others, and the more dramatic the improvement, the greater the threat. Large organizations have complex forces that maintain the status quo and inhibit the spread of new ideas. Often, even the most effective local line leaders fail to understand these forces or know how to work with them.

Despite these limitations, committed local line leadership is essential. At least half of the Learning Center companies that have made significant strides in improving business results and developing internal learning capabilities have had little or no executive leadership. But we have seen no examples where significant progress has been made in an organization without leadership from local line managers, and many examples where sincerely committed CEOs have failed to generate any significant momentum.

Executive Leaders

At the Learning Center, our excitement around the practical experiments led by local line managers has frequently made us blind to the necessary and complementary roles played by executive leaders. Local line leaders can benefit significantly from “executive champions” who can be protectors, mentors, and thinking partners. When dramatic improvements achieved in one line organization threaten others, executive partners can help manage the threat. Alternatively, executive partners can make sure that new innovative practices are not ignored because people are too busy to take the time to understand what the innovators are doing. By working in concert with internal networkers, executives can help connect innovative local line leaders with other like-minded people. They also play a mentoring role in helping the local line leaders understand complex political cross-currents and communicate their ideas and accomplishments to those who have not been involved.

In one company, a local line organization had achieved what it regarded as dramatic improvements in the product development process, but its efforts lacked credibility when judged by more traditional metrics. For instance, at critical checkpoints the team had record numbers of engineering change orders. The team interpreted this as evidence that people were more willing to surface and fix problems early in the development process. But outside the team, these same orders were seen as evidence that the group was “out of control:’

Eventually, executives in the company commissioned an independent audit, which showed that the team was indeed highly effective. The executives also supported the development of a “learning history” to help others understand how the team had accomplished its results.

But the “better mousetrap” theory may not apply in large institutions. Improved results are often threatening to others, and the more dramatic the improvement, the greater the threat.

Part of our difficulty with appreciating the role that effective executive leadership can play in learning is that all of us are used to the “captain of the ship” image of traditional hierarchical leaders. However, when executives act as teachers, stewards, and designers, they fill roles that are much more subtle, contextual, and long term than the traditional model of the power-wielding hierarchical leader.

“We in top management are responsible for creating an operating environment that can allow continual learning,” says Harley-Davidson’s Teerlink. Although executive leadership has traditionally focused on structure and strategy, Teerlink and other executives are increasingly thinking about the operating environment in less tangible ways.

Effective executive leaders can build an environment that is conducive to learning in several ways. The first is by articulating guiding ideas. “I have always believed that good ideas will drive out bad ideas,” says Hanover’s O’Brien. “One of the basic problems with business today is that our organizations are guided by too many mediocre ideas — ideas which do not foster aspirations worthy of people’s commitment.” Guiding ideas are different from slogans or management buzzwords. They are developed gradually, often over many years, through reflection on an organization’s history and traditions and on its long-term growth and opportunities.

A second way to build operating environments for learning is through conscious attention to learning infrastructure. In a world of rapid change and increasing interdependence, learning is too important to be left to chance. “We have plenty of infrastructure for decision making within AT&T,” says Chairman Bob Allen. “What we lack is infrastructure for learning” (Peter M. Senge, et al., The Fifth Discipline Field-hook, 1994, p. 34).

I have met many CEOs in recent years who have lamented that “we can’t learn from ourselves” or “we are better at learning from competitors than from our own people.” But with little or no infrastructure to support ongoing learning, one might ask, “Why should successful new practices spread in organizations?” Who studies these innovations to document why they worked? Where are the learning processes that will enable others to follow in the footsteps of successful innovators? Who is responsible for creating these learning processes?

There can be little doubt of the long-term business impact of executive leadership in developing learning infrastructure. When the Royal Dutch/Shell Group’s central group planning leaders became convinced that “scenario thinking” was a vital survival skill in turbulent, unpredictable world oil markets, they didn’t initiate a set of scenario-planning courses for Shell’s management. Instead, they redesigned the planning infrastructure so that management teams regularly were asked not just for their budget and their “plan,” but for several plans describing how they would manage under multiple possible futures. “Planning as learning” has gradually become a way of life within Shell — a change to which many attribute Shell’s rise to preeminence in the world oil business.

A third way to build operating environments for learning lies within the executive’s own domain for taking action — namely, the executive team itself. It is important that executives recognize that they, too, must change, and that many of the skills that have made them successful in the past can actually inhibit learning.

I think these ideas will eventually lead to a very different mindset and, ultimately, a different skill-set among executives. “Gradually, I have come to see a whole new model for my role as a CEO,” says Shell Oil’s Carroll. “Perhaps my real job is to be the ecologist for the organization. We must learn how to see the company as a living system and to see it as a system within the context of the larger systems of which it is a part. Only then will our vision reliably include return for our shareholders, a productive environment for our employees, and a social vision for the company as a whole.”

Internal Networkers

The most unappreciated leadership role is that of the internal networkers, or what we often call internal community builders. Internal networkers are effective for the very reasons that top-management efforts to initiate change can backfire — oftentimes, no power is power. Precisely because they have no positional authority, internal networkers are free to move about a large organization relatively unnoticed.

When the CEO visits someone, everyone knows. When the CEO says, “We need to become a learning organization,” everyone nods. But when someone with little or no positional authority begins asking which people are genuinely interested in changing the way they and their teams work, the only ones likely to respond are those who are genuinely interested. And if the internal networker finds one person who is interested and asks, “Who else do you think really cares about these things?” he or she is likely to receive an honest response. The only authority possessed by internal networkers comes from the strength of their convictions and the clarity of their ideas.

It is very difficult to identify the internal networkers because they can be people in many different organizational positions. They might be internal consultants, trainers, or personnel staff in organization development or human resources. They might be front-line workers like engineers, sales representatives, or shop stewards. They might, under some circumstances, be in senior staff positions. What is important is that they are able to move around the organization freely, with high accessibility to many parts of the organization. They understand the informal networks through which information and stories flow and how innovative practices naturally diffuse within organizations.

Internal networkers are effective for the very reasons that top-management efforts to initiate change can backfire—oftentimes, no power is power….The only authority possessed by internal networkers comes from the strength of their convictions and the clarity of their ideas.

The first vital function played by internal networkers is to identify local line managers who have the power to take action and who are predisposed to developing new learning capabilities. Much time and energy can be wasted by working with the wrong people, especially in the early stages of a change process. Convincing people that they should be interested in systems thinking or learning is inherently a low-leverage strategy. Even if they are persuaded initially, they are unlikely to persevere.

When the Liaison Officers from the Learning Center companies were asked how they each got started in this work, they responded, virtually unanimously, that they were “predisposed.” All of them had something in their backgrounds — perhaps an especially influential college course, a particular work experience, or just lifelong interest — that made them more open to the systems perspective. They each had a deep curiosity about learning, or mental models, or the mystery of profound teamwork. In turn, they felt attuned to others they met who shared this predisposition.

In ongoing experiments within line organizations, we have found that internal networkers can help in many ways. In our own Learning Center projects, they serve as project managers, as co-facilitators, or as “learning historians” — people trained to track a major change process and to help those who are involved to better reflect on what they are learning (see “Learning Histories: ‘Assessing’ the Learning Organization,” May 1995). As practical knowledge is built, internal networkers continue to serve as organizational “seed carriers,” connecting like-minded people from diverse settings and making them aware of each other’s learning efforts. Gradually, they may help in developing the more formal coordination and steering mechanisms needed to move from local experiments to broader, organization-wide learning. At Ford, for example, an informal “Leaders of Learning” group was formed by local line leaders and internal networkers who wanted to share leanings and serve as a strategic leadership body. They saw their work as supporting continuing experiments, connecting those experiments with the interests of top management, and wrestling with organization-wide capacity building and learning.

As with local line managers and executive leaders, the limitations of internal networkers are likewise counterparts to their strengths. Because they do not have a great deal of formal authority, they can do little to counter hierarchical authority directly. If a local line leader becomes a threat to peers or supervisors, they may be powerless to help him or her. Internal networkers have no authority to institute changes in organizational structures or processes. So, even though they are essential, internal networkers are most effective when working in concert with local line leaders and executive leaders.

The Leadership Challenges

The leadership challenges inherent in building learning organizations are a microcosm of the leadership issue of our times: how human communities can productively confront complex issues where hierarchical authority is inadequate to bring about change. None of today’s most pressing issues — deterioration of the natural environment, the international arms race, erosion of the public education system, or the breakdown of the family and increasing social fragmentation — will be resolved through hierarchical authority.

In all these issues, there are no single causes, no simple “fixes” There is no one villain to blame. There will be no magic pill. Significant change will require imagination, perseverance, dialogue, deep caring, and a willingness to change on the part of millions of people. I believe these same challenges exist in the work of building learning organizations.

Recently, a group of CEOs from the Learning Center companies spent a half-day with Karl-Henrik Rob rt, the founder of Sweden’s path-breaking Natural Step process for helping societies become ecologically sustainable. The next day, Rich Teerlink of Harley-Davidson came in and said, “I don’t know why I stay awake at night trying to figure out how to transform a six-thousand person company. Yesterday, we talked with someone who is transforming a country of four million people.”

The necessity of creating systemic change where hierarchy is inadequate will, I believe, push us to new views of leadership based on new principles. These challenges cannot be met by isolated heroic leaders. They will require a unique mix of different people, in different positions, who lead in different ways. Although the picture sketched above is tentative and will certainly evolve over time, I doubt that it understates the changes that will be required in our traditional leadership models.

This article is an edited version of P Senge, “Leading Learning Organizations” (Cambridge, MA: MIT Center for Organizational Learning Research Monograph, 1995). Copyright © 1995 by Peter M. Senge. It has also appeared in the Peter F Drucker Foundation book The Leader of the Future, M Goldsmith, F Hesselbein, and R. Beckhard, eds. (San Francisco: Jossey-Bass, 1995).

Peter M. Senge is director of the Center for Organizational Learning at MIT’s Sloan School of Management. He is the author of The Fifth Discipline: The Art and Practice of the Learning Organization and co-author of The Fifth Discipline Fieldbook: Strategies and Tools for Building a Learning Organization.

Edited by Colleen P Lannon. Illustrations by Nancy Margulies of Mindscapes (St Louis, MO).

The post Rethinking Leadership in the Learning Organization appeared first on The Systems Thinker.

Consider, for a moment, that the most widespread and pervasive learning in your organization may not be happening in training rooms, conference rooms, or boardrooms, but in the cafeteria, the hallways, and the cafe across the street. Imagine that through e-mail exchanges, phone visits, and bull sessions with colleagues, people at all levels of the organization are sharing critical business knowledge, exploring underlying assumptions, and creating innovative solutions to key business issues.

Imagine that “the grapevine” is not a poisonous plant to be cut off at the roots, but a natural source of vitality to be cultivated and nourished. Imagine that its branching, intertwining shoots are the natural pathways through which information and energy flow in the organization.

Consider that these informal networks of learning conversations are as much a core business process as marketing, distribution, or product development. In fact, thoughtful conversations around questions that matter might be the core process in any company — the source of organizational intelligence that enables the other business processes to create positive results. A more strategic approach to this core process can not only appreciate an organization’s intellectual capital, but can also create sustainable business value in the knowledge economy.

The Power of Conversation

All of us have, at one time or another, experienced a conversation that has had a powerful impact on us — one that sparked a new insight or helped us see a problem in a radically different light. What sets apart this type of generative, transformative conversation from the many exchanges that occur on a daily basis at our workplaces and in our homes? What are the qualities that make it worthwhile?

We have posed this question to hundreds of executives and employees in diverse cultures around the globe. While we have seen a wide range of individual experiences, common themes include:

• There was a sense of mutual respect between us.
• We took the time to really talk together and reflect about what we each thought was important.
• We listened to each other, even if there were differences.
• I was accepted and not judged by the others in the conversation.
• The conversation helped strengthen our relationship.
• We explored questions that mattered.
• We developed shared meaning that wasn’t there when we began.
• I learned something new or important.
• It strengthened our mutual commitment.

When we consider the power of conversation to generate new insight or committed action, its importance in our work lives is quite obvious. Fernando Flores, one of the first to highlight this crucial link has said that “an organization’s results are determined through webs of human commitments, born in webs of human conversations. ”We share a common heritage as fundamentally social beings who, together in conversation, organize for action and create a common future.

Yet this view of conversation as a way of organizing action contradicts a basic tenet in many organizational cultures — one based on the edict, “stop talking and get to work!” The underlying belief is that conversation takes time away from the more “important” work of the organization (see “Discovering Your Organization’s Capabilities”).

Paradoxically, what we are discovering is that the talking — the network of conversations — actually catalyzes action. Through conversation we discover who cares about what, and who will take accountability for next steps. It is the means through which requests are initiated and commitments made. From this perspective, a more useful operating principle for organizational life might be “start talking and get to work!”

Discovering Communities of Practice

Etienne Wenger and his colleagues at the Institute for Research on Learning (IRL), an outgrowth of Xerox’s pioneering Palo Alto Research Center (PARC), confirmed the centrality of collaborative conversation when they studied how learning actually takes place in an organization. Using interdisciplinary teams of anthropologists, sociologists, cognitive scientists, and technology specialists, IRL has found that knowledge creation is primarily a social rather than an individual process. People learn together in conversation as they work and practice together. Therefore, important innovations are constantly being created at the grass-roots level, on the periphery, and at the local level, as people share common questions and concerns.

“Communities of practice” is what IRL calls the foundation for this social process of learning. In our own large-systems change work, we have called them “work communities.” These self-organizing networks are formed naturally by people engaged in a common enterprise — people who are learning together through the practice of their real work.

Conversation as a Core Process

IRL has found that the knowledge embodied in these communities is usually shared and developed through ongoing conversations. Because of this, John Seeley Brown, chief scientist at Xerox PARC, sees a critical need to develop systems and processes that “help foster new and useful kinds of conversations in the workplace.”

The MIT Center for Organizational Learning (OLC) has also been pursuing this challenge through ongoing research into the role of conversation in business settings. For several years, the study and practice of dialogue — a process of collective thinking and generative learning based on the seminal work of David Bohm — has been a central part of the Center’s action research and training efforts. In collaboration with the OLC, we are now developing principles and practices to support strategic conversation as a key business leverage.

In addition, Peter and Trudy Johnson-Lenz, innovators in the field of “groupware” technologies, have initiated a multi-company Community of Inquiry and Practice focused on supporting coherent conversations in cyberspace. Group members are actively experimenting with ways of strengthening the conversational practices of on-line communities, including the use of formal dialogue and inquiry mapping. Underlying all these activities is the belief that collaborative conversation is a strategic asset for supporting organizational learning infra-structures.

Alan Webber, in his pioneering Harvard Business Review article “What’s So New About the New Economy,” goes one step further and asserts that conversation is the lifeblood of the knowledge economy. Where information is the raw material and ideas are the currency of exchange, he explains, good conversations become the crucible in which knowledge workers to share and refine their thinking in order to create value-added products and services. In his assessment, “The most important work in the knowledge economy is conversation.”

Tools and Technologies That Support Good Conversation

Given that many organizations still operate from a “stop talking and get to work” mentality, it will take some focused attention to create an environment that recognizes and supports conversation as a core process. Toward this end, many companies are beginning to experiment with collaborative technologies and process tools that encourage the development of knowledge capital.

For example, one major consumer products company has instituted an innovative planning process throughout its sales organization. The process begins with an extensive situation analysis, in which management and field personnel explore all facets of the current business and competitive environment. From this analysis, they frame several core questions that will guide their subsequent strategic conversations. By encouraging the sales staff to develop a more disciplined focus on asking essential questions, the organization is encouraging the use of an inquiry model for business planning.

Other companies are exploring ways to create physical environments that encourage knowledge-generating conversations. For example, Steelcase Corporation has created office areas designed as “neighborhoods” where product and business teams work together in close proximity. Adjacent to these office neighborhoods are community “commons,” where informal conversation and community interaction occur. In similar style, SAS Airlines in Stockholm has a “central plaza” in the midst of its corporate headquarters. The plaza contains shops and a cafe where people from all levels and functions are encouraged to visit and share ideas.

Other organizations are developing sophisticated tools for collaborative work. For example, Buckman Laboratories International has created a worldwide intranet that enables its global sales force in 90 countries to engage in ongoing conversations about meeting customer needs. Users can contribute to the conversations at any time, from any place, and in several different languages. The system automatically updates the evolving “knowledge threads” as questions are explored and answers discovered.

With a simple and consistent focus on questions that matter, casual conversations are transformed into collective inquiry.

Likewise, Xerox is experimenting with Jupiter, a “virtual social reality” computer system that its designers hope will “support the organizational mind.” Jupiter comes complete with virtual white boards, personal offices, meeting rooms, and “lounges” where members can take a break and bump into a friend from a completely different city. In this environment, people can participate in larger community conversations as well as work in small groups on specific projects. Michael Schrage, in his book Shared Minds, points out that such collaborative tools and techniques “will transform both the perception and reality of conversation, collaboration, innovation, and creativity.”

Questions That Matter

Developing processes and infrastructure for tapping into the collective intelligence in an organization is an important part of establishing conversation as a core business process. But one area of activity that is just as crucial is honing the skill of discovering and exploring questions that matter. Why? Because the quality of our learning process depends on the quality of the questions we ask. Clear, bold, and penetrating questions that elicit a full range of responses tend to open the social context for learning. People engaged in the conversation develop a common concern for deeper levels of shared meaning.

Focusing on essential questions enables us to challenge our underlying assumptions in constructive ways. With a simple and consistent focus on questions that matter, casual conversations are transformed into collective inquiry. As these questions “travel” throughout the system, they enable creative solutions to emerge in unexpected ways.

Leading Inquiring Systems

What skills, knowledge, and personal qualities will be required in the more collaborative, networked organizations of the future? What are the emerging leadership capabilities that will foster the evolution of inquiring systems— systems that strengthen their capacity to learn, adapt, and create long-term business and social value? We believe there are several capabilities that will be essential to this process.

Framing Strategic Questions. Ray Kroc, the founder of McDonald’s, launched that company to its preeminent market position by posing a simple but powerful question to his colleagues: “How can we assure a consistent hamburger for people who are traveling on the road?”

Mastering the art and architecture of framing powerful questions that inspire strategic dialogue and committed action will be a critical leadership skill. Strategic questions create dissonance between current experiences and beliefs while evoking new possibilities for collective discovery. But they also serve as the glue that holds together overlapping webs of conversations in which diverse resources combine and recombine to create innovative solutions and business value.

Convening Learning Conversations. As another core aspect of this new work, leaders will create multiple opportunities for learning conversations. However, authentic conversation is less likely to occur in a climate of fear, mistrust, and hierarchical control. The human mind and heart must be fully engaged in authentic conversation for new knowledge to be built.

Thus, the ability to facilitate working conversations that enhance trust and reduce fear will become an important leadership capability. To succeed in this pursuit, leaders will need to strengthen their skills in the use of dialogue and other approaches that deepen collective inquiry (see “Improving the Quality of Learning Conversations”).

These skills include:

• Creating a climate of discovery;
• Suspending premature judgment;
• Exploring underlying assumptions and beliefs;
• Listening for connections between ideas;
• Honoring diverse perspectives; and
• Articulating shared understanding.

In this process, the authenticity, integrity, and personal values of leaders will become central to their role as “conveners and connectors”—of both people and ideas. Strengthening personal relationships through networks of collaborative conversations will be essential for building intellectual capital.

Supporting Appreciative Inquiry.

Becoming open to the multiple possibilities that conversations create will require a shift in leadership orientation from focusing on what is not working and how to fix it, to discovering and appreciating what is working and how to leverage it. Appreciative inquiry was developed by David Cooperrider and his colleagues at Case Western University as a powerful business process for valuing previously untapped sources of knowledge, vitality, and energy. When used in a disciplined way, this type of inquiry stimulates lively conversations about fundamental organizational values, and uncovers hidden assets that create sustainable business and social value.

Shifting the focus in this direction enables leaders to foster networks of conversations focused on leveraging emerging possibilities rather than just on fixing past mistakes. This attitude creates a “generative field” of mutual trust and appreciation, in which groups feel encouraged to discover and share their unique contributions in order to build their collective intellectual capital.

Fostering Shared Meaning. As organizations enter the 21st century, leaders will discover that one of their unique contributions is to provide “conceptual leadership” — creating a larger context within which groups can deepen or shift their thinking together.

To build shared context, we must first understand the importance of language for shaping our thought. We make meaning of our experiences through stories, images, and metaphors. To tap into this pool of shared meaning, leaders need to put time and attention into framing common language and developing shared images and metaphors. This can be done by constructing compelling scenarios — “stories of the future” that provide shared meaning and collective purpose across organization boundaries. In addition, it is important to incorporate time for system-wide reflection, to enable the collective “sense-making” that is essential in times of turbulence and change.

Nurturing Communities of Practice. Much of the learning and knowledge creation in an organization happens through informal relationships. But few of today’s executives and strategists have been trained to notice and honor the social fabric of informal “communities of practice.”

Nurturing and sustaining these learning communities will be another core aspect of the leader’s new work. Principles of community organization — including recruiting volunteers, convening gatherings, developing partnerships, and hosting celebrations — will be essential to this practice. Finally, the existing communities of practice need to be taken into account when reengineering work processes, so new work flows do not destroy the collective knowledge that is woven into them.

Using Collaborative Technologies. The notion of personal computing is fast giving way to “interpersonal computing.” New collaborative technologies create possibilities for different kinds of conversations. People can “see” innovative ideas pop up on their computer screen or on large wall murals created by graphics specialists. Such multisensory, interactive conversations enable people to share their thoughts and create knowledge in ways that have rarely been possible before.

As these tools become more widely available, the notion of “leadership” will expand to include facilitating on-line conversations and supporting the design of integrated learning systems that enable the co-creation of products and services among widely distributed work groups.

Creating the Future

Where collaborative learning and breakthrough thinking are requirements for a sustainable business future, the development of appropriate tool and environments to support good conversations are also essential. Indeed, it is the network and nature of those conversations that will help determine the organization’s strategic capacity to create the future it wants, rather than being forced to live with the future it gets.

Seeing the systemic ways in which conversation helps a learning organization evolve, and utilizing process principles, tools, and technologies to support this evolution, are everyone’s responsibilities. For only in this way can organizations cultivate both the knowledge required to thrive today and the wisdom needed to ensure a sustainable future.

Juanita Brown and David Isaacs (Mill Valley, CA) are also senior affiliates at the MIT Center for Organizational Learning. They serve as strategists and thinking partners with senior leaders, applying living systems principles to the evolution of knowledge-based organizations and large-scale change initiatives.

The authors would like to thank the Intellectual Capital Pioneers Group as well as Jennifer Landau and Susan Kelly of Whole Systems Associates for contributions to the development of their recent thinking.

Editorial support for this article was provided by Sue Wetzler of Whole Systems Associates and Colleen Lannon of Pegasus Communications.

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With a total of 300,000 employees, Ford operates in 50 countries around the world. It sells a huge array of products, and offers an equally widespread range of services — from financing to distributing and dealer support.

VENTURING INTO THE BADLANDS

When system and social complexity are high, the organization enters the realm of “the Badlands.”

Like any large organization, it’s also peopled by individuals who come from all walks of life — and who have the different outlooks to prove it. Engineers, accountants, human-resource folks — they all have unique backgrounds and view their work through unique perspectives. Add Ford’s various stakeholders to the mix, and you’ve got even more complexity. There are media stakeholders, shareholders, customers, the families of employees — all of them with different expectations and hopes for the company.

System and Social Complexity: “The Badlands”

Now let’s look even more deeply inside Ford to see what complexity really consists of. If you think about it, the complexity that Ford and other large organizations grapple with comes in two “flavors”: system complexity and social complexity. System complexity derives from the infrastructure of the company — the business model it uses, the way the company organizes its various functions and processes, the selection of products and services it offers. Social complexity comes from the different outlooks of the many people associated with Ford — workers, customers, families, and other stakeholders from every single country and culture that Ford operates in.

Why is it important to distinguish between these two kinds of complexity? The reason is that, if we put them on a basic graph, we get a disturbing picture of the kinds of problems that complexity can cause for an organization (see “Venturing into the Badlands”). We can think of these problems as falling into four categories:

“Tame” Problems. If an organization has low system and social complexity — for example, a mom-and-pop fruit market in a small Midwestern town — it experiences what we can think of as “tame” problems, such as figuring out when to order more inventory.

“Messy” Problems. If a company has low social complexity but high system complexity, it encounters “messy” problems. A good illustration might be the highly competitive network of tool-and-die shops in Michigan. These shops deal with intricate, precisely gauged devices that have to be delivered quickly. However, the workforce consists almost entirely of guys, all of whom root for the Detroit Lions football team — so there’s little social tension.

“Wicked” Problems. If a company has high social complexity but low system complexity, it suffers “wicked” problems. For instance, a newspaper publisher works in a relatively simple system, with clear goals and one product. However, the place is probably staffed with highly creative, culturally diverse employees — with all the accompanying differences in viewpoint and values.

The Winner: “Wicked messes,” or “The Badlands.” When an organization has high system and social complexity — like Ford and other large, globalized companies have — it enters “the Badlands.” Singer-songwriter Bruce Springsteen graphically captured that unique region in South Dakota characterized by dangerous temperature swings, ravenous carnivores, and uncertain survival in his song “Badlands.” But the area and the song also represent optimism and possibilities. More vegetation and wildlife inhabit the Badlands than anyplace else in the United States, and Springsteen’s voice and lyrics offer a sense of hope despite the song’s painful and angry chords.

What’s So Bad About the Badlands?

A company that’s operating in the Badlands faces a highly challenging brand of problems. The complexity is so extreme, and the number of interconnections among the various parts of the system so numerous, that the organization can barely control anything. Solutions take time, patience, and profound empathy on the part of everyone involved.

In Ford’s case, a number of especially daunting challenges have arisen recently. For one thing, the Firestone tires tragedy has left the entire Ford community reeling. Ford faces an immense struggle to make sure this kind of fiasco never happens again. The bonds of trust between company and supplier, and between company and customer, will take a long time to rebuild. In addition, Ford and other automotive manufacturers have come under fire not only for safety issues but also for environmental and human-rights concerns.

Clearly, Ford’s business environment keeps getting tougher. The company is held accountable for parts it buys from suppliers and for labor practices in the various parts of the world where it does business. It’s also accountable for resolving baffling patterns — for example, the demand for

All of these challenges come from a single error in thinking: the assumption that human beings can control a complex, living system like a large organization.

SUVs is rising, along with cries for environmentally friendly vehicles. The majority of Ford’s profits come from sales of SUVs; how will the company reconcile these conflicting demands? Ford’s newly launched initiative — to not only offer excellent products and services but to also make the world a better place through environmentally and socially responsible manufacturing — will probably be its toughest effort ever.

But here’s where the big lesson comes in. All of these challenges come from a single error in thinking: the assumption that human beings can control a complex, living system like a large organization. Systems thinker Meg Wheatley compares the complexity of large companies to that of the world. The world, she points out, existed for billions of years before we humans came along, but we have the nerve to think that it needs us to control it! Likewise, what makes us think that we can control a big, complex organization?

Yet attempt to control we do — often with disastrous results.

Our All-Too-Common Controls . . .

We human beings try to control the complexity of our work lives through lots of different means:

System Fixes. When we attempt to manage system complexity, we haul out a jumble of established tools and processes that seem to have worked for companies in the past. For example, we use something we blithely call “strategic planning.” Our assumption is simple: If we just write down the strategy we want to follow, and plan accordingly, everything will turn out the way we want. We even call in consultants to help us clarify our strategy — and pay them big bucks for it. The problem is that this approach to planning has long outlived its usefulness. The world has become a much more complicated place than it was back when organizations like General Motors and the MIT Sloan School of Management first devised this approach to strategy.

We also use financial analysis and reporting models that were probably invented as far back as the 1950s. These models don’t take into account all the real costs associated with doing business — such as social and environmental impacts. Nor do they recognize the value of “soft” assets, such as employee morale and commitment.

In addition, we all keep throwing the phrase “business case” around — “What’s the business case for that new HR program you want to launch?” “What’s the business case for that product modification?” In other words, what returns can we expect from a proposed change of any kind? Again, this focus on returns ignores the bigger picture: the long-term costs and benefits of the change.

Finally, we try to manage system complexity by making things as simple as possible through standardization — no matter how complicated the business is. Standardization is appropriate at times. For example, the Toyota Camry, Ford’s number-one competitor in that class of car, has just seven kinds of fuel pump applications. The Ford Taurus has more than 40! You can imagine how much simpler and cheaper it is to manufacture, sell, and service the Camry pump. But when we carry our fondness for standardization into areas of strategy — unthinkingly accepting methods and models that worked best during a simpler age — we run into trouble.

Social Fixes. Our attempts to manage social complexity get even more prickly. In many large companies, the human-resources department engineers all such efforts. HR of course deals with personnel planning, education and training, labor relations, and so forth. But in numerous companies, it spearheads change programs as well — whether to address work-life balance, professional development, conflict and communications management, or other social workplace issues. Yet as we’ll see, this realm of complexity is probably even more difficult to control than systemic complexity is.

. . . and Their Confounding Consequences

Each of the above “fixes” might gain us some positive results: We have a strategic plan to work with; we have some way of measuring certain aspects of our business; we manage to get a few employees thinking differently about important social issues. However, these improvements often prove only incremental. More important, these fixes also have unintended consequences — many of them profound enough to eclipse any gains they may have earned us.

The Price of System Fixes. As one cost of trying to control system complexity, we end up “micromanaging the metrics,” mainly because it’s the only thing we can do. This micromanaging in turn creates conflicts of interests. For example, when Ford decided to redesign one of its 40 fuel pumps to make it cheaper to build, it unwittingly pitted employees from different functions against each other. Engineering people felt pressured to reduce the design cost of the part, manufacturing staff felt compelled to shave off labor and overhead costs, and the purchasing department felt driven to find cheaper suppliers. Caught up in the crosscurrents of these conflicting objectives, none of these competing parties wanted to approve the change plan unless they got credit for its success. As you can imagine, the plan languished in people’s in-boxes as the various parties jockeyed for position as “the winner.”

Micromanaging the metrics can also create a “Tragedy of the Commons” situation — that archetypal dilemma in which all the parties in a system try to maximize their own gains, only to ruin things for everyone. For instance, at Ford (and probably at many other large companies), there’s only so much money available to support a new product or service idea. People know this, so when they build their annual budgets, they ask for the money they need for the new ideas — plus another 10 percent as a cushion (because they know the budget office would never give them what they originally asked for!). At the end of the year, everyone’s out of funds because they beefed up their budgets too much. And great, innovative ideas end up going unfunded.

The Price of Social Fixes. The biggest consequence of social fixes is probably a “Shifting the Burden” archetypal situation. Upper management, along with HR, tries to address a problem by applying a short-term, “bandage” solution rather than a longer-term, fundamental solution. The side effect of that bandage solution only makes the workforce dependent on management, thus preventing the organization from learning how to identify and implement a fundamental solution.

What does this look like in action? Usually, it takes the form of upper management’s decision to “roll out” a change initiative to address a problem. For instance, employees might be complaining about something — work-life tensions, conflicts over cultural differences, and so forth. Rather than letting people take responsibility for addressing their problems — that is, get involved in coming up with a shared solution — management force-feeds the company a new program (B1 in “Shifting the Burden to Management”). This might reduce complaints for a time, and managers might even capture a few hearts and minds. But these gains won’t stick. Worse, this approach makes employees passive, as they come to depend more and more on management to solve their problems and “take care of them.” The more dependent they become, the less able they are to feel a sense of responsibility and get involved in grappling with their problems (R3 in the diagram).

This “sheep-dip” approach to change — standardized for the masses — completely ignores employees’ true potential for making their own decisions and managing their own issues. For example, consider the difference between a company that legislates rigid work hours and one that trusts its employees to pull an all-nighter when the work demands it—and to head out to spend time with their kids

on a Friday afternoon because the work is in good shape. People can’t learn how to make these kinds of judgments wisely for themselves if their employer treats them like children.

“Sheep dipping” has another consequence as well: Because it makes employees passive, it discourages the fluid transfer of knowledge that occurs when people feel involved in and responsible for their work. Instead of looking to one another, anticipating needs, and collaborating as a team, employees have their eyes on management, waiting to be taken care of. Knowledge remains trapped in individuals’ minds and in separate functions in the organization, and the firm never leverages its true potential.

From Control to Soul

So, if we can’t control complexity, how do we go to work every day with some semblance of our sanity? Should we just give up hoping that our organizations can navigate skillfully enough through the Badlands to survive the competition and maybe even achieve their vision? What are we to do if we can’t control our work, our employees, and our organization? How can we take our organizations to places they’ve never been — scary, dangerous places, but places that also hold out opportunities for unimagined achievement?

The answer lies in one word: soul. “Soul” is a funny word. It means different things to different people, and for some it has a strong spiritual element. But in the context we’re discussing now — organizational health, values, and change — its meaning has to do with entirely new, radical perspectives on work and life.

To cross the Badlands successfully, all of us — from senior executives to middle managers to individual contributors — need to adopt these “soulful” perspectives:

Understand the system; don’t control it. As we saw above, we can’t manage, manipulate, or avoid problems in our organizations without spawning some unintended — and often undesirable — consequences. Understanding the organizational and social systems we live and work in makes us far more able to work within those systems in a healthy, successful way.

Know the relationships in the system. Understanding a system means grasping the nature of the relationships among its parts — whether those parts are business functions, individuals, external forces acting on the organization, etc. By knowing how the parts all influence each other, we can avoid taking actions that ripple through the system in ways that we never intended.

Strengthen human relationships. Success doesn’t come from dead-on metrics or a seemingly bulletproof business model; it comes from one thing only: strong, positive relationships among human beings. When you really think about it, nothing good in the world happens until people get together, talk, understand one another’s perspectives and assumptions, and work together toward a compelling goal or a vision. Even the most brilliant individual working alone can achieve only so much without connecting and collaborating with other people.

Understand others’ perspectives. This can take guts. People’s mental models — their assumptions about how the world works — derive from a complicated process of having experiences, drawing conclusions from those experiences, and then approaching their lives from those premises. Understanding where another person is “coming from” means being able to set aside our own mental models and earn enough of that other person’s trust so that he or she feels comfortable sharing those unique perspectives.

Determine what we stand for. Why do you work, really? Forget the easy answers — “I want to make money” or “I want to buy a nice house.” What lies beneath those easy answers? Around the world, people work for the same handful of profound reasons: They want their lives to have meaning, they want to create something worthwhile and wonderful, they want to see their families thrive in safe surroundings, they want to contribute to their communities, they want to leave this Earth knowing that they made it better. All these reasons define what we stand for. By clarifying what we stand for — that is, knowing in our souls why we go to work every day — we learn that we all are striving for similar and important things. That realization alone can build community and commitment a lot faster than any “rolled-out” management initiative can.

Determine our trust and our trustworthiness. Strong relationships stem from bonds of trust between people. To trust others, we have to assume the best in them — until and unless they prove themselves otherwise. But equally important, we also need to ask ourselves how trustworthy we are. We must realize that others are looking to us to prove our trustworthiness as well. By carefully and slowly building mutual trust, we create a network of robust relationships that will support us as we move forward together.

Be humble, courageous, and vulnerable. Understanding ourselves and others in ways that strengthen our relationships takes enormous courage — and a major dose of humility. It also takes a willingness to say “I don’t know” at times — something that many companies certainly don’t encourage. And finally, it takes a willingness to make ourselves vulnerable — to explain to others why we think and act the way we do, and why we value the things we value.

Find “soul heroes.” We need to keep an eye out for people whom we sense we can learn from — people who live and embody these soulful perspectives. These individuals can be colleagues, family members, friends, customers, or neighbors. If we find someone like this at work — no matter what their position — we must not be afraid to approach them, to talk with them about these questions of values, trust, and soul.

Tools for Your Badlands Backpack

So, to venture into the Badlands, we need soul — whole new ways of looking at our lives and work. But soul alone won’t get us safely through to the other side. We wouldn’t approach the real Badlands without also bringing along a backpack filled with water, food, first-aid materials, and other tools for survival and comfort. Likewise, we shouldn’t tackle the Badlands of organizational complexity without the proper tools.

These five tools are especially crucial:

Systems Thinking Tools.The field of systems thinking provides some powerful devices for understanding the systems in which we live and work, and for communicating our understanding about those systems to the other people who inhabit them. Causal loop diagrams, like the one in “Shifting the Burden to Management,” let us graphically depict our assumptions about how the system works. When we build such a diagram with others, we especially enrich that understanding, because we pull all our isolated perspectives into one shared picture. From there, we can explore possible ways to work with the system to get the results we want. These diagrams also powerfully demonstrate the folly in trying to manhandle a system: When we draw them, we can better see the long-term, undesirable consequences of our attempts to control the system.

Dialogue. The field of dialogue has grown in recent years to include specific approaches to talking with one other. For example, dialogue emphasizes patience in exploring mutual understanding and in arriving at potential solutions to problems. It also encourages us to suspend our judgments about others during verbal exchanges — that is, to temporarily hold our judgments aside in order to grasp others’ reasons for acting or thinking as they do. Dialogue lets a group tap into its collective intelligence — a powerful way of transferring and leveraging knowledge.

Ladder of Inference. This tool offers a potent way to understand why we think and respond to our world as we do. It helps us see how we construct our mental models from our life experiences — and how those mental models can ossify if we don’t keep testing them to see whether they’re still relevant. In the workplace, we all make decisions, say things, and take actions based on our mental models. By using the Ladder of Inference to examine where those models came from, we can revise them as necessary — and reap much more shared understanding with colleagues. (For information about the Ladder of Inference, see The Fifth Discipline Fieldbook published by Currency/ Doubleday).

Scenario Planning. This field has also grown in recent years. Numerous organizations, notably Royal Dutch/Shell, have used scenario planning to remarkable effect. This tool reflects the fact that we can’t control systems. Scenario planning encourages us to instead imagine a broad array of possible futures for our organization or even our entire industry — and to make the best possible arrangements we can to prepare for and benefit from those potential outcomes. This approach thus acknowledges the complexities inherent in any system; after all, there’s no way to easily determine the many different directions a system’s impact may take.

Managing by Means. New methodologies are emerging that can help us assess the true costs of running our businesses — costs to human society, to the environment, and to the business itself. And costs in the short run as well as the long run. We must grapple with these methodologies if we hope to achieve the only long-term business goal that really makes sense: business that doesn’t destroy the very means on which it depends.

Traditional change management methods build things to stick. They do not build things to last and are thus ineffective because well-intentioned people create the strategy, solution, and problem sets based on a narrow set of assumptions. To create a sustainable organization, we must work to understand the complex system dynamics of the environment and experiment with multidimensional strategies. We must also work to understand diverse social dynamics and allow multiple perspectives and behaviors to emerge. Finally, we must trust ourselves, hold true to our core convictions, and have courage, humility, and soul. In these ways, we can navigate through — and even prosper in — the most desolate and challenging of Badlands.

David Berdish is the corporate governance manager at Ford Motor Company. He is leading the development of sustainable business principles that will integrate the “triple bottom line” of economics, environmental, and societal performance and global human-rights processes. He is also supporting the organizational learning efforts at the renovation of the historic Rouge Assembly site.

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Why has accountability, which is merely a principle of sound managerial practice, gotten such a bad rap? Senior managers have too often invoked it as a way of getting things done that they themselves don’t know how do in our less-than-perfect organizational systems and structures. Sometimes this dubious ploy actually works. After all, when their boss says, “Just get it done!” many people can — through sheer willpower, brute force, and long hours — overcome managerial abdication, systemic dysfunctionality, and structural flaws. But the wear and tear burns people out and suboptimizes the whole.

As a managerial technique, holding people accountable after casually tossing a goal or task to them — without setting the context, securing the necessary resources, and providing the proper structure — is destructive. It generates negative emotions and behaviors and a widespread negative response to the proper and requisite notion of accountability. Nevertheless, accountability leadership is crucial for managers to move forward to more productive ways of doing business.

Rehabilitating Accountability

As a first step in rehabilitating accountability, I give you the following accurate, useful definition of the concept: “Accountability is the obligation of an employee to deliver all elements of the value that he or she is being compensated for delivering, as well as the obligation to deliver on specific output commitments with no surprises.”

The essence of employee accountability becomes clear by comparing the role of an employee with that of an independent contractor. A contractor is accountable for delivering a measurable, usually quantifiable, product, service, or result. Repair the roof. Install a phone system. Collect past due accounts. In the process, the contractor has the absolute right to be paid as long as you receive the value you requested. He is left on his own to create his own processes to secure resources, generate efficiencies, and produce results.

Employees, on the other hand, are accountable for delivering value consistent with the total requirements of their role while coordinating with other company processes and functions. In turn, they have the right to be compensated at a level consistent with the value they contribute. Employees are (by law!) paid every day, come what may. They also typically receive training, development, and benefits. But in order to follow through with their commitments, they need the appropriate resources, support, and guidance about expectations about their performance.

Fixed vs. Relative Accountabilities

Thus, in an organization, the term “accountability” refers to an employee’s obligations, some of which are fixed and some of which are relative. Fixed accountabilities comprise the employee’s obligations to deliver outputs and to use resources and processes precisely as specified by the employer. They are necessary to keep processes in control and can be summarized in two distinct categories:

• Commitment. Employees must fulfill the output commitments exactly, in terms of quantity, quality, and timeparameters, as defined in their assignments, projects, services, and other deliverables — unless the manager agrees to adjust them. Under no circumstances can the employee surprise her manager at the due date with changes.
• Adherence. Employees must simultaneously observe and work within defined resource constraints — that is, the rules and limits established by policies, procedures, contracts, and other managerial guidelines, as well as by law.

Relative accountabilities have to do with the employee’s exercise of judgment to maximize value; they include the following four categories:

• Reach. Employees are expected to add as much value as they can by signing on for ambitious yet achievable targets, rather than hanging back or committing to “low-ball” goals.
• Fit for purpose. Employees must continually strive to ensure the optimal means of producing appropriate outputs that support the purpose for which the outputs were designed in the first place.
• Stewardship. Employees must manage company funds and other resources efficiently and seek ways to continually improve and conserve those resources, wherever possible
• Teamwork. Employees must recognize that it is the concerted effort from and between everyone that generates profit in any organization, rather than isolated efforts to maximize personal output. Therefore, an employee must accommodate other people’s work across the organization to maximize the total organizational value — even if her job becomes more difficult in the process.

Many managers do a poor job of defining, explaining, and gaining commitment to fixed accountabilities with their subordinates and holding them to those commitments (see “Management Terminology”). Even more fail to properly explain relative accountabilities and to accurately assess their subordinates’ effectiveness in delivering on them. For that reason, some managers over-budget expenses so they’ll look good next year; some salespeople sell customers more than they need, just so they’ll reach their sales quota this year; some operating personnel pay too much for materials because it’s easier than shopping around — all are failing to fulfill their relative accountabilities. Clearly articulated relative accountabilities are the antidote to the pursuit of narrow goals, waste of resources, and lack of team play that renders so many employees, and their companies, ineffective.

QQT/R

Managers’ accountabilities include some that are unique to the managerial role. Chief among them is being clear with their subordinates about what (the quantity and quality of output) they are expected to deliver and how much time they have to deliver it. Managers are also accountable for providing the resources employees need to complete their assignments.

In virtually any environment, when I ask employees how clear their managers are about what they are accountable for getting done, most will say, “Not very.” In manufacturing, for instance, a supervisor may specify an increase in quantity but not the acceptable reduction, if any, in quality. Yet statistical process control and just-in-time working require unambiguous clarity about accountabilities and the interaction between quantity, quality, time, and resources.

Many managers assume their subordinates know what they are accountable for, not realizing the tension and anxiety they inadvertently cause by failing to be clear. Typically, a highly responsible subordinate will make her best guess at reading her boss’s mind, hoping to be in the right ballpark. Then, a few months later when she gives him a progress report and he says, “That’s not at all what I wanted,” she ends up feeling frustrated and distrustful.

Management scientist Elliott Jaques has developed a small but powerful tool that can be useful for clarifying fixed accountabilities: QQT/R. The slash in QQT/R does not indicate arithmetic division; it merely separates employees’ output accountabilities (quantity, quality, and time frame) from their resource constraints (see “QQT/R”). This expression is the simplest way for managers to accurately define assignments that they are delegating to their subordinates.

QQT/R creates unequivocal clarity regarding obligations. The formula puts all four variables on the table so managers and subordinates can examine, discuss, adjust, and commit to each one explicitly. The variables are both independent and interdependent, summing up real-world constraints and possibilities and exposing potential tradeoffs among them.

With the tradeoffs out in the open, managers and their subordinates are positioned for a hard-hitting, objective conversation about the manager’s goals and resources and the employee’s ability to meet those goals given current conditions. When this process is ignored or done haphazardly, employees are saddled with their managers’ unrealistic or unfair expectations, and managers delude themselves with their employees’ acquiescent or deceptive commitments to fulfill those expectations. When managers extract so-called stretch commitments from employees that are obviously unobtainable, or when they fail to provide adequate resources for an effort, employees know what’s happening and feel they’ve been taken. Similarly, when employees won’t commit to challenging goals, they are sabotaging their managers and their company.

Some managers fear that tools such as QQT/R inhibit initiative and creativity. But QQT/R does just the opposite, because it inspires employees to figure out how best to deliver on their commitments — not to decide what they are to deliver. The best employees delight in improving processes and conserving resources while hitting their QQT objectives. QQT/R should not be construed as top-down either. It should be the outcome of active, vigorous, two-way discussion between managers and their subordinates.

Other managers initially believe that QQT/R cannot be applied to people in analytical or research positions or other areas of knowledge work. Our clients involved in research, product, technology, and market development, as well as similar functions, don’t use QQT/R just to define results per se. They also use it to mutually define the processes, steps, and resources that must be developed in order to yield the intended results (see “A Technology QQT/R” on page 4).

QQT/R is not meant to be a straightjacket or a rigid set of rules. Rather, it is a useful tool for managers and employees to use in developing clearly articulated, mutually agreed upon commitments. It is the most efficient means of ensuring that the output delivered to managers is really the output they wanted. Significantly, QQT/R captures some of the managers’ accountabilities as well as those of employees by defining the resources the manager commits to deliver.

Yet being clear about the QQT/R does not capture all managerial accountabilities. In addition, managers must provide their subordinates the support and working conditions they need to deliver on their accountabilities. This support may include coaching subordinates to enhance their effectiveness and providing constructive feedback. The bottom line is that a manager is accountable for her subordinates’ outputs. She cannot blame her inability to deliver her commitments on her subordinates’ failure to meet their targets. You might say the manager’s credo for the 21st century must be: No excuses about your subordinates’ QQT/Rs! No surprises about your own!

Accountability and Authority

Managers must also be accountable for giving subordinates the authority they need in order to deliver on their obligations. Holding employees accountable for achieving a goal that they haven’t been given the authority to achieve is what I call “managing for fantasy.” Invariably, doing so generates stress, frustration, and resentment in employees. Even when the result is obtained, it is usually at the cost of suboptimizing overall organizational results (see “Managing for Fantasy”).

The reverse of this problem authority without accountability — is also prevalent. For example, an employee may be given authority over processes, people, or other resources but not held accountable for how well he or she manages or what results are achieved. When that happens, the employee eventually becomes self-absorbed and develops a sense of entitlement. In this fantasy culture of undisciplined performance and variable teamwork, one’s attitude is always “me first, productivity second.”

Accountability vs. Responsibility

Another common mistake is confusing accountability with responsibility. In the purest sense, responsibility is what an individual demands of himself or herself. It has to do with one’s conscience, aspirations, and internal standards. Accountability has to do with specific obligations one has to another individual based on mutual commitments each has made to the other. Unfortunately, most organizations use these words interchangeably as a way to make people feel accountable when they don’t actually have the necessary authority.

When employees are unclear about or lack the authority they need to deliver on their accountabilities, they fall back on their own sense of personal responsibility. Because most companies have highly responsible employees, those employees take it upon themselves to get the job done, usually at considerable cost to themselves and their coworkers. As a consequence, they always end up suboptimizing overall organizational effectiveness.

For example, a client of ours in the metal fabricating business asked me to talk with their newly promoted assistant superintendent Sam Travers, a 12-year veteran. Since the promotion, Sam had grown irritable and disruptive. His leadership style included yelling, threatening, cursing, and even kicking cans around. After talking with Sam, I found him to be courteous, reasonable, intelligent, and mature. If anything, he was fully aware of his so-called accountabilities — and chief among them was keeping his area’s machines operating at 80 percent of capacity, or more. However, the machine operators were subordinate to their shift supervisors, not to Sam, and they feared their supervisors would dock their pay, write them up, suspend them, or fire them if a machine broke from being cranked too high. The supervisors, busy fighting fires elsewhere, told Sam to handle the problem himself. Only by screaming at the operators could Sam get them to work faster. He had no managerial authority over the operators yet he felt responsible for getting those machines running at 80 percent or better.

An employee who is working hard but not getting the intended results, or who is achieving results only at considerable cost to coworkers, subordinates, or the larger organization, is probably acting responsibly. With such individuals, you must first review their accountabilities and set them in the context of overall company goals. The next crucial step is to ascertain whether the person has both the commensurate authority and the resources to get the job done. Gaps in the accountability-authority equation may be resolved simply or may require rethinking the alignments in your structures and processes.

LEAD People to Accountability

So what is the solution to this accountability crisis? How can we build accountability leadership in our organizations? The four cornerstones of accountability leadership are “LEAD” — leverage, engagement, alignment, and development. LEAD represents a systemic way of thinking and acting that greatly increases a manager’s effectiveness. It starts with the concept that managers exist to leverage people’s potential so that they can achieve more than they could alone. To get this leverage, managers must engage their employees’ enthusiastic commitment and ensure that they are in alignment with the organization and one another. To maintain leverage over the long term, managers must develop their people’s capabilities so they can apply their full potential to the work of the organization.

Let’s look more closely at each element of the system:

Leverage. In an accountability framework, managers are hired to leverage the creative capabilities of their people to make the total result of their contributions greater than the sum of the parts. A lever is a simple tool that enables someone to lift a heavy object higher than he could on his own. Similarly, leadership, when properly practiced using the levers of engagement, alignment, and development, enables people in a company, department, or team to accomplish something that would not otherwise be possible.

To help employees exercise judgment, the most important leadership practice a manager can deploy is setting context.

The key for managers to become effective leaders is to understand what they are leveraging. They’re not leveraging employees’ fixed accountabilities — the defined assignments and the rules of engagement surrounding the assignment — but rather their relative accountabilities — the value added by their application of judgment and discretion. In other words, managers must fully leverage the collective mental force of their people in order to elevate the whole organization’s ability to deliver value to the customer and, ultimately, to the shareholder.

To help their employees exercise their judgment, the most important leadership practice a manager can deploy is setting context. Doing so consists of including your subordinate in your own thinking and in your manager’s thinking, and then incorporating your subordinate’s thinking into your own. This approach improves upon the quality of a manager’s plan and it helps a subordinate to think, plan, and make adjustments intelligently — that is, in a way that best supports the bigger picture.

Engagement. Effective managers engage commitment by understanding what goes into a healthy “psychological contract,” a term coined by Harry Levinson in the 1950s to describe how managers understand and create the conditions necessary for people to feel supported and successful. This contract represents an implicit — often unspoken — understanding and agreement on what the company will provide, and what the employee will provide, to make the relationship work. It is not to be confused with an employment contract, a legal device detailing what employers and employees owe each other. Rather, the psychological contract rests upon a foundation of mutual commitment to each other’s success.

Negotiating strong, mutual, and reciprocal contracts requires that managers attend to what their employees value, how they define success, and what demonstrates to them that the organization supports their pursuit of success. As a general rule, employees perceive their companies as being committed to their success when they provide:

• A safe, healthy work environment
• Respectful, trustworthy relationships
• Regular opportunities for providing input to the organization, its goals, and one’s own assignments
• Valuable, personally meaningful, and challenging work
• The resources and authorities necessary to meet accountabilities
• Assistance in reaching one’s full potential within the organization
• Recognition and appreciation of one’s contribution
• Fair compensation
• A commitment to organizational success and perpetuation

If an employee — or your entire workforce — fails to demonstrate the level of engagement sought, use the preceding list as a diagnostic checklist. Invariably, at least one and usually more of these elements will be missing. This shortcoming is your clue to remedial actions that you might take.

Finally, it’s worth mentioning that context setting and QQT/Rs are part of the psychological contract. Employees prefer clarity, not vagueness. The very process of jointly defining intentions and ambitious and attainable QQT/Rs creates engagement.

Alignment. Employees are aligned when they understand the relationship between their activities and goals and those of their organization, managers, and coworkers — and then act on that understanding. Alignment enables employees to best use their judgment to craft, with others, the day-to-day, often minute-to-minute adjustments that will best support management’s thinking in light of changing conditions.

Alignment ensures that employees are not only accountable for accomplishing their own individual missions — the QQT/Rs — but that they deliver their accountabilities in such a way that ensures they fit into, and support, the whole. With that framework, employees can be expected to chart and continually adjust a course to reach optimal solutions — together. So by setting context, a manager brightens the light on the areas where employees should focus and dims it on areas where they do not need to do so.

To be most useful, context must be translated into a fully articulated decision-making framework within which subordinates can make optimal trade-offs. This framework guides subordinates when they must make decisions involving key dimensions such as revenue, costs, profits, quality, quantity, timeliness, customer satisfaction, or an objective such as winning a new market. Within such a framework, employees not only understand the context in terms of their manager’s thinking and intentions, but they also understand the umbrella of alternative logic within which they must operate.

Development. Employee development, as a continual, career long process, represents the surest path to a workforce that functions with enthusiastic commitment at its full potential. If there truly is a talent gap and companies cannot find and retain enough high performers, then senior executives need to start taking employee development seriously. This means understanding what development entails, creating a talent-pool development system, and holding each manager accountable for effectively developing her own employees — both in role and in careers.

To fully develop an employee’s potential, you need to have a good idea of what that potential is. The purest handle you can get on an employee’s potential involves assessing his ability to handle complexity. This point is quite important, because position levels in organizations are closely related to the complexity of the tasks and the kind of judgment involved in the work of those positions.

Broadly, the tasks of employee development fall into two areas: developing subordinates in their current positions (through coaching) and developing subordinates to improve their fit for higher-level positions in the future (through mentoring). In other words, managers must be accountable for coaching their immediate subordinates and for mentoring their subordinates’ subordinates.

What It Takes to LEAD

The system that I have labeled LEAD lacks the iron-fist approach of the old command-and-control style of management, as well as its paternalism and its limited view of employee potential. LEAD also eschews the passive approach associated with employee empowerment, self-directed work groups, and similar laissez-faire reactions to command and control.

Instead, LEAD begins with a clear mandate for managers to leverage their people to their highest levels of achievement, as individuals and as a group. LEAD recognizes that managers will draw forth employees’ best efforts not by the unilateral issuing of orders, but by enthusiastically engaging their employees’ commitment in their work. Furthermore, LEAD aligns those efforts when managers construct with their subordinates a powerful context — conveying management’s thinking and intentions — as well as practical decision-making frameworks. And finally, LEAD looks to the long-term value of the individual and the organization by holding managers accountable for effectively developing their employees to their fullest potential.

To implement LEAD, you need a clear view of your managerial role, the flexibility to adopt new viewpoints, and the patience and intelligence to learn new skills. You also need the energy and commitment to work with yourself and your people, to try and fail and try again until the system becomes part of your everyday managerial-leadership practice. In addition, you need the courage to establish LEAD as an accountability for every manager and to assess each manager’s value — and right to remain a manager — against this standard. Implementing accountability leadership does require hard work, but I fervently believe that business leaders and managers who undertake it can use LEAD to their competitive advantage.

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We use the term “Habits of Mind” to mean having a disposition toward behaving intelligently when confronted with problems to which we do not immediately know the answers. When humans experience dichotomies, are confused by dilemmas, or come face to face with uncertainties, our most effective actions require drawing forth certain patterns of intellectual behavior. When we draw upon these intellectual resources, the results that we produce are more powerful, of higher quality, and of greater significance than if we fail to employ those patterns of intellectual behaviors.

Employing Habits of Mind requires a composite of many skills, attitudes, cues, past experiences, and proclivities. It means that we value one pattern of thinking over another, and therefore it implies choice making about which pattern should be employed at which time. It includes sensitivity to the contextual cues in a situation signaling that it is an appropriate time and circumstance to employ this pattern. It requires a level of skillfulness to employ and carry through the behaviors effectively over time. Finally, it leads individuals to reflect on, evaluate, modify, and carry forth to future applications their learnings.

Research in effective thinking and intelligent behavior indicates that there are some identifiable characteristics of effective thinkers. Scientists, artists, and mathematicians are not the only ones who demonstrate these behaviors. These characteristics have been identified in successful mechanics, teachers, entrepreneurs, salespeople, and parents — people in all walks of life.

Habits of Mind

Following are descriptions and an elaboration of 16 attributes of what human beings do when they behave intelligently (see “16 Habits of Mind”). These Habits of Mind are what intelligent people do when they are confronted with complex problems. These behaviors are seldom performed in isolation. Rather, clusters of such behaviors are drawn forth and employed in various situations. When listening intently, for example, one employs flexibility, metacognition, precise language, and perhaps questioning.

Please do not think that there are only 16 ways in which humans display their intelligence. It should be understood that this list is not meant to be complete. You, your colleagues, or your students will want to continue the search for additional Habits of Mind by adding to and elaborating on this list and the descriptions (for an example of an additional list, see “13 Habits of a Systems Thinker,” compiled by the Waters Foundation).

1. Persisting

“Persistence is the twin sister of excellence. One is a matter of quality; the other, a matter of time.”

— Marabel Morgan

Efficacious people stick to a task until it is completed. They don’t give up easily They are able to analyze a problem to develop a system, structure, or strategy to attack it. They employ a range and have a repertoire of alternative strategies for problem solving. They collect evidence to indicate their problem-solving strategy is working, and if one strategy doesn’t work, they know how to back up and try another. They recognize when a theory or idea must be rejected and another employed. They have systematic methods of analyzing a problem that include knowing how to begin, what steps must be performed, and what data need to be generated or collected. Because they are able to sustain a problem-solving process over time, they are comfortable with ambiguous situations.

• Managing Impulsivity“. . . . [G]oal-directed self-imposed delay of gratification is perhaps the essence of emotional self-regulation: the ability to deny impulse in the service of a goal, whether it be building a business, solving an algebraic equation, or pursuing the Stanley cup.”

  —Daniel Goleman

  Effective problem solvers have a sense of deliberativeness: They think before they act. They intentionally form a vision of a product, plan of action, goal, or destination before they begin. They strive to clarify and understand directions, develop a strategy for approaching a problem, and withhold immediate value judgments about an idea before fully understanding it. Reflective individuals consider alternatives and consequences of several possible directions prior to taking action. They decrease their need for trial and error by gathering information, taking time to reflect on an answer before giving it, making sure they understand directions, and listening to alternative points of view.

• Listening to Others — With Understanding and Empathy“Listening is the beginning of understanding. … Wisdom is the reward for a lifetime of listening. Let the wise listen and add to their learning and let the discerning get guidance.”

  —Proverbs 1:5

  According to Stephen Covey, highly effective people spend an inordinate amount of time and energy listening. Some psychologists believe that the ability to listen to another person, empathize with them, and understand their point of view is one of the highest forms of intelligent behavior. Being able to paraphrase another person’s ideas, detecting indicators of their feelings or emotional states in their oral and body language, accurately expressing another person’s concepts, emotions, and problems — all are indications of listening behavior (Piaget called it “overcoming egocentrism”).

  Peter Senge and his colleagues suggest that to listen fully means to pay close attention to what is being said beneath the words. Generative listening is the art of developing deeper silences in yourself, so you can slow your mind’s hearing to your ears’ natural speed and hear beneath the words to their meaning. This is a complex skill requiring the ability to monitor one’s own thoughts while, at the same time, attending to the partner’s words. Honing this behavior does not mean that we can’t disagree with someone. A good listener tries to understand what the other person is saying. In the end, he may disagree sharply, but because he disagrees, he wants to know exactly what it is he is disagreeing with.

• Thinking Flexibly“If you never change your mind, why have one?”

  — Edward deBono

  An amazing discovery about the human brain is its plasticity — its ability to “rewire,” change, and even repair itself to become smarter. Flexible people are the ones with the most control. They have the capacity to change their minds as they receive additional data. They engage in multiple and simultaneous outcomes and activities, draw upon a repertoire of problem-solving strategies, and know when it is appropriate to be broad and global in their thinking and when a situation requires detailed precision. They create and seek novel approaches and have a well-developed sense of humor. They envision a range of consequences.

  13 HABITS OF A SYSTEMS THINKER

  The Water Foundation has identified 13 Habits of a Systems Thinker. For detailed definitions of each, click here.

  • Seeks to understand the “big picture”
  • Observes how elements within systems change over time, generating patterns and trends
  • Recognizes that a system’s structure generates its behavior: focuses on structure, not on blame
  • Identifies the circular nature of complex cause and effect relationships, i.e. interdependencies
  • Changes perspectives
  • Surfaces and tests assumptions
  • Considers an issue fully and resists the urge to come to a quick conclusion
  • Considers how mental models (i.e., attitudes and beliefs derived from experience) affect current reality and the future
  • Uses understanding of system structures to identify possible leverage actions
  • Considers both short- and long-term consequences of actions
  • Finds where unintended consequences emerge
  • Recognizes the impact of time delays when exploring cause and effect relationships
  • Checks results and changes actions if needed:, “successive approximation”

  Flexible people can approach a problem from a new angle using a novel approach (deBono refers to this as lateral thinking). They consider alternative points of view or deal with several sources of information simultaneously. Thus, flexibility of mind is essential for working with social diversity, enabling an individual to recognize the wholeness and distinctness of other people’s ways of experiencing and making meaning.

  Flexible thinkers are able to take a “macro-centric” perspective. This is similar to looking down from a balcony at ourselves and our interactions with others. This bird’s-eye view is useful for discerning themes and patterns from assortments of information. It is intuitive, holistic, and conceptual. Since we often need to solve problems with incomplete information, we need the capacity to perceive general patterns and jump across gaps of incomplete knowledge or when some of the pieces are missing.

  Yet another perceptual orientation is “micro-centric” — examining the individual and sometimes minute parts that make up the whole. Without this “worm’s-eye view,” science, technology, and any complex enterprise could not function. These activities require attention to detail, precision, and orderly progressions.

  Flexible thinkers display confidence in their intuition. They tolerate confusion and ambiguity up to a point, and are willing to let go of a problem, trusting their subconscious to continue creative and productive work on it. Flexibility is the cradle of humor, creativity, and repertoire.

• Thinking About Our Thinking (Metacognition)“When the mind is thinking it is talking to itself.”

  — Plato

  Occurring in the neocortex, metacognition is our ability to know what we know and what we don’t know. It is our ability to plan a strategy for producing what information is needed, to be conscious of our own steps and strategies during the act of problem solving, and to reflect on and evaluate the productiveness of our own thinking. Probably the major components of metacognition are developing a plan of action, maintaining that plan in mind over a period of time, then reflecting back on and evaluating the plan upon its completion. Planning a strategy before embarking on a course of action assists us in keeping track of the steps in the sequence for the duration of the activity. It facilitates making temporal and comparative judgments, assessing the readiness for more or different activities, and monitoring our interpretations, perceptions, decisions, and behaviors.

  Metacognition means becoming increasingly aware of one’s actions and the effect of those actions on others and on the environment, forming internal questions as one searches for information and meaning, developing mental maps or plans of action, mentally rehearsing prior to performance, monitoring those plans as they are employed. It involves being conscious of the need for midcourse correction if the plan is not meeting expectations, reflecting on the plan upon completion of the implementation for the purpose of self-evaluation, and editing mental pictures for improved performance.

• Striving for Accuracy and Precision“A man who has committed a mistake and doesn’t correct it is committing another mistake.”

  — Confucius

  Embodied in the stamina, grace, and elegance of a ballerina or a shoemaker is the desire for craftsmanship, mastery, flawlessness, and economy of energy to produce exceptional results. People who value these qualities take time to check over their products. They review the rules by which they are to abide; they review the models and visions they are to follow; and they review the criteria they are to employ and confirm that their finished product matches the criteria exactly.

  To be craftsman-like means knowing that one can continually perfect one’s craft by working to attain the highest possible standards and pursue ongoing learning in order to bring a laser-like focus of energies to task accomplishment. For some people, craftsmanship requires continuous reworking. Mario Cuomo, a great speechwriter and politician, once said that his speeches were never done — it was only a deadline that made him stop working on them!

• Questioning and Posing Problems“The formulation of a problem is often more essential than its solution, which may be merely a matter of mathematical or experimental skill. To raise new questions, new possibilities, to regard old problems from a new angle, requires creative imagination and marks real advances.”

  — Albert Einstein

  One of the distinguishing characteristics between humans and other forms of life is our inclination and ability to find problems to solve. Effective problem solvers know how to ask questions to fill in the gaps between what they know and what they don’t know. Effective questioners are inclined to ask a range of questions. For example, they request data to support others’ conclusions and assumptions through questions such as, “What evidence do you have?”

  They pose questions about alternative points of view:, “From whose viewpoint are we seeing, reading, or hearing?”

  They inquire into causal connections and relationships:, “How are these people/events/situations related to each other?”

  They pose hypothetical problems: “What do you think would happen if …?”

  Inquirers recognize discrepancies and phenomena in their environment and probe into their causes:, “Why do cats purr?”, “Why does the hair on my head grow so fast, while the hair on my arms and legs grows so slowly?”, “What are some alternative solutions to international conflicts other than wars?”

• Applying Past Knowledge to New Situations“I’ve never made a mistake. I’ve only learned from experience.”

  — Thomas A. Edison

  Intelligent human beings learn from experience. When confronted with a new and perplexing problem, they will often draw forth experience from their past. They can be heard to say, “This reminds me of . . .” or “This is just like the time when I . . .” They call on their store of knowledge and experience as sources of data to support, theories to explain, or processes to solve each new challenge. Furthermore, they are able to abstract meaning from one experience, carry it forth, and apply it in a new and novel situation.

• Thinking and Communicating with Clarity and Precision“I do not so easily think in words . . . after being hard at work having arrived at results that are perfectly clear . . . I have to translate my thoughts in a language that does not run evenly with them.”

  — Francis Galton

  Language refinement plays a critical role in enhancing a person’s cognitive maps and their ability to think critically, which is the knowledge base for efficacious action. Enriching the complexity and specificity of language simultaneously produces effective thinking. Language and thinking are closely entwined. Like two sides of a coin, they are inseparable. Fuzzy language is a reflection of fuzzy thinking. Intelligent people strive to communicate accurately in both written and oral form, taking care to use precise language, defining terms, correct names, and universal labels and analogies. They strive to avoid overgeneralizations, deletions, and distortions. Instead, they support their statements with explanations, comparisons, quantification, and evidence.

• Gathering Data Through All Senses“Observe perpetually.”

  — Henry James

  The brain is the ultimate reductionist. It reduces the world to its elementary parts: photons of light, molecules of smell, sound waves, vibrations of touch — which send electrochemical signals to individual brain cells that store information about lines, movements, colors, smells, and other sensory inputs. Intelligent people know that all information gets into the brain through the sensory pathways: gustatory, olfactory, tactile, kinesthetic, auditory, visual, Most linguistic, cultural, and physical learning is derived from the environment by observing or taking in through the senses. To know a wine it must be drunk; to know a role it must be acted; to know a game it must be played; to know a dance it must be moved; to know a goal it must be envisioned. Those whose sensory pathways are open, alert, and acute absorb more information from the environment than those whose pathways are withered, immune, and oblivious to sensory stimuli.

  Furthermore, we are learning more about the impact of arts and music on improved mental functioning. Forming mental images is important in mathematics and engineering; listening to classical music seems to improve spatial reasoning. Social scientists solve problems through scenarios and roleplaying; scientists build models; engineers use cad-cam; mechanics learn through hands-on experimentation; artists experiment with colors and textures; musicians learn by producing combinations of instrumental and vocal music.

• Creating, Imagining, and Innovating“The future is not some place we are going to but one we are creating. The paths are not to be found, but made, and the activity of making them changes both the maker and the destination.”

  — John Schaar

  All humans have the capacity to generate novel, original, clever, or ingenious products, solutions, and techniques—if that capacity is developed. Creative individuals try to conceive problem solutions differently, examining alternative possibilities from many angles. They tend to project themselves into different roles using analogies, starting with a vision and working backward, imagining they are the objects being considered. Creative people take risks and frequently push the boundaries of their perceived limits. They are intrinsically rather than extrinsically motivated, working on the task because of the aesthetic challenge rather than the material rewards. Creative people are open to criticism. They hold up their products for others to judge and seek feedback in an ever-increasing effort to refine their technique.

• Responding with Wonderment and Awe“The most beautiful experience in the world is the experience of the mysterious.”

  — Albert Einstein.

  Efficacious people have not only an “I can” attitude, but also an “I enjoy” feeling. They enjoy figuring things out by themselves and continue to learn throughout their lifetimes. They find beauty in a sunset, intrigue in the geometry of a spider web, and exhilaration at the iridescence of a hummingbird’s wings. They see the congruity and intricacies in the derivation of a mathematical formula, recognize the orderliness and adroitness of a chemical change, and commune with the serenity of a distant constellation.

• Taking Responsible Risks“There has been a calculated risk in every stage of American development — the pioneers who were not afraid of the wilderness, businessmen who were not afraid of failure, dreamers who were not afraid of action.”

  — Brooks Atkinson

  Flexible people seem to have an almost uncontrollable urge to go beyond established limits. They are uneasy about comfort; they “live on the edge of their competence.” They seem compelled to place themselves in situations where they do not know what the outcome will be. They accept confusion, uncertainty, and the higher risks of failure as part of the normal process, and they learn to view setbacks as interesting, challenging, and growth producing.

  However, they are not behaving impulsively. Their risks are educated. They draw on past knowledge, are thoughtful about consequences, and have a well-trained sense of what is appropriate. They know that not all risks are worth taking! It is only through repeated experiences that risk taking becomes educated. It often is a cross between intuition, drawing on past knowledge, and a sense of meeting new challenges.

• Finding Humor“Where do bees wait? At the buzz stop.”

  — Andrew, age six

  Another unique attribute of humans is our sense of humor. Laughter transcends all cultures and eras. Its positive effects on psychological functions include a drop in the pulse rate, the secretion of endorphins, and increased oxygen in the blood. It has been found to liberate creativity and provoke such higher-level thinking skills as anticipation, the identification of novel relationships, visual imagery, and analogy. People who engage in the mystery of humor have the ability to perceive situations from an original and often interesting vantage point. Having a whimsical frame of mind, they thrive on finding incongruity and perceiving absurdities, ironies, and satire; finding discontinuities; and being able to laugh at situations and themselves.

• Thinking Interdependently“Take care of each other. Share your energies with the group. No one must feel alone, cut off, for that is when you do not make it.”

  — Willie Unsoeld

  Humans are social beings. We congregate in groups, find it therapeutic to be listened to, draw energy from one another, and seek reciprocity. In groups, we contribute our time and energy to tasks that we would quickly tire of when working alone. In fact, we have learned that one of the cruelest forms of punishment that can be inflicted on an individual is solitary confinement.

  Cooperative humans realize that all of us together are more powerful, intellectually and/or physically, than any one individual. Probably the foremost disposition in the post-industrial society is the heightened ability to think in concert with others and to find ourselves increasingly more interdependent and sensitive to the needs of others. Problem solving has become so complex that no one person can go it alone. No one has access to all the data needed to make critical decisions; no one person can consider as many alternatives as several people can.

• Learning Continuously“Insanity is continuing to do the same thing over and over and expecting different results.”

  — Albert Einstein

  Intelligent people are in a continuous learning mode. Their confidence, in combination with their inquisitiveness, allows them to constantly search for new and better ways. People with this Habit of Mind are always striving for improvement, growing, and learning. They seize problems, situations, tensions, conflicts, and circumstances as valuable opportunities to learn.

  A great mystery about humans is that we confront learning opportunities with fear rather than mystery and wonder. We seem to feel better when we know rather than when we learn. We defend our biases, beliefs, and storehouses of knowledge rather than inviting the unknown, the creative, and the inspirational. Being certain and closed gives us comfort, while being doubtful and open gives us fear. The highest form of thinking we will ever learn is the humility of knowing that we don’t know.

In Summary

Drawn from research on human effectiveness, descriptions of remarkable performers, and analyses of the characteristics of efficacious people, we have presented descriptions of 16 Habits of Mind. This list is not meant to be complete but rather to serve as a starting point for further elaboration and description.

These Habits of Mind may serve as mental disciplines. When confronted with problematic situations, students, parents, and teachers might habitually employ one or more of these Habits of Mind by asking themselves, “What is the most intelligent thing I can do right now?”

• How can I learn from this? What are my resources? How can I draw on my past successes with problems like this? What do I already know about the problem? What resources do I have available or need to generate?
• How can I approach this problem flexibly? How might I look at the situation in another way? How can I draw upon my repertoire of problem-solving strategies? How can I look at this problem from a fresh perspective?
• How can I illuminate this problem to make it clearer, more precise? Do I need to check out my data sources? How might I break this problem down into its component parts and develop a strategy for understanding and accomplishing each step?
• What do I know or not know? What questions do I need to ask? What strategies are in my mind now? What am I aware of in terms of my own beliefs, values, and goals with this problem? What feelings or emotions am I aware of which might be blocking or enhancing my progress?
• The interdependent thinker might turn to others for help. She might ask, How does this problem affect others? How can we solve it together? What can I learn from others that would help me become a better problem solver?

These Habits of Mind transcend all subject matters commonly taught in school. They are characteristic of peak performers, whether in homes, schools, athletic fields, organizations, the military, governments, churches, or corporations. They are what make marriages successful, learning continual, workplaces productive, and democracies enduring.

The goal of education therefore should be to support others and ourselves in liberating, developing, and habituating these Habits of Mind more fully. Taken together, they are a force directing us toward increasingly authentic, congruent, ethical behavior. They are the tools of disciplined choice making. They are the primary vehicles in the lifelong journey toward integration. They are the “right stuff” that makes human beings efficacious.

This article is adapted with permission from Arthur Costa and Bena Kallick, “Describing 16 Habits of Mind.” Click here to access the original article. The authors have a new book coming out, Learning and Leading with Habits of Mind: 16 Essential Characteristics for Success (Association for Supervision and Curriculum Development, 2009).

Arthur L. Costa, Ed. D., is an Emeritus Professor of Education at California State University, Sacramento and co-director of the Institute for Intelligent Behavior in El Dorado Hills, California. He has served as a classroom teacher, a curriculum consultant, and an assistant superintendent for instruction and as the director of educational programs for the National Aeronautics and Space Administration.

Bena Kallick, Ph. D., is a private consultant providing services to school districts, state departments of education, professional organizations, and public sector agencies throughout the United States and abroad. Her areas of focus include group dynamics, creative and critical thinking, and alternative assessment strategies in the classroom.

The post Habits of Mind: Strategies for Disciplined Choice Making appeared first on The Systems Thinker.

All businesses desire high and stable profitability, period after period for as long as possible. That surely is the goal of most performance improvement programs, including lean initiatives. However, such programs invariably boost profitability for only a while, followed by increasing instability and reduced performance until the cycle repeats and management once again rolls out another improvement program. Again, profitability increases for a while, followed by another disappointing downturn that leads to yet another improvement program. As a consequence of such improvement-initiative cycles, average results over the long term move in the opposite direction to the desired result, despite brief periods of improvement in the short run.

Unintended Consequences of Improvement

I believe this unintended consequence of improvement initiatives occurs because management’s view of what causes business results differs greatly from how the business system itself would naturally produce those results. In virtually all businesses today, and for the past 50 years or more, management actions meant to improve financial performance reflect a mechanistic view of what causes financial results. In that view, financial results are a linear, additive sum of independent contributions from different parts of the business.

In other words, managers believe that reducing an operation’s annual cost by $1 million simply requires them to manipulate parts of the business that generate spending in that amount each year. Because managers assume that all parts of their operations make independent contributions to overall financial performance, like the parts of a machine, they would consider any or all of the following steps to be equally effective: lay off employees whose annual pay equals $1 million; force suppliers to accept reduced prices for their goods or services; outsource employment or contract purchases to less-developed countries. It doesn’t matter what steps are chosen, as long as they eliminate $1 million of annual spending.

Were managers to assume, however, that the financial performance of business operations results from a pattern of relationships among a community of interrelated parts, and is not merely the sum of individual contributions from a collection of independent parts, their approach to reducing cost could be entirely different. In that case, managers might attempt to reduce costs by improving the system of relationships that determines how the business consumes resources to meet customer requirements. This would suggest that they view “improvement” primarily in terms of a system of relationships the human social system that is the business and not simply in terms of an arithmetic sum of separate parts. Viewing current operations through the lens of this vision would enable everyone in the organization to see the direction that change must take to move operations closer to that vision.

However, such thinking has not yet influenced business education and practice. Indeed, the thinking and behavior of almost all managers in today’s business world reflect a worldview grounded in the whole-equals-sum-of-parts and win-lose competitive principles of 19th-century mechanics and 18th-century classical physics, not the systemic, cooperative, and win-win symbiotic principles of 21st-century cosmology and life science. That explains, I believe, why virtually all improvement initiatives, including so-called lean initiatives, inevitably generate long-run financial results that fall far short of what was intended by the initiatives’ designers.

Confusion of Levels

This failure has to do with a “confusion of levels,” a phrase writers often use to describe what the 20-century systems thinker Gregory Bateson called a type of epistemological error. Bateson said that humans in any culture share certain premises about epistemology, that is, “about the nature of knowing and the nature of the universe in which we live and how we know about it” (Gregory Bateson, Steps to an Ecology of Mind, p. 478). Many of these premises, because they work at some levels and under certain circumstances, are misapplied to other levels. Problems occur when this happens.

People in Western cultures have premises for explaining or understanding the world at two main levels, referred to briefly above. At one level, call it the mechanical, all events are explained by the influence of external force or impact on independent objects. At the other level, call it the living, all events are explained by patterns of relationships connecting a world of self-organizing beings. The premises at the first level have been successfully used for nearly two centuries to study mechanical processes and to promote engineering technology. They are the basis for scientific and business education and practice in the Western world today.

But problems have grown increasingly severe from the erroneous application of these premises to human dealings with nature and to social organizations, such as businesses, that embody principles of living systems. For example, viewing reality through the premises of the first level, a management accountant in modern business views a spreadsheet of financial results as the company. Oblivious to premises at the second level, this person fails to see the system of human relationships that produces those financial results as the company. As a consequence, the person promotes policies to “improve financial results” by arbitrarily destroying relationships through layoffs or outsourcing, not by nurturing and reinforcing the features of those relationships that produce robust results. The long-term outcome, predictably, is less than expected.

Lean Practices Versus Toyota Results

In their customary way of doing things in business, managers confuse linear cause-effect connections at the abstract quantitative level of financial results with the non-linear, complex cause-effect connections that naturally exist at the concrete level of relationships among employees, suppliers, customers, owners, and community. Their business training and experience cause managers to believe that linear cause-effect connections at the abstract quantitative level apply everywhere in the world, including the level of real operations. Thus, they proceed to manipulate and control people and things according to the linear principles that apply at the abstract quantitative level.

Therein lies another confusion of levels. Whereas in a mechanical system, one-dimensional quantities can both describe results and enable one to control the linear process that produces those results, in a living system, quantities can only describe results, but cannot explain or enable one to control the multi-dimensional interactions and feedback loops of the process that produces the results. As I discuss in more detail below, this confusion of levels invalidates all management accounting practices in which businesses attempt to use financial quantities to explain and control financial results. Those practices, which are endemic to American management but are not evident at Toyota, are the main reason why lean initiatives fail to have their desired impact on financial performance in American business.

An example of the damaging impact of this confusion is in a case (co-authored with MIT Professor David Cochran) I describe elsewhere that compares the financial (and other quantitative) results in two automobile bumper-making plants (H. Thomas Johnson, “Lean Accounting: To Become Lean, Shed Accounting,” Cost Management, Jan/Feb 2006, pp. 3-17). One is run by an American “Big Three” automaker whose managers continually manipulate separate parts of the plant’s operations and arbitrarily increase output in order to achieve unit cost targets defined by an abstract financial cost equation. The other is run by Toyota, whose managers focus on nurturing systemic relationships in the plant according to a constant vision that has guided all operations in the company for many decades. The case demonstrates that Toyota does not confuse linear cause-effect connections at the abstract level of financial cost equations with the complex cause-effect connections at the concrete operating level of human relationships and that it, in turn, achieves lower costs and higher overall performance.

I believe lean initiatives fail to achieve results like those observed at Toyota because they do not change the underlying mechanistic thinking that has guided management decisions in virtually all American businesses for the past half century or more. Lean initiatives in non-Toyota companies invariably fail to embody Toyota’s unique way of thinking about business and the fundamentally different approach to management. Thus, businesses transplant Toyota practices into a context of alien thinking that overpowers and dilutes their effectiveness. As a consequence, such companies can demonstrate Toyota-style management practices, but not Toyota performance results.

“Going to the Place”

The prevalence of management accounting control systems in American business probably contributes more than any single thing to the confusion of levels that causes managers to believe they can run operations mechanically by chasing financial targets, not by nurturing and improving the underlying system of human relationships from which such results emerge. It is significant, then, to note that Toyota doesn’t use management accounting targets (or “levers”) to control or motivate operations. I argue that this is an important reason why Toyota’s financial performance is unsurpassed in its industry.

People at Toyota place great importance on genchi genbutsu, or “going to the place” where the problem occurs to see it firsthand. They don’t rely on secondhand reports or charts of data to get true understanding of root cause. Instead, they go to the place (gemba) where they can watch, observe, and “ask why five times.” This attitude shows a deep appreciation that results (and problems) ultimately emanate from and are explained by complex processes and concrete relationships.

Managers in a Toyota plant, unlike their counterparts in American organizations, do not refer to accounting documents such as standard cost variance budgets to discuss the state of current operations. Indeed, in 1992, during my first of scores of trips to Toyota’s Georgetown, Kentucky plant, I was told that the Toyota accounting system treats daily plant operations essentially as a “black box” that it does not enter. Accountants of course record everything that goes into the plant and all the products that come out. But within the plant they don’t track the flow between incoming resources and outgoing finished product. Everything one needs to know about the transformation that takes place inside the plant is inherent in the flow of the work itself. Indeed, a key feature of the Toyota Production System is that the work itself provides the information needed to control its state.

Professor Kazuhiro Mishina introduced me to this aspect of the Toyota Production System (TPS) in 1992 when he showed me a high-level “material and information flow map” for the Georgetown plant. He explained that the map is designed to show material flowing from left (raw material) to right (finished autos) and information flowing from right to left. Basically there was only one line going from right to left a line to represent the customers’ orders entering the plant each day and going directly to the body-welding operation. Today this type of map is familiar to anyone who has studied “value-stream mapping.” But Kazuhiro pointed out to me that no lines representing information enter the plant from either the accounting system or the production control system. The work itself provides all the information that in non-Toyota plants customarily comes from computerized material requirements planning (MRP) and standard cost variance reports.

While the value-stream mapping literature does an excellent job of showing how the TPS dispenses with the need for production controls in daily operations, it is silent on how the TPS also dispenses with the need for accounting controls in daily operations. This is an unfortunate lapse, in my opinion, because it has left the door open to the idea that lean manufacturing programs must include lean accounting controls.

In Toyota plants, all information needed to control operations is in the work, simply because all work flows continuously at a balanced rate through virtually every operation, from the beginning to the end of the manufacturing process. The work has been carefully designed so that one can “see” its current state quite literally. Is it on time to meet the day’s orders? If not, how much additional time will be needed? Have defects or other errors occurred along the way? Are components to final assembly being replenished on a timely basis? Has any undue inventory accumulated anywhere? Are problems being identified and addressed according to standard procedures? Such questions, and hundreds more, can be answered every moment in every step of the process throughout the plant. Any “exceptions” that managers might need to address to keep financial results on track are visible real time as the work is being done, not days, weeks, or months later in a report from the accounting department.

The Wrong Question

If traditional management accounting practices are the key problem preventing American businesses from emulating Toyota’s performance, what should companies do? Many proponents of lean accounting suggest that companies should reform management accounting itself by doing things such as activity-based value-stream costing, direct costing, cash-flow accounting, value-add capacity analysis, and more. These proposals should cause a sense of deja vu among those who are old enough to recall the proposals 20 years ago to gain better control over burgeoning overhead costs with activity-based cost (ABC) information. ABC seemed like a good idea at the time, but in retrospect it was a good answer to the wrong question. We see better today, when we understand more fully what Toyota does, that reducing manufacturing overhead costs requires a new way to organize work, not better cost information. The question that proponents of ABC should have been asking was how to organize work to eliminate the causes of overhead activity, not how to trace costs of overhead activities to products in more discriminating ways.

The question most companies ask now is how to control the financial results of business operations, as if financial results are a linear sum of individual contributions from separate parts of the business. Accounting control information seems the logical way to show how those contributions, and changes in those contributions, add up to the organization’s overall financial results. But if we assume that financial results emerge from complex interactions and non-linear feedback loops in the interrelated parts of a natural living system, then attempting to control those results with linear accounting information is not only erroneous, but possibly destructive to the system’s operations in the long run. In this case, the new question is: How does one control, if at all, the financial results that emerge from operations that abide by the principles that govern a natural living system?

Managing by Means

An early answer to this question was provided in the 1930s and 1940s by Walter Shewhart and W. Edwards Deming, both trained in mathematical physics and experienced in using state-of-the-art statistical tools in business and government. One of their lasting contributions was to devise a scientific way to estimate the “control limits” within which a business system’s results would normally fall until one of two steps were taken that altered the limits. One step was to ignore all but abnormal variation in results and work to improve the system itself, thereby narrowing the control limits and improving long-term performance. The other step, a less desirable but more common way of managing, was to try to improve long-term performance by intervening in the system every time results varied from a desired target. The inevitable consequence of the second step, Shewhart and Deming proved, is to widen the system’s control limits and impair its long-term performance.

In essence, Shewhart and Deming likened a well-designed business system to a living system in nature. Its results vary over time, but the range of variation has limits. However, in a human system such as the operations of a business, managers can improve performance by taking steps to reduce that range of variation. The key to performance improvement, then, is to nurture the system that produces results, not to drive the system to achieve targets that fall outside its normal performance limits. In his early work, Deming articulated 14 principles (or points) that defined what he meant by nurturing the system. Those principles included things such as create constancy of purpose, constantly improve systems by reducing variation, cease dependence on inspection, do not base purchases on price alone, do not reward individual performance, institute training, eliminate management by objectives, and more.

This is precisely the approach that Toyota takes to manage its operations. Toyota lives by a set of deep underlying systems principles that I tried to sum up in my own words with the concept “managing by means.” As I outlined it in my book Profit Beyond Measure, the essence of that concept is that satisfactory business results follow from nurturing the company’s system (the “means”), not from manipulating its processes to achieve pre-determined financial results (a mechanistic strategy popularly known as “managing by results”). In other words, nurture the process and satisfactory results will follow.

This sentiment is central to Toyota’s deep-seated belief that one cannot improve financial performance by intervening in the system and forcing operations people to achieve results targets. Instead, they emphasize the importance of defining the properties their operating system should manifest and of having everyone in the organization work assiduously to move the system toward those properties. Toyota people frequently refer to those properties as “True North.” True North in Toyota’s system includes safety, moving work always in a continuous flow, one order at a time on time, with no defects, with all steps adding value, and with the lowest consumption of resources possible. The assumption is that the more that every process in the system manifests the properties of True North, the better will be the company’s long-term performance.

These three approaches to managing operations the Shewhart-Deming approach, managing by means (MBM), and Toyota’s approach all suggest how different it is to nurture the system that produces a company’s financial results than it is to arbitrarily intervene in and wrench the system in an attempt to force it to produce a desired result beyond its current capabilities. The latter strategy is, of course, followed by virtually all large companies in the United States today, especially the large publicly traded companies whose top managers are pressured to deliver results demanded by financial markets and other outside interests. Many of those companies are pursuing lean initiatives in the expectation of achieving performance like Toyota’s. The fact that they will not or cannot forego pressure to drive operations with management accounting “levers of control” makes the likelihood of their realizing such expectations nearly zero.

Accounting Controls or System Principles?

If managers look primarily at financial information to judge the performance of a business, then they are certain to be working in the dark. Financial quantities cannot reveal if a system is improving or not. To assume otherwise is to fall prey to confusion of levels. If a company requires cost information to show the “savings” from “going lean,” it will never get there. When managers look at cost information in order to eliminate unfavorable unit cost variances, they discourage people from continuously removing sources of delay and error. Instead, employees will create workarounds such as rework loops, forks, and inventory to keep work moving (even if it is not continuously flowing). In other words, the demand to justify operational decisions with cost information causes people to forego root-cause problem solving and, instead, to build “cost-effective” workarounds that violate systems principles. Eventually the systems principles are forgotten, and managers spend increasing amounts of time working to improve the efficiency of the workarounds.

No company that talks about improving performance can know what it is doing if its primary window on results is financial information and not natural system principles. No amount of financial manipulation will ever improve long-term results. The dilemma facing all companies that intend to become lean is that they can follow a truly systemic path to lean or they can continue to use management accounting “levers of control.” They can’t do both.

Life-Enhancing, Not Life-Denying, Businesses

Management accounting controls impose a curse on lean management programs; they cause managers to believe that addressing the imperative of growth is compatible with the possibility of systemic well-being. Abstract quantities by themselves can of course grow without limit. However, the universe has never allowed any real, concrete system to grow endlessly. Such attempts inevitably fail.

Nevertheless, all businesses that chase accounting targets for revenue, cost, profit, or return on investment somehow believe they are an exception to this universal pattern. They are deaf to the primordial message being delivered every time their real operations fail to deliver the long-term performance that their abstract equations and their occasionally favorable short-term returns seem to promise. They fail to see that the pursuit of endless growth is incompatible with the long-term survival of the system.

This message applies to the entire human economy as well as to individual businesses. Even if every company in the world were to become as lean as Toyota, the economy in which they operate is not sustainable. Forces drive it to focus on quantitative goals, hence, on extensive growth. Government tax, spending, and monetary policies promote more and more production and consumption, to grow GDP endlessly. Financial markets drive companies, including Toyota, to play in the same game. But an economy that lives on steroids is no more sustainable than any growth-driven organization operating within it. Until they can escape the curse of endless growth, both the economy and all its members are doomed to collapse and die.

Our Earth and its life-sustaining biosystem, as well as all systems in the entire universe from which Earth emerged, reflect the existence of continuously open fields of possibility. The most fundamental and pervasive process in the universe, and especially on our Earth, is the constant emergence of newness out of what went before. Nothing ever constrained the flourishing of possibility in that process until humans introduced the idea of quantitative choice to the system. Quantity automatically limits possibility and emergence to outcomes that can be measured. Quantum physicists have suggested that undisturbed systems in the universe naturally stay in multiple states simultaneously, unless someone intervenes with a measurement device. Then all states collapse, except the one being measured. Perhaps what you measure is what you get. More likely, what you measure is all you get. What you don’t (or can’t) measure is lost.

By using quantitative targets to manage results without regard for the effect our actions have on the underlying system from which the results emerge, we close fields of possibility and limit ourselves to what our measures will produce. In effect, that describes existence inside a machine, not life. Life implies flourishing in fields of continuously renewing possibility. Mechanistic existence suggests a repetitive, homogeneous system running down to death, without hope of renewal or new possibility. Our worship of quantity virtually guarantees that the economy we inhabit today and the businesses within it are life-denying, not life-enhancing.

Businesses, like any living systems, should grow to be what they are supposed to be, not more. Ants grow to be ants, elephants grow to be elephants and humans grow to be humans. Each in its context flourishes in life, in being not in growing, accumulating, or having. Sustainability, as my colleague John Ehrenfeld has said, is the possibility that humans and other life flourish on the Earth forever. Nurturing that possibility is the challenge that companies, citizens, and the communities we inhabit must accept in the name of sustainability. Lean management in the sense of running companies according to living system principles is an important first step in meeting this challenge. Then comes the hard part: conducting our economic activities within the limits of Earth’s regenerative processes. To fail at that will make all the lean initiatives irrelevant. But we can succeed, as long as we choose to live according to the principles of living systems and not according to the imperative of quantitative growth.

© 2006 H. Thomas Johnson. All rights reserved. This article is adapted with the author’s permission from his 2006 working paper that received the 2007 Shingo Prize for Excellence in Manufacturing Research. A later version of that paper appeared as chapter 1 of Lean Accounting: Best Practices for Sustainable Integration, edited by Joe Stenzel (Wiley, 2007).

H. Thomas Johnson is Professor of Business Administration at Portland State University in Portland, Oregon, U. S. A. Direct comments to tomj@sba.pdx.edu.

For Further Reading

Bateson, Gregory. Steps to an Ecology of Mind (Ballantine Books, 1972).

Capra, Fritjof. The Hidden Connections: A Science for Sustainable Living (Doubleday, 2002).

Ehrenfeld, John. Sustainability by Design: A Subversive Strategy forTransforming our Consumer Culture (Yale University Press, 2008)

Johnson, Elaine B. The Dismantling of Public Education and How to Stop It. (Rowman & Littlefield, 2004), Ch. 3.

Johnson, H. Thomas., “Using Performance Measurement to Improve Results: A LifeSystem Perspective,” International Journal of Strategic Cost Management, Vol.1, No. 1 (Summer 1998), 1-6.

Johnson, H. Thomas, and Anders Broms. Profit Beyond Measure: Extraordinary Results through Attention toWork and People (The Free Press, 2000).

Joiner, Brian L., and Marie A. Gaudard. “Variation, Management, and W. Edwards Deming,” Quality Progress (December 1990), 29–37.

Rother, Mike. Toyota Kata (McGraw-Hill, forthcoming in Sept. 2009).

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It was a long day of heated discussions with little agreement or progress against an ambitious agenda. Sam asked how I thought it had gone. I recall saying, “It depends on your desired outcome. If success meant getting through the agenda and getting resolution on the issues, you did not meet that objective. If, however, you wanted to get a view of the team dynamics, I believe you had a very successful meeting.” He laughed and said, “What should I do about this situation? I need a team of VPs who can work together to create uniform standards of manufacturing that are necessary for us to achieve our revenue and profitability targets. Can you help me?”

The Team’s Current State

In the meeting I attended, I observed a team that was ill equipped to work in a collaborative and productive manner. Some of the behaviors I saw included:

• An inability to focus on an agenda and make decisions
• A lack of willingness to engage in dialogue
• Poor capacity to listen to one another
• An apparent lack of respect for one another’s ideas
• A tendency to personalize the conversation and get defensive

These observations led to some preliminary hypotheses — that the group lacked trust and the willingness to operate as a team; that they were focused on furthering their individual agendas; and that they would be unsuccessful in creating a standardized manufacturing platform for the company unless they were able to come together and operate with mutual respect, trust, and a willingness to listen to and learn from each other.

In the meeting I attended, I observed a team that was ill equipped to work in a collaborative and productive manner.

During conversations concerning Sam’s 360-review, I had developed a rapport with each member of the team. I leveraged this to have open and honest discussions on what I’d observed during their business meeting. One of them commented, “It was embarrassing to have you witness that meeting. That is so typical of the way we operate. It’s a challenge to get through an agenda with this group.” These one-on-one conversations helped validate my hypotheses around specific concerns and enlisted the executives in Sam’s overall objective — of creating a cohesive team who could work well together in executing an aggressive and critical element of the organization’s strategy.

I also used a team effectiveness questionnaire from Edgar Schein (from Process Consultation: Its Role in Organization Development, Addison-Wesley, 1988, p. 57–58) to get the team to self-assess and have a structured view of their current effectiveness. When I shared the results of this assessment, one of the executives commented, “I had no idea we were so disruptive in the way we operated.”

Based on the assessments, and with Sam’s agreement, my mandate for a 12-month engagement was to create a team that:

• Made sound business decisions in a considered and timely manner
• Had the ability to work together to solve critical production and quality issues
• Engaged in meetings that were productive, energetic, and constructive
• Showed evidence of listening, collaboration, and mutual respect
• Set aside personal agendas and depersonalized the conversation
• Collaborated to develop and implement a world-class manufacturing strategy

The Design of Interventions

I saw this as an amazing opportunity to delve into territory that is typically not explored. I based the design of my interventions on a model of human structural dynamics derived from the work of David Kantor (see “Human Structural Dynamics Model”). This model suggests that human interactions are a function of the social context in which they take place and of what goes on in people’s hearts and minds (Ober, Kantor, Yanowitz, “Creating Business Results Through Team Learning, The Systems Thinker, V6N5, June/July, 1995, pp.1–5). I chose to focus on two aspects of this model—the team or what is described as the face-to-face structure, and the deeper individual structures and how they might influence the team’s interactions, either one-on-one or in the team.

I chose to include individual-level interventions because they cover ground that is typically less acknowledged and yet significantly impacts behavior — what we see at the face-to-face level. It also meshed well with my belief as an OD practitioner that all change starts with individual change, and that our behavior as adults is strongly influenced by our mental models, core beliefs, and stories — many of these arising from experiences in our formative years. I had a sense that if I was able to allow for the surfacing and at some point sharing of deep imagery from each individual, it would help this team coalesce and begin the process of trusting each other.

The Team Interventions

At the team level, the interventions were designed to help develop trust and connection, and start to develop the capacity for listening. The following models, beliefs, and assumptions influenced the choice of interventions:

• A high-performing team is characterized in part by strong personal commitments to the growth and success of each team member (Katzenbach and Smith, The Wisdom of Teams: Creating the High Performance Organization, Harper Business, 1993).
• Appreciation of individual experiences and gifts is a powerful foundation for transformation and allows for creation of powerful outcomes (Cooperrider and Whitney, Appreciative Inquiry, Berrett Koehler, 1999; Elliott, Locating the Energy for Change: An Introduction to Appreciative Inquiry, International Institute for Sustainable Development, 1999).
• The ability to listen deeply allows for connection and a foundation for collaboration and “thinking together” — the essence of dialogue (Isaacs, Dialogue and the Art of Thinking Together, Currency/Doubleday, 1999).
• Dialogue fosters and maintains the high levels of openness and trust that are present in healthy teams.

“Progress Toward Trust and Cohesiveness” demonstrates how the different elements were integrated to guide the team’s progress toward trust and cohesion. In addition to determining the current state, five other building blocks contributed toward creating a team that was able to sustain behavioral changes that enabled an environment of trust, collaboration, and cohesiveness:

Establishing Structural Elements. Sam wanted the team to own and follow basic housekeeping guidelines. This set of interventions was aimed at establishing a process by which the team could focus its discussions and deliberations and make decisions in an effective manner. It involved clarifying roles and responsibilities, delineating decision rights, and setting up operating guidelines between Sam and his team, as well as within the team.

PROGRESS TOWARD TRUST AND COHESIVENESS

The interventions were integrated to guide the team’s progress toward trust and cohesion.

Developing the Capacity for Deep Listening and Dialogue. The more challenging aspects of this engagement were around creating a safe container for the team to have strong dialogue. To achieve this, I introduced the principles and intentions of council to structure the meetings (Zimmerman and Coyle, The Way of Council, Bramble Books, 1996; Baldwin, Calling the Circle: The First and Future Culture, Bantam, 1998). These principles included always being seated in a circle and using a talking piece that the team co-created. The intentions of council are speaking from the heart or being honest and authentic; listening from the heart or being deeply present and attentive when another speaks; being “lean of expression” and learning to be succinct; and allowing for silence as well as spontaneous expression.

To facilitate their interactions within this structure and to help them make the distinctions that would allow them to realize the intentions of council, I introduced the four behaviors of dialogue as described by Bill Isaacs — voicing, listening, respecting, and suspending (see “Developing the Capacity for New Behaviors”). At one level, the intention was to help the team develop a capacity for listening without judgment and reaction, and at another it was aimed at helping them experience how deep listening could result in more powerful outcomes and decisions. Above all, it was aimed at building trust within the team.

DEVELOPING THE CAPACITY FOR NEW BEHAVIORS

The four behaviors of dialogue as described by Bill Isaacs are voicing, listening, respecting, and suspending.

Over the course of my engagement (and subsequently), the team adopted sitting in a circle as part of their meeting protocol. Initially they struggled with the some of the practices of council — in particular with holding a silence. They tended to reach for the talking stick before the person who was speaking had finished. Over time, as they became more comfortable with the practices, the use of the talking stick as a mechanism to allow “one voice at a time” and to help “hold the silence” evolved from a forced behavior to a more natural and comfortable one. Their discussions went from individuals fighting to say their piece to comments that were more indicative of listening and building on what has been said. The reaction to silence went from a rush to fill it to actually asking for a moment of reflection during the course of a conversation. Although there was evidence of progress, it was more of an iterative process than a linear progression. The awareness and reinforcement of dialogic behaviors was one that continued throughout my 12-month engagement with this team and continues to be a core part of the team’s operating model.

Appreciating the Diversity of Skills and Capabilities. While most of Sam’s team had been at this company for many years and had deep roots in the industry, some of the more recent additions were brought in with different industry experience, including experience in creating world-class manufacturing organizations. The input of these individuals was often not considered and valued by their colleagues. As Sam put it, “I hired Joel and Charisse for their expertise in Lean Manufacturing. I am concerned the rest of the team is shutting them out. I suppose I could be more directive by simply telling people we have to rely on their experience, but I don’t want to add to the resistance.”

The team needed to operate in an environment of respect and appreciation for the diversity of style, skills, experiences, and contributions. They also needed to understand how to work effectively with this diversity and leverage the strengths of each other. To create this culture and capacity, I used interventions derived from Appreciative Inquiry, team role preference (Margerison and McCann, “Team Management Profiles: Their Use in Managerial Development,” Journal of Management Development, Vol 4, No 2, pp 34–37, 1985), and individual assessments such as DiSC as building blocks on the foundation of dialogue.

These interventions had the desired impact. For instance, the Appreciative Inquiry exercise used in the first session allowed for a breaking of the ice in the team. The team found many points of connection — shared experiences, interests, hopes, and desires. After that session, some of the sources of tension dissipated, such as the resentment of the role an individual played or the lack of industry experience. In addition, the resistance to being seen as and operating as a team started to fall away as they worked through their stories of positive team experiences.

In using the Team Management Profiles, the team was able to appreciate the different work preferences and styles that were present in the room. It allowed them to identify strategies that would be most effective in interacting with this group of individuals and to value the different roles each member of the team tended to prefer in a team setting. It also gave them a snapshot of what might be missing and how they could develop those roles as a collective.

Becoming an Observer of the Self. As I worked with the team, I felt it was important to facilitate the development of their capacity for diagnosis and action in order to make them self-correcting and self-sustaining after I had transitioned out of the process. I also wanted them to have a greater awareness of how to facilitate a dialogue by understanding the roles they tended to gravitate to in a conversation. I introduced another element of structural dynamics — that of boundary profiles and, more specifically, David Kantor’s “four-player system” (Kantor and Lonstein, “Reframing Team Relationships: How the Principles of ‘Structural Dynamics’ Can Help Teams Come to Terms with Their Dark Side,” The Fifth Discipline Field book, Currency/ Doubleday, 1994).

My intention was to get this team of individuals to see their patterns of interaction. I believed if they were conscious of their operating tendencies, how these impacted their effectiveness, and what roles were being played out in their team interactions, they might be able to shift the roles they played and engage in more productive and effective dialogue. It would help them notice whether their conversations were dialogic in nature or at the level of discussion and debate. At a minimum, it would increase their self-awareness of how they showed up and help them develop a capacity to become observers of their own behavior. To facilitate their learning, I videotaped some of their meetings and had them analyze their interactions afterward.

One of the insights that emerged was the difference in expectations of how the team should operate. For instance, Sam expected his team to be his equal partners in the decisions they made. There were some members who would defer to Sam’s decisions. Another insight came from seeing two members of the team frequently engaging in a move-oppose dynamic and how it stymied the progression of the conversation.

Creating Sustainability of Change. The emphasis of each intervention was to help them not only become familiar with the skills but also to practice and develop a level of mastery with that skill. Each session built on the previous ones. The final intervention was a visual image storytelling process (Reeve, Creating a Catalyst for Change via Collage Inspired Conversations, unpublished Master’s thesis, Fielding Graduate University, 2005) where the team incorporated the various building blocks (i.e., practices of dialogue, appreciation and knowledge of self and other, and observation) to co-create their vision for their team. It required them to collaboratively create the guiding principles and core values of the team, and the behaviors that would govern their interactions going forward, by building on the values and vision of each individual. I chose a visual process to shift the context from the verbal, left-brain activities that this team was facile with to a process that would invite them to activate in a positive way some of the drivers of their behavior — their beliefs, values, and mental models. As the team moved from sharing individual values and beliefs to co-creating a shared set of guiding principles and vision, they exhibited respect for individual ideas and the diversity of opinions. There was a remarkable absence of the heated arguments that had characterized the first meeting I’d attended. In its place was an energy of collaboration and partnership, resulting in the creation of a shared vision that each individual had contributed to, owned, and had personalized through the storytelling process.

The Individual Interventions

While working with the team as an entity, I was also coaching individual members. A core outcome for the coaching sessions was to help the individual become an observer of the self and understand what drove behavior so they were able to choose how to act, rather than acting from a place of habitual tendency. The ultimate goal for the “Human Structural Dynamics Model” is authenticity; insight, mastery, and alignment are intermediate stages that lead to authenticity. In an effort to be pragmatic (and recognizing the journey toward authenticity is a lifelong one), I focused on a realistic goal of building the capacity for insight through self-awareness and inquiry into the underlying causes of behaviors, along with varying degrees of mastery.

Using a subset of the human structural dynamics model as a base, I worked to help each individual become aware of their feelings, mental models, belief systems, and deeper stories that governed their behavior in the team context. Specifically, the intent was to make visible those factors that were invisible or less visible and enable the individual to act in an authentic manner.

As I used this model to guide the individual coaching sessions with each executive, my role evolved in the following manner:

• Help the individual become aware of feelings, mental models, belief systems, and deeper stories
• Create and strengthen their capacity for embracing these deeper structures
• Facilitate their understanding of how these structures impact their behavior and how to recognize the shadow aspects
• Help them develop the ability to reframe and choose the internal structures that influence behavior

Interplay Between Individual and Team Interventions

Having simultaneous interventions at the individual and team levels and playing a dual role as facilitator for the team and as personal coach allowed me to observe shifts that occurred as individuals gained insight into their behavior and changed how they interacted with the team. The team meetings also provided me with direction on how to intervene at the individual level with different executives.

The Results

Over the 12-month period, there were many visible changes at both the team level and with individuals. For instance, the team’s interactions were much less fractious and chaotic. Their discussions resulted in key decisions being made in a timely manner with each individual feeling heard even if their idea was not included. They had greater appreciation and respect for what their colleagues brought to the team, “I had no idea Charisse had such wide-ranging experience. It is quite refreshing to have someone who hasn’t grown up in this industry.”

They were able to appreciate silence and the quality of reflection and insight that came from it, “I realized how much of my time is filled with doing things — meetings, conference calls. I never get time to think. I was actually able to think about and find a solution to this problem.” There was a greater sense of camaraderie and trust among them. In self-assessing their progress on the team effectiveness instrument used at the beginning of the process, on all measures, the team had moved from a “below average” score to an “above average” rating.

When I started my work with the team, I would have described members as exhibiting behaviors characteristic of “breakdown.” Probably one of the more profound changes I saw was their ability to maintain a quality of inquiry. At rare moments, particularly in our last session together, there were moments when their interactions had elements of flow.

At the individual level, the changes varied depending on the person. Certainly some of them moved more than others. As their capacity to observe their own behavior grew, it created greater awareness and ownership of their own issues, and led to more courage and honesty in their communications. As they stepped in to appreciate and value their own contributions and role on the team, their insecurities went down; they developed more confidence and demonstrated a greater sense of presence as leaders. The awareness and legitimizing of their individual stories allowed them to have respect for and appreciation of the same in others. By practicing compassion for themselves, they developed the capacity for compassion toward others. This in turn allowed for a level of trust and a commitment to each other’s success, which provided a strong basis for collaboration.

Critical Success Factors

I was operating at two levels of the system simultaneously and addressed not only the behaviors that emerged in team interactions but also the underlying triggers of these behaviors. One reason I was able to successfully take this path was Sam’s uncompromising sponsorship and support, as well as the trust we had built as a result of our long-standing relationship and my candor in the early stages of the engagement. Over the course of the 12 months, he allowed me tremendous creative freedom to introduce the ideas behind council practices and dialogue. He’d been exposed to the practices and was a great believer in the notion of “going slow to go fast.”

Although some members of the team were initially resistant to the team process, because of my work with them individually, they grew to trust me with their inner stories and thus trust the process I was taking the team through. Their cynicism and resistance started to wear down as they experienced having a voice in the conversation and being heard as a result of using council and dialogue practices.

One of the other unexpected contributors to the success of the engagement was my knowledge of the organization, its business, and the dynamics within the industry. It allowed me to connect the interventions aimed at strengthening team effectiveness to core business issues the team was dealing with, rather than have “stand-alone” team-building sessions. By integrating business issues into the design of the interventions, the team had an immediate context for applying and practicing their new skills, which enhanced the capacity for retention and recall of new behaviors.

Challenges Encountered

There were some challenges during the course of this engagement. Even as they saw the value of the practices of council and dialogue, the team didn’t readily embrace some aspects. It took a while for them to honor silence and not jump into the fray. “I find it so difficult to sit still and not say something when no one is speaking. It makes me wonder if I did something wrong,” said one of the executives early in our sessions. While this reflected the challenge of holding silence, it was also a powerful example of how our inner story shows up in our behavior. Over time, and with the help of reflective practices in their individual coaching as well as in their team sessions, they started to see the value of having silence and silent time in their process.

Another difficulty that was more present in earlier sessions than in later ones was a desire to be “in action.” This is reflected in the comment from a team member that “we talk a lot and I enjoy our sessions, but when do we make decisions for the business?” Fortunately, given Sam’s experience with dialogue, he was able to support me and provide a context of “We are making decisions. By talking about and resolving the issues, our decisions are becoming clearer.” It took them a while to realize that by being in dialogue, they were “in action” around decisions.

In creating the experience of being an observer of the self and using the four-player model, there were some unintended consequences. During the debrief, one of the team commented,

The human structural dynamics model provided a valuable set of lenses to examine this team’s issues.

“We sure were on our best behavior today. I suppose we knew we were being watched.” Had I anticipated this better, I might have introduced a disturbance to the system to raise the stakes, because when the stakes are high, people tend to revert to “default” or typical behaviors, especially in early stages of behavioral change.

Summary

The human structural dynamics model provided a valuable set of lenses to examine this team’s issues. At the same time, it allowed for improvisation in the choice of interventions used to address different team issues. The occasion to work with an intact team over an extended period of time helped create a robust foundation wherein the skills introduced had a chance of taking hold. It helped build trust with each individual and created a space for personal growth. This systemic approach presented a powerful learning opportunity for all of us engaged in the process.

A longer version of this article appears in Reflections: The SoL Journal on Knowledge, Learning, and Change, Volume 9 Number 1. For more information, go to www.solonline.org/reflections.

Deepika Nath (dnath@indicaconsulting.com) is the founder and principal of Indica Consulting, where her focus is on bridging strategy and organizational development to bring about growth and lasting transformation. She is a trusted advisor and coach to senior executives seeking to define an authentic and effective leadership style. Her experience spans 15 years of strategy and organizational consulting with leading firms such as the Boston Consulting Group and Ernst &Young. A member of SoL, she holds a PhD in Management and an MA in Organizational Development.

The post Building Trust and Cohesiveness in a Leadership Team appeared first on The Systems Thinker.

In this changing world, it’s useful to think of leadership not as an immutable set of qualities but as an activity: the activity of engaging people to accomplish a common purpose. This process takes place within a particular social, political, economic, and technological environment — the features of which influence the effectiveness of certain styles and approaches to leadership. It is my contention that the environment has changed dramatically — in ways that I will describe more fully below — and that one of the new characteristics that leaders must adopt to be effective is that of vulnerability.

Vulnerability is not an attribute commonly associated with leadership. The word evokes images of weakness, fallibility, and defenselessness. Roget’s Interactive Thesaurus identifies nine synonyms for the word “vulnerability”: danger, dependence, exposure, infirmity, instability, jeopardy, liability, peril, and weakness. So why would anyone deliberately seek to be vulnerable? How can doing so possibly be necessary for leaders today? Isn’t living in the world dangerous and unstable enough without deliberately cultivating vulnerability? Before discussing these questions, let’s explore what I mean by “vulnerability” in the context of leadership.

The Discipline of Vulnerability

Pema Chödrön uses the metaphor of a room to describe how we often relate to the world. We create this room to suit us perfectly. It is the perfect temperature; the food is our favorite, as is the music. Only the people with whom we get along are allowed to enter this room. It is a wonderful environment, perfectly suited to us. But gradually the room turns into a prison as we become more and more afraid to venture out. The longer we stay in the room, the more threatening the outside So we take steps to for selves even more, padlocking the doors and shuttering the windows.

This is the position of too many leaders today. In a world full of perceived threats from all quarters, leaders tend to isolate themselves as they attempt to single-handedly eradicate all perils facing their organizations. In doing so, they cut themselves off from important sources of information and valuable relationships. In this new environment, the existing leadership paradigm — the “leader as hero” —  serves as a prison.

As Chödrön says, “Staying in this room is not productive of being a whole, healthy, sane, well-adjusted person. . . . It’s not productive of awe, wonder, curiosity, or inquisitiveness. It’s not productive of tolerance, and it breeds bigotry and racial hatred.” And then she adds, “Our life’s work is to learn to open the door.” Learning to open the door — for individuals, organizations, and even nations — involves cultivating vulnerability.

In The Fifth Discipline, Peter Senge writes: “Each of the five learning disciplines can be thought of on three distinct levels:

1. Practices, which are the things you do
2. Principles, which are guiding ideas and insights
3. Essences, which is the state of being of those with high levels of mastery in the discipline.”

Using this framework, and thinking of vulnerability as a discipline, its essence is a sense of unguardedness and willingness to be changed. Principles or guiding ideas that support the discipline of vulnerability might include openness, transparency, “not knowingness,” trust, and compassion. Openness is a sense of permeability, a receptivity to influences from outside “your room.” Transparency is essentially a willingness to invite scrutiny and critique. “Not knowingness” is a bit harder to describe. The Zen Buddhist phrase “beginner’s mind” captures this principle well, in that it encourages us to approach each situation with a spirit of curiosity combined with a lack of certainty. “Not knowingness” is another form of openness — the openness to new ideas and ways of seeing the world. Trust involves yet another kind of openness — the willingness to engage in relationship with the other.

“The other” can be parts of oneself, other people, a higher power, or a process. Finally, compassion entails an openness to the suffering of others and the desire to alleviate that suffering. Embracing vulnerability through the application of these principles can be strengthened through a myriad of practices, some of which will be described later in this article.

The Call for Change

Why is vulnerability particularly relevant as a leadership discipline now? First, people around the globe are increasingly aware of the interconnectedness of all existence. Even in the most isolated settings, developments in communications technology have made it possible for people to quickly and easily learn about events occurring in other parts of the world. Such awareness then influences what they consider to be their sphere of concern. At the same moment, I can be troubled by the performance of my local school system, the bombing of the U. N. headquarters in Iraq, and the continuing heat wave in Europe. Knowing about these events inevitably expands my consciousness.

The globalization of the economy also compels individuals and organizations to operate as part of a larger whole. Even remote areas feel the economic impact of events occurring in other regions. For example, some months following the bombing of the World Trade Center, my husband and I were riding in a taxi on the Caribbean island of Saint Lucia. The driver started talking about September 11th and what a terrible thing it had been. As an American, I assumed that he was expressing his condolences for the loss of life in the U. S. As it turned out, his primary concern was the effect on his local economy of the drop in air travel following the attacks. This incident is but a small example of the powerful web of economic interconnectedness that characterizes our time.

Additionally, we have become increasingly consciousness of the interconnectedness of systems that were once perceived and treated as substantially separate. For example, there is more and more evidence that the phenomenon of “urban sprawl” contributes to a diminished sense of community and environmental degradation. When people must get in their cars and drive in order to carry out their daily activities, they no longer

Although the “leader as hero” may never be completely replaced, we now have other models to guide our behavior.

casually encounter fellow community members and they contribute to environmental pollution. Other examples abound. It is too early to know whether our rising awareness in this area will lead to changes in practices, but further progress will certainly be aided by a stance of vulnerability.

A second condition that calls for leaders to adopt a stance of vulnerability is the tarnished credibility of many major institutions, including the media, the church, and the marketplace. This may be a “good news, bad news” occurrence, setting the stage for citizens to require their leaders to act with humility, transparency, and trustworthiness. At this writing, it is hard to know what direction society will take: a flurry of laws, litigation, reorganization, and regulations intended to prevent such violations from recurring, or a more fundamental revisiting of our basic expectations about social institutions and their leaders.

A third condition, which is a potentially positive development, is an emerging civic re-engagement movement that seems to be gaining momentum. One example is the powerful Internet-based citizen participation vehicle “Move On,” which aims to “bring ordinary people back into politics.” It currently has an international network of more than two million online activists, which has taken action on a variety of political and social issues since 1998. In addition, more and more opportunities exist for large numbers of citizens to engage in dialogue and offer their views on important public developments. One such example was the historic “Listening to the City” event held in July 2002, in which 5,000 New Yorkers offered comments on plans to redesign lower Manhattan, rebuild the World Trade Center, and create a memorial for the victims of the September 11th attacks.

As a facilitator of this session, I was profoundly impressed by both the skillfulness of the process and the quality of the results. This event required a stance of vulnerability from everyone involved. Those who commissioned the process remained open to being influenced and were willing to modify the outcome to reflect the needs expressed by participants during the day-long event. Those who attended the gathering demonstrated trust that their input would be taken seriously, even as they entered into the dialogue with self-described “New York cynicism.” Those who organized the process were flexible and willing to make changes in real time, for instance, when the majority of participants balked at taking part in one planned exercise. The gathering truly demonstrated the qualities of vulnerability described in this article and, indeed, had an impact on the course of the rebuilding process.

A final condition brings us back to the point made earlier: that desirable leadership attributes will be influenced by the environmental context. In order to help leaders to operate effectively in this complex, interdependent, and heterogeneous environment, scholars are articulating a new image of leadership. Recent books such as The Spirit of Leadership by Harrison Owen (Berrett Koehler, 1999), Leading Without Power by Max De Pree (Jossey-Bass, 1997), and Leading Quietly by Joseph Badaracco, Jr. (Harvard Business School Publishing, 2002) emphasize the relational, subtle, and even spiritual elements of modern leadership. Increasingly, the inner work of leadership is being linked to outer actions. Although the “leader as hero” may never be completely replaced, we now have other models to guide our behavior.

Taking Off the Armor

“You become what you practice most.” — Unknown

It is difficult to expect leaders who have not embraced the discipline of vulnerability throughout their careers to do so when the stakes are high. Instead, leaders must consistently cultivate this approach over the long term. Pema Chödrön writes, “When I was about 12, I read a Life magazine series, ‘Religions of the World.’ The article on Confucius said something like: ‘By the time you’re 50, if you’ve spent your life up until then taking the armor off . . . then you’ve established a pattern of mind that for the rest of your life, you won’t be able to stop. You’ll just keep taking the armor off. But if by the time you’re 50 you’ve become really good at keeping

that armor on . . . it’s going to be very hard to change.”

Regardless of our age or position in our organization, how might we start to “take off the armor”? We can begin with the principles of vulnerability outlined above: openness, transparency, “not knowingness,” trust, and compassion. For each of these guiding ideas there are numerous practices that run the gamut from audits to Zen. Below are examples of some that might support each of the principles (also see “The Principles of Vulnerability”).

Openness. A number of years ago, I attended a barbecue hosted by a local police officer, along with mutual friends. This was the first time we had met most of the people at this party. Early in the evening, our host began railing against the Puerto Ricans who had moved into his community in recent years. He described them as having caused an increase in crime, poverty, and teen pregnancy in the town. My first instinct was to react to aggressively defend the people he was maligning — but we were his guests and it did not seem appropriate. I was greatly conflicted: I felt as though his beliefs, his perspective, would seep into me and become a part of my identity if I didn’t mount a defense. But as a guest and a stranger, I did not feel it was polite to argue with him.

Instead, I tried to be open to his perspective. When I actually allowed myself to take in his point of view, I realized that police officers regularly encounter people at their worst. Given that, why would he have a different perspective about Puerto Ricans? Once I became vulnerable and considered his perspective, it changed me.

At that point, I began to pay attention to the ways in which my fear of being “colonized” by “the other” was causing me to become rigidly defensive of my own views. I started exploring various practices that enhance individual and collective openness. The Buddhist practice of tonglen, which means “exchanging oneself for the other,” is a powerful personal discipline for cultivating compassion and a sense of connection with others. Tonglen entails the deliberate “breathing in” of someone’s pain, anger, sadness, and negative energy and “breathing out” light, warmth, and positive energy directed toward that individual. I have found it to be especially helpful in countering the tendency to defend my own beliefs and reject those of other people.

There are also numerous exercises that encourage taking different perspectives, including the exercise called “Multiple Perspectives” described in The Fifth Discipline Fieldbook. The exercise, which is useful for teams working on a real problem, involves identifying each of the stakeholders and rotating among roles in order to see the issue from as many vantage points as possible. This exercise can benefit individual participants as well the team as a whole.

The June 2003 issue of Fast Company magazine features an organizational example of the power of taking multiple perspectives. The Dofasco Steel Company of Hamilton, Ontario, has distinguished itself because of its emphasis on the “triple bottom line” (society, the economy, and the environment) as well as its consistent profitability, in an industry where neither are typical. Former CEO John May berry says, “These things all bleed into each other. How do you get happy shareholders? Start with satisfied customers. How do you get satisfied customers? Start with happy employees. How do you please employees? Try not to wreck the community they live in.” When faced with seemingly incompatible goals, such as reducing energy consumption while still producing high-quality steel, the company creates innovative solutions by “constantly examining problems from all perspectives as we try to solve them. And often, an improvement in one area that might initially look bad for another stakeholder actually pushes you to come up with solutions that are better all around.”

Transparency.

Individuals and groups alike can practice transparency, the openness to scrutiny or critique. On an individual level, we can invite friends, family members, and colleagues to offer feedback about our behavior and its impact on them. We can also make ongoing efforts to align our purpose, values, and goals to result in more consistent actions. If others know what our values are and can observe a pattern of behavior consistent with those values, then the reasons for our actions are clearer than they might have been if we behaved in inconsistent and unaccountable ways. Any effort to bring to consciousness our own mental models and assumptions, along with the willingness to make those public, is practicing transparency.

For organizations, one powerful way of practicing transparency is by inviting scrutiny — feedback — from outside parties through external evaluations and audits. Recently, the food industry, spearheaded by the Food Marketing Institute and the National Council of Chain Restaurants, implemented an animal welfare initiative that is producing audits of eggs, milk, chicken, and pork producers and will eventually result in inspection of cattle and feed lots. In 1997, McDonald’s restaurant began a process that eventually required all of its meat producers to undergo animal welfare audits: In 2002, it conducted 50 such audits worldwide.

Other ways in which organizations can practice transparency include aligning vision, mission, values, goals, and practices and collectively uncovering assumptions and mental models. The Fifth Discipline Fieldbook and other resources describe a number of techniques for creating a shared vision and uncovering mental models. Although the techniques are well proven, they are most successful in environments in which there is already a fair amount of openness and trust.

For a variety of reasons, having the answers can be the most unhelpful thing a leader can do.

“Not Knowingness.” People in leadership roles are often expected to have all the answers. In fact, for a variety of reasons, having the answers can be the most unhelpful thing a leader can do: It allows others to avoid taking responsibility; it perpetuates the “leader-as-hero” myth; it suppresses creative thinking that can come from those on the margins; and it keeps others at a distance. “Not knowingness” requires especially rigorous practice because the pressure that leaders experience “to know” comes both from within and without.

Leaders who want to adopt this principle might find inspiration in the experiences of former Hewlett-Packard executive Greg Merton. In his article, “Leadership is Sourced by a Commitment to Personal Development” (Reflections, Fall 2002), he writes, “I am learning that a willingness to be vulnerable arises out of strength, not weakness. We protect ourselves out of fear, not confidence. And if we want those around us to learn, then we must be learning as well.”

The creation of the Grameen Bank in Bangladesh is an excellent example of “not knowingness.” Since the early 1980s, this bank has made a success of doing something no other bank has done: lending to the poor. In Reflections (Spring 2002), the leader of the bank, Muhammad Yunus, described its origins. Conditions in Bangladesh in the mid-1970s were horrific. As Yunus walked from his beautiful bungalow to the university where he was teaching economics, he would pass by people dying in the street. He realized that his economic theories were useless in the face of those conditions. He said, “I felt completely empty. . . . I realized I could help people as a human being, not an economist. So I decided to become a basic human being. I no longer carried any preconceived notions.”

Stimulated by this realization, he traveled into local villages to learn about poverty by listening to poor people themselves. He discovered that many of them earned a meager income by making things to sell but, in order to buy the raw materials, they had to borrow cash from a moneylender at high interest rates. Making these payments left them without enough money to live on. The people Yunus met were not victims or malingerers; they were motivated entrepreneurs who lacked resources. This learning became the foundation of the creation of Grameen Bank, which has grown to be an international model for microcredit banks, lending money to people with no collateral.

Trust. “Not knowingness” also involves a willingness to trust an unfolding process and to have a kind of faith, whether it is faith in other people, in oneself, in a deity, or merely in the integrity of the outcome. In A Path with Heart (Bantam Books, 1993), Jack Kornfield includes a wonderful story about Vinoba Bhave, who was Gandhi’s closest disciple and heir apparent. After Gandhi’s death, his followers tried to convince Vinoba to lead a nationwide convention to decide how to continue Gandhi’s work. With serious reservations, Vinoba agreed, but only on the condition that the conference be postponed for six months so he could walk there on foot, halfway across India.

In his travels, Vinoba discovered the same scenario in village after village: The people were poor and were unable to grow their own food because they owned no land. At first, he promised to talk to Prime Minister Nehru about passing a law to give land to the poor villagers. Upon reflection, he realized that such a law would be ineffective in addressing the problem because it would take years to pass and when it was finally put into place, corrupt governmental officials would siphon the land grants away before they ever reached the people. Sadly, he gathered a group of villagers together and told them his conclusion.

In response, one rich villager pledged to give some of his land to 16 families, each of whom needed five acres. This generous offer prompted others to follow suit in village after village as Vinoba traveled to the conference. During his journey, he stimulated the transfer of more than 2,200 acres of land to poor families. As a result, others joined the effort, which became known as the great Indian Land Reform Movement.

Kornfield writes, “All of this began from a spirit of listening, a caring for truth, and a compassionate beginner’s mind brought to an old and difficult situation.” I would add that it also came from a trust in an unfolding process. If Vinoba had proceeded with an agenda, clear goals, and a decisive vision of the future of the Gandhian movement, would the Indian Land Reform Movement ever have happened?

Compassion. Compassion is defined as “deep feeling for or understanding of misery and suffering and a desire to promote its alleviation.” It results from the act of “opening the door” discussed earlier in this article. The spiritual practice of tonglen is deliberately aimed at cultivating compassion.

Whether we use a spiritual or cognitive route to expand our perception of the interconnectedness of elements within systems, we cannot fail to experience a strengthened relationship with the other parts of that system: individuals, work groups, organizations, cultures, nature, and so on. Awareness of this relationship creates the groundwork for a compassionate response to the other. Peter Senge quotes Einstein on this topic:

“[The human being] experiences himself, his thoughts and feelings as something separated from the rest — a kind of optical delusion of our consciousness. This delusion is a kind of prison for us, restricting us to our personal desires and to affection for a few persons nearest to us. Our task must be to free ourselves from this prison by widening our circle of compassion to embrace all living creatures and the whole of nature in its beauty.”

The practice of systems thinking can enable us to see the interconnection between elements that had previously been perceived as separate. Systems diagrams can be a useful tool for cultivating this type of thinking. In a leadership course I was teaching for people with mental retardation and their workers, we used a rudimentary systems diagram to describe the relationship between the behavior of staff and clients in a group home. One of the residents understood the connection immediately: “So when staff yell at me, then I feel ashamed and that makes me mad and I yell back. The staff think I’m acting out and then they restrain me.” Through the practice of systems thinking, this participant, who had previously viewed interactions entirely from her own perspective, was able to take the perspective of others. This stimulated a thoughtful discussion about the ways in which the behavior of the staff and residents influenced each other, which helped to break down barriers between people in those two roles.

Perhaps a case study will be useful at this point. What follows is a real situation.

In the mid-1990s, a small town in a rural state experienced a series of violent events that challenged the community’s capacity to act compassionately toward individuals with mental illness. The incidents also challenged the state mental health department to operate with a stance of vulnerability rather than the usual defensive posture that is so prevalent in response to scandal. First, a man with a history of mental illness attacked members of a local religious order; two of these women subsequently died. The man knew these individuals and had grown up in the community. Several months later, another murder took place in the town; the alleged perpetrator was on a waiting list for mental health services. During the same year, in a nearby town, a resident of one of the state-run psychiatric facilities was murdered by her boyfriend.

Any one of these tragic events might have provoked a serious backlash against the mental health department and the people it served. The coincidence of three violent crimes happening within a short timeframe was a recipe for disaster. It would not have been surprising to find the system’s leaders engaging in defensive practices such as scapegoating, retreating, and retaliating. Instead, leaders within the system chose to stay focused on the circumstances of the people they served and the well-being of the community at large, a focus that necessitated a different set of responses than the conventional ones.

What did the department actually do? In the instance of the nuns’ murder, the department reached out to those people who had a stake in the unfolding events. First, officials asked themselves, “Who is going to be most affected by this horrible incident and its potential implications?” They contacted the head of the local chapter of AMI, a national education and advocacy group for people with psychiatric disabilities and their families. They also got in touch with the leader of the local mental patients’ advocacy movement, the mayor of the community, the head of the agency that served the perpetrator, and the Catholic diocese. This group of people from the community got together and said, “Our community has a reputation as a caring community, and we need to let people know we are not going to scapegoat people with mental illness or let this become a witch hunt. That’s not what this community is all about.”

Although the event and its aftermath were tragic and painful, the behavior of this community group, supported by leaders within the mental health department, prevented worse consequences. In fact, a reporter who had grown up in the community returned to his hometown shortly after the attack to see what the effects had been. Fully expecting a severe backlash against people with mental illness, what he found was very different. Four days after the incident, 1,000 citizens crowded into a church just down the street from the convent for a public prayer service. The town’s mayor urged them to pray for the family of the perpetrator. The state legislature later called for improved treatment of mental patients living in local communities. The nuns continued to pray for the man who had killed two of their own.

How does this example illustrate the discipline of vulnerability? Instead of padlocking the door, turning off the phones, and hunkering down in their “room,” the department heads acknowledged that they needed to work with other key stakeholders. They recognized that they were but one element of a larger system, and possibly not even the central or most relevant one. Instead of protecting and defending itself, the department reached out to others. Its message was, “We need you; we can’t do this alone.” Given that department leaders were besieged by lawsuits and attacks in the newspaper, actions that often lead people to feel defensive, it is all the more remarkable that they chose to respond in this way.

Further, the department proceeded with a sense of not knowing, a courageous stance for an institution expected to wield power, expertise, and accountability. Leaders focused on creating an expansive, long-term agenda, rather than on merely reacting to the crisis. This approach enabled the broader group of stakeholders to establish common ground. It would have been impossible for them to do so if the emphasis had been on defending the stakeholders’ individual actions regarding the specific incident. Instead of fortifying their “room,” these courageous folks opened the door and went out into the world, vulnerable and open to influence. This is a clear example of the discipline of vulnerability at work.

A Fresh Approach

I have attempted to describe some current conditions that call for a stance of vulnerability and to describe why vulnerability is a core leadership discipline for these times. Although it may not be the most accurate term for what I have tried to describe, it does have the advantage of freshness. Using “vulnerability” as a positive term, a condition to which leaders might aspire rather than eschew, invites reflection upon our existing assumptions about leadership. Because I also wanted to include some practical elements, I have attempted to touch on some of the ways in which an individual or collective might cultivate vulnerability. Anyone interested in further pursuing these practices will find ample information else-where. My main hope in writing this article is that it might contribute to our individual and collective capacity to “open the door” and venture out into the world.

The post Embracing Vulnerability:A Core Leadership Discipline for Our Times appeared first on The Systems Thinker.

I have also observed that the amount of trust that exists within a group of people greatly affects the results they can achieve together. A guest on a recent talk-radio show on financial investments demonstrated the impact of trust within the U. S. economy. A highly respected portfolio manager with 40 years of success in mutual fund investing, he remarked that, despite Alan Greenspan’s testimony before Congress that the economy is moving in a positive direction, the stock market is still slumping. Historically after recessions, markets recover first, followed by the rest of the economy; yet in our current situation, the economy is showing signs of recovery but the markets are still experiencing downward trends. Why? The guest attributed the slow market improvement to human factors. He asserted that, in response to gross misrepresentation of earnings and other mismanagement by top executives from companies such as Enron and Worldcom, many people now distrust large corporations and hesitate to invest in them. In other words, despite signs that our economy is getting back on track, trust — or lack of trust, in this case — appears to be significantly limiting the recovery of the markets and the economy as a whole.

As a result of my observations and conversations with others about this topic, I have been investigating how to build trust in organizations, particularly schools. I’ve looked at numerous studies that have attempted to define trust and explain how it works. While thought provoking, their findings leave me unsatisfied. One of the reasons I am not adequately convinced by many researchers arguments is that their approach to understanding trust tends to be deconstructivist.

They break apart the concept into many different components in order to analyze it, and the more they do, the less I understand and connect with it.

I have come to believe that we can better understand trust by looking at it as a system composed of many independent yet interrelated and interconnected factors, including but not limited to integrity, honesty, character, reliability, and competence. Because the power of trust lies in the synergy of these variables, building it requires us to understand their interplay in our relationships and in our organizations.

In a recent article, Peter Senge touched more deeply on this process when he discussed the importance of “holism,” a way of understanding the world whereby “the whole is enfolded into each element or part” (see “Creating the World Anew,” The Systems Thinker, V13N3). It is a way of seeing not only the interconnections among the parts and the whole, but also how they mutually evolve together. I believe trust is a concept to which holism applies: We cannot adequately understand and nurture its components without looking at the essence of the whole concept. In our attempts to break it into what appears to be its constituent parts, the “spirit” of trust no longer exists.

To illustrate, let’s try to isolate one of trust’s components, honesty. Although honesty is a positive trait for which we should strive, an honest person is not necessarily reliable or dependable, two other components of trust. Would we trust an honest but unreliable person? We might have confidence that that person will tell the truth, but we probably wouldn’t trust him or her to follow through with commitments. As Stephen Covey puts it, would we really trust an honest but incompetent surgeon to perform a major operation on us? This example hints at the complex nature of this seemingly simple characteristic.

Defining Trust

Let’s begin by defining trust. Webster’s Dictionary says trust is “firm reliance on the integrity, ability, or character of a person or thing” and “assured resting of the mind on the integrity, veracity, justice, friendship, or other sound principle of another person.” Stephen Covey defines it as “the balance between character and competence.” These definitions focus on a particular state of mind that one needs to be able to trust someone.

But if instead we think of trust as an underlying condition necessary to support all effective human interactions, then it becomes a foundational systemic structure. In this supporting role, trust is not visible in the traditional sense; like the wind, only its effects can be seen. For example, trust is absent if we think a relationship might jeopardize our personal or professional interests and well-being. Similarly, we can comfortably surmise that high levels of trust exist in organizations in which members feel a sense of community and connectedness.

To explore the idea of trust as an actual but intangible structure, let’s consider the iceberg metaphor. When you look at an iceberg, only the tip is visible; the greater mass lies out of sight below the surface. By looking “beneath the surface” of daily events in your organization, you can determine the structures that influence people’s behavior. If we apply this metaphor to understanding trust, the tip is our daily interactions in which we experience varying levels of trust or mistrust (see “The Iceberg Model of Trust” on p. 2). These interactions, a series of seemingly unrelated events, are the concrete results of an organization’s climate of trust, which exists in the patterns and structures “below the waterline.” One unpleasant encounter may not lead us to feel an overall sense of mistrust. But if the behavior continues over time, it’s likely to undermine relationships and erode trust throughout the organization. (Note that certain events, such as layoffs, are significant enough to be “trust busters” the first time they occur.)

Using the Trust Lens

So how do we notice patterns of behavior that support or undermine trust? By looking through a “trust lens.” In almost every interaction between people, a “trust transaction” takes place that transcends the actual event; that is, based on what occurs, levels of trust rise or fall. To determine the degree of trust being transacted during an interaction, you can take the following elements into consideration:

1. The history of interactions between individuals and/or groups (What has happened between them in the past?)
2. The literal meaning conveyed through the interaction (What words are being expressed?)
3. The inferential meaning conveyed through the interaction (What voice tones, facial expressions, and body language are being used?)
4. The result of the interaction (Did one party gain an advantage over or “hurt” the other in some manner?)

If we think of trust as an underlying condition necessary to support all effective human interactions, then it becomes a foundational systemic structure.

Knowing the history between two parties offers us the greatest insight in determining the level of trust transacted in a given encounter. Consider, for instance, how different your conclusions would be if you knew that two individuals you were observing had been best friends their entire lives or that two groups had previously experienced a significant conflict with each other.

Because we don’t always know the history, we can try to “read” the trust transaction at both the literal and inferential levels. At the literal level, we analyze the words and phrases being transmitted between the parties involved. In general, using deceptive, demeaning, and intimidating language diminishes trust, while communicating openly and honestly with what Covey calls “courage and consideration” builds it.

Observing literal transactions has its limits, though. According to numerous studies, the words we use make up only about 10 percent of what we communicate. It is at the inferential level — the voice tone, facial expression, and body language — where we do 90 percent of our communicating. Psychologist Gwyneth Doherty-Sneddon says that “language is seen as the primary vehicle” to transmit information and “non-verbal communication is primarily seen to transmit emotional information.” Thus, actively observing all aspects of an interaction and asking, “Do these behaviors convey trust or lack of trust?” is crucial in determining the degree of trust being transacted.

We have to be cautious, though, whenever we try to determine levels of trust, because we each bring to any situation our own set of assumptions about how the world works. Therefore, when we use a “trust lens,” we need to consider how our mental models are influencing our perceptions. A continual comparison between actual data and our assumptions will help us to discern whether we are making accurate judgments or whether we are overgeneralizing based on limited information.

How Trust Becomes a Structure

When a pattern of transactions occurs over a period of time, it creates a structure that becomes the “cultural norm”—a climate of trust or mistrust. In a reinforcing process, our behaviors strengthen the cultural norm, which strengthens the behaviors, and so on. For example, suppose a number of people in an organization behave dishonestly — perhaps by misrepresenting financial data — to help the organization “get ahead.” If the organization’s leaders fail to censure the dishonest conduct, the organization will assume that “this is how we do business.” In this way, isolated behaviors grow into a pattern of dishonesty. Likewise, when trustworthy behaviors, such as honest communication, competence, and integrity, are modeled and reinforced, they eventually become the cultural norm.

Another example is using standardized testing as the sole mechanism for assessing the quality of a school system, which may end up creating a culture steeped in cynicism and deceit. In order to maintain their school’s stature in the community and — in some cases, even it’s funding — some teachers might end up “teaching to the test,” basing their lesson plans on the test questions rather than on sound curriculum. And, in extreme cases, this emphasis on “making the grade” might even influence students to cheat, especially if passing the test is the only way to advance to the next grade or graduate.

The scenario seems like a “chicken and egg” syndrome: Did the structure cause the behaviors, or did the behaviors create the structure? I believe the answer is “yes” to both questions. We may blame lack of trust on the “system,” but we need to remember that, with or without intention, we create and reinforce that system through our behaviors.

LOW TRUST IN AN ORGANIZATION

If the lever is a district’s strategies for reaching its objective — helping every child reach his or her potential — then the position of the fulcrum reflects the level of trust within the organization. In a low-trust environment, the fulcrum is far away from the goal. People end up expending more effort to achieve the objective than they might otherwise in a high-trust environment.

In this sense, we might view trust as an example of what system dynamicists call “dynamic complexity,” because the effects of trustworthy or untrustworthy behaviors in an organization are not always closely related in time or space to when they actually happen. In fact, the impact is often felt much later. So to nurture trust, we need to practice the art of simultaneously “seeing the forest and the trees” — seeing the organizational culture and the individual behaviors within it.

Leveraging Trust

Activities such as mandated standardized testing, which attempt to solve a complex problem in one fell swoop, reflect the prevailing system of management in most organizations today. In a keynote address at the Systems Thinking and Dynamic Modeling Conference in June 2002, Peter Senge described the attributes of this type of organization:

• Culture of compliance
• Management by measurement
• Right and wrong answers
• Managing outcomes versus designing systems
• Uniformity
• Predictability and controllability
• Excessive competitiveness
• Loss of the whole (person, connections to others and to the world)

This management structure creates an environment that undermines trust and produces a, “Trust Death Spiral,” in which mistrust and low performance continually reinforce each other. In this setting, people may feel that they must do whatever necessary to get ahead or even survive in the organization. From a systems thinking perspective, to move away from this kind of management system and toward one that is fundamentally transformational and empowering in nature, we need to understand how an organization’s interrelationships, processes, patterns, and underlying structures influence individual and group behaviors — and how we can leverage trust to change those dynamics.

What does it mean to leverage trust? Archimedes, one of the world’s great mathematicians, claimed that he could transport the globe with a lever, saying, “Give me a place to stand on, and I will move the earth.” The principle of how a lever and fulcrum work together can help us understand how trust influences an organization’s ability to reach its goals.

A lever is a stiff beam that rotates about a point of support called a “fulcrum”; one end of the beam goes under an object to be moved. The purpose of this simple machine is to lift a heavy load using the minimum possible force. How much force you need depends on the length of the lever and where you place the fulcrum. Since it’s often not possible to change the length of the lever, to get the highest leverage, you need to focus on the position of the fulcrum. To minimize effort, place the fulcrum so that it’s close to the object and push on the other end. This is how a jack raises a car so we can change a tire. If the fulcrum is farther away from the object, you’ll need to apply greater force to the lever to lift it.

Low Trust. Let’s apply the metaphor of a lever and fulcrum to the organizational setting. If the lever is a district’s strategies for reaching its objective — helping every child reach his or her potential — then the position of the fulcrum reflects the level of trust within the organization. In a low-trust environment, the fulcrum is far away from the goal. People end up expending more effort to achieve the objective than they might otherwise in a high-trust environment. For instance, if administrators of a school district and its professional teacher organization mistrust each other, the district may spend more time settling disputes than fulfilling its true mission to educate children (see “Low Trust in an Organization” on p. 4).

High Trust. When the trust fulcrum is in a more advantageous position, most institutional actions can be directed toward fulfilling the organization’s mission. In the example above, if the school district works closely with its professional teacher organization to nurture a trusting, mutually beneficial relationship, it will likely not have to direct so much effort to managing that dynamic and can instead focus on educating children (see “High Trust in an Organization”).

Organizations that build systems and structures that nurture high trust and mutually beneficial relationships can trigger a “Trust Growth Spiral.” In this positive reinforcing process, trust and consequently high levels of performance mutually reinforce one another. Increased trust results in intangibles, such as confidence, pride, and ownership, which lay the psychological foundation for continued success, thereby inspiring even greater levels of trust.

Building Trust

In most organizations, the process of building trust consists of occasional events designed to promote teamwork. Many of us have participated in activities such as “supportive chair trust circles,” in which people simultaneously sit on the lap of the person behind them and support the person in front of them; eventually, the entire group is seated in a circle without the use of any props. In “trust falls,” one partner closes her eyes and falls backward, trusting that her partner will catch her before she hits the floor. While fun (unless your partner doesn’t catch you!), these exercises only tap the surface of what it takes to build trust in an organization.

Creating lasting trust is not a one-shot deal; it is an ongoing process that requires deep, long-term commitment from everyone involved. So how do we begin? Following are some examples of how my organization, the West Des Moines Community School District in Iowa, has sought to understand the systemic nature of trust and then work to create structures and engage in behaviors that enable it.
In 2000, the administrative staff development planning team, part of the Administrative Leadership Team (ALT), began to design a three-year leadership development program. We found that we value what the IABC Research Foundation has identified as five qualities that high-trust cultures generally acknowledge and reward:

• Competence (workers’ effectiveness)
• Openness and honesty (amount, accuracy, and sincerity of information shared)
• Concern for employees (exhibition of empathy, tolerance, and safety)
• Reliability (consistent and dependable actions)
• Identification (sharing of common goals, values, and beliefs)

To evaluate the levels of trust in our organization, the ALT disseminated a 16-question trust survey to all its members. The results revealed that, while the perceived level of trust was generally high, some items scored relatively low on the overall trust barometer. Based on those results, we initiated a four-session in-service training during the 2000-2001 school year. The sessions involved all building and district-level administrators and focused on identifying trustworthy and untrustworthy behaviors and their impact at the interpersonal and organizational levels. Feedback following each session was overwhelmingly positive. Results from a follow-up survey revealed an improvement in perceived levels of trust among ALT members.

HIGH TRUST IN AN ORGANIZATION

When the trust fulcrum is in an advantageous position, most institutional actions can be directed toward fulfilling the organization’s mission rather than dealing with interpersonal issues.

Here are some of the breakthroughs we have achieved through our efforts:

Building a Shared Vision. For several years, the district, with the vision and support of its superintendent, has embarked on building a learning community. One step in this process has been to develop a shared vision statement for the district through a series of collaborative processes with parents, students, staff, board of education members, and interested citizens. Through continued dialogue, the district generated a simple, yet powerful statement: “The West Des Moines Community School District will be a caring community of learners that knows and lifts every child. We will inspire joy in learning. Our schools will excel at preparing each student for his or her life journey.”

This shared vision is now guiding the district’s discussions, decisions, and future plans. It has:

• Provided the foundation for a major reorganization of the high school
• Caused the administration to seek to identify the students who do not feel “known or lifted” and to improve our services to them
• Influenced some conversations to focus on why and how we want students to experience joy in learning
• Brought forth community members who challenge the district to do better

In a nutshell, through a foundation of trust built through the development of our vision statement, avenues of communication are opening up.

Changing Our Mental Models.

In the early 1990s, the district’s school board created a policy that supports and encourages “participatory management.” This policy, which allows greater partnership and ownership in decision-making among all district stakeholders, has strongly influenced our mental models about how decisions should be made. At the event level, this policy demonstrates a belief in actively including those directly impacted by decisions in the process. Below the surface, the message is one of trust in the integrity, character, and competence of those once uninvolved, who now have a greater role in influencing policy.

Developing Personal Mastery.

The year-long trust-building workshop for members of the district’s administrative leadership team has brought trust and trustworthiness to the forefront of our consciousness and conversations. Our understanding of the gap between the current reality of our district’s trust climate and our future vision of a high-trust culture has inspired us to grow and learn as individuals and as a group.

Engaging in Team Learning.

Central office administration regularly conducts “maintenance” meetings with the leaders of our district’s professional and support organizations. These meetings provide opportunities for team learning through honest conversations. The conversations go beyond polite talk to deeper listening, engagement, and feedback. Using reflective skills has helped team members more effectively manage disagreement and resolve conflict.

Building Trust Informally.

Through the development of policies, practices, and cultural norms, an organization can make conscious efforts to build and maintain trust

In addition to formal organizational efforts to build trust, more informal interactions have also contributed to a high-trust climate. For example, recently, a confrontation between a teacher and student required an administrative response. Rather than the principal dictating how the teacher should handle the situation, the principal conducted a dialogue with the teacher based on the spirit of “knowing and lifting every child.” She helped the teacher recognize why the interaction did not align with the shared vision; turned the meeting into a learning opportunity; and indicated that she trusted the teacher to do the right thing. The teacher ultimately resolved the conflict with the student in a way that maintained a positive teacher-student relationship.

Benefits of a High-Trust Culture

When the level of trust in an organization is high, its influence is felt and observed at every level and in every aspect of its operations. High trust allows organization members to focus on their primary mission rather than taking precious time and energy to deal with the numerous crises that prevail in a low-trust environment. They can then focus their resources and energy to reach their goals.

For schools, “profit” is measured by student achievement. A multi-year study completed by University of Chicago professors Anthony S. Bryk and Barbara Schneider resulted in the book Trust in Schools: A Core Resource for Improvement (Russell Sage Foundation, 2002), which links higher student achievement with high levels of trust between teachers and principals and among the teaching staff. Bryk and Schneider go so far as to say that without trusting relationships, school improvement efforts are “doomed to fail.”

For all kinds of enterprises, trust is a high-leverage resource that sustains success and effectiveness. Through the development of policies, practices, and cultural norms, an organization can make conscious efforts to build and maintain trust. As an organization reaps the “profits” of a trusting culture, it simultaneously perpetuates, or sustains, trust as an important commodity unto itself.

Ultimately, trust involves developing and maintaining relationships. Today’s workplace requires effective, skilled, and compassionate transformational leaders — not just managers — who recognize the need for trust and who facilitate organizational change to create high-trust cultures. We can start this process by taking to heart the words of Edward Marshall, who said, “The answer to leading others to trust and high performance may be found by looking in the mirror and asking: Am I trustworthy?” Ensuring the answer to that question is “yes” may be the highest-leverage action we can take as leaders today.

Doug Stilwell has 22 years of experience in education. He is currently the principal of Crestview Elementary in the West Des Moines Community School District in Iowa. Doug is also a doctoral student in Educational Leadership at Drake University.

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