Following are summaries of three of the keynote talks. Recordings of some keynote and parallel sessions are also available on audio and/or videotape as part of the Systems Thinking in Action Conference Collection.

—Colleen P. Lannon

Peter Senge—Creating Transformational Knowledge

The concept of the learning organization first became prominent about six years ago. It is only now becoming clear, however, that this concept is missing something fundamental. We are now learning that what goes on in any creative process isn’t about organization, it’s about community. The absence of effective learning communities keeps our organizations from being able to learn from our most clear, demonstrated breakthroughs. Although individual learning occurs all the time in organizations, it often has little or no impact on the larger system. Learning communities provide the infrastructure and support to expand learning beyond the individual level.

The three core activities of the learning community are practice, research, and capacity building (see “Core Activities” on p. 2). Practice is anything that people do to produce an outcome or result. Practitioners can be line managers, a product development team, a sales team, or front-line manufacturing people. Research, on the other hand, is any disciplined approach to discovering and understanding, with a commitment to share what’s learned. The institution we associate most often with research is the university. Capacity building is carried out by coaches and mentors, who help people develop the capacity to do something they couldn’t do before. Consulting, or the HR function within an organization, is the institution most often associated with capacity building.

Unfortunately, in the real world these three activities rarely overlap. But if we were to get rid of the imaginary boxes that separate these areas, we would actually begin to see a system for producing theory, methods, tools, and practical know-how. This is the essence of a learning community.

Fragmentation

The fragmentation among these three areas of activity is at the heart of many problems we face today. One reason we are powerless to deal with our environmental problems or can’t help our large institutions change in fundamental ways is that the system whereby we collectively learn and alter our conditions is deeply fragmented. Walls have been built around the three areas of activity. Capacity builders such as consulting institutions, for example, undermine the knowledge-creating process because they have almost no incentive to share their insights with others. How free are they really to deal with the toughest issues of the client system? What if the person paying the bill is the problem? Can they tell him or her?

Then there are the walls between the university and other parts of the system. A typical article from an academic journal is full of jargon, referencing thousands of ideas that only a handful of people know about. These experts employ what Donald Schorr calls “technical rationality,” which separates theory from application: first you get the theory, then you apply it. This disconnection also appears in organizations, where the executives operate by technical rationality while the people on the front lines are the ones who actually have to put theory into practice.

Once we let go of technical rationality, we can ask: How does real learning occur? What happens in a community that integrates these areas? Artistic communities, for example, show that a different way of working together is possible. MIT’s Eric von Hipple, a world leader on product design, cites another example of a learning community. He notes that a lot of terrific new products are created by the customer, not by the company. In his view, companies that form different relationships with their customers can be extraordinarily more competent in product innovation—an example of how companies can form a learning community.

AutoCo: Learning Community in Action

Another example of a learning community is the AutoCo case, which has been the subject of a three-and-a-half year project at the MIT Center for Organizational Learning (OLC). It has been documented through a series of interviews that tell the story of this product development team’s journey—a story that chronicles fascinating change among individuals that occurred as they developed new capacities to work together. As one of the team leaders explained, “(Now) everybody says what’s really on their mind. All our problems are thrown on the table. It looks like chaos, but issues really get sorted out. We don’t wait until we have the answer to bring up the problem.”

In an engineering culture, this directly contradicts a basic ground rule: bring up the problem only after you have solved it. But by the end of the project, this team wasn’t operating that way anymore. They had found a new way of working together—one that proved extraordinarily successful and broke many company records. Clearly, this is a powerful story of the interaction between capacity building and practice.

However, the activities and mindset of the team were viewed as so foreign by the larger bureaucracy that the team was seen as “out of control.” After a global reorganization, the senior team members were not offered compelling positions, so they left the company within a few months of the product’s release.

Core Activities

[drop]T[/drop]he three core activities of the learning community Involve practice, research, and capacity building. By integrating these areas, we can begin to create a system for producing theory, methods, tools, and practical know-how.

There is a postscript to this story. Today, almost two years later, there are thousands of people involved in learning organization projects at AutoCo. Somehow, what seemed like an enormous setback at the time—the loss of several senior team members—did not hamper the overall process. And, per-haps even more surprising, AutoCo’s senior managers recently decided to publicly disseminate the learning history document, which tells the story of the team’s successes and failures. Why? Because it was consistent with their overall vision of making the link between research and practice. Until this disciplined approach to “discovery and understanding with a commitment to sharing” is present, the toughest issues that arise in innovative practices will often remain submerged.

Creating Learning Communities

How do we create learning communities? First, as in the AutoCo case, we must let our story out—even the parts of it that we do not like. Second, we need to be clear about our larger purpose. What are we committed to? If we are focused only on producing practical results, our efforts will never be truly successful. The knowledge-creating process must be broader than that; it must embrace all three areas. Without these multiple perspectives and commitments, brilliant innovations will not spread.

Finally, we have to find new ways of governing. At the MIT Center for Organizational Learning, we’re moving toward having a governing council that is elected by all the members of the community. This approach is radical, because in almost all nonprofit organizations the council appoints its own successors. But we believe that a democratic system, in essence, should invest more power in underlying ideas than in institutions.

In a democratic community, theory, tools, and practical knowledge are like a tree. The roots of the tree are theory, the branches are tools, and the fruit is practical knowledge. If you just eat all the fruit (take all the practical know-how, apply it, make lots of money) but don’t reinvest some of that fruit and let it reseed, you’ll have no more theory, no more trees.

At the heart of this tree is a transformational process: photosynthesis. The ideas that are drawn up through the roots (the theory) interact with the outside environment through the leaves (the tools) that create the fruit of practical knowledge. This system is transformational, and knowledge of the whole system might be called transformational knowledge.

But this transformational knowledge– of the knowledge-creating process—is not held by any one individual or group. It exists as collective knowledge held only by a community, a learning community. Thus, as we learn how to develop such communities, we may come to a much deeper appreciation of democracy, “a great word,” as Walt Whitman said, “whose … history has yet to be enacted.”

—Edited by Joy Sobeck

Robert Fritz—The Power and Beauty of Structure: Moving Organizations from Oscillation to Advancement

I studied at a conservatory of music, which is something I usually don’t mention in business settings. When people hear that you are in the arts, they immediately assume that you don’t know anything about business. But it strikes me that, in some ways, an organization is really no different from a piece of music. No organization is more structurally complex than, for example, Stravinsky’s Rite of Spring. In fact, if our organizations functioned like great orchestras, they would work very well—far better than many of them currently do. But we must include design as well as execution in our analogy—the composition is as important as the performance, if not more so.

The key to optimal performance—both in organizations and in the arts—lies in understanding and working with structure. Structure is an essential element in artistic pieces, and it can also work for or against change in organizations. If we focus on altering those fundamental structures that don’t work, we can accomplish the changes we want. However, if we don’t take structure into consideration, any change effort, no matter how valuable, may be doomed to failure.

The key to optimal performance—both in organizations and in the arts—lies in understanding and working with structure.

What Is Structure? The first characteristic of structure is that it consists of individual elements. These elements form relationships in which the combination of the elements causes the elements to behave in particular ways. The relationships, taken together, form a kind of unified entity. So structure is not simply various elements that have relationships with each other; it is the overall entity formed by these particular causal relationships.

In the arts, structure is based on tension/resolution systems. Tension is caused by a discrepancy between two things (light/dark, loud/soft, protagonist/antagonist, etc.), and it produces a desire for resolution. Artists manage tensions and resolutions quite consciously. To a filmmaker, the audience’s feelings are predictable, controllable. Alfred Hitchcock, for example, was a master at understanding how structural relationships cause particular patterns of behavior. He could make a film in which he determined exactly what the audience would feel at any moment of the film. If we, like Hitchcock, can understand structure, we can create a structure that is bound CO go in a particular direction. For an organization, this principle can help people form structures that lead to predictable and wanted changes, rather than unintended consequences and neutralization of success.

For example, a pivotal moment in the movie Casablanca occurs when Ilsa and Victor Laslow walk into Rick’s cafe. They’re sitting at a table chatting, and Rick looks over at Ilsa. Their eyes meet, and in that moment, we know we have a triangle. We have a woman who loves two men. We have a movie!

To determine if these relationships are structural, let’s test them. If we change the elements, do any of the dynamics change? Let’s say that Rick is in his cafe and Ilsa comes in alone. Does that change the dynamics? How about if Ilsa and Victor come into Rick’s cafe, but Rick has gone to Chicago, so he’s not there? Or, Rick is at the cafe and Victor comes in, but Ilsa’s not with him? It’s simply not the same—the tension that is set up between those three people dissipates the moment one of them is taken out of the scene. As soon as we change the structure of the relationships, the tendency for behavior changes.

As this scene illustrates, a structural relationship is one in which there’s a tendency for behavior to move in a particular direction. At the beginning of the film, Rick says, “I stick my neck out for nobody.” But at the end he sends the woman he loves off with another man for the well-being of humanity. Now that’s movement!

Organizational Structures

We can see similar tension/resolution systems operating within organizations. This type of system produces either oscillation or advancement (also called resolution). Obviously, we would like our companies to advance, but we often get stuck in oscillating patterns. Why? It has to do with the conflict that is set up when there are two competing tension/resolution structures operating in the same system.

To understand how conflict plays out, let’s say I’ve got a rubber band tied around my waist and anchored to a wall that represents change. This sets up a tension/resolution system—the tension in the rubber band will naturally resolve as I move toward the desired change. But suppose I’ve got another rubber band around my waist that anchors me to the opposite wall, representing stability and continuity. As I start moving toward change, the rubber band in front of me becomes slack, but the rubber band behind me becomes more tense. At a certain point, no matter how much I believe in the change, the tension produced by the desire for stability will overcome the desire for change. At this point, I will move toward continuity and away from change.

This is the type of trap that many organizations find themselves in when they are caught in competing tension/ resolution systems. In our example, there is a need for both continuity and change, but if these two tension resolution systems are in the same structure, they must compete. It isn’t that people by nature are resistant to change, but that there has to be an underlying structural motivation for us to resolve tension in the direction in which we want to go.

Moving Toward Resolution

Obviously, we want to structure our organizations to enable resolution rather than oscillation—to move from where we are to where we want to be and, having moved there, be able to move to yet another place. So how can we prevent ourselves and our companies from getting stuck in competing structures? By creating structures that can “resolve,” thus moving us toward advancement and success.

One way to sort out these conflicts is to establish hierarchies of importance in values, which can enable us to create structural tension— structures that are capable of resolution and advancement. When thinking about capitalizing a business, for example, the goals of building the company and managing short-term stock-market performance can become conflicting. If a leader in a company doesn’t sort out what’s more important—building the business or focusing on the return on the stock market—every time the employees move in a direction that will build long-term growth and sustainability, they will be pulled away from that because the company’s share price went down. In contrast, if a company understands the principle of structural tension, organizes itself around what matters to it most (in contrast with its current reality), and then takes actions that move it in that direction, it will move toward resolution rather than oscillation.

In a way, this process is like creating music. As a composer takes a theme and begins to develop it throughout a piece, all the parts coordinate and play together to create a comprehensive whole. It’s the same way in a well-designed company—by understanding and working with the concept of tension/resolution systems, individuals and departments can work together to continually evolve their capacity to design and then create their future.

—Edited by Joy Sobeck

Margaret Wheatley—Understanding Organizations as Living Systems

Most of us are pathfinders. We are trying to understand organizations as systems. But there are profound differences between cybernetic systems and living ones. The path of living systems requires that we entertain some startling and disturbing concepts—ideas that call into question our present approaches to systems study.

An organization is not just a system, it is a living system. Life is always new and surprising, constantly creating further complications and mystery as it unfolds. These characteristics of life do not sit well with our desire for control. Yet life creates such dense and entangled webs that it is impossible for us to predict its behavior or to understand it through mapping. Graphic depictions deceive us into believing that we can truly understand a system. In truth, every time we develop precision in our understanding of something—including causal loops and system maps—we lose the rest of the system. Every act of defining loses more information than it gains. The relevancy is actually in the messy, never-ending complexity of relationships.

Our desire for control leads us not just to maps, but to a reverence for techniques. We substitute the messiness of meaning for the elegance of techniques. Dialogue is an example. We took this valuable idea and turned it into a matter of technical skill, focusing on the techniques of dialogue at the expense of its essence. In this way, our desire for control can turn vital ideas into approaches that endanger and even destroy the good that we are trying to create in organizations.

Organizational Identity

A system is alive only if it can give birth to itself. This means that all organizations create themselves, spin themselves into existence. They become more dense and complex as they generate endless webs of connections. Organizations create themselves around questions of identity—i.e., what is the organization? Any changes that we hope to accomplish in the workplace must therefore occur at this deep level of identity.

To create learning organizations, we must understand the underlying agreements we have made about how we will be together. Instead of focusing on training programs or structures related to organizational learning, we first need to explore the agreements people have used to organize themselves, since it is within such agreements that our organizations take form. What is the cost, the price, of belonging to this system?

Failure to address these kinds of beliefs leaves us tinkering at the level of structure and form rather than at the organization’s core. An organization cannot be changed at the level of what we see, but only at the level where its identity is forming itself. Therefore, we cannot expect a learning structure to work unless the organization’s agreement of belonging is about learning. We cannot train people to be life-long learners if the agreements of belonging dictate keeping their mouths shut and “never making the boss look bad.”

The Autonomy of Living Systems

A living system is also autonomous—free to choose what it wants to recognize, regardless of what we explain to it or show it. Only if the system finds what we have to say interesting and meaningful will it open itself to new information. Thus we can never direct a living system; we can only disturb it. To truly understand an organization as a living system, we need to determine what the system finds meaningful. One way to do this is to think of our “interventions” as indications of what the system notices. This method can reveal a lot about what is going on inside the system—what motivates and inspires it, and how information moves through it. If we try to change an organization and it pushes back by ignoring us or moving in another direction, we need to see these responses as a window onto how the system works, rather than as a personal failure.

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Starting with the Basks

Jorge began his exploration of The Fifth Discipline Fieldbook by looking for an exercise that could help him better understand how to create a learning organization. He found a “solo exercise” entitled “Defining Your Learning Organization” (p. 50). Following the instructions, he began envisioning the learning organization he would like to build. To do this, the exercise suggested answering three questions about this ideal organization: 1) What are the characteristics of this organization that make it succeed? 2) How do its people interact inside the organization and with the outside world? 3) How does this organization differ from my current organization?

When Jorge completed the exercise, he was enthusiastic about his personal vision of what a learning organization would look like. Since he had heard the phrase “shared vision” tossed around the office, he decided to share his vision with the other members of his organization. He picked up the book once again to look for suggestions.

His search brought him to an article entitled “Building Shared Vision: How to Begin” (p. 312), one of the “Theory and Methods” entries in the book. The article described five stages in the process of building shared vision, and suggested first determining your current stage, and then designing a strategy to get you to the next stage. With help from the Fieldbook, Jorge determined that his company was at stage two (“selling” the vision), and to further the work he should focus on enrolling people in the vision by sharing his personal excitement and commitment. Based on the suggestions in the book, he plotted a course of action.

Creating a Vision

Some weeks later, Jorge picked up his tattered copy of The Fifth Discipline Fieldbook. He felt his work group was now at the stage where the members were ready to co-create a vision. One intriguing phrase he came across said, When a shared vision effort starts with personal vision, the organization becomes a tool for people’s self realization, rather than a machine they’re subjected to.” When he shared this passage with the other members of his group, he was asked, “I low do we do this?”

After skimming through the book, Jorge stumbled upon a “Guiding Ideas” article entitled “Intrapersonal Mastery” (p. 226), which stated that personal mastery involves a move from reacting to the past to creating your future. As this shift happens, you often realize that you are intimately related to your organization, your nation, and the world. Along with this realization comes the desire to adjust your personal vision so that it encompasses not just what you want for yourself, but what you want for the larger systems in which you work and live.

Jorge immediately wrote up a presentation on intrapersonal mastery and presented it to his group. The meeting, however, was a disaster. He was constantly interrupted, people seemed to react to things that weren’t said, and there was a lot of posturing. Afterward, he met with each of the members individually to get their impressions of what went wrong, and to reemphasize his belief in the importance of intrapersonal mastery. To his surprise, each team member expressed excitement and interest in the topic. He wondered how they could possibly agree with him individually and yet act so unproductively in a group setting. It seemed that his group also needed to work on team learning.

That evening he picked up his Fieldbook and found another “Theory & Methods” article in the Team Learning chapter (p. 357). The article was on dialogue, a process through which people learn how to think together by creating a “container” — an atmosphere of trust and respect in which difficult topics can be addressed. After reading about dialogue, Jorge invited the other members of his group to come to a series of meetings to begin experimenting with the dialogue process. After they met a number of times in “dialogue sessions, Jorge felt like they were beginning to reach a new level of understanding and communication. At this point, he presented the group with a team exercise from the Fieldbook entitled “What Do We Want to Create?” (p. 337), which offers a two-step method for jointly articulating a shared vision and evaluating current reality. After doing this exercise a number of times, they felt comfortable with the shared vision they created.

Looking at the System

The group agreed that the next step was to design a method to achieve that vision. Jorge knew that before you change the structure of a system, you better know what you’re doing or you could make it worse. He decided that it would be a good idea to map out the structure of the system using system dynamics’ causal loop diagramming technique. A “Systems Stories” article in the Fieldbook entitled “Start with Story Telling” told of a company like his that used systems thinking to move from focusing on events to recognizing patterns of behavior over time. They then mapped out the mental models of the company’s managers so they could see the systemic structure underlying their problems. Jorge and the other managers decided that they would attempt to do the same.

Using the archetype family tree in the Fieldbook (p. 149), they identified the “Shifting the Burden” archetype as best capturing one of their most persistent problems. It seemed to Jorge’s group that at International Chocolate, managers spent much of their time “fighting fires” — even though they all recognized the havoc and the short-term perspective crisis management engenders. Using the storyline of the “Shifting the Burden” archetype from the Fieldbook, the group saw that a dependence on crisis management had led to addictive behavior in the company as a whole. As the team began to flesh out the storyline, they soon developed a free-form causal loop diagram that accurately reflected their shared view of their problem. But although they all agreed on the structure of the system as represented in their causal loop diagram, they disagreed about the behavior that system would produce if they tried to change the addictive structure.

As Jorge was puzzling over this latest dilemma, he noticed a cameo article in the Fieldbook by John Sterman entitled “Beyond Training Wheels” (p. 177), which discussed the shortcomings of archetypes and causal loop diagrams. Jorge and his team discovered that they were not alone in being unable to mentally “simulate” the solution to the problem they had mapped, and that in order to do this they needed to convert their causal loop map to a mathematical model.

Although the Fieldbook contained several articles on converting causal loop diagrams to computer models, Jorge felt that it was not nearly as rich in this area as it was in others. It did, however, point to and review many modeling resources that Jorge could pursue for using system dynamics to create mathematical models and test their systems hypothesis (p. 546).

Next Steps

Jorge is currently busy finding a consultant to help build a computer model. Although he is not using the Fieldbook quite as much at this stage, he keeps it on a shelf next to his desk because he knows he’ll pick it up again soon. Jorge has learned that building a learning organization is a continuous process, and despite their progress, his company still has a long way to go.

W. Brian Kreutzer is a consultant, teacher, and writer associated with Gould-Kreutzer Associates, Inc.

The Fifth Discipline Fieldbook (New York: Doubleday, 1994) is available through Pegasus Communications, Inc.

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A system of public education inevitably rests on public consensus regarding the skills, knowledge, and attitudes that will be needed by future citizens. Today, I believe our traditional consensus regarding the goals and processes of public education leaves us dangerously vulnerable in a world of increasing interdependence. We have all been taught to break apart complex problems and fix the pieces. Our traditional education process — indeed, our theory of knowledge in the West — is based on reductionism, fragmenting complex phenomena into component parts and building up knowledge of the parts. Moreover, our traditional system is based on competition and individual learning.

This process starts in elementary school and continues through the university, getting worse and worse the further one “progresses” in higher education. Literally, to be an expert in our society is to know a lot about a little. Such an educational process can never lay a solid foundation for understanding interdependency and for fostering genuine dialogue that integrates diverse points of view.

Concern today with public education focuses on achievement relative to traditional standards. But the real problem lies with the relevance of the traditional standards themselves. Preparing citizens for the future with the skills of the past has always been the bane of public education. Today, it could be the tragedy of our times.

We are witnessing a massive breakdown of traditional institutions worldwide.

A Leading Edge Of Change

Given the profound changes unfolding around us, it is not surprising that we are witnessing a massive breakdown of traditional institutions worldwide. In a world of increasingly rapid change and growing interdependence, large, centrally controlled organizations have become virtually ungovernable. The Soviet Union, General Motors, and IBM, one-time paragons of power and control, all suffered massive breakdowns in the 1980s.The fundamental problem became the management system itself — the inability to effectively coordinate and adapt in an increasingly dynamic world, to push decision-making to the “front lines,” and to break up power blocks committed to self-interest over common interest.

The breakdown in our traditional system of management is driving extraordinary change in large business enterprises. In fact, no institution has been forced to confront the changes of an interdependent world more rapidly than business. Because businesses compete against one another around the world, if one company or one part of the world makes significant headway in developing new skills and capabilities for a dynamic, interdependent world, it will quickly gain advantage. Others will have to play catch-up or go out of business.

The basic problem is that it takes years to develop the skills and knowledge to understand complex human systems, to learn how to think and learn together across cultural boundaries, to reverse years of conditioning in authoritarian organizations where everyone looks “upward” for direction instead of “sideways” to see the larger systems of which one is a part. Equally challenging, it takes patience, perseverance, and extraordinary commitment to develop these skills and understandings in the context of corporate environments still largely dominated by authoritarian, control-oriented cultures.

A Lagging Edge Of Change

The more one understands the skills, knowledge, and beliefs needed to succeed in an increasingly interdependent world, the more one sees that it is folly to focus exclusively on our “system of management” and ignore our “system of education.” Isn’t it silly to begin developing systems thinking capabilities in 35-year-olds who have spent the preceding 30 years becoming master reductionists? Isn’t it grossly inefficient to begin developing reflectiveness, the ability to recognize and question one’s own mental models, with adults who, in order to be successful in school and work, had to become masters at solving problems rather than thinking about the thinking that generated the problems? Isn’t it naive to think that we can suddenly master collaborative learning as adults, when so much of our lives has been devoted to win-lose competition and proving that we are better than each other? Shouldn’t personal mastery, the discipline of fostering personal vision and working with creative tension, be a cornerstone of schooling? Isn’t it hypocritical to espouse personal vision and self-assessment when so much of traditional schooling is devoted to learning what someone else says we should learn and then convincing them we’ve learned it?

Increasingly, business people are beginning to recognize the tragic neglect of fundamental innovation in public education. And they are moving from financial contributions to action. Electronic Data Systems allows employees to take time off to volunteer in public schools. Intel employees have worked to start new public schools in Arizona and in statewide educational reform movements in Oregon and New Mexico. Ford employees are teaching systems thinking and mental models in community colleges in Detroit. Motorola has started its own summer camp, teaching employees’ children basic science and technology.

But, little is likely to take hold and grow from such isolated experiments until there is a widespread revolution in professional and public thinking about the nature and goals of public education. How will we need to expand the traditional skillset of the industrial era for the knowledge era? How must our traditional ideas about school give way as more and more of the content of traditional education becomes available over the Internet? What will educational institutions in the knowledge era look like?

There are no easy answers to such questions. My guess is that two cornerstones of the new system of education will be recognizing the importance of the learning process in addition to the content of what is learned, and making high-level thinking and learning skills, like systems thinking and collaborative learning, as central as the traditional skills of reductionist thinking and individual problem-solving. These could be two elements of a thought revolution in education.

Who Will Lead The Transformation?

Several years ago, my wife and I attended an awards assembly at our teenage son’s school. Our five-year-old son, Ian, was with us. When the winner of the first award was announced, Ian turned to Diane and asked, “Mommy, is only one child getting an award? What about the others?”

What did a young child see that sophisticated educators overlook?

Why can he see the system as a whole — all the students — and the educators see only the pieces, the “exceptional” kid? Maybe it’s simply that the professional educators have spent their whole lives in school. Maybe, despite their knowledge about learning theory and research, they have a hard time seeing beyond “the way it’s always been done.” Maybe we all need to be leaders for change.

In 1995, I participated in a series of satellite broadcasts on learning organizations sponsored by the Association of Supervision and Curriculum Development and the PBS Satellite Network. One of these shows involved three students from the Orange Grove Middle School in Tucson, Arizona, which had been integrating systems thinking and learning-directed learning throughout its curriculum and management practices for over five years. The clarity, articulateness, and composure of these young people impressed the other participants, mostly corporate managers doing the same kind of work within their businesses. As the program went on, many of the most penetrating insights were offered by the young people. When the moderator asked for any closing remarks, Kristi Jipson, an eighth-grade student at Orange Grove, said, “. . . We are really excited about what we are learning now. Before, you only needed to learn the ‘book and ruler’ stuff. But now, as this program shows, businesses are changing and, by the time we get there, this is what will be going on, and we’ll need to know it.”

Interestingly, one of the more forceful voices for innovation in the Catalina Foothills District, where Orange Grove is located, has been a group of senior “citizen champions,” many in their 70s and older. They formed The Ideals Foundation, with a vision of developing entire curricula organized around “demonstrating how the parts relate to the whole.”

These examples demonstrate that the profound rethinking of public education required today cannot be led by any one constituency or professional group. The future is the responsibility of us all. And “all” includes those who have seen the most of the past and those who will see the most of the future. All must participate and all must lead.

Excerpted from the Preface to Envisioning Process as Content, edited by Arthur L. Costa and Rosemarie M. Liebmann. Copyright © 1997 by Corwin Press, Inc. Reprinted by permission of Corwin Press, Inc.

Peter M. Senge, best-selling author of The Fifth Discipline: The Art and Practice of the Learning Organization, is an international leader in the area of creating learning organizations. He is a senior lecturer in the Organizational Learning and Change Group at MIT and chairman of The Society for Organizational Learning (SOL). Peter has lectured through- out the world and written extensively on systems thinking, institutional learning, and leadership.

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Peter Senge: Organizations will have to be much more in tune with and ultimately responsible for their impact on social and environmental wellbeing. In addition, to remain competitive and successful, they will need to tap the collective intelligence, spirit, and energy of their people. Bill O’Brien used to say that in the 20th century, to be effective, organizations focused on developing manufacturing, financial, and, to some degree, marketing sophistication, but they operated with mediocre people skills. In the 21st century, while manufacturing, financial, and marketing expertise will remain important, organizations that will thrive will have comparably sophisticated people skills.

These two imperatives will increasingly intertwine. As former Volvo and IKEA CEO Goran Carstedt said, the challenge is to develop organizations “worthy of people’s commitment.” Most of us can see that our current approach to globalization is creating great stress in the world. Organizations, especially businesses, that seek to tap the insight, commitment, and creativity of their people will need to be committed to enhancing social and environmental wellbeing, not just to making money.

TST: What changes are most needed in the next decade? Where is the highest leverage for bringing about the kinds of changes you think would help our world?

Any enduring change strategy includes building and sustaining networks of collaborators across many boundaries.

Senge: SoL (the Society for Organizational Learning) operates from the assumption that collaboration among organizations is, and will increasingly be, vital to sustaining deep changes in the traditional management culture. When I say management culture, I mean the prevailing and often unquestioned assumptions and taken-for-granted practices of management in Industrial Age organizations. One traditional assumption is that, rather than having several performance requirements, the sole purpose of a business is to maximize return on invested capital.

Another is that, to enhance performance, managers need to focus everyone on “the bottom line,” what accounting theorist Tom Johnson calls “management by results,” rather than on enhancing the capacities of people at all levels to understand complexity and to learn.

These narrow assumptions may have led to innovation and success in the past, but today, what any individual organization—whether a business, hospital, governmental agency, or school—can do alone to significantly break from the cultural mainstream is very small. Each one operates as if it were tied to a rubber band. Even if an organization innovates significantly for many years, it eventually gets snapped back to the norm. For example, at any one point in time, you can always find a small number of highly innovative schools in which kids are engaged and teachers love their work. But virtually all return to average within 5 to 10 years.

From my standpoint, any enduring change strategy includes building and sustaining networks of collaborators across many boundaries. For the past several years, SoL has focused on bringing together large multinational companies, prominent nongovernmental organizations, and key governmental agencies to work on significant issues around environmental sustainability. For example, oil companies that establish residency in a country, such as Nigeria, Angola, or Venezuela, to produce oil over 50 or more years, have traditionally justified their efforts by promising that the country would be better off as a result. But there are several reasons to challenge this premise. Many countries that have exported large quantities of oil for years have seen little real economic, social, and environmental progress. Many end up as permanent oil exporters with little modern industry and strained relationships with the oil companies. Much of the profit goes to corrupt regimes that squander it long before it benefits the society at large. “Rigged rules and double standards” in global trade, as a recent Oxfam report puts it, favor developed countries’ exports over developing countries’ exports, hindering industrial diversification in emerging economies. For oil companies to deliver on their promise for economic and social development in exporting countries, they cannot work alone, and SoL members are looking for ways to foster collaboration within these countries and among different multinational organizations to help this process.

Another project within the SoL community is based on German chemist Michael Braungart’s idea of “intelligent materials pooling.” In their new book Cradle to Cradle: Remaking the Way We Make Things (North Point Press, 2002), Braungart and U. S. architect William McDonough discuss the adverse environmental and health effects of current industrial products. They propose a business model in which companies collaborate to eliminate toxins from their products and integrate natural systems ideas, such as continuous reuse, into product design. This paradigm has become increasingly attractive to companies, especially in Japan and the European Union, where some governments have started passing legislation that holds private industries responsible for their products after the periods of use are over.

The basic idea is that if you produce something, you own it forever. Ideally, we’ll get to the point where every product we come in contact with can be indefinitely recycled or remanufactured, and nothing ever goes into a landfill. In this way, we start to “close the loops,” as the environmentalists would say, just as nature does. Nature doesn’t generate waste. End products or byproducts of one living system are nutrients to another. What companies can do on their own to support such changes is often very limited. There may be no cost-effective substitute for many widely used chemicals, like PVCs, and the research costs to a company for redesigning its products could be prohibitive. But a group of companies could pool their purchasing power and work collaboratively with chemical producers to find substitutes, just as they could pool research efforts.

TST: What are some of the challenges organizations face as they collaborate with multiple stakeholders?

Senge: Let’s look at the automobile industry. Part of the EU legislation I was just referring to requires companies to give a complete account of all the material components of a car they intend to sell. Why do we need to know this information? Well, probably about 90 percent of a vehicle’s materials, starting with the seat fabric, is toxic to people. For example, in most new cars today, you can see a thin film on the inside of your window in the morning. That is not moisture; rather, it’s outgassing from the dashboard’s components. Braungart and McDonough point out that many of the widely used materials in everyday products are carcinogenic substances that remain in living systems for a long time. In other words, they’re harmful to humans and other life. In the pharmaceutical industry, drugs are regulated to avoid the production of dangerous products. In most other industries from which we buy, use, and discard products, however, up until recently, little such regulation has existed.

But just the task of identifying material components is daunting. In making an automobile, you deal with a complex web of suppliers, few of who know the chemical composition of the products they’re selling. In addition, companies selling vehicles in Europe are now faced with phase-out schedules for particular chemicals, starting with heavy metals such as lead, mercury, hexavalent chromium, and cadmium. In many cases, nobody knows how to remove these elements from vehicles or what material can be used as a substitute.

As SoL member companies collaborate, we are finding connections and possible synergies. For example, we recently discovered that Pratt &Whitney has developed a product that eliminates hexavalent chromium from fasteners. But because this product was developed for the aircraft industry, it was unknown to auto and motorcycle manufacturers. Another collaborative project involves building common databases so that product designers can quickly determine the chemical constituents of different materials, their potential environmental and health consequences, and preferred alternatives, where they exist.

TST: Have any organizations successfully collaborated and designed sustainable product development processes?

Senge: About five years ago, Nike, Inc., began to address a serious discrepancy between its mission and its products. Founded on a vision of fitness and vitality, Nike was making products that included potentially harmful chemicals. Several Nike leaders started meeting with external and internal designers for the company to explore more sustainable practices in product design, manufacturing, and distribution. Eventually, this group evolved into a substantial network of designers and producers who are collaborating to figure out how to integrate sustainable product development into the company’s core strategy for success. Nike now sells an entire line of organic clothing made from cottons produced by small farmers around the world. It’s currently trying to figure out how to mass-produce nontoxic organic fibers so they can use these materials in more of their products. To pursue such large-scale collaborations, Nike initiated SoL’s materials pooling project.

TST: Who will be the movers and shakers making an impact in society in the next few years?

Senge: It depends on how you interpret the phrase “movers and shakers.” In our present society, the media tends to focus on the CEO, who is typically regarded as the key to the company’s success. But the types of leadership truly critical to an organization’s prosperity are not ones you usually read about in the newspapers or Fortune magazine. In the change efforts I’ve been engaged in, I’ve found that the local line leaders and what we call “internal networkers” are making the greatest impact on changing how our larger systems work.

They’re the ones operating on the ground implementing innovative ideas like materials pooling, turning schools around so students can excel, and creating community leadership organizations that eliminate gang warfare.

Many of us have the mental model that somebody—some senior leader or manager—must be controlling the organization’s systems, which we ourselves feel overwhelmed by. But from a systemic perspective, the reality is just the opposite. Most large institutions are so complex that no one person—no “mover or shaker” in a position of authority—can bring about the needed change. Rather, when lots of people at all levels of an organization start to do things differently, they begin to enact new systems.

TST: How do we get a critical mass of people doing things differently?

Senge: For one, through the sharing of generative ideas, ideas that can change how people think and act. The Industrial Revolution is a perfect example of how a set of ideas can produce wide-scale change without a single plan or group in charge of the process. Over a long period of time, hundreds and thousands and ultimately hundreds of millions of people started doing things a little bit differently than they had before. As a result, factories sprang up, assembly lines were developed, public schools were created, and entrepreneurial activity exploded. As these concepts grew in people’s minds, the way work was organized changed dramatically—for better and for worse.

How did these ideas spread?

Mostly through stories. Academic books usually have less short-term impact than a compelling story told informally over and over. Even more powerful is a reinforcing pattern of stories that gradually starts to build an idea in people’s heads. For example, many of us have begun to internalize the notion that we’re inextricably linked with others around the world because we all live on one increasingly smaller planet—a public consciousness that did not exist 50 years ago. Regardless of whether the idea evolved from seeing pictures of the earth from space or television images from the other side of the planet, or being able to work around the clock with colleagues from Asia and Europe—we’ve begun to accept the “story” that we are all to a certain degree interdependent. This is a historic change but it’s just at its beginning; we still to a large extent identify first with our own tribe or country.

Although we’re beginning to realize how interdependent we are, few people know how to transcend the boundaries that still separate people and institutions. Just like the beginning of the Industrial Revolution, where people embraced the idea of reorganizing production for efficiency without knowing how to accomplish it, we’re at the early stage of enacting systems that support an interdependent world. The idea has credibility, but we’re still not sure how to do things differently. As I mentioned earlier, one way is to build networks of people and organizations who are implementing diverse ideas of interdependency and sustainability. Then, sharing stories of projects such as the materials pooling initiative can inspire more examples.

There’s no end to what people can do. I’ve been particularly impressed with innovative projects in which young people are trying to think globally while doing things locally. Young people today have grown up acutely aware of the stresses in the world, especially those living in poverty or in countries with obvious social divisions. They’re beginning to network with each other internationally to initiate changes addressing social and environmental imbalances.

For example, Pioneers of Change, an emerging global network of people in their 20s and early 30s, is involved in significant social change projects to produce healthy communities around the world. One of its members is developing a network of villages based on sustainable agriculture in Rwanda. Another is starting the first management school in Croatia. Another group, Roca, located in Massachusetts, is composed of former gang members focused on helping teenagers leave their gangs and build their communities. If you listen carefully to these young people, you’ll understand that they’re all working on the same basic issue—how can we humans learn to live together in this world.

TST: The Fifth Discipline has been out for more than 10 years. Has its popularity resulted in the effects you hoped for? How do you view your own purpose now? Has it changed over the last 10 years?

Senge: I don’t think my sense of purpose has changed very much. But it does get clearer. If you pay close attention, hopefully you learn more each day about what you’re here to do in the world.

I have always been concerned with the imbalances in our patterns of development. I think the Industrial Age is a historic bubble, just like the “dot com” financial bubble. I don’t think it will continue, because I don’t think it can continue. The Industrial Age has ignored the reality that human beings are part of nature; instead, it has operated based on the idea that nature is a resource waiting to be used by us. If we go back to the idea of interdependency, human beings depend on nature in many ways for our survival. This is where traditional economics breaks down. Economics says that if the price of a commodity rises, demand for it will go down and a less expensive substitute will replace it. But there are no substitutes for air and water. There is no substitute for a healthy climate. These are common elements shared by everybody. Systems of management that do not value the “commons” cannot continue indefinitely. It’s that simple. We don’t know when we will hit the wall—we’re probably hitting it right now. By some estimates, private soft-drink companies now own rights to more than 10 percent of the drinkable water in the world. If these companies are allowed to continue their current system of management, which focuses on exponential growth of their products, this percentage will grow even further. We have not yet seen the implications of some of our patterns of development.

I never expected The Fifth Discipline to have as much impact as it did.

Partly, I attribute its success to a pervasive awareness of these sorts of problems. As the old adage goes, “There’s nothing more powerful than an idea whose time has come.” No one knows what is needed, but we sense that we face immense learning challenges, which are not just individual but collective and which concern how our institutions shape our collective actions. For example, if you live in China, where economic development is happening so rapidly, everyone can clearly see the social and environmental consequences in the pollution, congestion, and social stresses that have sprung up almost over night. Unlike past industrialization in North America and Europe, which unfolded over four or five generations, or longer, China’s industrialization is taking place within one generation.

Interestingly, The Fifth Discipline and the fieldbooks (The Fifth Discipline and The Dance of Change) have become quite popular in China. Schools That Learn is about to be translated, even though it contains nothing about Chinese schools. I have found that the ideas about rethinking our systems of management and leadership on a personal level hold a particular appeal in China. In the recent past, the Chinese education system has followed Western models—urban Chinese schools look pretty much identical to urban schools in the West, in terms of what they teach and how they teach. Yet, deep down, I feel the Chinese, like all people, long for a system of management and education that reflects their own distinctive culture. Personal and institutional learning offers an integrating thread that speaks to the diverse problems we all face.

TST: Can we really make the world better by making our organizations better, or is this a naïve hope?
Senge: I don’t think it’s naïve, I think it’s inescapable.

Turn the statement around: How are you going to change the world without changing organizations, since organizations are what shape how the world works today? For example, it’s impossible for one individual, or even a local community, to destroy an entire species, yet species around the world are becoming extinct at an alarming rate. Who is responsible for this critical situation? It’s clear that the destruction of Earth’s ecosystem is a result of millions and millions of individual actions mediated by the activities of our current global network of institutions. Governments are important but not adequate to meet the depth and breadth of the changes we face. To begin to shift our course, I believe, requires deep personal change in all of us, in the sense that we must “expand our circle of compassion,” as Einstein said, beyond tribalism. These personal changes, in turn, will shift how institutions such as businesses and schools function.

How are you going to change the world without changing organizations, since organizations are what shape how the world works today?

So if organizations don’t change, how can the world change? What is naïve is to believe that any one person has the answer for how to do it, that there’s a single strategy or way to do it, or that change can happen quickly. Going back to our earlier conversation, ultimately, large-scale transformation occurs when new ideas take root in people’s minds and inspire them to do things differently—many things by many people.

For example, today’s business leaders are recognizing that, in order for their companies to remain competitive, they must consider the health of their employees—not just medical issues but also personal well-being. They’re beginning to understand that having a group of committed, imaginative, patient people, who can work well together based on a strong sense of purpose, will make a bigger difference in whether the company is successful than any amount of money spent on technology and marketing. As this idea of employee well-being gradually grows in people’s minds, we’ll start to see changes in organization design and management practices. But it will not happen quickly. Promising innovations will come and go. Nevertheless, even as individual innovative firms struggle, the larger trend—the collective learning across many organizations and many cultures—will continue.

For example, Plug Power is a small manufacturer of fuel cells. It is struggling, as are all the firms in this critical but nascent industry. Its CEO comes from Ford and its senior technical officer from Xerox. Both accomplished remarkable results in those two companies, but they innovated faster than the overall company cultures could absorb. Together they, along with a few hundred other folks, are now doing something that stands to be much more important than either cars or copiers for our future creating commercially viable steps toward an environmentally sustainable energy system. They are now together because of a larger network of innovators that connected not only Ford and Xerox but several other firms, and eventually resulted in pathways for innovators coming together that otherwise would not have existed. This is exactly how change occurs in nature—the new grows up in the presence of what already exists and eventually becomes viable collectively, not as isolated individuals.

The idea that real change occurs in large networks of innovators has been one of the biggest surprises to me. I had originally thought that individual organizations could initiate and sustain significant innovation in management and culture. But I’ve discovered that, while an individual firm may run into difficulties with this process, once people cross the line into working in a way that touches who they are as human beings, and they know that this way of working together is possible, they do not go back. They may go elsewhere, but they do not go back.

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