This volume explores these questions and introduces the principles and practice of a quietly growing field: systems thinking. With roots in disciplines as varied as biology, cybernetics, and ecology, systems thinking provides a way of looking at how the world works that differs markedly from the traditional reductionistic, analytic view. Why is a systemic perspective an important complement to analytic thinking? One reason is that understanding how systems work – and how we play a role in them – lets us function more effectively and proactively within them. The more we understand systemic behavior, the more we can anticipate that behavior and work with systems (rather than being controlled by them) to shape the quality of our lives.

It’s been said that systems thinking is one of the key management competencies for the 21st century. As our world becomes ever more tightly interwoven globally and as the pace of change continues to increase, we will all need to become increasingly “system-wise.” This volume gives you the language and tools you need to start applying systems thinking principles and practices in your own organization.

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One of the reasons for this wide-spread institutional failure is that the knowledge-creating system, the method by which human beings collectively learn and by which society’s institutions improve and revitalize themselves, is deeply fragmented. This fragmentation has developed so gradually that few of us have noticed it; we take the disconnections between the branches of knowledge and between knowledge and practice as a given

A Knowledge-Creating System

Before we can address the issue of fragmentation, we need to establish what has been fragmented. In other words, what do we mean by a knowledge-creating system, and what does it mean to say it is fragmented?

THE CYCLE OF KNOWLEDGE-CREATION

Like theories, the tree’s roots are invisible, and yet the health of the root system determines the health of the tree. The branches are the methods and tools, which enable translation of theories into new capabilities and practical results. The fruit is that practical knowledge. The tree as a whole is a system.

We believe that human communities have always attempted to organize themselves to maximize the production, transmittal, and application of knowledge. In these activities, different individuals fulfill different roles, with varying degrees of success. For example, in indigenous cultures, elders articulate timeless principles grounded in their experience to guide their tribes’ future actions. “Doers, “whether warriors, growers, hunters, or nannies, try to learn how to do things better than before and continually improve their craft. And coaches and teachers help people develop their capacities to both perform their roles and grow as human beings. These three activities-which we can term theory-building, practice, and capacity-building-are intertwined and woven into the fabric of the community in a seamless process that restores and advances the knowledge of the tribe. One could argue that this interdependent knowledge-creating system is the only way that human beings collectively learn, generate new knowledge, and change their world.

We can view this system for producing knowledge as a cycle. People apply available knowledge to accomplish their goals. This practical application in turn provides experiential data from which new theories can be formulated to guide future action. New theories and principles then lead to new methods and tools that translate theory into practical know-how, the pursuit of new goals, and new experience-and the cycle continues.

Imagine that this cycle of knowledge-creation is a tree (see “The Cycle of Knowledge-Creation” on p.1). The tree’s roots are the theories. Like theories, the roots are invisible to most of the world, and yet the health of the root system to a large extent determines the health of the tree. The branches are the methods and tools, which enable translation of theories into new capabilities and practical results. The fruit is that practical knowledge. In a way, the whole system seems designed to produce the fruit. But, if you harvest and eat all the fruit from the tree, eventually there will be no more trees. So, some of the fruit must be used to provide the seeds for more trees. The tree as a whole is a system.

The tree is a wonderful metaphor, because it functions through a profound, amazing transformational process called photosynthesis. The roots absorb nutrients from the soil. Eventually, the nutrients flow through the trunk and into the branches and leaves. In the leaves, the nutrients interact with sunlight to create complex carbohydrates, which serve as the basis for development of the fruit.

So, what are the metaphorical equivalents that allow us to create fruits of practical knowledge in our organizations? We can view research activities as expanding the root system to build better and richer theories. Capacity-building activities extend the branches by translating the theories into usable methods and tools. The use of these methods and tools enhances people’s capabilities. The art of practice in a particular line of work transforms the theories, methods, and tools into usable knowledge as people apply their capabilities to practical tasks, much as the process of photosynthesis converts the nutrients into leaves, flowers, and fruit. In our society,

• Research represents any disciplined approach to discovery and understanding with a commitment to share what’s being learned. We’re not referring to white-coated scientists performing laboratory experiments; we mean research in the same way that a child asks, “What’s going on here?” By pursuing such questions, research-whether performed by academics or thoughtful managers or consultants reflecting on their experiences-continually generates new theories about how our world works.
• Practice is anything that a group of people does to produce a result. It’s the application of energy, tools, and effort to achieve something practical. An example is a product development team that wants to build a better product more quickly at a lower cost. By directly applying the available theory, tools, and methods in our work, we generate practical knowledge
• Capacity-building links research and practice. It is equally committed to discovery and understanding and to practical know-how and results. Every learning community includes coaches, mentors, and teachers – people who help others build skills and capabilities through developing new methods and tools that help make theories practical.

“The Stocks and Flows of Knowledge-Creation” shows how the various elements are linked together in a knowledge-creating system.

THE STOCKS AND FLOWS OF KNOWLEDGE-CREATION

Research activities build better and richer theories. Capacity-building functions translate the theories into usable methods and tools. The use of these methods and tools enhances people’s capabilities. The art of practice transforms the theories, methods, and tools into practical knowledge, as people apply their capabilities to practical tasks.

Institutionalized Fragmentation

If knowledge is best created by this type of integrated system, how did our current systems and institutions become so fragmented? To answer that question, we need to look at how research, practice, and capacity-building are institutionalized in our culture (see “The Fragmentation of Institutions”).

For example, what institution do we most associate with research Universities? What does the world of practice encompass? Corporations, schools, hospitals, and nonprofits. And what institution do we most associate with capacity-building-people helping people in the practical world? Consulting, or the HR function within an organization. Each of these institutions has made that particular activity its defining core. And, because research, practice, and capacity-building each operate within the walls of separate institutions, it is easy for the people within these institutions to feel cut off from each other, leading to suspicion, stereo typing, and an “us” versus “them” mindset.

This isolation leads to severe communication breakdown. For example, many people have argued that the academic community has evolved into a private club. Nobody understands what’s going on but the club members. They talk in ways that only members can understand. And the members only let in others like themselves.

Consulting institutions have also undermined the knowledge-creating process, by making knowledge proprietary, and by not sharing what they’ve learned. Many senior consultants have an incredible amount of knowledge about organizational change, yet they have almost no incentive to share it, except at market prices.

Finally, corporations have contributed to the fragmentation by their bottom-line orientation, which places the greatest value on those things that produce immediate, practical results. They have little patience for investing in research that may have payoffs over the long term or where payoffs cannot be specifically quantified.

Technical Rationality: One Root of Fragmentation

How did we reach this state of fragmentation? Over hundreds of years, we have developed a notion that knowledge is the province of the expert, the researcher, the academic. Often, the very term science is used to connote this kind of knowledge, as if the words that come out of the mouths of scientists are somehow inherently more truthful than everyone else’s words.

Donald Schon has called this concept of knowledge “technical rationality.” First you develop the theory, then you apply it. Or, first the experts come in and figure out what’s wrong, and then you use their advice to fix the problem. Of course, although the advice may be brilliant, sometimes we just can’t figure out how to implement it.

But maybe the problem isn’t in the advice. Maybe it’s in the basic assumption that this method is how learning or knowledge-creation actually works. Maybe the problem is really in this very way of thinking: that first you must get “the answer,” then you must apply it.

THE FRAGMENTATION OF INSTITUTIONS

Because research, practice, and capacity-building each operate within the walls of separate institutions, the people within these institutions feel cut off from each other, leading to suspicion, stereotyping, and an “us” versus “them” mindset.

The implicit notion of technical rationality often leads to conflict between executives and the front-line people in organizations. Executives often operate by the notion of technical rationality: In Western culture, being a boss means having all the answers. However, front-line people know much more than they can ever say about their jobs and about the organization. They actually have the capability to do something, not just talk about something. Technical rationality is great if all you ever have to do is talk.

Organizing for Learning

If we let go of this notion of technical rationality, we can then start asking more valuable questions, such as:

• How does real learning occur?
• How do new capabilities develop?
• How do learning communities that interconnect theory and practice, concept and capability come into being?
• How do they sustain themselves and grow?
• What forces can destroy them, undermine them, or cause them to wither?

Clearly, we need a theory, method, and set of tools for organizing the learning efforts of groups of people.

Real learning is often far more complex and more interesting than the theory of technical rationality suggests. We often develop significant new capabilities with only an incomplete idea of how we do what we do. As in skiing or learning to ride a bicycle, we “do it” before we really understand the actual concept. Similarly, practical know how often precedes new principles and general methods in organizational learning. Yet, this pattern of learning can also be problematic.

For example, teams within a large institution can produce significant innovations, but this new knowledge often fails to spread. Modest improvements may spread quickly, but real breakthroughs are difficult to diffuse. Brilliant innovations won’t spread if there is no way for them to spread; in other words, if there is no way for an organization to extract the general lessons from such innovations and develop new methods and tools for sharing those lessons. The problem is that wide diffusion of learning requires the same commitment to research and capacity-building as it does to practical results. Yet few businesses foster such commitment. Put differently, organizational learning requires a community that enhances research, capacity-building, and practice (see “Society for Organizational Learning” on p. 4)

Learning Communities

We believe that the absence of effective learning communities limits our ability to learn from each other, from what goes on within the organization, and from our most clearly demonstrated breakthroughs. Imagine a learning community as a group of people that bridges the worlds of research, practice, and capacity-building to produce the kind of knowledge that has the power to transform the way we operate, not merely make incremental improvements. If we are interested in innovation and in the vitality of large institutions, then we are interested in creating learning communities that integrate knowledge instead of fragment it.

In a learning community, people view each of the three functions-research, capacity-building, practice-as vital to the whole (see “A Learning Community”). Practice is crucial because it produces tangible results that show that the community has learned something. Capacity-building is important because it makes improvement possible. Research is also key because it provides a way to share learning with people in other parts of the organization and with future generations within the organization. In a learning community, people assume responsibility for the knowledge creating process.

Learning Communities in Action

To commit to this knowledge-creating process, we must first understand what a learning community looks like in action in our organizations. Imagine a typical change initiative in an organization; for example, a product development team trying a new approach to the way they handle engineering changes. Traditionally, such a team would be primarily interested in improving the results on their own projects. Team members probably wouldn’t pay as much attention to deepening their understanding of why a new approach works better, or to creating new methods and tools for others to use. Nor would they necessarily attempt to share their learnings as widely as possible – they might well see disseminating the information as someone else’s responsibility.

In a learning community, however, from the outset, the team conceives of the initiative as a way to maximize learning for itself as well as for other teams in the organization. Those involved in the research process are integral members of the team, not outsiders who poke at the system from a disconnected and fragmented perspective. The knowledge creating process functions in real time within the organization, in a seamless cycle of practice, research, and capacity-building.

Imagine if this were the way in which we approached learning and change in all of our major institutions. What impact might this approach have on the health of any of our institutions, and on society as a whole? Given the problems we face within our organizations and within the larger culture, do we have any choice but to seek new ways to work together to face the challenges of the future? We believe the time has come or us to begin the journey back from fragmentation to wholeness and integration. The time has come for true learning communities to emerge.

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. Peter has lectured throughout the world and written extensively on systems thinking, institutional learning, and leadership.

Daniel H. Kim is a co-founder of Pegasus Communications, Inc., and publisher of The Systems Thinker. He is a prolific author as well as an international public speaker, facilitator, and teacher of systems thinking and organizational learning

Editorial support for this article was provided by Janice Molloy and Lauren Johnson

A LEARNING COMMUNITY

In a learning community, people view each of the three functions—research, capacity-building,practice—as vital to the whole

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In 1982, however, a period of massive change began. The president of the college was forced to resign, and the college subsequently went through four presidents over a span of 13 years. After the most recent departure, an interim CEO was brought in to “clean up the mess” while the board of directors searched for yet another replacement.

Although the interim president was considered highly competent, he had a reputation for being more like Atilla the Hun than Stephen Covey in terms of his leadership style. And despite the board’s assurances that any interim replacement would not be eligible for the position, the acting president was eventually hired permanently. This decision, on top of years of change and instability, sent the organization into a state of shock. Daily rumors circulated about potential firings, and few people in the college felt secure enough to take risks. In order to regain our effectiveness as an organization, we needed to somehow work on rebuilding our community. But first, we needed to address the underlying issues that had bred a culture of fear and mistrust.

Examining the Culture

In September 1994, I discovered an article in The Systems Thinker by Greg Zlevor entitled “Creating a New Work-place.” The article asserted that all organizations operate at some point along a “community continuum”: somewhere between “disciety” (dysfunctional society) and “community.” It seemed to me that in order to improve our organizational climate, we first needed to identify where we were on the continuum.

I shared the article with the director of research at MATC, and together we decided to conduct a “quick-and-dirty” survey based on Zlevor’s model to get a sense of how our colleagues viewed our organization (see “MATC Community Survey”). Once it was complete, we mailed the survey to the entire management council of the college (over 125 people).

To our surprise, we were inundated with phone calls the next morning. Many of the callers were struck by the candor of the statements, which were considered “undiscussables” in the organization. (The statements were taken verbatim from Zlevor’s description of the different positions on the continuum.) Some callers had questions about confidentiality (their names were inadvertently included on the back of the survey, due to the internal mail routing labels). Several callers wanted to know if the new president was behind the survey. Still others were relieved that our organization was beginning to talk about these issues:

Amazingly, we received more than an 85% return rate on the surveys. We separated the responses into five piles, each representing a point along Zlevor’s continuum. The results were almost perfectly bimodal: people either saw the college as dysfunctional (“This place is so political”) or formative (“We have our ups and downs, but mostly ups”). We surmised that because there was no shared sense of the community as a whole, people’s experience of the college depended to a large extent on the ups and downs of their daily experience.

We brought our data to the next meeting of the senior administrators (all of whom had been recipients of the survey) in order to explore the results. The dynamics of the ensuing discussion were as revealing as the survey results had been. Some people immediately demanded to know, “Why was my name put on the back of the survey?” Others became defensive, wondering, “Why wasn’t I told about the original article?” The group as a whole seemed to attack the validity of the survey itself, asking, “Why was this even done?” Their reactions seemed to reflect the overall climate of the organization—one of fear, mistrust, and well-entrenched defensive routines. At the conclusion of the meeting, they recommended that the entire survey episode be put to rest. However, it was not going to be forgotten that easily.

MATC Vision Deployment Matrix

To get a better picture of current reality at the college, and to paint a picture of the desired future. the STOL group used a tool called the Vision Deployment Matrix!”. This diagram shows the collective responses of the STOL group to the first two columns of the matrix.

Reframing the Work

Earlier that year, a small group of people representing a cross-section of management began meeting regularly to learn more about systems thinking concepts and tools. The official title for the group was STOL—for Systems Thinking and Organizational Learning—but we jokingly referred to our get-togethers as “Systems Thinking over Lunch.” Since our group had been using different case studies to hone our skills, I brought up the survey as a good opportunity to explore the larger dynamics at play in the organization. However, we quickly realized that the implications of this project were larger than any of our previous case studies—it really involved reframing how we thought about the nature of our entire organization.

As one of the ways to provide a framework for this effort, we decided to use the Vision Deployment Matrix TM, a tool developed by Daniel Kim for helping groups articulate an action plan for moving from current reality toward a shared vision (see “Vision Deployment Matrix T”: A Framework for Large-Scale Change,” February 1995). The nine members of our STOL group filled out the Vision Deployment Matrix individually, then worked together to weave the individual perspectives into a collective matrix (see “MATC Vision Deployment Matrix”). After we filled out the first two vertical columns of the matrix—”Desired Future Reality” and “Current Reality”—we decided to get the president’s input to see how his perceptions compared to our own.

After hearing a short explanation of the matrix, the president also filled out the first two columns. Interestingly, his responses were similar to ours. For example, in the box that indicated the systemic structures needed to achieve the vision, the STOL group had noted a need for “shared decision-making” and “effective communications,” while the president expressed a desire for “more constructive meetings.” This gave the STOL group confidence that the president shared our understanding of the vision and current reality of the college. In addition, his willingness to participate sent an important signal that he supported our efforts to examine and improve our organizational culture.

Improving Communication

Through the process of developing our matrix, we began to realize that one of our biggest obstacles to achieving our vision of improved community was the unspoken mental models held by members of the college—the untested assumptions that were preventing open and effective communication. This became clear at the next meeting of the Management Council, when the president gave a presentation on the issues facing the organization. After his talk, the STOL group then conducted a “left-hand column” exercise, in which the participants wrote down on the right side of the page what the president said, and on the left side they voiced what they thought or felt in reaction to his comments.

What the group discovered through the process was that we all tend to hear what we expect to hear. For example, the people who anticipated hearing only “bad news” heard precisely that. Those who expected to see a “tough guy” in the president had their predictions confirmed. And, intriguingly, the people who were open to organizational change saw the shifts that were occurring as a positive development for the college (see “Left-Hand Column: One Perspective” for an example of this exercise). This exercise opened up our awareness of the significant role our mental models play in selecting what we hear and don’t hear, and it had the desired effect of opening the group up to a deeper level of conversation. Our work in developing a deeper level of community was beginning to take hold.

Preliminary Results

When the STOL group developed its Vision Deployment Matrix, we noted that one of the indicators of progress toward developing community would be an openness in communication throughout the administration of the college, as well as an increased ability as a group to suspend our assumptions and inquire more deeply into each other’s reasoning. The area where we have seen the greatest progress toward this goal has been in the Management Council meetings. In the past, they were full-day sessions that consisted primarily of lectures given by the president and/or his direct reports. The attendees often felt “talked at” for hours on end. There was very little participation, and many attendees passed the time by surreptitiously doing paperwork. When we did a quick analysis of the cost of the meetings, we discovered that the college was spending approximately $100,000 per year on a function that yielded very little benefit.

We decided, therefore, to use the Management Council meetings as an opportunity to work on developing better communication, and to begin to tap into the collective intelligence of the members. We shortened the meetings to half-day sessions, eliminated the speakers, and refocused the agenda on working together in small groups to tackle some of the serious issues facing our institution. At the first of the redesigned management meetings, two college-wide issues that were generally considered to be undiscussables were addressed: (1) how to better implement the entire CQI process; and (2) how to productively examine the positive and negative effects of the changes that occurred within the organization during the last several years.

In order to facilitate more productive communication at the meeting, we assigned people to small groups, each of which represented a cross-section of the college. As the groups were invited to share their insights with the entire council, previously undiscussable issues were sufficed, and some very productive conversations ensued. For example, the “undiscussable” issue of a compensation and benefits inequity between union and non-union employees was raised, and specific recommendations were made for further action. After the meeting, we shared the outputs with the president (who chose not to be present during the meeting so as not to inhibit open communication), and we forwarded the results to the CQI Steering Committee of the college.

Left-Hand Column: One Perspective

After a talk by the president to the Management Council the STOL group conducted a left-hand column” exercise. In order to surface the mental models operating in the group.

Our Ongoing Work

The evaluations from our first redesigned Management Council meeting were very positive. Many people commented that the college was “finally moving forward.” But even as we are celebrating this modest success, we recognize that we have a long way to go toward our goal of developing a healthy community at MATC. In order to continue our work on organizational integration and community building, the STOL group has identified four areas for further action:

• continue to work on building communication and trust
• make systems thinking courses and materials available to others at the college
• continue to develop systemic solutions for problems at the college, working with the president to effect high-leverage changes
• re-survey the Management Council to accurately assess current reality at the college

As we develop our skills in community building and in creating structures that will sustain that community, we believe we can make a profound difference in the organizational culture. With the help of organizational learning tools, we are confident that our culture will continue to move toward openness and community.

James B. Rieley directs the Center for Continuous Quality improvement at Milwaukee Area Technical College. He also consults with business and industry, government, and educational institutions. Editorial support for this article was provided by Diane J. Reed and Colleen P. Lannon.

This story was presented at the 1995 Systems Thinking in Action”‘ Conference.

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The theme of the 1991 Systems Thinking in Action Conference, “Building a Foundation for Change,” proposed a way to address the challenges that lie ahead. Both keynote speakers, Peter Senge and Jay Forrester, focused squarely on the critical issue of building capabilities and understanding that will endure throughout the turbulence that accompanies such periods of great change.

“We are embarking on one of the great frontiers of human endeavor…I see the frontier for the next 50 to 100 years as being a greater understanding of our social and economic systems.”

New Frontiers

“We are embarking on one of the great frontiers of human endeavor — similar to the founding of nation-states, the exploration of the surface of the earth, and the pursuit of scientific and technical knowledge,” declared keynote speaker Jay W. Forrester. “I sec the frontier for the next 50 to 100 years as being a greater understanding of our social and economic systems.”

The timing is auspicious, according to Forrester, because the economy is in the midst of a long wave downturn that will spark fundamental changes in our society (see “Not All Recessions are Created Equal,” February 1991 for more on the long wave and the current recession). “Long wave downturns are windows of opportunity for great social and economic change,” he explained. “Old methodologies have been overdone and overbuilt, and the institutions behind them have been swept away. The public is looking for change. During downturns, foundations are laid for new ideas and methodologies that will flourish during the next upturn.”

Over 250 people from across the U.S. and the globe came together for the conference to hear Senge’s and Forrester’s context-setting remarks, acquire systems tools and techniques for developing new skills, and learn from the experience of managers who have been on the forefront of building their companies’ foundations for change. Summaries of both keynote speeches follow.

Peter M. Senge — Transforming the Practice of Management

I think the primary institutional contexts that we need to consider are the world of management and the world of public education — the two primary institutions in our society. They represent fundamental areas for profound and extensive innovation.

Focusing on the corporate world, let me summarize what I see happening as a paradigm shift from the resource-based organization to the knowledge-based organization. According to Peter Drucker, there have been two previous major changes in the evolution of the organization: first, at the turn of the century, when management became distinguished from ownership; and then in the 1920s, when fundamental changes at DuPont and General Motors introduced the command and control organization of today. “Now we are entering a third period of change,” writes Drucker. “A shift from the command and control organization, the organization of departments and divisions, to the information-based organization, the organization of knowledge specialists.”

The evolution of the Total Quality movement in Japan is further evidence of a growing shift toward managing knowledge. The foundation of the first wave of quality management was in statistics. However, Dr. Edwards Deming, “father of Japanese management” has taken to saying lately that statistics is only 2% of the work. The new book he is working on crystallizes the essence of his management philosophy around four points. Interestingly, the first of Deming’s four cornerstones is appreciation of a system. Similarly, the second wave of Total Quality is focusing more on the area of linguistics and anthropology, because the world of management is the world of ideas. If the work of the front line of an organization is to continually improve the physical processes, then perhaps the work of management is to continually enhance the base of knowledge.

Multi-dimensional Aspects

An article in the most recent issue of the Harvard Business Review, written by Ikujiro Nonaka, summarizes quite well a variety of trends which are part of this shift. In his article, “The Knowledge-Creating Company,” he describes what this type of organization is like: “The centerpiece of the Japanese approach is the recognition that creating new knowledge is not simply a matter of processing objective information. Rather, it depends on tapping the tacit, and often highly subjective insights, intuitions and hunches, of individual employees and making those insights available for testing and use by the company as a whole.”

In characterizing the multidimensional aspects of the shift toward the knowledge-based organization, let me contrast five basic tasks at the resource-based organization and the knowledge-based organization: direction setting; thinking and executing; the nature of thinking; conflict resolution; and the role of leadership (see side-bar for an overview).

• Direction Setting and Thinking and Executing. The key to success in the authoritarian, traditional organization is to have a few great thinkers at the top, design some good control systems throughout the organization, and get some good actors at the local level. The top thinks and the local acts. That’s the essence of a traditional organization.

In the knowledge-based organization, shared vision emerges from all levels. The responsibility of top management is to articulate a vision for the company that is broad enough so that workers can interpret and add to that vision, giving them the freedom and autonomy to set their own goals which will put that vision into action. Within this framework, thinking and acting can be merged at all levels of the organization.

• Nature of Thinking. One of the central issues in the shift toward the knowledge-based organization is how power and authority will be distributed. Tight central control is not effective for working in a complex system. When you have people throughout an organization making important decisions, it’s absolutely critical that those people have some contextual knowledge or understanding of how their decisions affect others. Atomistic Winking, the hallmark of the resource-based organization, must give way to an understanding of the whole system. If we are going to distribute power and authority throughout the organization, we must also develop the necessary skills and capabilities for people to use that power and authority wisely.
• Conflict Resolution. In the traditional model, mediating disputes usually means “the biggest stick wins.” In the corporation of the future, the emphasis must be on integrating diverse views and building shared mental models. The great range of differing perspectives and mental models in a corporation might seem like a big problem. In fact, it can be a rich source of new knowledge if a company knows how to challenge employees to continually examine their fundamental assumptions.
• Role of Leadership. The fundamental task of the leader in the knowledge-based organization is to create conditions so that good decisions can be made throughout the entire organization. It is no longer enough to have great thinkers at the top who set • direction, motivate people, and make important decisions. In the corporation of the future, thinking and acting must occur at all levels. For this to happen, the key questions we need to address are: How do we design the learning processes? What are the tools we need? And what are the ways in which we can literally build shared knowledge so we can enable good decision making throughout the organization?

Building a Foundation

If we really accept this paradigm shift as something that is occurring, we need to ask ourselves some questions. From the standpoint of an individual organization, do we want to ignore it? Do we want to get dragged along kicking and screaming? Or do we want to be a leader, and be out on the leading edge helping to create that new model?

I propose four “levels of attention” that we must focus on to build a foundation for such an organization: philosophy, attitudes and beliefs, skills and capabilities, and tools and artifacts. Philosophy is the vision, values, and sense of purpose that we articulate. Attitudes and beliefs are those values that reside more at the tacit or unconscious level Artifacts, a term used by Buckminster Fuller, means those tools which, in helping us deal with practical and important issues, can shift our ways of thinking and interacting and actually influence and improve our skills and capabilities.

The greatest leverage lies in focusing both on the level of philosophy and the level of tools. I think the best strategy for building such an organization is to build from the top down and the bottom up simultaneously. Wherever I see an organization, West or East, that’s really made significant progress, there is a significant amount of tension on both levels.

“The fundamental task of the leader in the knowledge-based organization is to create conditions so that good decisions can be made throughout the entire organization.”

Jay Forrester — Education into the 21st Century

Our educational system is unrealistic in almost every way. Students work on solving problems that are artificial and irrelevant, in which neither the teacher or student is interested, and for which the facts have already been provided. That is just the opposite of the real world, where we start with a problem and then have to search for the necessary information and frame a solution.

The failure of our educational system has brought a great national lamenting, as well as many proposed solutions. A recent Fortune magazine, for example, listed over 100 companies that have donated money to reforming the schools. But the amount of money being given is relatively very small, and the tasks that the money is being earmarked for amount to doing more of what is already clearly not working. It is my intention to give you a glimpse of how the field of system dynamics can address some of the underlying reasons why education is not working and provide a framework that has great power, persuasiveness, and relevance for changing our current educational situation.

A New Framework

System dynamics turns upside down the American theory of education. In traditional education, children start out by learning facts. They then progress through learning how to analyze and break down problems, and then finally to synthesis — putting it all together.

System dynamics places synthesis at the beginning of the educational sequence. By junior high school, students already possess a wealth of facts about interpersonal relations, family life, community, and school. What they need is a framework into which those facts can be fitted. System dynamics simulation models allow the students to learn facts within the larger context of how the dynamics will play out in the real world.

Learner-Directed Learning

Currently there are probably about 30 high schools with substantial activity in bringing system dynamics simulations into the classroom, and about 300 schools that are doing something in this area. The greatest progress is being made in those schools where system dynamics is being used in conjunction with another important concept — learner-directed learning.

With learner-directed learning, students take on a substantial responsibility for what they learn and how they learn it. Operationally, this means that students work together in teams of two or three on a given project, while the teacher plays the role of a coach and advisor — someone who inspires and encourages them. This gives the 7th or 8th grade classroom the atmosphere of a research laboratory.

There seems to be no correlation between a student’s previous academic standing and his or her ability to do well in the new environment. Some students who have seemed “backwards” in the traditional classroom — who have had difficulty learning through memorizing facts or listening to lectures — may have a very keen understanding of how things interrelate and can do very well in the new setting.

In one school in Arizona, for example, an English teacher has the bottom-third track of students. Using the STELLA”‘ software by High Performance Systems (Hanover, NH), she created a system dynamics simulation of the psychological dynamics in Shakespeare’s Hamlet. For the first time, students began to discuss and debate issues among each other. They argued over which one of them was like which character in the play, and what ordinary people would have done in Hamlet’s shoes. They asked the teacher for quantitative changes in the character of an actor in the computer simulation so they could see who got killed instead. Those students are now going around asking why they can’t do similar projects in other classrooms, and they are starting to see themselves as the educational innovators in the school.

Innovation in Orange Grove

Probably the most advanced work with system dynamics and learner-directed learning has been taking place at the Orange Grove Middle School in Tucson, AZ. My mentor at MIT, Dr. Gordon Brown, has acted as a “citizen champion,” bringing system dynamics into the local school system. He first introduced one of the biology teachers at Orange Grove, Frank Draper, to the STELLA software. Frank began using the software to develop projects in his class, with some very exciting results. Two-thirds of the way through the semester, his class had already covered all of the required material for the semester. Because there had been so much excitement, dedication, and accelerated learning going on, the students absorbed the material much faster than ever before.

It was the first time the school had seen twelve- to fourteen-year-old students who wanted to come into school early or stay late to work on their simulations. Even without written assignments, the students would spend weekends researching information they would need for their next project. Discipline problems practically disappeared.

“It was the first time the school had seen twelve- to fourteen-year-old students who wanted to come into school early or stay late to work on their simulations.”

Since then, 200-300 students have been taught using this approach and teachers have seen an order of magnitude improvement in their abilities. As a sign of the school district’s further commitment and confidence in system dynamics and learner-directed learning, last year the district passed a $30 million bond issue to build a new high school which will be organized and taught along the ideas that have been pioneered in the junior high school.

Building a Network

Most schools that are working with system dynamics are isolated from one another. They don’t have knowledge of other programs being developed or work being done in other schools. They need the inspiration of knowing that a growing community of people are all working toward common goals. Programs are now starting that will support these pioneering schools and provide educational materials.

At MIT, I work with a group of undergraduates who are developing materials that can be used in high schools and junior high schools. They have been working with teachers in the Cambridge Rindge and Latin high school in Cambridge, MA as a field laboratory for developing and testing new materials. Also, John R. Bemis of Concord, MA, has made a very generous donation to set up an office that will act as an information interchange among schools that are pursuing this field. Called the Creative Learning Exchange, it will solicit material being developed in various places, reproduce it, and send it out to the schools.

Time Frame

I believe it will probably take 20 years for these ideas to be fairly widely embedded in the schools. It will be another 20 years after that for the students who have gone through these schools and learned the systems viewpoint to become active in politics and corporations. So at the very least we are talking about a forty-year time horizon.

Building any sort of a new foundation takes a lot of investment in time and energy. I don’t see the forty-year time horizon is anything to be pessimistic about. It’s a challenge, an opportunity. Along the way there will be many exciting discoveries, as there has been with the exploration of past frontiers.

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Many corporations, which have watched their skilled labor pool shrink over the past decade, are responding with a slew of innovative approaches to education. In 1989, Fannie Mae began a ten-year mentor program in a Washington, DC high school. Sears and United Airlines, along with 14 other Chicago-area corporations, have donated $2 million to start a model school that practices school-based management. Citicorp, Exxon and RJR have donated money toward the Coalition of Essential Schools, a network of over 50 schools dedicated to curriculum reform which focuses on active, small group learning.

The Role of Systems

Thinking Out of these innovative educational programs, a vision of a radically different school system is emerging — one that is managed more like an organization, where teachers are accountable for their students’ results and principals have the power to give raises and tire teachers; a school where the curriculum stresses critical thinking skills over dry facts and learner-directed learning replaces the typical lecture format. Systems thinking holds the promise of making such a school a reality.

“Education in the U.S. is generally recognized as serving less and less well in meeting modern needs. Failures in education appear in the form of corporate executives who cannot cope with the complexities of growth and competition, government leaders who are at a loss to understand economic and political change, and a public that supports inappropriate response to immigration pressures, changing international conditions, rising unemployment, the drug culture, government reform, and inadequacies in education.”

-Jay Forrester, System Dynamics as a Foundation for Pre-College Education

Primarily, systems thinking is being applied to schools in one of two ways: as a problem-solving framework that enhances students’ understanding of a subject; and as a restructuring tool for creating a more effective educational system (see “Systems Thinking in the Classroom: Two Accounts” for an example of how systems thinking is being used in the classroom). The two perspectives are not mutually exclusive. Says Jim Daniel of the Kentucky Educational Foundation (KEF), “As systems thinking creates a new culture within the school system, that change should eventually translate into systems thinking being taught in the classroom, as a problem-solving approach.”

A “Hybrid”

Since its introduction three years ago, systems thinking has come to play an increasingly important role at the Orange Grove Junior High School in Tucson. It is now being used in almost all of the science curriculum, and is in the process of being expanded to all six schools in the district.

Orange Grove Junior High can be described as a hybrid of traditional educational techniques and innovative new methods. Teachers still give grades and have one-hour classes devoted to a particular subject. But courses no longer have specific titles, such as biology or history — report cards sport such broad-ranging topics as human studies and marine studies, which emphasize the systems orientation of the subjects. Classes are scheduled in blocks (for example, science and social studies are back-to-back), so that they can be shortened, lengthened, or combined to allow students to pursue more in-depth projects in one subject or both.

Because of the flexible scheduling, teachers are able to pursue more interdisciplinary projects. For example, one class recently conducted a mock trial to learn first-hand how the legal system works. However, the subject of the legal dispute was scientific, allowing them to expand their knowledge in that area as well.

Systems thinking has sparked a dramatic change in the roles of teachers and students at Orange Grove. “In our classroom, students shift from being passive receptacles to being active learners. They are not taught about science per se, but learn how to acquire and use knowledge, scientific and otherwise,” says biology teacher Frank Draper. “Our jobs have shifted from dispensers of information to producers of environments which allow students to learn as much as possible.”

From Vermont to San Francisco

The Systems Thinking and Curriculum Innovation Network Project (STACI) began at the Brattleboro Union High School in Vermont in 1985. Four committed teachers wanted to use systems thinking to improve their teaching, but they had no computer skills or understanding of systems theory. Undaunted, they applied for and received a grant from the U.S. Department of Education, and enlisted the support of High Performance Systems, creators of STELLA, to give them technical assistance and training.

Their work attracted the attention of researcher Ellen Mandinach of the Educational Testing Service (ETS), who was interested in studying the impact of technology on learning. ETS, through its affiliation with the Educational Technical Center at Harvard, established STACI to examine the introduction of systems thinking in the Brattleboro High School.

At the prompting of an Apple Computer representative, ETS decided to try a similar experiment on the West Coast. “We learned from our early experience in Vermont that teachers need lots of resources, training and support,” explains Mandinach, “so rather than pick one site in California, we decided to use a consortium of schools.” In order to create a continuity of systems learning for the students, they selected two San Francisco middle schools and the four high schools that they feed into.

Mandinach describes STACI as an “implementation project” whose focus is on developing materials, training teachers, and providing resources for those teachers to develop systems-based curricula for the classroom. But she adds, “Ultimately, it is a study of the impact of systems thinking on students, classrooms, and schools.

“What happens to teachers, their instruction, and the classroom environment when a systems approach is used? You cannot introduce systems thinking into a school without changing the structure of the school. Do teachers start to cross disciplines, or communicate differently with each other and with their students? And, ultimately, do kids learn more effectively or efficiently using systems thinking? These are the types of long-term questions we are trying to answer.”

Precollege Education

Project Professor Emeritus Jay Forrester, the founder of system dynamics, has been the driving force behind the precollege education project at MIT. Funded by John Bemis of Concord, MA, the project is staffed by MIT undergraduates who are exploring ways to introduce systems thinking into local schools. The project is only a year old and still at a “beginning point,” says staff advisor Nan Lux, but in the past year the students have put together several tutorials for I I teachers at the Cambridge Rindge and Latin School. The interactive tutorials, explains Lux, are intended to “grab teachers’ attention and show them another way to teach their subjects.”

One of the most exciting things to come out of the project is the idea for creating a central clearinghouse to track the work being done on systems thinking in education. Although the plans are still in the works, Forrester sees the center as a “focal point to maintain communication between the network of schools, to expand the presently available training seminars for teachers, and to assist teachers in preparing their new materials for wider dissemination.”

Kentucky — Starting Over

In 1989, prompted by a lawsuit in which 23 Kentucky school districts charged that funds were not being distributed equally, the Supreme Court declared the entire Kentucky state educational system unconstitutional. This watershed event sparked a complete restructuring of the state educational system. The result: the Kentucky Educational Reform Initiative (KERA), has been described as an “integrated, comprehensive, systemic effort to change public schools.”

KERA will have wide-ranging effects on the way schools are structured and classes are taught. The end result, according to Jim Daniel, will be to “change the educational system to an outcome-based system.” By 1996, schools will be graded on how well students solve problems, work in teams, and make the transition to higher education, the workplace, or the military.

KERA also established baseline performance goals for the schools: those schools that perform above the base range will receive more money and resources, while those who fall below the range will be penalized. In order to foster choice in the school system, school districts will be required by law to publish their rating. If a school is declared in “crisis,” parents can take their children out of the school at the state’s expense.

Successfully implementing KERA may prove even more challenging than drafting the legislation. To help facilitate that process, KEF has created the Institute for the 21st Century, a two-year leadership education and training program for educators. The goal of the Institute, says KEF’s Daniel, “is to use a systems thinking approach to produce leadership teams of change within ten selected school districts.” Each of the ten district teams participating in the project was nominated by a business partner and was selected on the basis of its commitment to change.

The ultimate goal for the Institute is to foster innovation in education. In the type of school they hope to create, says Daniel, “teachers won’t go to school to lecture students. Instead, they will act as resources and as facilitators for those students.”

The Nordic Experience

In the Nordic countries, systems thinking was introduced as a result of their efforts to bring computers into the schools as interactive educational tools. Says Professor PAI Davidsen of the University of Bergen, “System dynamics filled that vacuum between the available technology and the educational goals of the schools.”

The highly centralized educational system in the Nordic countries required a different approach. Rather than bringing systems thinking directly to the schools, it has been introduced in the graduate teacher’s schools. The idea, according to Davidsen, is to “train the trainers” — to teach educators how to use systems thinking, and let them develop tools and curriculum that will integrate systems thinking into the classroom.

Initially, computer simulations were used only to support the current curriculum by illustrating key concepts. Now educators are exploring more inter-disciplinary activities. For example, in a systems thinking study of the marine pollution, students can trace declining fish population to an overgrowth of algae caused by chemical fertilizers. This leads to a study of crop farming and fish farming and their interaction — economic, cultural, and sociological. Understanding the many interrelationships requires further study of government regulations concerning both industries, the biological systems of aquaculture and agriculture, and the methods by which pollutants are transferred to and within the sea.

Computer models, explains Davidsen, remove the constraints of traditional educational material. “Computer models have a high degree of interaction, unlike textbooks. In effect, students can create their own course material, giving them a degree of creativity that is missing when working with textbooks.”

Results

Early results of the use of systems thinking in the classroom have been anecdotal, rather than empirical, but they are encouraging. Frank Draper, for example, has witnessed a remarkable change in his classes: “Not only are we covering more material, but we’re covering it faster and the students are learning more useful material than ever before.”

Preliminary results from the ETS study at Brattleboro reveal interesting differences in skills acquired by students taught with traditional teaching methods versus those who were taught with a systems approach. In a general physical science class, so-called “traditional” students were able to identify and define patterns of speed and motion on simple graphs, but had difficulty with more complex problems. Systems students, on the other hand, were more adept at synthesizing parts of problems to understand the entirety.

Another set of students in a physics class were given a story problem to solve, first using the traditional quadratic equation approach, then by designing a model and testing various hypotheses. After the exercise, students commented that when working with quadratic equations, the numbers did not have concrete, real-world meaning. But with the model, they were able to demonstrate theoretically and practically what the problem and solution meant.

Although the results of the Brattleboro study are preliminary, ETS’s Mandinach notes that students “seemingly achieved a more conceptual understanding of the content and solution processes by using the systems approach.” A more thorough implementation and systematic examination of the curriculum is in progress and will continue over several years to determine the impact of systems thinking on general problem solving skills.

While many communities are making significant progress in introducing systems thinking into the schools, they are a long way from achieving the visionary school described at the beginning of this article. The main roadblocks are a lack of resources to fund innovative projects and the knowledge and experience to restructure the existing school system — two areas where businesses can play an important role.

Getting involved in the school system can no longer be viewed as a charitable activity — it is vital to businesses’ survival because the labor pool on which they draw is the product of that school system. As Vivian Ruth Sawyer of Humana, a partner in the Kentucky reform initiative, points out, “We owe that responsibility to our stockholders for the long-term prosperity of our business.”

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