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1 Making a Better World Peter M. Senge Introduction // Profit and Purpose // The Vision of Learning Introduction Our ideal of the learning organization comes from a different understanding of learning. Our culture uses the word learning in a way that equates it with taking in information: "I know a lot because I read a lot." This is a very weak definition of learning. The expression for learning in Chinese is made up of two symbols: One stands for studying, the other for practicing constantly. In China, you can't think of learning without thinking of practicing constantly. The central definition of learning is the enhancement of capacity to produce results that matter to you. We re all inquisitive about things we care about, and companies need to tap that intrinsic motivation. Because once you start doing your life's work, everything changes. When you connect what matters in your life and what you're doing professionally, work has a very different meaning. People sometimes ask me, "How do you tap that motivation for production workers?" They imply that it's more difficult t o find meaning if you're doing a job on the front line. Why would it be more difficult, unless these people are doing something they don't want to do or are treated as if they're only there to execute tasks and don't have brains. The way jobs are defined by the system of management somewhat determines the opportunity people have to bring their whole selves to work. There's nothing wrong with hierarchy, but we might redefine it in a nonvalue-laden way, saying it exists because people at different levels deal with different time horizons. Some are focused on 20 years, some on 10 days. It's like somebody plays left field, and somebody pitches. It's a position. But we have tied positions with value, believing some people are more important because of their position. Profit and Purpose I question whether the fundamental purpose of any organization is to make a profit. I don t think that's descriptive of most successful companies. Russ Ackoff, at the Wharton School of Economics, says profit is like oxygen. If you don't have enough, you won't be around long; but if you think life is about breathing, you're missing something. Obviously, profit is important. But it doesn't tell you about the purpose of the enterprise. The

2 Making a Better World Peter M. Senge p 2 founders of such companies as Ford and AT&T believed that if you did something well, a natural by-product would be making a lot of money. That's not so radical. Maybe what's more radical is thinking about a multiplicity of dimensions of purpose, where one might be the continual growth of everyone in the enterprise. But that doesn't exist by itself. I personally wouldn't want to be part of a business solely focused on that, and not trying to contribute something to the world. A social mission is the essence of a successful business: doing something that makes a difference to somebody. Otherwise, they wouldn't want to pay for it. The problem is that the phrase " social responsibility" has become a hackneyed phrase that sounds like do-goodism, and it doesn't get the right spirit of it. For organizations to prosper over the long term, they must contribute something. And t he more they can contribute on multiple dimensions, the more they're likely to prosper. Those multiple dimensions include communities, customers, and employees. Yes, that amounts to a socially responsible view, but it also amounts to a systems view. We tend to think in terms of dichotomies, of either/ors: Either it's good for society, or it's smart business. Might it be possible to have organizations that are both more consistent with our deeper values, and more effective? We've bought into the idea that to be successful in business, you have to violate your values. The idea has been propagated using all these metaphors about the law of the jungle. But the root goes back to the industrial era, when we developed a set of practices which were not sustainable. Ideas that began with the Renaissance and the Scientific Revolution became crystallized in Western reductionist philosophy: the attitude that we could control our world. We tried t o set our own rules, with no appeal to the larger systems of which we are a part. It certainly accomplished a lot, but it's not sustainable over the long run. Paul Hawken talks about imagining an economic system where every enterprise is responsible for the life cycle of its products. So you build a car, and you own those parts forever. The Vision of Learning The learning organization is really a vision. We need to be weaned from the model of fostering innovation by watching companies that are doing it right and copying them. One good illustration of how vision works comes from Allen Kay, who led the research at Xerox Park that produced the technical breakthroughs that led to the personal computer. He was responsible for the user interface. The vision they had was of a Dynabook.@ It would be like a book --something you could carry with you -- but fully interactive. By Kay's own assessment they failed, because the machine they created was not as portable as a book.

3 Making a Better World Peter M. Senge p 3 But that's the point. It wasn't whether they accomplished the vision; it was what the vision did. We're so hooked on getting it right that we miss the essence of the creative orientation, which is to aspire to something really worth our effort. Maybe you never fully accomplish the vision. The vision s an abstraction. Kay always thought of himself as a forcing function for change. And that's what the learning organization is about. The more progress that any organization makes, the more it will see its inadequacy. The most radical aspect of the way we approach things is to focus on thinking. Most people believe you change organizations by rearranging external conditions such as the reward systems, the information technologies. Our premise is that organizations are the way they are because of how people think. Until we change how we think and interact, nothing really changes. The idea of creative tension is important. When we have a vision of where we want to be and we tell the truth about where we are now, there s a natural tension between the two. Creative tension points us in two directions: toward our aspiration, but also toward our ability to inquire into the current reality -- not just the conditions, but the underlying causes of the conditions. Now, as soon as you go in that direction, it doesn't take much thought to realize there is no current reality, no absolute truth. There are only interpretations. And these are a reflection of underlying assumptions. So that leads you into the discipline of surfacing the assumptions we bring to the table, and how do you have conversations that free up those assumptions so that we can come to a deeper shared sense of what's going on? For example, Royal Dutch Shell, the first company in the West to work with mental models, was at the bottom of the oil industry in the early seventies, and today it's at the top of the industry. A big part of that was a change in how they went about planning. At Shell, they talk about planning as learning. They see the purpose of planning as surfacing the underlying assumptions behind managers plans. Every strategy is an expression of a set of assumptions. Usually, business people argue about the right strategy, and that's pointless. The real conversation should be, what are our different assumptions, and how can we understand how each other's thinking? Many people at the top of organizations today are disoriented. They don't know what they're supposed to be doing. On the one hand, they may be pushing empowerment or breaking down traditional hierarchy. But, they're wondering: "What's my job? My job has always been making the key decisions, or having a key influence on how they get made. So what do I do now?" We need to begin thinking of leaders as designers, stewards, and teachers, and not as the key decision-makers. I see many people leaning in that direction. It's not a matter of saying to someone, "Do it like they do it." You have to understand the direction

4 Making a Better World Peter M. Senge p 4 of change underway in our time, and not just try to copy people. The shared vision is an essential element to unite people, but it's just as important to develop a shared understanding of current reality. The Shell story illustrates the power of surfacing our hidden assumptions and developing more coherent shared images of reality. That is a very non-trivial task. In fact, it s much harder than developing a shared vision. How do you surface mental models? One key is the principle called "the ladder of abstraction," which has to do with developing awareness of how we move from direct observation t o interpretation. It's like this: The meeting started at nine o'clock, and Joe walked in at 9:15. What goes off in everybody's head? "Joe's late; he's not committed; he can't organize time." That's not data. The data is that Joe walked in at 9:15. The rest is an interpretation nobody bothers to test. The problem is not that we have these thoughts, but that we treat them as data. That's where the discipline of working with mental model starts. We have to become self-conscious of our own thinking. Maybe we need to pull back and say, "Let's look at the facts here," and try to separate the facts from the interpretation. But then you come to the next level of skills. If you go to Joe and say, "Joe, why did you come in at 9:15?" and try to be fact-based, very likely his first reaction will be defensiveness. We need to learn to talk to one another in ways that will bring assumptions into the open without invoking defensiveness. It's not easy; there are no quick answers. The world has changed profoundly, but we haven't changed with it. It's absolutely awesome the power we've acquired to shape the world. And yet our wisdom hasn't increased; in fact, it's diminished. It's like we're driving down a road at night and speeding up, and at the same time turning our headlights down. All the major crises we face in the world today are systemic, and they're man-made. That's absolutely unique in human history. All the major threats we used to face were short-term dramatic events, caused by something outside ourselves, whether a natural disaster or a saber-toothed tiger. But crises today are slow, gradual processes. And they're of our own making. Our work is all about making a better world. You take any area of real concern, like long-term environmental issues, it's very difficult to have improvement without a significant change in the way businesses operate. Businesses collectively are more important than government today. They have more global impact, more ability to influence things. We all need to live our lives in the service of our highest aspirations. We can't afford to be paralyzed by fear or apprehension. We need a better sense of what the deeper issues are and what the changes are we're called upon to make.

5 Making a Better World Peter M. Senge p 5 Peter Senge is a faculty member of MIT, director of the Center for Organizational Learning at MIT's Sloan School of Management, founding partner of Innovation Associates, author of The Fifth Discipline, and contributing editor to Executive Excellence (617)