C. OTTO SCHARMERADDRESSING THE BLIND SPOTOF OUR TIMEAn executive summary of the new book by Otto ScharmerTheory U: Leading...
ADDRESSING THE BLIND SPOT OF OUR TIME   An executive summary of the new book by Otto Scharmer       Theory U: Leading from...
In his new book Theory U: Leading from the Future as It Emerges (Cambridge,    MA: Society for Organizational Learning, 20...
We know very little about the invisible                    disconfirming data. You switch off yourdimension of leadership, ...
possibility that can emerge. We no longer              At that special level, all sorts of odd       look for something ou...
To be effective leaders, we must first understand      one another, and how institutions form theirthe field, or inner space...
•    structuring (institutions)                      on the everyday downloading type of cognition.       •    ecosystem c...
1. CO-INITIATING:             5. CO-EVOLVING:    Build Common Intent stop and listen to             Embody the New in Ecos...
problems, this may be an appropriate approach.         whole begin to operate with a heightened level of    But if you are...
and so forth—supplying needed objects and             The co-creation movement of the U journeyfurnishings in real time. P...
Why is that? Why is the U the road less traveled       with the principle of incompleteness. You invite    in institutions...
the University of California at Berkeley. She        situation from the whole, the open will enablesexplained the differen...
anything with just five people. With only one        An interesting detail during this stage is that person, it’s hard—but ...
1. HOLDING THE SPACE:                                                                7. PERFORMING:      Listen to what li...
ApplicationsMany projects using Theory U have been launched recently or are well under way.Here are a few of the early exa...
• An Africa-based team is testing mobile     What started as an idea by a few people       community-based life education ...
• changing the mind and heart of the                 advantage of new opportunities and to clear     president of Zambia a...
In the Executive Leadership track, an initial       cultural change in the whole organization, from workshop established a...
With the answers to these questions in hand, the    III. Presencing Institutedirectors gather for a five-day U-based worksh...
Dr. C. Otto Scharmer is a Senior Lecturer at MIT     Germany. His article “Strategic Leadership and the founding chair of ...
In a world burdened with too much information, we are occasionally blessed with a genu-inely new idea about how to perceiv...
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Executive summary in english. From precencing.com, used for education purpose on Ryslinge Innovation Folk High School in Denmark

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Theory U - exec_summary

  1. 1. C. OTTO SCHARMERADDRESSING THE BLIND SPOTOF OUR TIMEAn executive summary of the new book by Otto ScharmerTheory U: Leading from the Future as It EmergesThe Social Technology of Presencing
  2. 2. ADDRESSING THE BLIND SPOT OF OUR TIME An executive summary of the new book by Otto Scharmer Theory U: Leading from the Future as It Emerges
  3. 3. In his new book Theory U: Leading from the Future as It Emerges (Cambridge, MA: Society for Organizational Learning, 2007), Otto Scharmer introduces readers to the theory and practice of the U process, based on a concept he calls “presencing.” A blend of the words “presence” and “sensing,” presencing signifies a heightened state of attention that allows individuals and groups to shift the inner place from which they function. When that shift happens, people begin to operate from a future space of possibility that they feel wants to emerge. Being able to facilitate that shift is, according to Scharmer, the essence of leadership today. At the end of this Executive Summary you will find more complete coverage of how Theory U is being used by numerous stakeholders and corporate innovators, and information on how you might become involved with the Presencing Institute. Tapping Our Collective Capacity We know a great deal about what leaders do and how they do it. But we know very little about the We live in a time of massive institutional inner place, the source from which they operate. failure, collectively creating results that nobody wants. Climate change. AIDS. Hunger. Successful leadership depends on the quality Poverty. Violence. Terrorism. Destruction of of attention and intention that the leader brings communities, nature, life—the foundations to any situation. Two leaders in the same of our social, economic, ecological, and circumstances doing the same thing can bring spiritual well-being. This time calls for a new about completely different outcomes, depending consciousness and a new collective leadership on the inner place from which each operates. The capacity to meet challenges in a more conscious, nature of this inner place in leaders is something intentional, and strategic way. The development of a mystery to us. We do know something about of such a capacity will allow us to create a future the inner dimensions of athletes because studies of greater possibility. have been conducted on what goes on within an athlete’s mind and imagination in preparation Illuminating the Blind Spot for a competitive event. This knowledge has led to practices designed to enhance athletic Why do our attempts to deal with the challenges performance from the “inside out,” so to speak. of our time so often fail? Why are we stuck in But in the arena of management and leading so many quagmires today? The cause of our transformational change, we know very little collective failure is that we are blind to the deeper about these inner dimensions, and very seldom dimension of leadership and transformational are specific techniques applied to enhance change. This “blind spot” exists not only in our management performance from the inside out. collective leadership but also in our everyday In a way, this lack of knowledge constitutes a social interactions. We are blind to the source “blind spot” in our approach to leadership and dimension from which effective leadership and management. social action come into being. Successful leadership depends on the quality of attention and intention that the leader brings to any situation. Two leaders in the same circumstances doing the same thing can bring about completely different outcomes, depending on the inner place from which each operates.1 EXECUTIVE SUMMARY: Theory U
  4. 4. We know very little about the invisible disconfirming data. You switch off yourdimension of leadership, even though it is our inner voice of judgment and listen to thesource dimension. voices right in front of you. You focus on what differs from what you already know. RESULTS: Factual listening is the basic mode of What good science. You let the data talk to you. You ask questions, and you pay careful attention to the responses you get. PROCESS: How “Oh, yes, I know exactly how you feel.” SOURCE: This deeper level of listening is empathic Who listening. When we are engaged in real Blind spot: Inner place dialogue and paying careful attention, from which we operate we can become aware of a profound shift in the place from which our listeningFigure 1. Three Perspectives on the Leader’s Work: originates. We move from staring at theThe source dimension of leadership is often invisible objective world of things, figures, andand functions as a “blind spot” in the process of social facts (the “it-world”) to listening to thereality formation and transformational change. story of a living and evolving self (the “you-world”). Sometimes, when we say “I know how you feel,” our emphasis is onSlowing Down to Understand a kind of mental or abstract knowing. ButAt its core, leadership is about shaping and to really feel how another feels, we haveshifting how individuals and groups attend to have an open heart. Only an open heartto and subsequently respond to a situation. gives us the empathic capacity to connectThe trouble is that most leaders are unable to directly with another person from within.recognize, let alone change, the structural habits When that happens, we feel a profoundof attention used in their organizations. switch as we enter a new territory in theLearning to recognize the habits of attention in relationship; we forget about our ownany particular business culture requires, among agenda and begin to see how the worldother things, a particular kind of listening. appears through someone else’s eyes.Over more than a decade of observing people’sinteractions in organizations, I have noted fourdifferent types of listening. “I can’t express what I experience in words. My whole being has slowed down. I feel more quiet and present “Yeah, I know that already.” I call this type and more my real self. I am connected of listening “downloading”—listening by to something larger than myself.” This reconfirming habitual judgments. When type of listening moves beyond the you are in a situation where everything current field and connects us to an even that happens confirms what you already deeper realm of emergence. I call this know, you are listening by downloading. level of listening “generative listening,” or listening from the emerging field of future possibility. This level of listening “Ooh, look at that!” This type of listening requires us to access not only our open is factual or object-focused: listening by heart, but also our open will—our paying attention to facts and to novel or capacity to connect to the highest future www.theoryU.com 2
  5. 5. possibility that can emerge. We no longer At that special level, all sorts of odd look for something outside. We no longer things happened: The game would be in empathize with someone in front of us. the white heat of competition, and yet We are in an altered state. “Communion” somehow I wouldn’t feel competitive, or “grace” is maybe the word that comes which is a miracle in itself. I’d be putting closest to the texture of this experience. out the maximum effort, straining, When you operate from Listening 1 (down- coughing up parts of my lungs as we ran, loading), the conversation reconfirms what you and yet I never felt the pain. The game already knew. You reconfirm your habits of would move so quickly that every fake, thought: “There he goes again!” When you operate cut, and pass would be surprising, and yet from Listening 2 (factual listening), you disconfirm nothing could surprise me. It was almost what you already know and notice what is new out as if we were playing in slow motion. there: “Boy, this looks so different today!” When During those spells, I could almost sense you choose to operate from Listening 3 (empathic how the next play would develop and listening), your perspective is redirected to seeing where the next shot would be taken. the situation through the eyes of another: “Boy, Even before the other team brought the yes, now I really understand how you feel about ball inbounds, I could feel it so keenly it. I can sense it now too.” And finally, when you that I’d want to shout to my teammates, choose to operate from Listening 4 (generative ‘it’s coming there!’—except that I knew listening), you realize that by the end of the everything would change if I did. My conversation you are no longer the same person premonitions would be consistently you were when it began. You have gone through correct, and I always felt then that I not a subtle but profound change that has connected only knew all the Celtics by heart, but also you to a deeper source of knowing, including the all the opposing players, and that they all knowledge of your best future possibility and self. knew me. There have been many times in my career when I felt moved or joyful, but Deep Attention and Awareness these were the moments when I had chills pulsing up and down my spine. Deep states of attention and awareness are well known by top athletes in sports. For example, “... On the five or ten occasions when the Bill Russell, the key player on the most game ended at that special level, I literally successful basketball team ever (the Boston did not care who had won. If we lost, I’d Celtics, who won 11 championships in 13 still be as free and high as a sky hawk.” years), described his experience of playing in (William F. Russell, Second Wind: The the zone as follows: Memoirs of an Opinionated Man, 1979) “Every so often a Celtics game would According to Russell’s description, as you heat up so that it became more than a move from regular to peak performance, you physical or even mental game, and would experience a slowing down of time, a widening be magical. That feeling is difficult to of space, a panoramic type of perception, and describe, and I certainly never talked a collapse of boundaries between people, even about it when I was playing. When it between people on opposing teams (see figure happened, I could feel my play rise to 2: movement from Fields 1-2 to Fields 3-4). a new level. It came rarely, and would While top athletes and championship teams last anywhere from five minutes to a around the world have begun to work with refined whole quarter, or more. Three or four techniques of moving to peak performance, plays were not enough to get it going. where the experience Russell describes is more It would surround not only me and the likely to happen, business leaders operate largely other Celtics, but also the players on the without these techniques—or indeed, without other team, and even the referees. any awareness that such techniques exist.3 EXECUTIVE SUMMARY: Theory U
  6. 6. To be effective leaders, we must first understand one another, and how institutions form theirthe field, or inner space, from which we are geometries of power (figure 2).operating. Theory U identifies four such “field The four columns of figure 2 depict fourstructures of attention,” which result in four fundamental meta-processes of the social fielddifferent ways of operating. These differing that people usually take for granted:structures affect not only the way we listen, but • thinking (individual)also how group members communicate with • conversing (group) Figure 2. Structures of Attention Determine the Path of Social Emergence: In order to respond to the major challenges of our time, we need to extend our ways of operating from Fields 1 or 2 to Fields 3 or 4 across all system levels.To be effective leaders, we must first understand the field, or inner space,from which we are operating. Theory U identifies four such “field structuresof attention,” which result in four different ways of operating. www.theoryU.com 4
  7. 7. • structuring (institutions) on the everyday downloading type of cognition. • ecosystem coordination (global systems) So we asked him, “How do you do that? If I want to learn that as an organization or as Albert Einstein famously noted that problems an individual, what do I have to do?” In his cannot be resolved by the same level of response he walked us through a sequence of consciousness that created them. If we address our three core movements. 21st-century challenges with reactive mindsets that mostly reflect the realities of the 19th and 20th The first movement he called “observe, observe, centuries (Field 1 and Field 2), we will increase observe.” It means to stop downloading and start frustration, cynicism, and anger. Across all four listening. It means to stop our habitual ways of meta-processes, we see the need to learn to respond operating and immerse ourselves in the places from a deeply generative source (Field 4). of most potential, the places that matter most to the situation we are dealing with. Summing up: the way we pay attention to a situation, individually and collectively, The second movement Brian Arthur referred to determines the path the system takes and how it as “retreat and reflect: allow the inner knowing emerges (figure 2). On all four levels—personal, to emerge.” Go to the inner place of stillness group, institutional, and global—shifting where knowing comes to the surface. We listen from reactive responses and quick fixes on a to everything we learned during the “observe, symptoms level (Fields 1 and 2) to generative observe,” and we attend to what wants to responses that address the systemic root issues emerge. We pay particular attention to our own (Fields 3 and 4) is the single most important role and journey. leadership challenge of our time. The third movement, according to Brian Arthur, is about “acting in an instant.” This means to prototype The U: One Process, Five Movements the new in order to explore the future by doing. To In order to move from a reactive Field 1 or 2 create a little landing strip of the future that allows to a generative Field 3 or 4 response, we must for hands-on testing and experimentation. embark on a journey. In an interview project on That whole process—observe, observe, access profound innovation and change that included your sources of stillness and knowing, act 150 practitioners and thought leaders I heard in an instant—I have come to refer to as the many practitioners describe the various core U process because it can be depicted and elements of this journey. One person who did so understood as a U-shaped journey. In practical in particularly accessible words is Brian Arthur, contexts the U-shaped journey usually requires the founding head of the economics group at the two additional movements: an initial phase of Santa Fe Institute. When Joseph Jaworski and I building common ground (co-initiating) and a visited him he explained to us that there are two concluding phase that focuses on reviewing, fundamentally different sources of cognition. sustaining, and advancing the practical results One is the application of existing frameworks (co-evolving). The five movements of the U (downloading) and the other accessing one’s journey are depicted in figure 3. inner knowing. All true innovation in science, business, and society is based on the latter, not On all four levels—personal, group, institutional, and global—shifting from reactive responses and quick fixes on a symptoms level (Fields 1 and 2) to generative responses that address the systemic root issues (Fields 3 and 4) is the single most important leadership challenge of our time.5 EXECUTIVE SUMMARY: Theory U
  8. 8. 1. CO-INITIATING: 5. CO-EVOLVING: Build Common Intent stop and listen to Embody the New in Ecosystems that others and to what life calls you to do facilitate seeing and acting from the whole 2. CO-SENSING: 4. CO-CREATING: Observe, Observe, Observe go to the Prototype the New in living examples to places of most potential and listen with your explore the future by doing mind and heart wide open 3. PRESENCING: Connect to the Source of Inspiration, and Will go to the place of silence and allow the inner knowing to emerge Figure 3. The U as One Process with Five Movements:In order to move from Field 1 or 2 to Field 3 or 4 ways of operating, we need to move first into intimate connection with the world and to a place of inner knowing that emerges from within, followed by bringing forth the new, which entails discovering the future by doing. aware of their own collective potential—almost as if a new, collective organ of sight was opening up. Goethe put it eloquently: “Every object,At the beginning of each project, one or a few well contemplated, opens up a new organ ofkey individuals gather together with the intention perception within us.”of making a difference in a situation that really The late cognitive scientist Francisco Varela oncematters to them and to their communities. As told me about an experiment that had been conductedthey coalesce into a core group, they maintain with newborn kittens, whose eyes were not yet open.a common intention around their purpose, the They were put together in pairs, with one on the backpeople they want to involve, and the process of the other in such a way that only the lower kittenthey want to use. The context that allows was able to move. Both kittens experienced the samesuch a core group to form is a process of deep spatial movements, but all of the legwork was donelistening—listening to what life calls you and by the lower cat. The result of this experiment wasothers to do. that the lower cat learned to see quite normally, while the upper cat did not—its capacity to see developed inadequately and more slowly. The experiment illustrates that the ability to see is developed by the activity of the whole organism.The limiting factor of transformational change When it comes to organizing knowledgeis not a lack of vision or ideas, but an inability management, strategy, innovation, and learning,to sense—that is, to see deeply, sharply, and we are like the upper cat—we outsource thecollectively. When the members of a group see legwork to experts, consultants, and teacherstogether with depth and clarity, they become to tell us how the world works. For simple www.theoryU.com 6
  9. 9. problems, this may be an appropriate approach. whole begin to operate with a heightened level of But if you are in the business of innovation, energy and sense of future possibility. Often they then the upper cat’s way of operating is utterly then begin to function as an intentional vehicle dysfunctional. The last thing that any real for the future that they feel wants to emerge. innovator would outsource is perception. When innovating, we must go places ourselves, talk with people, and stay in touch with issues as they evolve. Without a direct link to the context I often work with people trained as engineers, of a situation, we cannot learn to see and act scientists, managers, and economists (as I effectively. was). But when it comes to innovation, we all What is missing most in our current organizations received the wrong education. In all our training and societies is a set of practices that enable this and schooling one important skill was missing: kind of deep seeing—“sensing”—to happen the art and practice of prototyping. That’s what collectively and across boundaries. When you learn when you become a designer. What sensing happens, the group as a whole can see designers learn is the opposite of what the rest the emerging opportunities and the key systemic of us are socialized and habituated to do. forces at issue. I still remember my first visit to an art and design school when I was a doctoral student in Germany. Because I had published a book on aesthetics and management, a design professor at the Berlin Academy of Arts, Nick Roericht, invited me to At the bottom of the U, individuals or groups on co-teach a workshop with him. The night before the U journey come to a threshold that requires the workshop, I was invited to meet with Roericht a “letting go” of everything that is not essential. and his inner circle at his loft apartment. I was In many ways, this threshold is like the gate in eager to meet the group and to see how a famous ancient Jerusalem called “The Needle,” which designer had furnished his Berlin loft. When I was so narrow that when a fully loaded camel arrived, I was shocked. The loft was spacious, reached it, the camel driver had to take off all beautiful—but virtually empty. In a very small the bundles so the camel could pass through— corner kitchen stood a sink, an espresso machine, giving rise to the New Testament saying that “It a few cups, and a quasi kitchen table. But no is easier for a camel to go through the eye of a drawers. No dishwasher. No table in the main needle than for a rich man to enter the kingdom room. No chairs. No sofa. Nothing except a few of God.” cushions to sit on. At the same time that we drop the non-essential We had a great evening, and later I learned aspects of the self (“letting go”), we also open that the empty loft reflected his approach to ourselves to new aspects of our highest possible prototyping. For example, when he developed future self (“letting come”). The essence of a prototype interior design for the dean’s office presencing is the experience of the coming in of at his school, he took out all of the furniture and the new and the transformation of the old. Once then watched what happened there. Roericht and a group crosses this threshold, nothing remains his students then furnished it according to the the same. Individual members and the group as a dean’s actual needs—the meetings he conducted What is missing most in our current organizations and societies is a set of practices that enable this kind of deep seeing—“sensing”—to happen collectively and across boundaries.7 EXECUTIVE SUMMARY: Theory U
  10. 10. and so forth—supplying needed objects and The co-creation movement of the U journeyfurnishings in real time. Prototyping demands results in a set of small living examples thatthat first you empty out all the stuff (“let go”). explore the future by doing. It also results inThen you determine what you really need (“let a vibrant and rapidly widening network ofcome”) and provide prototype solutions for change-makers who leverage their learningthose real needs in real time. You observe and across prototypes and who help each other dealadapt based on what happens next. with whatever innovation challenges they face.This was such a great lesson for me. I thought:Boy, if this famous design professor has aloft with no things in it, why can’t the bestmanagement schools and all of the famous Once we have developed a few prototypes andmanagement minds create equally simple microcosms of the new, the next step is to revieworganizational design that throws out all of the what has been learned—what’s working and whatdysfunctional bureaucracy? isn’t—and then decide which prototypes might have the highest impact on the system or situationThe next day we started the workshop around at hand. Coming up with a sound assessment1:00 p.m. The task was to invent game boards at this stage often requires the involvement offor all of the current and alternative ways of stakeholders from other institutions and sectors.governing the local and global economy. A Very often, what you think you will create at thefairly ambitious design challenge, I thought. But beginning of the U process is quite different fromit was what Roericht said next that really floored what eventually emerges.me: “Okay, now split up into teams. At 5:00 p.m.each team presents its first prototype.” I was The co-evolving movement results in andumbfounded. In my world of economics and innovation ecosystem that connects high-management, the reaction to such a design task leverage prototype initiatives with thewould have been this: “First, it’s too big. You institutions and players that can help take it toneed to narrow your question. Second, if you do the next level of piloting and scaling.it, take a year or so to review all the work that The five movements of the U apply both to thehas been done on the topic. Then come up with macro level of innovation projects and changea summary of that and maybe a suggestion for architectures and to the meso and micro levels ofwhat to do next.” But come up with a prototype group conversation or one-on-one interactions.in four hours? My professional training insisted In martial arts you go through the U in a fractionthat this approach lacked depth and method. But of a second. When applied to larger innovationwhat I didn’t realize was that coming up with a projects, the U process unfolds over longer periodsprototype in less than four hours is the method. of time and in different forms. Thus, the teamWhile the conventional method is based on composition in such projects usually changes andanalytical penetration, then blueprinting the adapts to some degree after each movement.design, then building it, the prototyping methodworks differently. First clarify the question, then A New Social Technology: Sevenobserve, then build in order to observe more, Leadership Capacitiesthen adapt, and so forth. The U process feels familiar to people who useSo the prototype is not the stage that comes after creativity in their professional work. They say,the analysis. The prototype is part of the sensing “Sure. I know this way of operating from myand discovery process in which we explore the own peak performance experiences. I know itfuture by doing rather than by thinking and from people whom I consider highly creative. Noreflecting. This is such a simple point—but I problem.” But then, when you ask, “How doeshave found that the innovation processes of work look in your current institutional context”many organizations are stalled right there, in the they roll their eyes and say, “No, hell, it’s different.old analytical method of “analysis paralysis.” It looks more like this downloading thing.” www.theoryU.com 8
  11. 11. Why is that? Why is the U the road less traveled with the principle of incompleteness. You invite in institutions? others to help plan the menu, not to arrive after Because it requires an inner journey and hard the dessert is in the oven. work. The ability to move through the U as a team or an organization or a system requires a new social technology. The social technology of presencing is based on seven essential leadership The second capacity in the U process is to observe capacities that a core group must cultivate. with an open mind by suspending your voice of Without the cultivation of these capacities, judgment (VOJ). Suspending your VOJ means the process described above (five movements) shutting down (or embracing and changing) won’t deliver the desired results. the habit of judging based on past experience. Suspending your VOJ means opening up a new space of inquiry and wonder. Without suspending that VOJ, attempts to get inside the places of most “The key principle of all community organizing potential will be futile. is this,” L.A. Agenda’s Anthony Thigpenn once Here is a case in point: In 1981, an engineering told me. “You never hand over the completed team from Ford Motor Company visited the cake. Instead, you invite people into your Toyota plants that operated on the “lean” Toyota kitchen to collectively bake the cake.” production system. Although the Ford engineers The trouble with this principle is that most had first-hand access to the revolutionary new meetings in most organizations work the production system, they were unable to “see” other way around. You only call a meeting or recognize what was in front of them and once you have completed the cake and you claimed that they had been taken on a staged want to cut it and serve it. There is a reason, tour—because they had seen no inventory, however, why people often shy away from they assumed they had not seen a “real” plant. convening conversational situations that are The reaction of the engineers reminds us how more upstream, that start with the desire for a difficult it is to let go of existing ideas and cake rather than with the completed cake. Such beliefs, even when we find ourselves in the endeavors require a special form of leadership. place of most potential. The leader must create or “hold a space” that invites others in. The third capacity in the U process is to The key to holding a space is listening: to connect to the deeper forces of change through yourself (to what life calls you to do), to the opening your heart. I once asked a successful others (particularly others that may be related top executive at Nokia to share her most to that call), and to that which emerges from important leadership practices. Time and time the collective that you convene. But it also again, her team was able to anticipate changes requires a good deal of intention. You must keep in technology and context. Time and again, your attention focused on the highest future they were ahead of the curve. Her answer? possibility of the group. And finally, it takes a lot “I facilitate the opening process.” This is the of kitchen gear. It requires you to be intentionally essence of what moving down the left side incomplete, to hand over the recipe, cooking tools, of the U is all about—facilitating an opening and ingredients rather than the finished cake. Yes, process. The process involves the tuning of three you can talk about why this is a particularly good instruments: the open mind, the open heart, and recipe, you can add some ingredients, and you the open will. While the open mind is familiar to can help mix the batter, too. You can even go first most of us, the other two capacities draw us into if you want to. But you must intentionally leave a less familiar territory. lot of open space for others to contribute. That’s why building the U leadership capacity starts To understand more about that territory, I once interviewed psychologist Eleanor Rosch of9 EXECUTIVE SUMMARY: Theory U
  12. 12. the University of California at Berkeley. She situation from the whole, the open will enablesexplained the difference by comparing two types us to begin to act from the emerging whole.of cognition. The first is the analytical knowledge Danish sculptor and management consultant Erikupon which all conventional cognitive science is Lemcke described to me his experience of thisbased. “In this state,” said Rosch, “the world is process: “After having worked with a particularthought of as a set of separate objects and states sculpture for some time, there comes a certainof affairs and the human mind as a machine that moment when things are changing. When thisisolates, stores, and retrieves knowledge as an moment of change comes, it is no longer me,indirect representation of the world and oneself.” alone, who is creating. I feel connected toThe other type of knowledge, the one that relates something far deeper and my hands are co-to the open heart and open will, is gained “by creating with this power. At the same time, I feelmeans of interconnected wholes (rather than that I am being filled with love and care as myisolated contingent parts)…. Such knowing perception is widening. I sense things in anotheris ‘open,’ rather than determinate; and a sense way. It is a love for the world and for what isof unconditional value, rather than conditional coming. I then intuitively know what I mustusefulness, is an inherent part of the act of do. My hands know if I must add or removeknowing itself.” Action resulting from that type something. My hands know how the formof awareness, Rosch continued, “is claimed should manifest. In one way, it is easy to createto be spontaneous, rather than the result of with this guidance. In those moments I have adecision-making; it is compassionate, since it is strong feeling of gratitude and humility.”based on wholes larger than the self; and it canbe shockingly effective.”To awaken this other cognitive capacity in The back-stories of successful and inspiringpeople, teams, and organizations, I have found projects, regardless of size, often have a similarit productive to have people work on real story line—a very small group of key personsprojects in real contexts that they care about commits itself to the purpose and outcomesand to support them with methods and tools of the project. That committed core group andthat cultivate the open heart. The mind works its intention then goes out into the world andlike a parachute, as the old saying goes—it creates an energy field that begins to attractonly functions when open. The same applies people, opportunities, and resources that maketo the intelligence of the heart. It only becomes things happen. Then momentum builds. Theavailable to us when we cultivate our capacity core group functions as a vehicle for the wholeto appreciate and love. In the words of biologist to manifest.Humberto Maturana, “Love is the only emotion In an interview, Nick Hanauer, the founder ofthat enhances our intelligence.” half a dozen highly successful companies, told Joseph Jaworski and me: “One of my favorite sayings, attributed to Margaret Mead, has always been ‘Never doubt that a small groupThe fourth capacity in the U process is of thoughtful, committed citizens can changeconnecting to the deepest source of your self the world. Indeed, it is the only thing that everand will. While an open heart allows us to see a has.’ I totally believe it. You could do almost“While an open heart allows us to see a situation from the whole, the openwill enables us to begin to act from the emerging whole.” www.theoryU.com 10
  13. 13. anything with just five people. With only one An interesting detail during this stage is that person, it’s hard—but when you put that one the sequence in which the new shows up in the person with four or five more, you have a force human mind is contrary to conventional wisdom. to contend with. All of a sudden, you have (1) The new usually begins with an unspecified enough momentum to make almost anything emotion or feeling. (2) That feeling morphs into that’s immanent or within reach actually real.” a sense of the what: the new insight or idea. (3) Then the what is related to a context, problem, or challenge where it could produce a breakthrough innovation (the where: the context). (4) Only then The sixth capacity in the U process is the do you begin to develop a form in which the what prototyping skill of integrating head, heart, and and the where are framed by a rational structure hand. When helping a golfer who has lost his and form of presentation (the why: rational swing, the master coach in the novel and film reasoning). This sequence can be traced in “The Legend of Bagger Vance” advises, “Seek almost any type of breakthrough innovation. The it with your hands—don’t think about it, feel it. biggest mistake when dealing with innovation is The wisdom in your hands is greater than the to first focus on the rational mind. In order for wisdom of your head will ever be.” a new insight to emerge, the other conditions That piece of advice articulates a key principle must already exist. In short, connecting to one’s about how to operate on the right side of the best future possibility and creating powerful U. Moving down the left side of the U is about breakthrough ideas requires learning to access opening up and dealing with the resistance of the intelligence of the heart and the hand—not thought, emotion, and will; moving up the just the intelligence of the head. right side is about intentionally reintegrating the intelligence of the head, the heart, and the hand in the context of practical applications. The seventh capacity in the U process is learning Just as the inner enemies on the way down the to play the macro violin. When I asked him to U represent the VOJ (voice of judgment), the describe presencing-type moments from his VOC (voice of cynicism), and the VOF (voice music experience, the violinist Miha Pogacnik of fear), the enemies on the way up the U are told me about his first concert in Chartres. “I felt the three old methods of operating: executing that the cathedral almost kicked me out. ‘Get without improvisation and mindfulness out with you!’ she said. For I was young and I (reactive action); endless reflection without tried to perform as I always did: by just playing a will to act (analysis paralysis); and talking my violin. But then I realized that in Chartres without a connection to source and action (blah- you actually cannot play your small violin, but blah-blah). These three enemies share the same you have to play the ‘macro violin’. The small structural feature. Instead of balancing the violin is the instrument that is in your hands. intelligence of the head, heart, and hand, one The macro-violin is the whole cathedral that of the three dominates—the will in mindless surrounds you. The cathedral of Chartres is built action, the head in endless reflection, the heart entirely according to musical principles. Playing in endless networking. the macro violin requires you to listen and to play from another place, from the periphery. “...connecting to one’s best future possibility and creating powerful breakthrough ideas requires the intelligence of the heart and the hand —not just the intelligence of the head.”11 EXECUTIVE SUMMARY: Theory U
  14. 14. 1. HOLDING THE SPACE: 7. PERFORMING: Listen to what life Play the “Macro-Violin” calls you to do suspending embodying2. OBSERVING: 6. PROTOTYPING: Attend with your Integrate head, mind wide open heart, hand redirecting enacting 3. SENSING: 5. CRYSTALLIZING: Connect with Access the power your heart of intention letting-go letting-come 4. PRESENCING: Connect to the deepest source of your self and will Who is the Self? What is my Work? Figure 4. A New Social Technology with Seven Leadership Capacities: The ability to move through a U process as a team, an organization, or a system requires a new social technology, presencing, an inner journey and intimate connection that helps to bring forth the world anew.You have to move your listening and playing of coordinating—seeing and acting from thefrom within to beyond yourself.” presence of the whole (figure 2).Most systems, organizations, and societies today In summary, the seven Theory U leadershiplack the two essentials that enable us to play capacities are the enabling conditions that mustthe macro violin: (1) leaders who convene the be in place for the U process and its moments toright sets of players (frontline people who are work (figure 4). In the absence of these sevenconnected with one another through the same leadership capacities, the U process cannot bevalue chain), and (2) a social technology that realized.allows a multi-stakeholder gathering to shift These seven Theory U leadership capacitiesfrom debating to co-creating the new. are practiced today in the following examplesStill, there are many examples of how this of multi-stakeholder innovation and corporatecapacity to act and operate from the larger applications. You are also invited to learn morewhole can work. One is in disaster response. about the Presencing Institute, which is dedicatedWhen a disaster occurs, other mechanisms to advancing these new social technologies by(like hierarchy) don’t exist or aren’t sufficient integrating science, consciousness, and profoundto deal with the situation (like markets or social change into a coherent methodology ofnetworked negotiation). In these situations sensing and co-creating the future that is seekingwe see the emergence of a fourth mechanism to emerge. www.theoryU.com 12
  15. 15. ApplicationsMany projects using Theory U have been launched recently or are well under way.Here are a few of the early examples and some of their first results.I. Multi-stakeholder Innovation dedicated to finding productive solutions to the most confounding dilemmas of our time. Each member is a powerhouse in its realm—BASF, BP, Oxfam, Nissan, the Society for OrganizationalIn a rural area of approximately 300,000 Learning, Unilever, the UN Global Compact,inhabitants near Frankfurt, Germany, a network UNICEF, the World Bank Institute, and theof physicians applied the U process in several World Wildlife Fund, among others.ways, including in a patient-physician dialogue Together ELIAS members are examiningforum. When negotiations between the problems by combining systems thinking,physicians’ network and the insurance company deepened personal awareness, and listeningstalled, the core group of physicians invited skills with hands-on prototyping in order toother physicians and their patients to a one- develop and test new cross-sector approaches today meeting designed around the U process. In some of today’s most difficult challenges. Thepreparation for the meeting, a group of students ELIAS pilot program convened a group of 25trained in dialogue interviews spoke with 130 high-potential leaders from these organizationspatients and their physicians. Then they invited and sent them on an intensive learning journeyall of the interviewees to a feedback session, that included training in leadership capacitywhich 100 of them attended. building and hands-on systems innovation. AfterDuring this event and afterward, the patients shadowing each other in their work environmentsand physicians moved from politeness and (each fellow spent several days in the life ofdebate to real dialogue and thinking together. one or more peers in another business sector),The initiatives formed or crystallized during the group traveled to China in the fall of 2006,this day had a profound impact on the region. where they engaged in discussions with ChineseOne group proposed a standard format for thought leaders, consulted with sustainabilitytransferring information between hospitals and engineers, journeyed to rural China to observeoutside physicians and has since opened an emerging challenges, and capped the trip with aoffice for the outside physicians at the largest week of contemplative retreat.hospital in the region. It is jointly run by the • One of the prototyping projectsclinic and residential physicians and works to developed by the ELIAS pilot groupimprove critical interface between the two. is the Sunbelt team, which is exploringThe group also prototyped and then institutional- methods for bringing solar- and wind-ized a new program that provides better emergency generated power to marginalizedcare for patients, incorporates cross-institutional communities, especially in the globalcooperation, and costs less. As a result, factor 4 cost South. This decentralized, distributive,savings have been realized, and patient complaints democratic model would significantlyin that region have decreased to almost zero. reduce CO2 emissions and foster economic growth and well-being in rural communities. • Another team is testing alternative energy resources, such as theELIAS (Emerging Leaders for Innovation indigenous development of renewableAcross Sectors) is a network of twenty global and hybrid sources of power for thebusiness, government, and civic organizations Chinese automotive industry. www.theoryU.com 14
  16. 16. • An Africa-based team is testing mobile What started as an idea by a few people community-based life education as a two years ago has turned into a vibrant and way to uproot the HIV/AIDS pandemic. rapidly evolving global network of change- • An ELIAS fellow from the Indonesian makers and prototyping projects. In addition Ministry of Trade applied the U process to company-city- and country-specific projects to government policies for sustainable and programs, ELIAS fellows have developed a sugar production in Indonesia. His idea global ecology of prototyping initiatives and an was to involve all key stakeholders in alumni network of high-potential leaders in some the policymaking process. The results of the most innovative institutions in business, were stunning: for the first time ever government, and the NGO sector. Together, this the Ministry’s policies did not result global network hopes to use a web of activities in violent protests or riots by farmers develop the capacity to respond to some of the or other key stakeholders in the value key challenges of our time in truly innovative chain. Now, the same approach is being ways (Field 4 responses). applied to other commodities and to Other outcomes of participation in the ELIAS standards for sustainable production. program include: The Indonesia-based ELIAS team 1. Prototypes of cross-sector innovation that plans to launch a country version of address thte shared challenges of the ELIAS cross-sector innovation • creating value for the triple bottom platform in early 2008 that will focus line—the environment, society, and the on the severe flooding problems in Jakarta. • economy—with the ultimate goal of advancing global sustainability • A Brazil-based team is focused on integrating the whole demand-and- 2. A steadily growing network of leaders from supply chain for organic agricultural the public, private, and civic sectors products. They are creating infra- • that will enhance and accelerate the structures, raising awareness, and benefits to individual members building skills and support networks of small farmers using organic agricultural 3. Information and ideas for innovative methods. The goals include improving solutions to individual members’ contractual fairness and creating a • challenges transparency that allows the entire value chain, from the farmers to the 4. An enhanced capacity among leaders to deal consumers, to see one another, connect, with the complexity of globalization and co-evolve. The ELIAS team from • and sustainable development through Brazil also intends to launch a country practical innovations. version of the ELIAS innovation platform in Brazil in 2008. • In the Philippines, one ELIAS fellow of Unilever teamed up with This initiative was formed by a cross-sectoral former colleagues who now work group of leaders seeking to have a profound and in the NGO sector to form a venture lasting impact on HIV and AIDS in Zambia. (MicroVentures) that advises and Their goal is to shift the systemic undercurrents finances women micro-entrepreneurs that fuel the pandemic. They hope to achieve in the Philippines by leveraging the a breakthrough in thinking and action that can Unilever business and its network at be applied to other areas and regions. Possible the community level. prototyping projects being considered:15 EXECUTIVE SUMMARY: Theory U
  17. 17. • changing the mind and heart of the advantage of new opportunities and to clear president of Zambia about HIV/AIDS, bottlenecks. perhaps by offering to provide him The Innovation Lab in Namibia will convene with an HIV advisor; healthcare leadership teams from government, • “waking up” other leaders and change business, and civil society. Teams will be guided makers across society; through an intensive leadership development • changing the role of the media in Zambia; and project-based learning experience over two • motivating people to get tested for HIV/ years. The pilot project of this approach seeks to AIDS, perhaps by making counseling benefit people who are underserved by current mandatory for those who test positive; healthcare systems, particularly those living on less than $2/day. The proposal has been co- • finding new ways to care for and created by the Synergos Institute, the Presencing educate youth who must grow up Institute, Generon Consulting, and McKinsey & without parents. Company in collaboration with partners in the global South and has been submitted to the Bill and Melinda Gates Foundation for funding.The Sustainable Food Lab (SFL) comprises leadersfrom more than 100 organizations that representa microcosm of the stakeholders in food delivery II. Corporate Applicationssystems. The purpose of this large-scale interventionis to make food systems more sustainable. Currentmembers include individuals from the following HP has applied Theory U in change effortscompanies: Carrefour, General Mills, Nutreco, within its digital photography business portfolio,Organic Valley Cooperative, Rabobank, Sadia, focusing on improving the customer experienceCostco, US Foodservice, SYSCO, and Unilever; and cross-category business strategies. In 2005,from governmental organizations in Brazil and the HP launched an effort to improve the value ofNetherlands, plus the European Commission, the its digital photography products and servicesInternational Finance Corporation, and the World by designing compelling customer experiencesBank; from civil society organizations including the across its broad portfolio. Although originallyNational Confederation of Agricultural Workers of designed to focus on customer experiences,Brazil, Oxfam, The Nature Conservancy, the World interviews with executives revealed thatForum of Fish Harvesters and Fishworkers, and delivering satisfying customer experiencesthe World Wildlife Fund. The Lab’s prototyping would require substantial cross-category andprojects are addressing supply chain innovations, cross-value chain strategy development anddemand pull for sustainability, purchasing standards, alignment. A more holistic change effort wasand policy changes. then developed and launched, consisting of four tracks: (1) an Executive Leadership track to address executive learning and leadership, including management of portfolio objectivesThis initiative will develop a replicable model and leading interdependent cross-businessfor improving public health leadership and programs; (2) an Experience Design Operatingsystem performance using an approach called Model to address governance, decision-making,the Innovation Lab. The Innovation Lab collaboration, and lifecycle processes; (3) anincreases leaders’ effectiveness by cultivating Experience Design track to develop the designtheir managerial skills and by addressing the capabilities and capacity required to meet businessattitudes, values, and relationships that drive goals; and (4) an Organizational Developmentbehavior. It stimulates system change by track to grow the broader organizationalenabling cross-sectoral leadership teams to take culture in support of the previous three tracks. www.theoryU.com 16
  18. 18. In the Executive Leadership track, an initial cultural change in the whole organization, from workshop established a common ground being negative and skeptical to one of inquiry perspective of the digital photography and keenness to move forward. A survey of the opportunities and challenges. This workshop Shell participants revealed greater motivation also established a learning agenda that served as and reduced frustration at the gas plant site.” the foundation for executive learning journeys. Based on the initial positive results of the digital photography effort, HP is now pursuing a broader use of Theory U in change efforts in With his colleagues, Otto Scharmer has its Imaging and Printing Group. developed and conducted award-winning leadership development programs based on the U process in institutions around the world, Shell has applied some key elements of Theory including Daimler, PricewaterhouseCoopers, U in change efforts at Shell EP Europe. In 2005 and Fujitsu. More than 150 leaders from the organization was experiencing significant each organization have participated in these problems getting its new Plant Maintenance programs to date, and together they function process to work. One site, a gas plant in the as an important network for communication Netherlands, with about 60 staff members, was and peer coaching on business innovation and selected to be the pilot site for diagnosing transformational change. what was going on. Interviews with Shell staff revealed that the problems in the organization, For example, at Daimler, all newly promoted while being attributed to new SAP software, directors use the U method to deal with their were more likely symptoms of the way people business and leadership challenges better and were working together. faster. As they begin their new posts, they explore their network leadership challenge The rich material gained from the interviews by conducting dialogue interviews with all of allowed a team of internal consultants to develop their key stakeholders in order to see their new a number of “what’s in it for me?” propositions jobs from the perspective of others. Each new as a way of tapping into people’s feelings. The director is encouraged to ask four questions: propositions, in the form of cartoons, were used in two small focus groups of six or seven 1. What is your most important objective, people to help Shell staff visualize a different and how can I help you realize it? future. In the focus group dialogues, Shell 2. What criteria will you use to assess employees were able to express some of their whether my contribution to your work deeper feelings about working at the plant and has been successful? about SAP. They expressed a desire for less conflict during the workday, and they welcomed 3. If I were able to change two things ideas for a new approach to organizational in my area of responsibility within effectiveness. Instead of seeking any specific the next six months, what two things business targets, the team sought to create a would create the most value and benefit better environment for learning, innovation, and for you? change. The results of that approach proved to 4. What, if any, historical tensions and/ be powerful and sustainable. Says Jurry Swart or conflicting demands have made of Shell: “After a couple of months we saw the it difficult for people in my role or output KPI’s [key performance indicators] of function to fulfill your requirements the process improving. Furthermore we saw a and expectations?17 EXECUTIVE SUMMARY: Theory U
  19. 19. With the answers to these questions in hand, the III. Presencing Institutedirectors gather for a five-day U-based workshop The Presencing Institute is a global communitythat helps them to connect more deeply to their of individuals, institutions, and initiatives thatchallenges, to one another, and to themselves. apply and advance the U process of presencingThe workshop and follow-up activities include to collectively create profound innovationcase clinics, dialogue, peer coaching, and a and change. It is composed of key playersroom of intentional silence. Directors who and leaders from business, government, andexperienced this learning environment have civil society who are at the core of the rapidlyreported personal behavioral changes (such evolving project ecology described above. Theas better listening skills and a greater capacity Presencing Institute focuses on refining theto deal with pressure) that have led to new social technology of presencing and makingleadership techniques, behaviors and results. it available to all change-makers who want toThey have used many of these skills in their operate from a future space of possibility thatown areas of responsibility and are beginning to they feel wants to emerge.apply them to organizational and sustainability-related change. The Presencing Institute will offer regular public capacity-building programs in the global North and global South (North America, South America, Europe, Africa, Asia, Australia) beginning in 2007 and 2008. It aspires to create a global constellation of “power places” or “planetary acupuncture points” that function as holding spaces and a supporting infrastructure for an incipient global movement that integrates science, consciousness, and profound social change. To join the Presencing Institute: To order the book, Theory U: Leading from the Future as It Emerges: or For additional copies of this Executive Summary: to download and print your own copy from a pdf file, or leave your email address to receive free printed booklets. www.theoryU.com 18
  20. 20. Dr. C. Otto Scharmer is a Senior Lecturer at MIT Germany. His article “Strategic Leadership and the founding chair of ELIAS (Emerging within the Triad Growth-Employment-Ecology” Leaders for Innovation Across Sectors), a won the McKinsey Research Award in 1991. A program linking twenty leading global institutions synthesis of his most recent research has resulted from business, government, and civil society in in a theoretical framework and practice called order to prototype profound system innovations “presencing,” which he elaborates in Theory U: for a more sustainable world. He also is the Leading from the Future as It Emerges (2007), founding chair of the Presencing Institute and a and in Presence: An Exploration of Profound visiting professor at the Center for Innovation Change in People, Organizations, and Society and Knowledge Research, Helsinki School of (2005), co-authored with Peter Senge, Joseph Economics. Scharmer has consulted with global Jaworski, and Betty Sue Flowers. With his companies, international institutions, and cross- colleagues, Scharmer has used presencing sector change initiatives in North America, to facilitate profound innovation and change Europe, Asia, and Africa. He has co-designed and processes both within companies and across delivered award-winning leadership programs societal systems. More information about for client organizations including Daimler, Scharmer and his work can be found at: PricewaterhouseCoopers, and Fujitsu. Scharmer holds a Ph.D. in economics and management from Witten-Herdecke University,19 EXECUTIVE SUMMARY: Theory U
  21. 21. In a world burdened with too much information, we are occasionally blessed with a genu-inely new idea about how to perceive, think about, and act on our overly complex world.Scharmer’s Theory U model of how to open our mind, emotions, and will to momentsof discovery and mutual understanding is profound and much needed. Readers will beimpressed not only by the depth of theory in this volume but also by the very practicalapproach that Scharmer provides us for enlarging our human capacity for growth. Thiswill be an important book. — Edgar Schein, Sloan Fellows Professor of Management Emeritus, MIT Sloan School ManagementThough many agree with Einstein’s observation that “problems can not be resolved atthe level of consciousness, that created them, “the key question remains how to realizesuch a shift. Otto Scharmer’s Theory U offers a unique integral perspective combinedwith a practical approach to addressing the mega-issues facing our world today. — Jack Jacometti, Vice President, Global GTL Development, Shell International Gas LimitedTheory U is destined to be one of the defining paradigms of the 21st century. — Nicanor Perlas, recipient of the 2003 Alternate Nobel Prize and the UN Environmental Program Global 500We are using the Theory U method with diverse leadership teams in the U.S., Europe,and Asia. The impact on our organization is remarkable, but even more important isthe amazing personal growth many leaders have experienced. Scharmer’s work hasallowed them to experience a new approach to the world. — Marcia Marsh, Senior Vice President Operations, World Wildlife FundOtto Scharmer has given us a brilliant, provocative, and important book on the leading-edge of the “next big thing”: integral thought. Highly recommended. — Ken Wilber, author, A Theory of Everything: An Integral Vision for Business, Politics, Science, and SpiritualityThis book is a must-read for all who are interested in the emerging future of leadershiptheory and practice. Otto Scharmer’s Theory U takes you on an exciting deep dive intothe true center of leadership as a process of inner knowing and social innovation. Withmany tested and practical exercises drawn from a rich background of disciplines, thisbook will help you to discover and follow the path towards mastery on your own leader-ship journey. It pushes the envelope of current leadership wisdom and invites you toexplore the strongest leadership tool there is: yourself. — Ralf Schneider, Head of Global Talent Management, PricewaterhouseCoopersThis book is an inspiration. It gives definition to the mystery of the creative process. Itconfirms and clarifies what we have been doing at our company. Thank you Otto for thisgreat work! — Eileen Fisher, President and Chief Creative Officer, EILEEN FISHER Inc.www.theoryu.com

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