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Theory U: Leading from the Future as It Emerges

Theory U: Leading from the Future as It Emerges

by Otto Scharmer


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Product Details

ISBN-13: 9781576757635
Publisher: Berrett-Koehler Publishers
Publication date: 01/01/2009
Series: Bk Business Series
Edition description: Older Edition
Pages: 533
Product dimensions: 7.00(w) x 9.00(h) x 1.50(d)

About the Author

C. Otto Scharmer is a senior lecturer at the Massachusetts Institute of Technology and the founding chair of the Presencing Institute. He is faculty chair of MIT’s IDEAS program; visiting professor at Tsinghua University, Beijing; and a cofounder of the Global Wellbeing and Gross National Happiness Lab, which links innovators from Bhutan, India, China, Brazil, Europe, and the United States to prototype profound innovations in government, business, education, and civil society. He is the coauthor of Leading from the Emerging Future and Presence.

Foreword author Peter Senge is a senior lecturer at the Massachusetts Institute of Technology. He is also founding chair of the Society for Organizational Learning North America and the coauthor of the bestselling book, The Fifth Discipline.

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Theory U

Leading From the Future as it Emerges


Berrett-Koehler Publishers, Inc.

Copyright © 2016 C. Otto Scharmer
All rights reserved.
ISBN: 978-1-62656-800-6


Facing the Fire

When I left my German farmhouse that morning for school, I had no idea it was the last time I would see my home, a large 350-year-old farmhouse thirty miles north of Hamburg. It was just another ordinary day at school until about one o'clock, when the teacher called me out of class. "You should go home now, Otto." I noticed that her eyes were slightly red. She did not tell me why I needed to hurry home, but I was concerned enough to try to call home from the train station. There was no ring. The line was obviously dead. I had no idea what might have happened, but by then I knew it probably wasn't good. After the usual one-hour train ride I ran to the entrance of the station and jumped into a cab. Something told me I didn't have time to wait for my usual bus. Long before the cab arrived, I saw huge gray and black clouds of smoke billowing up into the air. My heart was pounding as the cab approached our long driveway. I recognized hundreds of our neighbors, area firefighters, and policemen along with people I'd never seen before. I jumped from the cab and ran down through the crowd, the last half mile of our chestnut-lined driveway. When I reached the courtyard, I could not believe my eyes. The world I had lived in all my life was gone. Vanished. All up in smoke.

There was nothing — absolutely nothing — left except the raging flames. As the reality of the fire in front of my eyes began to sink in, I felt as if somebody had ripped away the ground from under my feet. The place of my birth, childhood, and youth was gone. I just stood there, taking in the heat of the fire and feeling time slowing down. As my gaze sank deeper and deeper into the flames, the flames also seemed to sink into me. Suddenly I realized how attached I had been to all the things destroyed by the fire. Everything I thought I was had dissolved into nothing. Everything? No, perhaps not everything, for I felt that a tiny element of my self still existed. Somebody was still there, watching all this. Who?

At that moment I realized there was a another dimension of my self that I hadn't previously been aware of, a dimension that related not to my past experiences — the world that had just dissolved in front of my eyes — but to my future possibilities, a world that I could bring into reality with my life. At that moment time slowed down to stillness, and I felt drawn in a direction above my physical body and began watching the scene from that unknown place. I felt my mind quieting and expanding in a moment of unparalleled clarity of awareness. I realized that I was not the person I had thought I was. My real self was not attached to all the material possessions smoldering inside the ruins. I suddenly knew that I, my true Self, was still alive! It was this "I" that was the seer. And this seer was more alive, more awake, more acutely present than the "I" I had known before. I was no longer weighted down by all the material possessions the fire had just consumed. With everything gone, I was lighter and free, released to encounter the other part of my self, the part that drew me into the future––into my future — into a world waiting for me, that I might bring into reality with my forward journey.

The next day my eighty-seven-year old grandfather arrived for what would be his last visit to the farm. He had lived in that house all his life, beginning in H890. Because of medical treatments, he had been away the week before the fire, and when he arrived at the courtyard the day after the fire, he summoned his last energy, got out of the car, and went straight to where my father was working on the cleanup. He did not even once turn his head to the smoking ruins. Without seeming to notice the small fires still burning around the property, he went up to my father, took his hand, and said, "Kopf hoch, mein Junge, blick nach vorn!" "Keep your head up, my boy, look forward!" Then he turned, walked directly back to the waiting car, and left. A few days later he died quietly.

Only years later did I realize that my experience in front of the fire was the beginning of a journey. My journey began with the recognition that I am not just one self but two selves. One self is connected to the past, and the second self connects to who I could become in the future. In front of the fire I experienced how these two selves started to connect to each other. Today, thirty-seven years later and several thousand miles away in Boston, Massachusetts, these two questions appear to be more relevant than ever: "Who is my true self?" and "How does this self relate to the other stream of time — the one that seemed to draw me from the future that wants to emerge?"

The journey of Theory U is basically an inquiry into this question: How can we access these deeper sources of time, being, and self in a way that is reliable, practical, and collective — and that works without your family farmhouse going up in flames every morning? These questions eventually prompted me to leave Germany for the United States in H994 to continue my research at the MIT Organizational Learning Center.


The Journey to "U"

Theory U • Interview with Brian Arthur at Xerox PARC • Francisco Varela on the Blind Spot in Cognition Sciences • The Inner Territory of Leadership

Theory U: Beginnings

As just discussed, the blind spot concerns the structure and source of our attention. I first began noticing this blind spot in organizations when I spoke with Bill O'Brien, the former CEO of Hanover Insurance. He told me that his greatest insight after years of conducting organizational learning projects and facilitating corporate change was that "the success of an intervention depends on the interior condition of the intervener." That struck a chord! So it's not only what leaders do and how they do it but their "interior condition," that is, the inner place from which they operate — the source and quality of their attention. So this suggests the same person in the same situation doing the same thing can effect a totally different outcome depending on the inner place from where that action is coming.

When I realized that, I asked myself: What do we know about that inner place? We know everything about the what and the how, the actions and the processes that leaders and managers use. But what do we know about that inner place? nothing! I wasn't even sure whether there were only one or many of these inner places. Do we have two? Ten? We don't know because it's in our blind spot. Yet what I have heard time and time again from profound innovators and creative people is that it is exactly that kind of blind spot that matters most. It is that blind spot that sets apart master practitioners and leaders from average performers. This is why Aristotle over 2,300 years ago made a distinction between normal scientific "what" knowledge (episteme) and practical and technical "how" knowledge (phronesis, techne) on the one hand and the inner primary knowing of first principles and sources of awareness (nous) and wisdom (Sophia) on the other.

Shortly after I came to MIT in 1994, I watched a live broadcast on organizational learning. In response to a question from the audience, Rick Ross, coauthor of The Fifth Discipline Fieldbook, went to the whiteboard and wrote the following three words:




When I saw that simple presentation, I realized that organizational change happens on different layers. In a flash I began mentally seeing these layers. Diagramming them helped, because the changes from structure to process to thoughts present more and more subtle shifts. When I completed the drawing in my mind, I had added two more levels — above structure and below thought — as well as a horizontal dimension showing change as we move from perceiving something to acting on it. This is how it began to look:

I began calling the state at the bottom of the U "Presencing." I will talk much more about this in Part III, but for now, we can call it "seeing from our deepest source": that is, sensing and operating from one's highest future potential. It is the state each of us can experience when we open not just our minds but our hearts and our wills — our impetus to act — in order to deal with the new realities emerging all around us.

Whenever I used this framework in presentations and in my work with groups, organizations, and communities, I noticed how deeply it resonated with experienced practitioners. As they worked with this U image, people began to understand its two key dimensions. One is the distinction between perception and action that defines the horizontal axis, as we work from deeply connecting and sensing toward enacting and realizing. The vertical axis then shows us the different levels of change from the shallowest response, "Reacting," down through the deepest, "Re-generating."

Most change and learning methods are based on the Kolb Learning Cycle, which suggests a version of the following sequence: observe, reflect, plan, and act. By grounding the learning process this way, the learning cycles are based on learning from the experiences of the past. The distinction made by Harvard and MIT's Chris Argyris and Don Schön between single-loop and double-loop learning refers to learning from experiences of the past. Single-loop learning is reflected in the levels of reacting and restructuring, while reframing is an example of double-loop learning (which includes a reflection of one's deep assumptions and governing variables). However, the deepest level of the U graphic — referred to as regenerating — goes beyond double-loop learning. It accesses a different stream of time — the future that wants to emerge — and is what in this book I will refer to as presencing or "the U process."

The concept of the U, of course, didn't spring from nothing. It emerged from many years of study and work on change in different contexts and movements, which are documented in two of my earlier books. Important sources of my early thinking about social development and change included a global learning journey whose purpose was to study the dynamics of peace and conflict (in 1989–1990). It led me to India to study gandhi's approach of nonviolent conflict transformation, and to China, Vietnam, and Japan to study Buddhism, Confucianism, and Daoism as different approaches to development and being. I also had the fortune to work with unique academic teachers, Ekkehard Kappler and Johan galtung, who taught me that critical thinking and science can function as powerful forces for social transformation and change. Other influences on my thinking were the work of the avant-garde artist Joseph Beuys, and the writings of Henry David Thoreau, Martin Buber, Friedrich nietzsche, Edmund Husserl, Martin Heidegger, and Jürgen Habermas, as well as some of the old masters like Hegel, Fichte, Aristotle, and Plato. Among the philosophical sources, perhaps most influential was the work of the educator and social innovator Rudolf Steiner, whose synthesis of science, consciousness, and social innovation continues to inspire my work and whose methodological grounding in goethe's phenomenological view of science has left the most significant imprint on Theory U. The simplest way of locating Theory U in the landscape of intellectual traditions is to identify it as applied phenomenology — a mindful phenomenological practice for investigating the social field. In that context, another important source of inspiration is the work of Friedrich Glasl, who, inspired by Steiner's work, developed a related concept of the U that looks at companies and organizations as three interrelated subsystems (Glasl 1997, 1999).

The key insight I developed from reading Steiner's foundational book, The Philosophy of Freedom, is the same insight that I walked away with after completing my first research project at MIT with Edgar Schein. In that project we looked at all the different theories of change that researchers at MIT's Sloan School of Management had come up with. While trying to summarize our findings, Ed reflected on the pretty complex integration of frameworks we had come up with and said, "Perhaps we have to go back to data and start all over again. Maybe we have to take our own experience in dealing with change more seriously." I took this to mean that, to paraphrase Steiner, we have to investigate our own experience and our own thought process in a clearer, more transparent, and more rigorous way. In other words, trust your senses, trust your observations, trust your own perception as the fundamental starting point of any investigation — but then follow that train of observation all the way back to its source, exactly as Husserl and Varela advocated in their work on the phenomenological method. In The Philosophy of Freedom, Steiner focuses on individual consciousness. In Theory U, we explore the structures and sources of collective attention in teams, organizations, and larger systems.

Interview with Brian Arthur at Xerox PARC

In 1999, I started an interview project with Joseph Jaworski, author of Synchronicity: The Inner Path of Leadership. Our task was to create a learning environment that would help a group of line leaders in a large global company that had just been restructured after a recent merger to learn faster and to innovate in changing business environments.

To do so, we interviewed practitioners and thought leaders on innovation, including W. Brian Arthur, the founding head of the Economics Program at the Santa Fe Institute. He is best known for his pathbreaking contributions to understanding high-tech markets. As Joseph and I walked up to the Xerox PARC building in Palo Alto, California, I couldn't help but think about all the revolutions that had begun in this very spot. Since the 1970s the original Xerox PARC team has been considered one of the most productive research and development teams of all time. It invented the Macintosh-type interface found on almost every computer on Earth; it also invented the mouse, as well as numerous core ideas and technologies used by many successful companies today, including Apple Inc. and Adobe Systems. The irony is that Xerox itself did not capitalize on all those inventions and breakthrough ideas. Instead, they were developed by people like Steve Jobs and others at Apple and Adobe (and elsewhere) who were not distracted by running a copy machine company.

When Arthur met us, we immediately started talking about the changing economic foundations of today's business world. "you know," Arthur said, "the real power comes from recognizing patterns that are forming and fitting with them." He went on to discuss two different levels of cognition. "Most tend to be the standard cognitive kind that you can work with in your conscious mind. But there is a deeper level. Instead of an understanding, I would call this deeper level a 'knowing.'"

"Suppose," he said, "that I was parachuted into some situation in Silicon Valley — not a real problem, just a complicated, dynamic situation that I'm trying to figure out. I would observe and observe and observe and then simply retreat. If I were lucky, I would be able to get in touch with some deep inner place and allow knowing to emerge." He continued, "you wait and wait and let your experience well up into something appropriate. In a sense, there is no decision making. What to do becomes obvious. You can't rush it. Much of it depends on where you're coming from and who you are as a person. This has a lot of implications for management. I am basically saying that what counts is where you're coming from inside yourself."

What we heard that day resonated deeply with what we had heard from other leading practitioners we had worked with in many sectors and industries. Leaders need to deal with their blind spot and shift the inner place from which they operate.

Arthur asked us to imagine what would happen if Apple Inc., for instance, decided to hire a CEO from, say Pepsi-Cola? That leader would bring one sort of cognition: cost down, quality up, whatever the mantra is. And it wouldn't work. But now imagine a Steve Jobs coming in — someone who can distance himself from the problem and think differently. "When he came back to Apple, the Internet was just beginning. No one knew what that might mean. now look at him: he turned Apple around." Top-notch scientists do the same thing, Arthur continued. "good, but not quite first-rate scientists are able to take existing frameworks and overlay them onto some situation. The first-rate ones just sit back and allow the appropriate structure to form. My observation is that they have no more intelligence than the good scientists do, but they have this other ability and that makes all the difference."

This "other way of knowing" shows up in Chinese and Japanese artists as well. Arthur said, "They'll sit on a ledge with lanterns for a whole week, just looking, and then suddenly they'll say, 'Ooohh' and paint something very quickly."


Excerpted from Theory U by C. OTTO SCHARMER. Copyright © 2016 C. Otto Scharmer. Excerpted by permission of Berrett-Koehler Publishers, Inc..
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

Foreword Peter Senge vii

Acknowledgments xv

Introduction 1

Part I Bumping into Our Blind Spot

Chapter 1 Facing the Fire 23

Chapter 2 The Journey to "U" 27

Chapter 3 Fourfold Learning and Change 49

Chapter 4 Organizational Complexity 59

Chapter 5 Shifts in Society 81

Chapter 6 Philosophical Grounding 105

Chapter 7 On the Threshold 111

Part II Entering the U Field

Chapter 8 Downloading 119

Chapter 9 Seeing 129

Chapter 10 Sensing 143

Chapter 11 Presencing 163

Chapter 12 Crystallizing 191

Chapter 13 Prototyping 203

Chapter 14 Performing 215

Part III Presencing: A Social Technology for Leading Profound Innovation and Change

Chapter 15 The Grammar of the Social Field 231

Chapter 16 Individual Actions 261

Chapter 17 Conversational Actions 271

Chapter 18 Organizational Actions 301

Chapter 19 Global Actions 327

Chapter 20 Catching Social Reality Creation in Flight 355

Chapter 21 Principles and Practices of Presencing for Leading Profound Innovation and Change 377

Epilogue: Birthing a Global Presencing-in-Action University 443

Glossary 463

Notes 471

Bibliography 487

Index 511

About the Author 531

About the Organizations 533

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