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

—Colleen P. Lannon

Peter Senge—Creating Transformational Knowledge

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

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

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

Fragmentation

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

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

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

AutoCo: Learning Community in Action

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

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

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

Core Activities

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

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

Creating Learning Communities

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

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

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

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

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

—Edited by Joy Sobeck

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

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

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

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

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

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

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

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

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

Organizational Structures

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

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

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

Moving Toward Resolution

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

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

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

—Edited by Joy Sobeck

Margaret Wheatley—Understanding Organizations as Living Systems

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

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

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

Organizational Identity

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

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

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

The Autonomy of Living Systems

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

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Despite this paradox, Margaret Wheatley, author, teacher, and radical thinker, has pursued the path of storytelling for more than three decades. In her most recent book, Finding Our Way: Leadership for an Uncertain Time (Berrett-Koehler, 2005), she richly articulates how the insights of modern science—as well as those from primal wisdom traditions, indigenous tribes, spiritual thought, and poets old and new—can usher in a new era of human and planetary health.

According to Wheatley, these insights are forcing us to question, and hopefully discard, a 300-year-old worldview that still dominates Western culture today. This outdated story emerged during the Industrial Age, when scientific discoveries gave rise to the idea that humankind could gain mastery over physical matter. Soon, the image of the universe as a grand, clocklike machine took hold, as well as the belief that we could engineer human beings, organizations, and life itself to perform however we directed them to.

Over time, the machine image has had a pernicious effect on how we think of ourselves and others. Wheatley explains, “When we conceived of ourselves as machines, we gave up most of what is essential to being human. We created ourselves devoid of spirit, will, passion, compassion, emotions, even intelligence….The imagery is so foreign to what we know and feel to be true about ourselves that it seems strange that we ever adopted this as an accurate description of being human. But we did, and we do.” One consequence of this imagery is that it has led us to believe that our “unpredictable behaviors, our passions, our independence, our creativity, our consciousness . . . are the problem rather than the blessing.”

The mechanistic story not only ignores the deep realities of human existence, says Wheatley, but makes exhausting demands on leaders. If people have no internal capacity for self-creation, self-organization, or self-correction, then leaders must constantly motivate, inspire, and organize them. In short, leaders are responsible for everything.

A New Story

The new story takes the burden off of leaders to run our organizations and puts it back where it belongs—on each of us. It offers a worldview in which creative self-expression and the embracing of systems of relationships are the organizing energies. It looks at humans and the organizations in which they work as living systems— with the capacity to move toward greater complexity and order as needed. And it offers the radical perspective that organization is a process, not a structure.

Explains Wheatley: “Self-organizing systems have what all leaders crave: the capacity to respond continuously to change. In these systems, change is the organizing force, not a problematic intrusion. Structures and solutions are temporary. Resources and people come together to create new initiatives, to respond to new regulations, to shift the organization’s processes. Leaders emerge from the needs of the moment. There are far fewer levels of management. Experimentation is the norm. Local solutions predominate but are kept local, not elevated to models for the whole organization. Involvement and participation constantly deepen. These organizations are experts at the process of change.”

Where can we find models of self-organizing systems? The author points to what happens when disaster strikes. Without planning, people and resources come together in coordinated, purposeful activity; leaders appear based on who is available and who has information; and everything happens quickly and efficiently. The World Wide Web is another example of a self-organizing network that forms around interests, the availability of information, and limitless access to other people. The tower-building termites of Africa and Australia offer a third example. They construct the largest, most intricate structures on earth proportionate to the size of the builders. Their engineering process is simple: They wander aimlessly, bump into each other, and react. By observing what others are doing and coordinating their own activities based on that information, these insects manage to make their arches meet in the middle.

The Role of Leaders

If blueprints and engineers aren’t necessary, what is the role of leaders in the living systems story? It is, Wheatley says, to foster the conditions that support self-organization. To meet that challenge, leaders first need to shift their thinking in three key areas:

Believe in the Goodness of People. Most leaders assume that employees work primarily for a self-serving reason: to make money. In reality, many people strongly desire to contribute to something beyond themselves that benefits others. Leaders who use participative, self-organizing approaches, in which they clearly communicate the organization’s purpose and real values, are amazed by the capacity, energy, creativity, and commitment of their employees to contribute to the enterprise.

Focus on Coherence, not Control. Typically, when an innovative solution emerges in one area, senior management rolls it out to the entire organization. But replication actually destroys local initiative because it denies everyone else’s creativity. Rather, leaders should share these success stories in order to spark people’s imagination and give them insight into what their own areas need. Eventually, tinkering on the local level will result in systemwide coherence.

Support Self-Organizing Responses. People don’t need intricate directions, timelines, plans, and organizational charts; they need information, access to one another, trust, and follow-through. Leaders can help by providing resources, creating connections across the organization, and fostering experimentation. They may not be able to direct employees into excellence, but leaders can engage them enough so that they want to do excellent work.

Part of the reason our organizations are troubled today, Wheatley explains, is that we’ve forgotten what people are capable of. For too long, we’ve forced workers into “roles and job descriptions,” telling them how to behave rather than allowing their creative, contributive, compassionate selves to emerge naturally. This type of reengineering brings out our worst nature and causes both employees and managers to suffer. By valuing human relationships, leaders can go a long way toward creating enduring organizations.

Tapping into Creativity

Another negative effect of the command-and-control mentality is that managers fail to appreciate employees’ personal initiative. People often complain that workers don’t follow instructions, no matter how clearly they’re given. Instead, they revise or tweak them in some way. Wheatley offers an interpretation of what’s going on. This seemingly resistant behavior actually reflects a principle of living systems: that each of us has “the unalienable freedom to create one’s life.” Simply put, people need to be involved in how they get work done, and they will somehow find a way to put their unique signature on any situation.

This freedom to create also reveals itself in what we notice. “We choose what disturbs us,” Wheatley says., “It’s not the volume or even the frequency of the message that gets our attention. If it’s meaningful to us, we notice it.” In other words, we become engaged when we find shared significance with someone or something. Leaders who want to leverage employees’ creative freedom focus on discovering what’s meaningful to them, not deciding meaning for them. They listen for diversity rather than expect agreement. They invite people to rethink, redesign, and restructure the organization. They stay alert to the change process, what they’re learning, and how their efforts are unfolding and emerging (see “Key Questions to Keep Asking”).

When leaders fail to invest in relationships with their employees, it often reflects their desire to maintain organizational flexibility—that is, the ability to let people go when times get hard. Wheatley condemns this behavior. She says, “There is only one prediction about the future that I feel confident to make. During this period of random and unpredictable change, any organization that distances itself from its employees and refuses to cultivate meaningful relationships with them is destined to fail. Those organizations who will succeed are those that evoke our greatest human capacities—our need to be in good relationships and our desire to contribute to something beyond ourselves.”

Enduring Organizations

Generous and inspiring, Finding Our Way covers so much ground that it can spark any reader’s interest. Building in ways similar to how living systems behave, the book’s essays are filled with profound wisdom and simple advice. From offering new approaches for facilitating knowledge management and supporting pioneering leaders to providing personal tips for starting the day off peacefully, Wheatley reaffirms her dedication to helping leaders fulfill what she believes is their real desire to create enduring organizations.

Using clear and abundant examples, she demonstrates how the timeless principles of developing trust, sharing information, engaging people’s creativity, and investing in relationships can serve as guideposts for finding our way in today’s uncertain times. As we implement these principles, the new story will take root and ignite an explosion of much-needed change.

Kali Saposnick is publications editor at Pegasus Communications.

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In her earlier writings, Wheatley deepened her readers’ understanding of how systems behave. The world is inherently orderly, she has said, as she invited us to live simply as partners within its playful dance. In this book, she goes a step further—she exhorts us to collectively birth the future.

Conversational Practices

The book is organized in three parts. The first part sets out the power, the courage, and the practices of conversation. Wheatley has been hosting dialogues of various kinds for a decade. But her appreciation of the potential of conversation has been deepened by two approaches that generate deep insights, a strong sense of community, and innovative possibilities for action. From Christina Baldwin, Wheatley gained a deeper understanding of circle and council practices for evoking compassionate listening and authentic conversation. From Juanita Brown and David Isaacs, she has incorporated the World Café, an exciting way to focus on “conversations that matter and questions that travel well.” This approach links small-group conversations in a way that causes knowledge to grow and the collective wisdom of the group to become visible to participants. Based on learnings from these and other sources, Wheatley founded The Four Directions, a global initiative that links local circles of leaders in a worldwide network on behalf of life affirming futures.

The brief second portion of the book is devoted to simple yet captivating sketches by Vivienne Flesher, coupled with pithy hand-scripted statements such as “It’s not differences that divide us. It’s our judgments about each other that do.” These statements or questions, often accompanied by a thought-provoking quotation, lend an “open-journal” feel to the book. Some readers may be prompted to add their own thoughts to these pages, making it an even more personal document.

Profound Challenges

It is the third part of the book that most people will find particularly useful. The author calls this last and longest section “Conversation Starters.” Each of the 10 “chapters” provides the framework for a conversation that readers themselves might host. With stories, quotations, and poetry interspersed throughout, Wheatley has lovingly compiled a set of resources that compel readers to thoughtful action on profound challenges.

For instance, she asks, “When have I experienced working for the common good?” and prompts conversation groups to dig deep inside to answer such questions as “How many times were you surprised by someone’s ingenuity, or your own?” She concludes this topic by reminding us that “if we raised our expectations, then it wouldn’t take a crisis for us to experience the satisfaction of working together, the joy of doing work that serves other human beings. And then we would discover, as the Chinese author of the Tao te Ching wrote 2,500 years ago, that ‘the good becomes common as grass.’”

This is an inspirational book at its core. It frees us to be our better selves. It’s all about service and community, and caring and unselfish behaviors. Because of its early 2002 publishing date, Wheatley must have written much of the material prior to the September 11 attacks, yet each page pulses with thoughts readers will find even more provocative since that dreadful day. One page features a World Trade Center survivor’s words: “We didn’t save ourselves. We tried to save each other.” Life is, indeed, too short to be selfish.

Wheatley also shares with us her experiences of the sacred, which is nothing special, she says—just all of life. She ends with an Aztec story about a forest fire, an owl, and a small Quetzal bird who attempts to put out the fire with tiny droplets from its beak. The owl questions this behavior, pointing out the futility of it all, but the tiny bird says, “I’m doing the best I can with what I have.”

That is, after all, the best any of us might do. Conversation, Wheatley says, requires that we extend ourselves to others, curious about what their stories might hold. For in the telling, the teller and the listener each becomes more fully human. And finally, she exhorts us, to trust that meaningful conversations can change our world.

Karen Speerstra (kspeerstra@aol.com) is a coach, writer, and editor based in central Vermont. During her 20-year career in professional and college text publishing, she was publishing director at Butterworth-Heinemann and founded a line of business books focusing on knowledge management, visionary leadership, change management, HR, and organizational development.

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