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

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

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

A Knowledge-Creating System

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

THE CYCLE OF KNOWLEDGE-CREATION

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

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

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

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

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

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

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

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

THE STOCKS AND FLOWS OF KNOWLEDGE-CREATION

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

Institutionalized Fragmentation

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

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

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

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

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

Technical Rationality: One Root of Fragmentation

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

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

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

THE FRAGMENTATION OF INSTITUTIONS

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

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

Organizing for Learning

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

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

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

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

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

Learning Communities

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

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

Learning Communities in Action

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

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

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

Peter M. Senge, best-selling author of The Fifth Discipline: The Art and Practice of the Learning Organization, is an international leader in the area of creating learning organizations. He is a senior lecturer in the Organizational Learning and Change Group at MIT. Peter has lectured throughout the world and written extensively on systems thinking, institutional learning, and leadership.

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

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

A LEARNING COMMUNITY

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

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These activities perhaps contain more optimism than realism. Learning is, at its heart, a complex and difficult process—a source of joy when it works, but a source of pain and tension when it does not. Learning forces us to fundamentally rethink the way we view the world—a process that is difficult in part because our cultural assumptions predispose us to take certain things for granted, rather than to re-examine them continually. Since learning and culture are so closely interrelated, it is incumbent upon us to understand more about the interaction of the two, and to identify, if possible, what elements of a culture might truly facilitate learning to learn.

Two Kinds of Learning

To understand the important role that organizational culture plays in learning, we need to first make a distinction between two types of learning: “adaptive” and “generative.” (The term “generative learning” comes from Peter Senge. However, the same process has been labeled by Chris Argyris and Donald Schön as “double-loop learning,” while Don Michael, Gregory Bateson, and others have identified it as “learning how to learn.”)

Adaptive learning is usually a fairly straightforward process. We identify a problem or a gap between where we are and where we want to be, and we set about to solve the problem and close the gap. Generative learning, on the other hand, comes into play when we discover that the identification of the problem or gap itself is contingent on learning new ways of perceiving and thinking about our problems (i.e., rethinking cultural assumptions and norms).

For example, from an adaptive point of view, we may decide that we have to replace corporate hierarchies with flat networks in order to reduce costs and increase coordination. From a generative point of view, however, we might instead begin by examining our mental models and considering how hierarchies and networks might be integrated into a more effective corporate design. From “either this or that” thinking, we might have to develop the capacity to think about “this and that.”

Two Kinds of Anxiety

The very process of identifying problems, seeing new possibilities, and changing the routines by which we adapt or cope requires rethinking and redesign, because we have to unlearn some things before new things can be learned. Thus, generative learning, by its very nature, asks us to question our mental models, our personal ways of thinking and acting, and our relationships with each other. This deep level of change can produce two kinds of anxiety.

The first is the fear of something new. Instability or unpredictability is uncomfortable and arouses anxiety— what I have called “Change Anxiety,” or the fear of changing—based on a fear of the unknown. Adaptive learning, whether it be in individuals, groups, or organizations, tends toward stability. We seek to institutionalize those things that work. Indeed, it is the stable routines and habits of thought and perception that we call “culture.” We seek novelty only when most of our surroundings are stable and under control.

However, learning how to learn may require deliberately seeking out unstable, less predictable, and possibly less meaningful situations. It may also require perpetual learning, which opens up the possibility of being continually subject to Change Anxiety. This is a situation most of us would prefer to avoid.

But if, as many people anticipate, the economic, political, technological, and sociocultural global environment will itself become more turbulent and unpredictable, then new problems will constantly emerge and past solutions will constantly become inadequate. This brings us to a second type of anxiety, which I call “Survival Anxiety”—the uncomfortable realization that in order to survive and thrive, we must change.

In order for learning to occur, somehow we must reach a psychological point where the fear of not learning (Survival Anxiety) is greater than the fear associated with entering the unknown and unpredictable (Change Anxiety).

As teachers, coaches, and managers, how then do we make sure that Survival Anxiety is greater than Change Anxiety? One method is to increase Survival Anxiety until the fear of not changing is so great that it overwhelms the fear of changing. We can do this by threatening the learner in various ways, or by providing strong incentives for learning. For example, if employees feel that they will not get promoted in the organization if they don’t use electronic mail or conduct their meetings with the latest groupware, it would seem logical that they would want to keep up with new technology.

However, humans don’t always do what logic dictates. If an employee’s Change Anxiety becomes too high, he or she may instead become defensive, misperceive the situation, deny reality, or rationalize his or her current behavior. Change agents often come up against this type of resistance to organizational change and retreat to the rationalization that “it’s simply human to resist change.”

Perhaps a more effective way to initiate change is to reduce Change Anxiety so that it is less than Survival Anxiety. We can do this by concentrating on making the learner feel more comfortable about the learning process, about trying new things, and about entering the perpetual unknown (see “Reducing Change Anxiety”).

Addressing the anxiety caused by learning and change is certainly a good way to begin the learning process, at least at the individual and small group levels. But how can we apply the generative learning process across various organizational boundaries and sustain the learning process over longer periods of time? This requires the creation of an organizational culture that supports perpetual learning at the individual, group, and organizational levels.

A Learning Culture

What would such a culture look like? Learning cultures share at least even basic elements:

1. A concern for people, which takes the form of an equal concern for all of the company’s stakeholders—customers, employees, suppliers, the community, and stockholders. No one group dominates management’s thinking because it is recognized that any one group can slow down or destroy the organization.
2. A belief that people can and will learn. It takes a certain amount of idealism about human nature to create a learning culture.
3. A shared belief that people have the capacity to change their environment, and that they ultimately make their own fate. If we believe that the world around us cannot be changed, what is the point of learning to learn?
4. Some amount of slack time available for generative learning, and enough diversity in the people, groups, and subcultures to provide creative alternatives. “Lean and mean” is not a good prescription for organizational learning.
5. A shared commitment to open and extensive communication. This does not mean that all channels in a fully connected network must be used all the time, but it does mean that such channels must be available and the organization must have spent time developing a common vocabulary so that communication can occur.
6. A shared commitment to learning to think systemically in terms of multiple forces, events being over-determined, short- and long-term consequences, feedback loops, and other systemic phenomena. Linear cause-and-effect thinking will prevent accurate diagnosis and, therefore, undermine learning.
7. Interdependent coordination and cooperation. As interdependence increases, the need for teamwork increases. Therefore, organizations must share a belief that teams can and will be effective, and that individualistic competition is not the answer to all questions.

Inhibitors to Learning

Culture is about shared mental models—shared ways of perceiving the world, sorting out that information, reacting to it, and ultimately understanding it. Therefore, in order to understand what prevents us from creating learning cultures, we need to explore the shared assumptions that act as inhibitors to learning. If we look at western (particularly U.S.) organizational and managerial cultures, there are several shared assumptions or myths that prevent organizations from developing the kind of learning culture I have described.

Generative learning, by its very nature, asks us to question our mental models, our personal ways of thinking and acting, and our relationships with each other.

Human history has left us with a legacy of patriarchy and hierarchy, and a myth of the “superiority” of our leaders based on the view of the leader as warrior and protector. This has created almost a state of “arrested development” in our organizations, in the sense that we have very limited models of how humans can and should relate to each other in organizational settings. The traditional hierarchical model is virtually the only one we have.

One consequence of this rigid model is that managers start with a self-image of needing to be completely in control—decisive, certain, and dominant. Neither the leader nor the follower wants the leader to be uncertain, to admit to not knowing or not being in control, or to embrace error rather than to defensively deny it. Of course, in reality leaders know that they do not have all of the answers, but few are willing to admit it. And since subordinates demand a public sense of certainty from their leaders, they reinforce this facade. Yet if organizational learning is to occur, leaders themselves must become learners, and in that process, begin to acknowledge their own vulnerability and uncertainty.

In the U.S., we have the additional cultural myth of “rugged individualism” that makes the lone problem-solver the hero. The interdependent, cooperative team player is not typically viewed as a “hero.” In fact, competition between organizational members is viewed as natural and desirable, as a way to identify talent (“the cream will rise to the top”). After all, if teamwork were more natural, would it be such a popular topic in organization development literature? For the most part, teamwork is viewed as a practical necessity, not an intrinsically desirable condition.

Another myth that has developed among managerial circles might be called the “divine rights of managers.” Management is believed to have certain prerogatives and obligations that are intrinsic and are, in a sense, the reward for having worked oneself up into the management ranks. The relatively young and egalitarian social structure of the U.S. exacerbates this problem by emphasizing achievement over formal status. We have no clear class structure that provides people with a clear position in society. Hence, they often rely instead on earned position, title, and visible status symbols (cars, homes, etc.) as a way of displaying rank. The competition based work hierarchy then ultimately becomes the main source of security and status, and higher level managers are expected to act in a more decisive and controlling manner to express that status.

Another barrier to learning is the fact that work roles and tasks are very compartmentalized in the U.S., and are separated from family and self-development concerns. These roles are expected to be treated in an emotionally neutral and objective manner, which makes it very hard to examine the pros and cons of organizational practices that put more emphasis on relationships and feelings. Even talking about anxiety in the workplace is often taboo. This creates an inherent dilemma: how can we effectively address learning-produced anxiety if we cannot discuss it?

Within the work context we have the further problem that task issues are always given primacy over relationship issues. Everyone pays lip service to the notion that people and relationships are important, but our society’s basic assumptions are that the real work of managers lies with quantitative data, money, and bottom lines. Within this framework, people can seem like nothing more than another resource to be “deployed” or “controlled.” If we have any doubts about the reality of this viewpoint, consider how many performance appraisal systems tend to reduce performance to numbers rather than deal with qualitative descriptions of performance and leadership potential.

In reality, leaders know that they do not have all of the answers, but few are willing to admit it. And since subordinates demand a public sense of certainty from their leaders, they reinforce this facade.

The bias toward viewing organizations in quantitative terms shows up most clearly in graduate schools of business, where the popularity of quantitative courses in finance, marketing, and production is much greater than qualitative courses in leadership, group dynamics, or communication. Associated with this myth that management is only about “hard” things is the focus on short time horizons. Driven by our current reporting systems, managers learn early on to pay closer attention to the short-term trends in their financial numbers than to the long-term morale or development of their employees. Creating an environment for learning is a long-range task, yet few managers feel that they have the luxury to plan for people and learning processes.

The combination of this task focus, preference for hard numbers, and short-run orientation all conspire to make systems thinking difficult. Systems are ultimately messy, and they cannot really be understood without taking a longer range point of view, as system dynamics has convincingly demonstrated.

Articulating the Challenge

Creating a learning culture from this set of assumptions is very difficult. It is one thing to specify what it will take for us to become effective learners; it is quite another thing to get there, given these strong cultural inhibitors. But the first and most necessary step is always a frank appraisal of reality. If we understand our cultural biases, we can either set out to overcome them slowly, or, better yet, figure out how to harness them for more effective learning.

But we first must acknowledge the difficulty of our task. Culture is about shared tacit ways of being. Because it operates outside of our awareness, we are often quite ignorant of the degree to which our culture influences us. Therefore, we cannot expect that we can just set about to create whatever culture we want, as if it were the same as creating espoused principles and values. Only shared successes in using a new way of thinking, perceiving, or valuing will create this new approach, and that takes time.

I believe one mechanism by which cultures change is to re-prioritize some of the shared assumptions that conflict with others. For example, as we discover that competition and rugged individualism fail in solving important problems, we will experiment more with other forms of organizing and coordinating. Initially we may do it only because it is pragmatically necessary. But gradually we will discover the power of relationships and teams to complete tasks more effectively and to improve learning. This “proactive pragmatism” will eventually force us to create a learning culture and, in that process, produce new and quite different 21st century organizations.

Edgar H. Schein is Sloan Fellows professor of management emeritus and a senior lecturer at the Sloan School of Management. He chairs the board of the MIT Center for Organizational Learning and is the author of numerous books on organization development.

Editorial support for this article was provided by Colleen Lannon.

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As a process leader or facilitator, how can you use systems thinking as part of an effective group process? The following are some overall considerations that should be addressed.

Engage, Don’t Convince

If learning is the objective, then you want everyone to be thinking hard about the problem at hand. To be engaged, people need to feel that their ideas are being heard, examined, and tested. Whether you are presenting a diagram, or facilitating the development of one, it is important to get everyone engaged in creating a shared understanding of the problem. This approach may generate more debate, but it is much better to finish a meeting with strongly felt, irreconcilable differences in the group than to finish with weak acquiescence to an analysis that no one truly believes.

Presume that every view has merit. Whenever anyone makes a suggestion or offers a fragmentary theory, listen to it, inquire into it, and draw out the assumptions. If necessary, help articulate the conditions under which it would be valid. This will draw out more ideas and create a sense of shared problem-solving.

Pursue differences. Areas of conflict often provide the greatest opportunities for learning. One of the most common sources of disagreement in systems thinking diagrams is fuzzy or changing definitions of variables (see “Clarifying Variables”). Work through these issues to gain clarity about what each variable means, and add variables if needed. This process will ensure that the finished diagram represents the collective understanding of the group.

CLARIFYING VARIABLES

Listen for the frequent mistake of changing the interpretation of a variable in a loop.

Treat Theory as Theory

Every causal loop diagram represents a theory (or model) of the way things work. When we create systems diagrams, we are trying to ensure that our solutions are well grounded in a theory of what caused the problem in the first place. In this way, we reduce the possibility that we will end up with solutions that address only the symptoms of the problem. Because each loop diagram is a theory:

• It is important to know who is advocating the theory. If it’s yours, say so. If it’s unclear, ask. A danger signal comes when no one is willing to take ownership of a particular theory. Some groups believe (or hope) that data will point the way to a theory independent of the personal commitment of any person. This rarely happens. Encourage people to suggest a hypothesis, a mechanism, or theory about how things are happening.
• Every theory should be tested vigorously. Since theories are by definition never complete or universally true, it is important to clarify under what conditions or assumptions the diagram will be valid and helpful (see “Testing Theory”). When a model fails a test, ask, “If that theory doesn’t work, what explanation might work better?”If testing a diagram becomes an issue of right vs. wrong, the discussion can quickly deteriorate into a win-lose situation and learning will suffer. Be careful when presenting your own diagrams—if challenged, it is easy to become defensive and lose the openness which is necessary for real inquiry.
• You can facilitate inquiry by asking, “As you see it, how does X cause Y? What’s your rationale? What is the data? Can you give me an example?” (Or just make sure someone asks questions like these.) Once you have heard the answers, state your point of view (“Well, that doesn’t quite work for me.. ..”), but share your own line of reasoning as well.

Remember that an effective group process brings out several alternatives before closing in on one. Without some guidance, most groups will settle for the first reasonable suggestion without investigating other possibilities.

Be Clear About Process

It is usually helpful for a group to have a “road map” for the process. Make sure that all participants have a clear understanding of the overall systems thinking process—if necessary, post a chart of the systems thinking steps (see “Six Steps to Thinking Systemically,” March 1995). From time to time, make sure the group stops to note where it is situated in the process.

Use the Diagram as a Learning Tool

Groups are often reluctant to add variables and links to their diagram until they’re sure that the line of thinking is sound. But the group may need to see an idea in the diagram in order to respond. To avoid this “chicken-and-egg” situation, encourage the group to use the causal loop diagram to support group thinking, not just to record finished, tested thoughts.

Show every suggestion or idea in the causal loop diagram. If someone says, “Longer hours will cause more turnover:’ then add that to the diagram. If someone responds, “I think the improved spirit will keep turnover low,” show this as well. If the ideas don’t work out, then change the diagram back to its original configuration.

The key to making this technique practical is to use self-adhesive notes (such as Post-Its). Put each variable on its own self-adhesive note, using a size large enough to be visible to the whole group. Arrange the notes to illustrate a chain of cause and effect. If the chain seems accurate, then ink in the arrows between variables. Magnetic vinyl tiles and a white board are another good alternative.

Being a Systems Thinker

Being a systems thinker yourself is perhaps the most important single factor for supporting systems thinking in your group. If people see that you model the behaviors and skills you are trying to encourage, it will provide a powerful example. If they hear you say one thing, but see you do another (not “walking the talk”), it can have a negative impact on the work. The actions and bearing of a single individual can be a strong force in setting the overall tone for an approach, regardless of that individual’s level or position in the organization.

Richard Karash (Boston, MA) is a consultant, facilitator, and trainer in the disciplines of the learning organization.

Editorial support for this article was provided by Colleen P Lannon.

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