Leaders today are torn between worlds: on the one hand they are confronted with a new set of emerging leadership challenges in a 21st-century world of complexity, chaos, and disruptive change; and on the other they find themselves equipped with a 20th-century management toolkit that is inadequate to fix the problems they face. Between these two worlds there yawns a wide chasm that today’s leaders must find a way to bridge.
Theory U addresses this situation by supplying two forms of help: a lens or framework that shines a new light on the current condition of leadership, and a social technology that gives leaders tools to deal with their challenges more effectively, more creatively, and more collectively.
Illuminating the Blind Spot
The premise of Theory U is that the current condition of leadership – that is, operating in the chasm that separates the two worlds – cannot be addressed without illuminating the blind spot of leadership. The blind spot of current leadership thought and practice is the Source level from which leaders and systems operate. We first recognized this when Otto interviewed Bill O’Brien, the late CEO of Hanover Insurance. Summarizing his own leadership learning as a CEO, O’Brien said: “The success of an intervention depends on the interior condition of the intervenor.” Success, according to O’Brien, does not depend on What leaders do, or How they do it. Instead, it depends on the “interior condition,” that is, the Source or the inner place from which leaders operate (see Figure 1).
Figure 1: The Blind Spot of Leadership
When we first heard this idea, we realized that he had touched upon something profound in contemporary leadership research and thought. Usually we are not aware of the source dimension from which effective leadership and social action come into being. It is this source that “Theory U” attempts to explore with a process built on ten years of action research. It’s a tested pathway for learning and leading change in individuals, groups, organizations, and larger systems.
Theory U: The Framework
The premise of Theory U is r = f(ai). The reality (r) that a system of players enacts is a function of the awareness (a) that these players operate from. The enacted results of a system follow the state of awareness from which the players operate. Theory U is a social field theory that differentiates between four different states of awareness (“field structures of attention”) that individuals, groups, institutions, or larger systems can operate from. They are “I-in-me” (ego-system awareness), “I-in-it” (object-system awareness), “I-in-you” (relational system awareness), and “I-in-now” (eco-system awareness) (see Figure 2).
Fig. 2: Systems Leadership Awareness Matrix: Four Fields of Awareness; Four System Levels (Micro, Meso, Macro, Mundo)
Columns 1-4 of Figure 2 identify four primary processes that players in complex social systems use to bring forth social reality: attending, conversing, organizing, and coordinating. Each of these four primary processes evolves through four stages (deep structures) of development. These stages follow the four states of human awareness and attention discussed above:
- The stages and states of attention are exemplified by the four types of listening. Listening 1 means to attend to what you already know (downloading); listening 2 means to recognize some new external facts (factual); listening 3 means to see a situation through the eyes of another (empathic). Finally, listening 4 means to sense the highest future potential of another person or a situation (generative). Each of these types of listening results in a different outcome and conversational pathway. In short: depending on the state of awareness that I operate from as a listener, the conversation will take a different course. “I attend this way, therefore it emerges that way.”
- The stages and states of conversation changes from “talking nice” and conforming (Field 1: downloading), to “talking tough” and confronting (Field 2: debate), to reflective inquiry, i.e., seeing your self as part of the larger whole (Field 3: dialogue), to collective creativity and flow (Field 4: presencing). Through conversation, we as human beings create our shared reality. The different field states of conversation determine the possible pathways of how teams and organizations can collaborate and think together. The quality of collaboration and thinking together depends on the interior condition from which we operate when enacting conversational fields.
- The institutional forms of social reality creation also evolve according to the field states of awareness outlined above. They give rise to the evolution of four different geometries of power (centralized; decentralized; networked; eco-system) and four mechanisms for coordinating complex systems (hierarchy and regulation; markets and competition; dialogue and negotiation; awareness-based collective action) (columns 3, 4).
The problem with our current approaches to leadership and systems change is that we try to solve level 4 problems by responding with level 1-3 mechanisms. But, as Albert Einstein once famously noted, problems cannot be solved by the same level of consciousness that created them. That is the essence of the great leadership challenge today: Leaders face level 4 challenges but find themselves equipped and surrounded with level 1-3 toolkits, mindsets, and institutional designs.
Levels of Change
Consider the example of managing change. Figure 3 depicts four types or levels of responding to change: reacting, redesigning, reframing, regenerating. People’s most common response to change, particularly to a crisis, is to react (level 1). When leaders react, they usually rely on established habits and routines. The next level we call redesigning. At this stage the leader moves beyond reacting to consider changing underlying structures and processes (level 2). Level 3, reframing, refers to changing underlying assumptions or patterns of thought.
Most change initiatives in organizations and institutions spend the bulk of their time and energy on levels 1 and 2. Although at times this type of reaction is perfectly appropriate, at other times it is not. According to some studies, approximately 70% of business reengineering projects during the 1990s failed. Why? Because those doing the reengineering usually operate only at the first two levels. The people involved do not deeply rethink or “reframe” the problem, do not change the inner place from which the respective players operate.
Figure 3: Four Levels of Responding to Change
In the field of organizational learning, the main focus is on addressing not only the first two levels but also the third level: rethinking and reframing one’s fundamental assumptions. The Harvard and MIT researchers Chris Argyris and Donald Schön use the terms “single-loop learning” and “double-loop learning” to refer to levels 2 and 3. Single-loop learning means that we reflect on our own actions. Double-loop learning goes one step further to include reflection on the learning process itself and on our deep, taken-for-granted assumptions.
Until now, organizational learning has been concerned primarily with how to build, nurture, and sustain the learning process based on past experiences. There are many fine examples, research, and books that demonstrate how to put this learning cycle into practice.
However, many leadership teams are now wrestling with challenges they’ve never faced before. Institutions across all sectors of society are struggling to succeed in an unprecedentedly turbulent, complex, and rapidly changing world. They realize that simply reflecting on what has happened in the past will not be enough to help them figure out what to do next. By watching leadership teams analyze and address these challenges, we began to recognize a fourth level of learning and knowing: learning from the future as it emerges. This level of knowledge deals with the sources of identity, energy, and common will.
Not every challenge or issue requires change processes on all levels, but the more complex the challenge, the more necessary it becomes to address change with more sophisticated and complex thought.
Existing change management toolkits contain many tools for managing change on levels 1-3, but we know very little about how to access the deeper sources of individual and common will at level 4.
The Road Less Traveled
How do we connect to the emerging future? How do we sense and actualize a future possibility that is waiting for us to bring it into the world? How do leaders lead on level 4?
Most people relate to the future by reflecting on the trends of the past. The future, from this view, is an extension of the past. Its an empty barrel that you fill with a modified version of the past. In contrast, we have learned from our studies of 150 leaders, innovators, and creative people that they relate to the emerging future at a deeper level. They see the emerging future as an advent, a coming-into-being of something profoundly new. To connect with such a field of emerging future opportunity we have to open up and tune our capacities of intuitive and inspirational knowing.
We call this deeper learning from the emerging future presencing. Presencing blends the two words presence, the now, and sensing, the capacity to detect what is to come, to sense with your heart. Presencing means to sense and actualize emerging future possibilities.
Figure 4 summarizes the process of accessing this deeper source of creativity and knowing. We call this process the U Process because it follows three basic movements in the shape of a U: from seeing and sensing (“observe, observe, observe”), to connecting to the deeper source of knowing (“stillness”), to bringing the new into reality (“acting in an instant”).
Figure 4: Three Instruments: Open Mind, Open Heart, Open Will
In conclusion, we can sum up the Theory U concept with the following seven propositions:
(1) The essence of 21st-century leadership is about shifting the fields of collective awareness and intention. The leader’s work in our age is to shift the fields of attention from ego-system awareness to eco-system awareness. “We attend this way, therefore it emerges that way.”
(2) That leadership process requires three movements: (1) establishing the horizontal connection (“observe, observe, observe”), (2) establishing the vertical connection (“connecting to Source”), and (3) acting from what emerges in the Now (“acting in an instant”).
(3) To establish this deep innovation process in institutions, leaders need a new social technology that allows them to tune three instruments: the Open Mind (IQ), the Open Heart (EQ or emotional intelligence), and the Open Will (SQ or spiritual intelligence).
(4) The most important tool in that leadership technology is the emerging Self – the leader’s highest future possibility. Theory U is based on the assumption that each human being and each human community is not one but two: one is the current self, the person that exists as the result of a past journey; the other is the Self, the self that we could become as the result of our future journey. Presencing is the process of the (current) self and the (emerging) Self listening to each other.
(5) The deeper levels of the U process are well known to many experienced innovators and leaders. They say, “Sure. I know this way of operating from my own peak performance experiences. I know it from people whom I consider highly creative.” But then, when asked if that’s how things happen in their own institutions, they roll their eyes and say, “No, hell, it’s different. We’re not operating at peak performance at all.” So why is that? Why is the U process of presencing the road less traveled in institutions? Because the moment you commit yourself to going on this journey, you meet three enemies, or three sources of resistance: the Voice of Judgment, the Voice of Cynicism, and the Voice of Fear, each of which blocks the entry to one of the three instruments that are required to access the bottom of the U (Open Mind, Heart, and Will).
(6) On the right-hand side of the U, the process of prototyping is slowed down by three dysfunctional (but common) patterns of behavior: thought without action (“analysis paralysis”), action without thought (a lack of learning), and confusing talk (“blah-blah-blah”).
(7) The massive leadership challenges of our time require leaders and institutions to extend their vocabulary from level 1 and 2 responses to level 3 and 4 responses—i.e., to transform their institutions from ego-system awareness to eco-system awareness. On levels 1 and 2, people, teams, organizations, and systems are completely separate from one another (transactional relationships). On levels 3 and 4, these boundaries of separation collapse and begin to form a single field of cross-institutional awareness, learning, and leadership (transformational relationships).
Dr. C. Otto Scharmer is a Senior Lecturer at MIT, the founding chair of the Presencing Institute. He has co-designed and delivered award-winning business leadership programs for client firms including Daimler, PricewaterhouseCoopers, Fujitsu, and Google.
Dr. Katrin Kaeufer leads the research effort at the Presencing Institute. Her current work includes research on social transformation, distributed leadership, and social technologies.
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