The Blind Spot of Leadership: How to Create Deep Innovation Through Moving

from Egosystem to Ecosystem Awareness

Oct 23, 2010, SVN Fall Conference

Otto ScharmerMIT

Presencing Institutewww.presencing.com

“I think there are good reasons for suggesting that the modern age has ended. Today, many things indicate that we are going through a transitional period, when it seems that something is on the way out and something else is painfully being born. It is as if something were crumbling, decaying, and exhausting itself – while something else, still indistinct, were rising from the rubble.”

Vaclav Havel

2.0: ego-system awareness

Hierarchy Traditional Villeinage Tradition-

bound Tradition-

bound Autocratic Low

1.0: habitual awareness

Markets Commodity Commodity Commodity Commodity MBO Informed

Negotiation/ dialogue

Regulatedcommodity

Regulated commodity

Money as regulated

commodity

Regulated IPR

Participative Conscious consuming,

investing

3.0: stakeholder awareness

7 Acupuncture Points: Infrastructure innovations for 4.0

Leadership for innovating at the scale of the whole

system

©2009 Otto Scharmer

Civic infra-

structures for empowering consumers + deepening democracy

Governance

4.0

Relinking economic

w. ecological cycles (closed loop design; prop. Rights

for commons)

Relinking

economy with basic needs (economic

human rights)

Relinking

financial with real economy

Collective

Knowledge and

Technology creation

infrastructures

Fields ofAwareness

4.0: eco-system awareness

ABC (Awareness

Based Collective Action)

Commons-based

property rights; natural capital

Human rights, human capital

Intentional, dedicated

capital

Open source

Co-creative Co-creative consuming,

investing

Coordina-tion Nature Labor Capital Technology Leadership

Consumer Awareness

Field 1.0Habitual awareness Field 2.0 ego-system awarenessField 3.0 Stakeholder awareness

Field 4.0 Eco-system awareness

7 Acupuncture Points: Infrastructure innovations for 4.0

Financial Security

LeadershipCivilization

Spiritual

CRISIS:

Health Poverty

ClimateEnergy

FoodWater

Education

Four Levels of Responding to Change

1. Reacting: quick fixes

3. Reframing: values, beliefs

2. Redesigning: policies

4. Regenerating: sources of creativity and self

Source of energy, inspiration and will

Manifest action

Thinking

Process, structure

Two Sources of Learning, Two Learning Cycles

A. Learning by reflecting on the experiences of the past

act - observe - reflect - plan - act

B. Learning from the future as it emerges (presencing)

On the Core Process of Profound Innovation

Brian Arthur, Santa Fe Institute

3 Movements of the U

Downloading

Observe,observe,observe

Retreat and reflect:Allow the inner knowing to

emerge

Act in an Instant:

prototype

“The success of an intervention depends on the

interior condition of the intervenor.”

William O’Brien,former CEO of the Hanover Insurance Company

The Blind Spot of Leadership

Source:Who

Blind Spot: Inner place from which we operate

Process:How

Results:What

Levels of Listening

disconfirming [new] data

LISTENING 2: from outside

Factual listening noticing differences

seeing through another person‘s eyesemotional connection

LISTENING 3:

from within

Empathic listening

reconfirming old opinions & judgments

Downloadinghabits of judgment

LISTENING 1:

from habits

connecting to an emerging future whole; shift in identity and self

LISTENING 4: from Source

Generative listening(from the future wanting to emerge)

Open Will

Open Heart

Open Mind

Theory U

Seeingwith fresh eyes

Sensing from the field

Prototyping the new by linking head, heart, hand

Crystallizing vision and intention

Presencing connecting to Source

Downloadingpast patterns

Who is my Self? What is my Work?

Performing by operating from the whole

VoF

VoC

VoJ

suspending

redirecting

letting go

embodying

enacting

letting comeOpen Will

Open Heart

Open Mind

I-in-me1.0: habitual

awareness

I-in-it2.0: ego-system

awareness

I-in-you3.0: stakeholder

awareness

I-in-now4.0: eco-system

awareness

Field:Structure

of Attention

Mundo:COORDINATING(global systems)

Listening 1:Downloading habits of thought

Listening 3:Empathic listening

Listening 4:Generative listening

Downloading:Talking nice, politeness,rule-reenacting

Centralized:Machine bureaucracy

Listening 2:Factual, object-focused

Debate:Talking tough,rule-revealing

Decentralized:Divisionalized

Dialogue:Inquiry,rule-reflecting

Networked:Relational

Negotiation +Dialogue:Mutual adjustment

Collective Creativity:Presencing, flow,rule-generating

Eco-system:Context, field-based

Awareness-Based Collective Action (ABC): Acting from the whole

Macro:ORGANIZING(institutions)

Meso:CONVERSING(group)

Micro:ATTENDING(individual)

Hierarchy:Central plan, regulation

Market:Competition

Theory U

Seeingwith fresh eyes

Sensing from the field

Prototyping the new by linking head, heart, hand

Crystallizing vision and intention

Presencing connecting to Source

Downloadingpast patterns

Who is my Self? What is my Work?

Performing by operating from the whole

VoF

VoC

VoJ

suspending

redirecting

letting go

embodying

enacting

letting comeOpen Will

Open Heart

Open Mind

2. Co-sensing: observe, observe, observe

connect with divers people and places to sense the system from the whole

4. Co-creating: prototype the new in living examples to explore

the future by doing

3. Co-inspiring: connect to the source of inspiration and will

go to the place of silence and allow the inner knowing to emerge

U-Process: 1 Process, 5 Movements

1. Co-initiating: uncover common intent

stop and listen to others and to what life calls you to do

5. Co-evolving: institutionalize the new in practices by linking micro, meso, macro change

Theory UFields of Awareness

Ego-system: Markets + Competition

Habitual: Hierarchy

Stakeholder: Networks + Negotiation

© 2010 Otto Scharmer

Eco-system: Collective Awareness-based Action

Sectors of the Current Institutional Transformation

Mono sector Dominating state

Traditional value-based

banking

Centralized: hierarchy-

driven

Centralized, advocacy

Medieval university

(unity of teaching)

Two sector

Dormant State

Externality blind markets

for money, capital

Decentralized, market driven

Decentralized, advocacy

Driven

Classic university

(unity of research + teaching)

Tri-sector

Welfare state

Partly externality

aware markets for money,

capital

Network: stakeholder

driven

Networked, multi-

stakeholder-driven

Modern university

(unity of research, teaching + practice)

Tri-sector-eco-

systemDialogic state

Fully externality

aware markets for banking,

capital

Ecosystem-awareness

driven

Cross-sector innovation-

driven

21st-century university

(unity of research, teaching, practice + social renewal)

Economy/ Society

Government/ State

Capital/ Banks

Companies NGOs Universities

Resources and Literature

Scharmer, C. Otto (2007). Theory U: Leading from the Emerging Future As It Emerges. The Social Technology of Presencing, Cambridge, MA: SoL Press.

Senge, P., C. O. Scharmer, J. Jaworski, and B. S. Flowers. (2004). Presence: Human Purpose and the Field of the Future, Cambridge, MA: SoL Press.

www.presencing.comwww.synergos.org www.sustainablefoodlab.orgwww.ottoscharmer.com