The Fifth Discipline
Also by Peter Senge
The Triple Focus
The Necessary Revolution Presence
Schools That Learn
The Dance of Change
The Fifth Discipline Fieldbook
The art and practice of the learning organisation
Second edition
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First published in the UK by Century Business 1992
This edition published by Random House Business Books 2006
Published by Cornerstone Press 2025 001
Copyright © Peter M. Senge 1990, 2006 Foreword copyright © Amy Edmondson, 2025
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To Diane
CONTE NTS
PA R T I
PART I
PA R T II
PART II
PA R T III
PART III
F O R E W O R D T O T H E
3 5 T H A N N I V E R S A R Y
E D I T I ON
When I first read The Fifth Discipline in 1990, as a young consultant and former engineer, I was captivated. A few years previously, I had worked for the inventor, architect, and futurist Buckminster Fuller on geodesic domes—the very strong and often very large structures, made up of hundreds of triangles, for which he was famous. The experience left me with an intense and enduring interest in systems thinking. Fuller was fascinated by the way the relationships between different parts of a system explained its behavior more fully than the most careful investigation of the parts separately. That was true of his domes, which exhibited enormous strength despite their fragile appearance because of the way stress is distributed across the struts. It was also true of molecules, organizations, even societies.
Systems thinking was—and sadly still is—in short supply. But as a consultant, I saw its principles unfolding in companies firsthand. All too often, decisions made in one part of a company (say, announcing a marketing promotion) adversely affected another part (such as by creating a backlog in manufacturing).
But until I read The Fifth Discipline, I had lacked the language and tools to practice systems thinking rigorously. Peter’s book offered me that language. It is one of those rare books that is both intellectually provocative and deeply readable, demonstrating how organizations operate as systems in much the same way as Fuller’s domes. And it did so by conveying complex, research-backed ideas in an accessible, engaging way.
In particular, Peter’s book encouraged me to think more broadly about learning—not as something that happens only in classrooms or training programs, but as something that lives in the daily interactions between people at work. I was especially struck by his idea that the fundamental unit of learning in organizations is the team. That insight would later inspire my own research, helping to establish team learning as a vital field within management studies. In my work, I came to explore the conditions that make team learning possible—in particular, stumbling into the concept of psychological safety, a climate in which people feel safe to speak up, take risks, and admit mistakes. In the absence of psychological safety, people hold back, failing to ask questions or challenge assumptions. They don’t reveal when they are unsure or need help. And without that openness, it is difficult—if not impossible—to build a truly successful organization. If I hadn’t encountered Peter’s book, my research on team learning and psychological safety might have taken a different turn.
I was not the only one influenced by Peter’s work. His seminal writing has profoundly altered management thinking and practice, inspiring countless individuals to see organizations in a radically different light. Before this book, corporate management was preoccupied with efficiency, competition, and control. Peter offered a transformative vision: that organizations can instead become places where people continually expand their capacity to create results together, where new and expansive patterns of thinking are nurtured, and where collective aspiration is channeled into meaningful accomplishment. He called these places “learning organizations,” and in doing so, launched a movement that continues to unfold.
At the heart of Peter’s approach is his commitment to viewing organizations as complex systems. His systems perspective profoundly shaped how I came to view leadership—not as directing action from above, but as cultivating the conditions where learning and innovation can thrive. And vitally, Peter understood that this learning is a social, collective process. It happens through relationships and over time. It is shaped by the systems in which we operate—and in turn, it reshapes those systems.
Long before psychological safety was a common term, Peter was writing about the importance of dialogue, about surfacing and testing assumptions, about engaging with one another not just to inform, but to learn and grow as people.
Above all, this book brings a transformative insight: a key part of organizational ineffectiveness is our own thinking. Peter placed a great emphasis on mental models—the deeply ingrained beliefs and assumptions that shape how we see the world. He realized that only by transforming our thinking can we create learning organizations. In the pages ahead, you will discover ways to make these invisible mental models visible—to hold up long-standing cultural norms for reflection, and thereby to shift them.
Thirty-five years since its publication, The Fifth Discipline feels not just relevant, but prescient—even urgent. The challenges we face today— geopolitical crises, climate instability, technological disruption, and unprecedented interdependence across sectors and nations—demand new ways of thinking and acting. In 1990, the internet was still in its infancy, and smartphones, large language models, and other drivers of today’s complexity were yet to emerge. In the years since, the disciplines Senge described—systems thinking, shared vision, team learning, personal mastery, and the ability to examine and shift our mental models—have moved from being merely helpful to essential.
But the most enduring gift of this book is that it offers not just ideas, but a way of being that invites humility, reflection, and action. Peter showed the fallacy of the quick fix and offered instead a framework for change rooted in rigorous thinking and deep respect for human potential. That framework has had a profound impact across sectors. I’ve seen schools use systems thinking to redesign curricula and governance. I’ve spoken with leaders in healthcare who have used Senge’s disciplines to reduce harm and improve care through team-based problem solving. I’ve witnessed organizations shifting from reactive crisis management to systems-oriented strategy grounded in shared vision.
Of course, not every attempt to build a learning organization has succeeded. The work is hard. It asks leaders to give up control and invite challenge. It asks teams to stay in discomfort long enough to see the system, not just attack the symptoms. It asks all of us to be learners, not just experts. But when it works, the results can be transformative—not only for performance, but for the people and communities involved. Today’s most successful organizations are those that foster continuous learning, empower people at all levels, and accept that complexity is here to stay.
For those encountering this book for the first time: you are in for an adventure. Do not expect a quick or easy read, but do expect a worthwhile and rewarding one. Peter Senge will stretch your thinking. He invites you to see the world—and your organization—as a living, dynamic system. He challenges you to reflect on your own role in sustaining (or changing) the patterns around you. And he offers you a vision of work that is not just more effective but more fulfilling and meaningful.
To Peter: thank you—for your wisdom, your clarity, and your unwavering belief in our capacity to learn together.
To the reader: welcome. May this book do what it has done for so many—spark insight, ignite curiosity, and plant the seeds of transformation.
Amy C. Edmondson
Novartis Professor of Leadership and Management
Harvard Business School 2025
INTR ODUCTION TO THE R EVIS ED EDITIO N
THE PREV AILING SY STEM OF MAN A GEMENT
In the spring of 1990, shortly after the writing and e di ting of the original edition of The Fifth Di scipline wa s co mpleted and publication was immine nt, my editor at Doubleday asked me who I wanted to write a comment for the book jacket. As a first time author, I had never considered this. After t hinking for a while I realiz ed that there wa s no on e I would rat h er have write so methi ng than Dr. W. Edwards De ming, reve re d around the world as a pioneer in the qualit y management revo lution. I knew of no one who had had a greater impact on management practice. Bu t I had neve r me t De ming. I doubted that a letter with such a request from an unknown author, re f erring to work with which Deming was unfamiliar, wo u ld get a favo rabl e response. Fortunately, through mu t ual friends at Ford, a copy of the manuscript did reach him. A few we ek s later, to my surprise, a letter arrive d at my ho me.
Wh e n I opened it I found a short parag rap h wr itten by Dr, De ming. Reading the first sentence, I sto pped to catch my breath. Somehow he had said in a se nt ence what I had struggled to put into fo u r hundred pages pages. It is a ma zing, I thought, how cle ar and direct yo u ca n be when you reach the end of yo u r years (Deming wa s th en almost 90). As I took in the totality of wh at he had written, I slowly sta rted to realiz e he had unve i led a deep er laye r of connections, and a bigger task, than I had prev i ously underst ood:
Our p reva iling system of ma nage ment ha s de stroye d our people. Pe o ple are born with intrinsic motivat ion , self-respect, dignity, curiosity to learn, joy in le arning. The forces of dest ruct ion begin with toddlers—a priz e for the best Ha llowe en co stum e, grades in sc hool, gold stars—and on up through the unive r sity. On the job, people, teams, an d divisions are ranked, reward fo r th e top, punishment for t he bottom. Management by Objective s, quot as, incentive pay, business plans, put together separat e ly, division by divi sion, cause further loss, un known and unknowable
As I subsequently learned, D eming ha d a lmost completely stopped using the ter minology of “Total Quali ty Manage ment,” “TQM” or “TQ” because he believe d it ha d become a superficial label fo r to ols and t echniques. The real work, wh i ch he simply called the “transfor mation of the preva i lin g sys te mo f ma nage ment,” lay beyond the aims of ma nagers seeking only short-ter m pe rfor ma nc e improve m ents. Th is transfor mation, he believe d , required “profo u nd knowledge” largely untapped in contemporary institutions. Only one element of this profound knowledge, “theory of va r iation” (statistical theory and method), was associated with the common understanding of TQ M. Th e oth er three elements, to my am az ement, mapped almost d irectly onto the five disciplines: “understanding a syste m, ”“ theory of knowledge” (the importance of me nta l models), a nd “psychology,”e s pecially “intrinsic motivation” (the importan ce of personal vision and genuine aspirat i on).
Th es e elements of De ming’s “profound knowledge” led eve ntually to the simplest and, today, most widely used way to present the five learning disciplines, a way that wa s no t evident when the original book was c om pleted. The five disciplines represent ap proaches (theories and methods) for deve l oping three core learning capabilities: fostering aspirat i on, deve l oping ref lective conversation, and underst an ding complexity. Bu ilding on an idea from t he original
book, that the fundamental learning units in an organization are wo rking t ea ms (people who need one another to produce an outcome), we came to refer to these as the “core learning capabilities of teams” and sy mbolic ally represented them as a three-legged stool, to visually conve y th e importance of each—the stool would not sta nd i f any of the three we re missing.
CORE LEARNING CAPABILITIES FOR TEAM
Even more importan t for me was De ming’s idea th at a common “syste m of ma nage ment” gove r ned modern institut ions, and in particular for me d a de ep connection between work and school. He wo u ld oft en say, “We will neve r transfor m the preva iling system o f ma nagement without transfor ming our preva iling system of education. They are the same system.” So f ar as I know, his insight into this connection between work and sc hool was original. I believe that De ming c ame to this realization late in his life, in part as a way to make sense of why so few managers seemed abl e to actually impleme nt real Quality Management as he conceive d it . Pe o ple failed, he realiz ed, because t hey had been socializ ed in way s of thinking and ac ting that were embedd ed in their most for mative institut ional experiences. “The relationship between a boss and subordinate is the same as the relationship between a te acher and student,” he said. The teacher sets the aims, the student responds to those aims. Th e tea cher has the answe r, the stu dent works to get the answer Students know when they have succ eeded because the teacher tells them. By the time all children are 10 they know what it takes to get ahead in school and please the teacher —a lesson they carry forward through t heir careers of “pleasing bosses and failing to improve th e system that serves customers.” After Dr. De ming passed away in 19 93, I spent many years thinking and talking with Int ro duction to the R
ASPIRATION
PERSONAL MASTERY
SHARED VISION
REFLECTIVE CONVERSATION
MENTAL MODELS
DIALOGUE
UNDERSTANDING COMPLEXIT Y SYSTEMS THINKING
colleagues ab o ut what constituted this preva iling system of ma nag e me nt a s D eming understood it, eve n tually settling on eight basic elements: 1
• Management by measurement:
- Focusing on short -ter m metrics
- Deva l uing intangibles
(“You can only measure 3 percent of wh at matters” – W.E. Deming)
• Compliance-based cultures
- Getting ahead by pleasing the boss
- Management by fear
• Managing outcomes
- Management sets targets
- P eople ar e held accountabl e fo r meeting ma na geme nt targets (regardless of wh e ther they are possible within ex i sting syste m a nd processes)
• “Right answe r s” vs. “wrong answe r s”
- Technical problem solving is emphasiz ed
- Dive rging (systemic ) p roblems are discounted
• Unifor mity
- Dive r sity is a problem to be solved
- Conf lict is suppressed in favo r of superficia l agreement
• Predictability and controllability
- To manage is to c ontrol
- The “holy trinity of ma nage ment” is planning, organizing, controlling
• Excessive competitive n ess and distrust
- Competition between people is essential to achieve desired perfor ma nc e
- Witho ut competition among people there is no innovat ion (“We’ve been sold down the rive r by co mpetition” – W.E. Deming)
Position and Internal Use
• Loss of the whole
- Frag me ntation
- Local innovat ion s do n ot spread
To d ay, mo st m ana gers probab ly re g ar d the “Quality Management revo lution,” like the organizational learning fad of the early 1990s, as h isto ry, far f rom the frontiers of today’s challe ng es. Bu t is that because we have achieved or abdicated the transfor mation Deming advo c at e d? It is hard for me to contemplate a list like this one and not feel that these maladies still affl i ct most organiz ations today, and that it will take generat i ons, not years, to change such deeply e mbedded beliefs and behaviors. Indeed, perhaps the most obvious question for many of us is: “Will th is system of ma nag e me nt eve r ch ange on a large scale?” Answering deep questions like this about the future requires loo king carefully at the present.
A TIME OF CR OSSCURRENTS
In the decade a nd a half since The Fifth Di scipline wa s fi rst published much has changed in the world. Our economies are more global than eve r; co nsequent ly, so is business. Amo ng businesses competing globally, cost and perfor ma nc e pressures are re l entless. Th e tim e ava i lable for people to t hink and ref lect is scarcer, if anything, and in many organizations, re s ources ava ilable for deve l oping people are scarcer still. But there is more to think about than just acc elerating change. Th e g lob ali zation of bu s iness and indu st rial development is raising the material standards of livi ng for many, bu t al so creating sig ni ficant side effects in the for m of a host of socia l and environmental su stainability challenges. All too of ten, the production of financial capital seems to occur at the expense of socia l and natural capita l. Gaps between “have s ”a n d “have - nots” are widening in many countries. Local environmental stresses, alway s a f eature of ind ustrial deve l opment, are now matched by problems on a larger scale, like global war ming and weather instability. Wh i le th e advo c at e s for global indust rial grow t h trumpet its benefits, people around the world are re a ct ing, nonviolently and violently, to losses in traditional way s of livi ng—and this shifting context is getting onto the strat e gic radar screen of many bu s in ess es.
For Position and Internal Use Only
At th e s ame time, the interconnected world creates a greater awa re n ess of others than has eve r be fo re existe d. It is an unprecedented t ime o f cultures colliding and in many instances learning from one another, and the promise of truly generative “dialogue among c ivilizations” holds great hope for the future. Yo u ng people around the world are creating a web of relationships that has neve r ex i ste d before. The frontiers of We s tern science, th e underp inning of our modern worldview, are reve aling a living world of f lux an d interdependency strangely familiar to aboriginal and native cultures, an d one that might, in the words of cosmologist Brian Swimme, once again show us that we have “a meaningful place in the unive r se.” And , as illustrat e d below, the organizational learning practices that we re limited to a few pioneers fifteen years ago have taken deeper root and spread.
In short, it is a time of dramatically conf licting forces. Things are getting be tte r and thing s are getting worse. Th e com ments of fo rme r Cz ech president Vaclav Have l ’s to the U.S. Congress in the mid1990s summariz e these perilous times aptly:
To d ay, ma ny things indicate that we are going through a transitional period, when it seems that something is on the way out and som ething else is painfully being born. It is as if som ething were crumblin g, decaying and exhausting itself, while something else, still indistinct, were arising from the rubbl e.
Th e s hape of Havel’s “something else” being born and the sorts of ma nagement and leadership skills it might require re m ain as fuzzy today as they were wh e n he made these remarks a dec ade ago Th es e conf licting forces play out within organizations as well, creating environments in which the need and possibility for learning capabilities are greater than eve r, but so t oo are the challenges of bu i ldin g su ch capabilities. On one hand , building enterprises capabl e of continually adapting to changing realities clearly demands new way s of thinking and operat i ng. So do the sustainability challenges, in many way s th e archetypal organizational learning challenge of this era. In addit ion, organizations are becoming more netwo rke d , which is weakening traditional ma nagement hierarchies and potentially ope ni ng up new capacity for cont inual learning, inn ovat i on, and adaptation. On the other hand, th e dysfunctions of the traditional management syste m keep many organizations in per-
petual fire-fighting mode, with little time or energy for innovat ion Th is frenzy and chaos also under mines the building of va l ues-based ma nagement cultures and opens the door for opportunistic grab s at ind ividual powe r an d wealth.
VO I CES FR OM THE FR ONT
Wh e n I was invited by Doubleday to create this new edition of The Fifth Discip line , I was initially ambiva l ent but then became exc i ted. One of the great joys of the past fifteen years has been getting to know countless gifted practitione rs of organizational learning— ma nagers, sc hool principals, community organiz ers, p olice chiefs, bu s iness and social entrepreneur s, milita ry leaders, teachers—people who have som ehow found an infinite array of imaginative way s to work with and utiliz e the five disciplines, eve n if they had neve r heard of or re a d the original book. A few of these figured prominently in the first book , like Arie de Geus and the recently deceased Bi ll O’Brien. Since then, the worldwide grow t h of the Society for Organizational Learning (SoL) has brought me in t ouch with hundreds more such practitione rs In their own way s, each has created an alternative system of ma nagement based on love rat her than fear, curiosity rat h er than an insistence on “right” answers, and learn ing rat h er than controlling. Now I could use the exc u se of this rev ised edition to talk with many of them.
Th ose interviews and conve r sations led to my making many changes in the text of this book and to a new section, Part IV, “Ref lection s from Practice.” Th e in terviews prov i ded fresh insights into how master practitione rs initiate change and deal creative ly with the ch all enges of sustaining mo mentum. I n addition to many bu s iness successes, p eo ple reve aled a host of new possibilities in ap ply ing organizational learning tools and principles in areas few of us could have imagined fifteen years ago: from grow i ng more enviro n me nta lly sound businesses and indust ries to ad dressing societa l problems like gang violence, transfor ming school systems, promoting econo mic d eve l opment, undertaking the improve me nt of global fo od production, and reducing pove r ty. In a ll thes e settings, openness, ref lection , deeper conve r sations, p er son al mas tery, and shared visions uniquely energiz e change; and understanding the systemic causes of problems is crucial.
Th e i nterviews also clarified core ideas that implicitly bound together the original work.
• There are ways of wo rking together that are vastly more sa tisfying and more productive than the preva iling system of management. As one seni or exe c utive said, ref lecting on her first learn ing experiment—“just getting people to talk to one anothe r” as a way to rethink how their organization was structured—“. . . was the most fun I had eve r ha d in business, and the ide as that emerged are still creating a compe ti tive advantage for the company fifteen years later.”
• Orga n izations work the way they do be cause of how we wo rk, how we think and interact; the changes re q uired ahe ad are not only in our orga n izations but in ourse lves as well. “The critical moment comes when people realiz e that this learning organization work is ab o ut each one of us,”c o mmented a twenty-year veteran of corporate organizational learning projects “Personal ma stery is core. If yo u ge t the personal mastery element of these changes rig ht, eve r ything else falls into place.”
• In building learning orga n izations there is no ultimate destination or end state, only a lifelong journey. “This work re q uires great re s ervoirs of patience,” c ommented the president of a global NGO (nongove r nmental organization), “but I believe the results we achieve are more sustainabl e be cause the people invo l ve d have re a lly grow n . It also p repares people for the ongoing journey. As we learn, grow, an d tackle more systemic challenges, things d o not get easier.”
I believe that, the preva iling system of ma nagement is, at its core, dedicated to mediocrity. It forces people to work harder an d harder to compensate for failing to tap t he spirit and collec tive int el ligence that character iz es wo rking together at their best. Deming saw this clearly, and I be lieve that now, so do a grow i ng number of leaders committed to grow i ng organizations capable of thrivi ng in and contributing to the extraordinary challenges and possibilit ies of the wo rld we are living into
“GIVE ME A LEVER
LO N G ENOUGH...AND SINGLE-HANDED I CAN MO VE THE WO R LD”
Fro m a very early ag e, we are taught to break apart problems, to fragment the world. Th is apparently makes complex tasks and subjects m ore manageable, bu t we pay a hidden, enor mous pric e. We can no longer see the consequences of our act ions; we lose our intrinsic sense of connection to a larger whole. Wh e n we then try to “see the big pic tu re, ” we try to reassemble the frag m ents in our minds, to list and organiz e all the pieces. But, as p hysicist David Bo hm says, the task is futile—similar to trying to reassemble the fragments of a broken mi rror to see a t rue ref lection Th us, after a wh i le we give up trying t o see the whole altogether. Th e tools and ide as presented in this book are for dest roy i ng the illusio n that the world is created of se pa rat e, unrelated fo rces. Wh e n we give up this illusion—we can then build “learning organiz ations,”o rganizations where people continually expand the ir capacity to create the results they truly de sire, wh e re new and expansive patterns of thinking are nu r tured, wh e re collective aspirat i on is set free, and where people are continually learning how to learn together.
As the world becomes more interconnected and business becomes more complex and dynamic, work mu s t become more “learningful.” It is no long er sufficient to have one person learning for the organization, a Ford or a Sloan or a Wat s on or a Gates. It’s just n ot possible any lon ger to figure it out from the top, and h ave eve ryone else fo l lowing the orders of the “grand strat e gist.” Th e organizations that will truly exc e l in the future will be the organizations that discover how to tap people’s com mitment and capacity to learn at all levels in an organization.
Learn ing organizations are possible becau se, deep down, we are all learne rs. No one has to teach an inf ant to learn. In fact, no one has to teach infant s anything. They are intrinsically inquisitive, ma sterful lea rners who learn to walk, speak, and pretty much run their households all on their own. Learning organizations are possible because not only is it our nature to learn but we love to learn. Most of us at o ne time or another have been part of a great team, a group of people wh o fu nctioned together in an extraordinary way wh o tr ust ed one another, who complement ed one anothers’s strengths and compe ns ated for one anot her’s lim it ations, wh o ha d common goals that were la rg e r tha n individual goals, and who produced extraordinary results. I h ave me t ma ny people who have ex p erience d this sort of profound teamwork—in sp orts, or in the perfo r ming arts, o r in business. Many say that they have spent much of their life looking for that experience again. What they experienced wa s a l earning organization. The team that became great didn’t sta rt offg reat—it learned how to produce extraordinary results.
One could argue that the entire global business community is learning to learn to gether, becoming a learning comm unity Wh e re a s once ma ny industries were dominated by a single, u ndisputed leader—one IBM, one Kodak, one Xerox today ind ustries, especially in manufacturing, have doz ens of exc e llent companies. Ameri ca n, European, or Jap a nese corporat i ons are pulled forward by inn ovat o rs in C hi na, Malaysia, or Brazil, and they in turn, are pulled by the Koreans and Indians. Dramatic improve me nts take place in corporat i ons in Italy, Au s tralia, Singapore—and quickly become inf luential around the world.
Th ere is also anoth er, in some way s de eper, movement towa rd learning organizations, part of the evo l ution of ind ustrial society Materia l affl u ence for the majority has gradually shifted pe ople’s orientation toward wo rk—from wh at Daniel Yankelovich called an “instrumental” view of wo rk, where wo rk was a means to an end, to
a more “sacred” view, wh e re people seek the “intrinsic” benefits of wo rk. 1 “Our grandfathers worked six days a week to earn what most of us now earn by Tuesday afternoon,” says Bi ll O’Brien, for me r CEO of Ha nover Insurance. “The fer me nt i n management will continue until we build organizations that are more consistent with ma n’s higher aspirat i ons beyond food, shelt er and belonging.”
Moreove r, many who share these value s are now in le adership positions. I find a grow i ng number of organizational leaders who, wh i le still a minority, feel th ey are part of a profound evo lutio n in the nature of work as a social institution. “Why can’t we do good wo rks at work ?” asked Edwa rd S imo n, for m er president of Her man Mil ler, a sentiment I often hear repeated today. In founding t he “Global C om pact,”U N Se cretar y General Kofi Annan invited businesses around the world to build learning communities that elevat e global standards for labor right s, and social and environmental re s ponsibility
Pe r haps the most salient reason for building learning organiz ations is that we a re only now sta rting to understand the capabilities such organizations must possess. For a long time, effo r ts to build learning organizations were like groping in the d ark until the skills, areas of knowledge, and paths for deve l opment of such organiz ations became known. What fundamentally will distinguish learning organizations from t raditional authoritarian “c ontrolling organiz ations” will be the mast er y of certain basic disciplines. That is why the “disciplines of the learning organization” are vital.
DIS CI PLINES OF THE LEAR NING OR GA NIZA TION
On a cold, cl ea r m orning in December 1903, at Kitty Hawk, North Carolina, the frag i le aircraft of Wilbur and Orville Wrig ht prove d that powered fl i ght was possible. Th us was the airplane inve n ted; bu t it wo uld take more than thirty years before commercial av i at i on could serve the general public.
En gi neers say that a new idea has be en “inve n ted” when it is prove n to wo rk in t he laboratory. Th e idea becomes an “innovat ion ” only wh e n it can be replicated re l iably on a meaningful scale at practical costs. If the idea is sufficiently importan t, such as the telephone, the digital computer, or commercial aircraft, it is called a “basic innovat ion ,” and it creates a new industry or transfor ms an
ex i sting industry. In these ter ms, learning organizations have been invented, but they have not yet been innovat ed.
In eng in eering, when an idea move s from an inve n tion to an in nov at i on, di ve r se “component technologies” come together. Emerging from isolated developments in separat e fi elds of re s earch, these components gradually for m an e ns emble of technologies that are critical to one another’s success. Until th is ensemble for ms, the idea, tho ugh possible in th e l aboratory, does not achieve its potential in practice. 2
Th e Wrig ht brothers prove d that powe red f light was possible, bu t the McDonnel Douglas DC-3, introduced in 1935, ushered in the era of commercial air trave l. The DC-3 was the first plane that supported itself economically as well as aerodynamically. During those int er ve ning thirty years (a typical time period for incubating basic inn ovat i ons), myriad experiments w it h commercial f light had failed. Li ke early experiments with learning organizations, the early planes we re not reliable and cost-effective on an appropr iate sc ale.
Th e D C-3 , for the first time, brought together five critical component technologies that for me d a suc cessful ensemble. Th ey were: the variabl e -pitch propeller, re t ra c table landin g ge ar, a type of lightwe i ght molded body c onstruction called “monocque,” a ra dial aircooled engine, and wing f laps. To succeed, the DC-3 needed all five ; fo u r were not enough. One year earlier, the Boeing 247 was introduced wit h all of them exc e pt wing f laps. Boeing’s eng in eers found that the plane, lacking wing f laps, was unstabl e on ta ke o ff and landing, and t hey had to downsiz e the engine.
To d ay, I b elieve, five new component technologies are gradually converging to innovat e learning organizations Th ough deve l oped se pa rately, each will, I believe, prove cr itical to the o thers’ succ ess, just as occurs with any ensemble. Each prov i des a vital dimension in bu i lding organizations that can truly “le arn,”t h at can continually enhance their capacity to realiz e their highest aspir at i ons:
Sy stems Thinking . A cl oud masses, the sky darke n s, leaves twist upward, and we know that it will rain. We also know the stor m runoff will feed into groundwat e r m iles away, and the sky w ill clear by t omorrow. Al l t hese eve n ts are distant in time and space, and yet they are all connected within the same pattern. Each has an inf luence on the rest, an inf luence th at is usually hidden f rom view. You can only understand the system of a rainstor m by contemplating the whole, not any individual part of the pattern. Bu siness and other human en deavo r s are also systems. They,
too, are bound by invisible fabrics of int er related actions, wh i ch often take years to fully play out their effects on each other. Since we are part of that lacework ourse lves, it’s doubly hard to see th e wh o le pattern of change. Instead, we tend to focus on snapshots of isolated parts of the system, and wonder why our deepest problems neve r se em to get solved. Systems thinking is a conceptual framework, a body of knowledge and tools that has been developed ove r th e past fifty years, to make the full patterns clearer, and to help us see how to change them effectively.
Though the tools ar e ne w, the under ly i ng wor ldvie w is ex t re m ely intuitive ; ex periments with young children show that they learn systems thinking very quickly.
Pe rso nal Maste ry “Mastery”might sug gest gaining dominance ove r people or things. But mastery can also mea n a speci al leve l ofproficiency A master craftsman doe sn’t dominate pott er y or we aving. People with a high leve l of personal mastery are abl e to consistently re a liz e the results that matter most deeply to the m— in effect, they approach their life as an artist would approach a wo rk of art. They do that by bec om ing commit ted to their own lif el ong learning.
Pe r sonal m astery is the discipline of continually c la rifying and deepening our personal vision, of fo c using our energies, ofdeve loping patience, and of se eing reality objective ly. As su ch , it is an essential cornerstone of the learning organization—the learning organization’s spiritual foundation. An organization’s comm itme nt to and capacity for learning can be no greater than that of its members. The roots of this discipline lie in both Eastern and We s tern spiritual traditions, and in se cular traditions as well.
But few organizations encourage the growth of their people in this manner. This results in vast untapped resources: “People enter business as bright, well-educated, high-energy people, full of energy and desire to make a difference,” says Hanover’s O’Brien. “By the time they are 30, a few are on the fast track and the rest ‘put in their time’ to do what matters to them on the weekend. They lose the commitment, the sense of mission, and the excitement with which they started their careers. We get damn little of their energy and almost none of their spirit.”
And surprisin gly few adults work to rigorously develop their ow n pe rsona l mas tery. When you ask most adult s what they want from their live s, t hey often t alk firs tabout what they’d like to get rid of: “ I’d like my mother-in-law to move out,” they say, or “I’d
like my back problems to clear up.” Th e discipline of personal ma stery sta rts with c la rifying the things that really matter to us, of living our live s in th e service of our highest as pirat i ons
He re, I am mo st interested in the connections between personal lea rning a nd organizational learning, in the reciprocal commitments between individual and organization, and in the spec ia l s pirit of an enterprise made up of learn er s.
Mental Models. Mental models are deeply ingrained assumptions, generalizations, or eve n pi ctures or images that inf luence how we understand the world and how we take action. Very often, we are not consciously awa re of our mental models or the eff ects they have on our behavior Fo r ex ample, we may notice that a co-worker dresses elegantly, and say to ourselves, “She’s a country club person.” Abo ut someone who dresses shabb ily, we may feel, “He doesn’t care ab o ut what others think.” Mental models of wh at can or cannot be done in different ma nagement se ttings are no less deeply entrenched. Many insights into new ma rkets or outmoded organizational practices fail to ge t p ut into practice because they conf lict with powe r ful, tacit mental models. Fo r ex ample, in the ear ly 1970s, Royal Dutch/Shell, became one of the first large organizations to understand how pervasive wa s th e inf luence of hidd en mental models. Sh el l’s success in the 1970s and 1980s (rising from one of the weakest of the big seve n oil companies to one of the strongest al ong with Exxon) during a period of unprecedented changes in the world oil business—the fo r mation of OPEC, extreme fl u ctuations in o il prices and ava i lab i lit y, and the eve n tual collapse of the Soviet Union—came in large me asure from learn ing h ow to surface and challenge manag e rs’ me nta l models as a discipline for preparing change. Arie de Ge us, Shell’s Coordinator of Group Planning during the 80s, said that continuous adaptation and grow t h in a changing business environment depends on “institutional learning, which is the process wh e reby manage ment te ams change the ir shared mental models of the company, their marke t s, and their c om petitors. For this reason, we think of planning as learning and of corporat e planning as institutional learning.” 3
Th e dis cipline of wo rking with mental models starts with turning t he mirror inward; learning to unearth ou r internal pictu res of the wo rld, to bring them to th e sur face and hold them rigorously to scrutiny. It also includes the ability to carry on “learningfu l” conve r sations that balance inquiry and advo c acy, wh e re
people expose their own thinking e ffectively and make that thinking open t o the inf luence of others.
Buil di ng Shared Vision. If any one idea about leadership has inspired organizations for thousands of ye a rs, it’s the capacity to hold a shared picture of the future we seek to create. One is hardpressed to think of any organization that has sustained some me asure of greatness in the absence of goals, va l ues, and missions that become deeply shared throughout the organization. IBM had “service”; Polaroid had instant photography; Fo rd had public transpor tation fo r th e masses and Apple had “computers fo r th e rest of us.” 4 Th ough radically different in content and kind, all t hese organizations managed to bind people together around a common identity and se ns e of destiny.
Wh e n there is a genuine vision ( as opposed to the all- toofamiliar “vision statement”), people exc e l and learn, not becau se they are told to, but because they want to. But many le aders have personal visions that neve r ge t translated into shared visions that galvaniz e an organization. All too often, a company’s sha re d vision has revo lved around the charisma of a leader, or around a crisis that galvaniz es eve ryone temporar ily. But, give n a c hoice, most pe ople opt for pursuing a lof ty goal, not only in times of crisis but at all times. What has been lacking is a discipline for translating individual vision into shared vision—not a “cookbook” but a set of principles and guiding practices.
Th e practice of sha re d vision invo l ve s th e skills of uneart hing sha re d “pictures of the future” that fo s ter genuine commit ment and enrollment rat h er than compliance. In mastering this discipline, leaders learn th e count erproductiveness of trying to dictate a vision, no matter how he artfelt.
Te a m Learning. How can a team of committed managers with ind ividual IQs above 120 have a c ol lective IQ of 63? The disc ipline of team learning confronts this paradox. We know that teams can learn; in sports, in the perfor ming arts, in scien ce, and eve n, occasionally, in business, there are striking examples where the intelligence of the team exc e eds the intelligence of the individuals in the te am, and where teams deve l op extraordinary capa cities for coordinated action. When teams are truly learning, not only are they producing extraordinary results, but the individual members are grow i ng more rap i dly than could have occurred otherwise.
For Position and Internal Use Only
Th e dis ci pline of team learning starts with “dialogue,”t h e capa city of me mbers of a team to suspend assumptions and e nt er into a genuine “thinking together.” To the Greeks dia-logos me ant a free-f lowing of me aning through a group, allowing the group to discove r in sig hts not attainabl e in di vi duall y. Interestingly, the practice of dialogue has been preserved in many “primitive ” cultures, such as that of the American Indian, but it has been almost completely lost to modern society. Today, the principles and practices of dialogue are being rediscovered and put int o a contemporary c ontext. (Dialogue differs from t he more common “discussion,”wh ich has its roots with “percussion” and “concussion,” lit erally a heaving of ideas back and fo r th in a winner-takes-all competition.)
Th e di scipl ine of dialogue also invo l ve s le arning how to recogniz e the patterns of interaction in teams that under mine learning . Th e patterns of defensiveness are often deeply ingrained in how a team operat e s. If unrecogniz ed, they under mine lea rning . If re c og n iz ed and surfaced creative ly, they can accelerat e le arning.
Te a m learning is vital becau se teams, n ot individuals, are the fundamental learning unit in modern organizations. Th is is where the rubber meets t he road; unless teams can learn, the organiz ation cannot learn.
If a learning organization were an engineering innovat ion , such as the airplane or the personal comput er, th e com ponents would be called “technologies.” Fo r an in novat i on in human behavior, the components need to be seen as disciplines . By “d iscip line,” I do no t me an an “enforced order ”o r “m eans of punishment,” bu t a b ody of theory and technique that must be studied and mastered to be put into practice. A disciplin e (from t he Latin disciplina , to learn) is a developmental path for acquiring certain skills or compet en ci es. As with any discipline, from playing the piano to electric al enginee ring, som e people have an innate gift, but anyo n e can deve l op proficiency through practice.
To practice a disc ip lin e is to be a lifelong learner. You neve r arrive; you spend your life mastering disciplines. You can neve r say, “We are a le arning organization,” any more than you can say, “I am an enlightene d pe rson.” Th e m ore you learn, the more acutely awa re yo u be come of yo u r ig norance. Th us, a corporat i on cannot be “excellent” in the sense of having arrived at a per ma ne nt exc e llence; it is alway s in the state of practicing the disciplines of learning, of getting better or worse.
Th at organizations can benefit from disciplines is not a totally new idea. Af ter all, management discipline s suc h as a ccounting have been around for a long time. But the five learning disciplines differ from more familiar management disciplines in that they are personal disc iplines. Each has to do with how we think and how we interact and le arn with one another. In this sen se, they are more like artistic disciplines than tr aditional mana gement discipline s. Moreove r, while accounting is good for “keeping score,” we have never approached the subtler tasks of bu i lding organizations, of enhancing their capabilities fo r in novat i on and creativity, of crafting strat e gy and de signing policy and struc tu re through assimilating new disciplines. Perhaps this is why, al l too often, great organiz ations are f leeting, enjoying their moment in the sun, the n pass ing quietly back to the ranks of the mediocre.
Practicing a disc ip lin e is different from emulating a model. All too often, new manage me nt innovat ion s are described in ter ms of the “best practices” of so-ca lled leadin g fir ms. I believe benchmarking best practices c an open people’s eyes as to what is po ssible, bu t it can also do more har m tha n good, lea ding to piecemeal copying and playing c atch-up. As o ne seasoned Toyo ta manager commented after hosting ove r a h undred tours for visiting exe c utives, “They alway s say ‘Oh yes, yo u have a Kan-Ban syste m, we do also. You have quality circles, we do also. Your people fill out standard work descriptions, ours d o also.’ Th ey all se e the parts and have copied the parts. What th ey do not see is the way all the parts work together.” I do not believe great organizations have eve r been built by trying to emulate another, any more than individual greatness is achieved by t ry in g t o copy another “great person.”
Wh e n t he five component technologies c onve rged to c reate the DC -3 the commercial airlin e in dustry began. But the DC-3 was not the end of the process. Rat h er, it was the precursor of a new industry. Similarly, as the five component learning disciplines conve rge they will not create the learn ing o rganization but rat h er a new wave of experimentation and adva n cement.
THE FIFTH DISCIPLINE
It is vital that the five disciplines deve l op as an ensemble. Th is is challenging because it is much harder to integrat e new tools than sim ply ap ply th em separat e ly Bu t the payo ffs are immense Th is is why sy stem s thinking is the fif th discipline. It is the disci-
pline that integrat e s the disc ip lines, f using them into a coherent body of theory and practice. It keeps them from being separat e gi mmicks or the latest organization change fads. Witho ut a systemic orientation, there is no motivat ion to look at how the disciplines int er relate. By enhancing each of the other disciplines, it continually reminds us that the whole can exc e ed the sum of its parts Fo r ex ample, vision without systems thinking ends up painting lovely pictures of the future with no dee p understanding of the fo rces that must be mastered to move from here to there. Th is is one of the re a sons why ma ny fir ms that have jumped on the “vision bandwag o n” in re c ent years have fo u nd that lofty vision alone fails to turn around a f ir m’s fo r tunes. Wi t hout sy stem s thinking, the seed of vision falls on harsh soil. If nonsystemic thinking predominates, the first condition for nurturing vision is not met: a genuine belief that we can make our vision real in the fu ture. We may say “We can achieve our vision” (most American managers are conditioned to this belief), but our tacit view of current reality as a set of conditions created by som eb ody e ls e betray s us
But systems thinking also needs the disciplines of bu i ld ing shared vision, me nta l m odels, team learnin g, an d personal mastery t o realiz e its po tential. Building shared vision fosters a commitment to the lon g ter m. Mental mode ls focus on t he openness needed t o unearth shortcoming s in our present way s of se eing the world. Te a m le arning deve l ops the skills of groups of people to look for t he larger picture beyond ind ividual perspective s. An d personal mastery fosters the personal motivat ion to continually learn how our actions affect our worl d. Witho ut personal mast er y, peop le are so steeped in the re a ctive mindset (“someone/something else is creating my problems”) that they are deeply threatened by the systems perspective.
Lastly, s ystems thinking makes understandabl e th e subtlest aspec t of the learning organization—the new way individu als perceive themselves and the ir world. At the heart o f a learning organization is a shift of mind—from se eing ourselves as separat e from the world to connected to the world, from se eing problems as caused by someone or some th ing “out t here” to se eing how our ow n ac tions create the problems we ex p erience. A learning organization is a place where people are continually discove r ing how they create their reality And how they can change it . As Archimedes sa id , “Give me a leve r lo ng enough . . . and single-handed I can move the world .”
MET ANOIA—A SHIFT OF MIND
Wh e n you ask people about what it is like being part of a great team, what is mo st stri king is the meaningf ulness of the experience Pe o ple talk about being part of som ething larger than themselves, of being connected, of being generat ive. It be comes quite clear that, fo r ma ny, th eir experiences as part of truly great teams stand out as singular periods of lif e live d to th e fullest. Some spend the rest of their live s lo oking for way s to re capture that spirit.
Th e m ost accurat e wo rd in Western culture to describe what happens in a learning organization is one that hasn’t had much curre n cy for the past seve ral hundred years. It is a word we have used in o ur work with organizations for some ten years, bu t we alway s caution them, and ourselves, to use it sparingly in public. The word is “metanoia” and it means a shift of mind. The word has a rich history Fo r th e Greeks, it meant a fundament al shift or change, or more literally transcendence (“ me ta ”—above or beyond, as in “metaphysics”) of mind (“ noia ,” f ro m th e root “ nous ,” o fm i nd). In the early (Gnostic) Christian tradition, it took on a special me aning of awa kening shared intuition and direct knowing of the highest, of God. “Metanoia” wa s probab ly the key ter m of such ear ly Christians as John the Baptist. In t he Catholic corpus the word “metanoia” was eve n tually translated as “repent.”
To grasp the meaning of “metanoia” is to grasp the dee pe r m eaning of “learning,” fo r le arning also invo l ve s a f undamental shif t or movement of mind. The problem with talking about “learning organizations” is that the “learning” has lost its central meaning in contemporar y usage. Most people’s eyes glaz e ove r if yo u ta lk to them about “learning” or “learning organizations.” Th e words tend to immediately evo ke i mages of si tting passively in schoolrooms, listening, following directions, and pleasing the teacher by avo i ding ma ki ng mist akes. In effect, in eve r yd ay use, learnin g has come to be sy nonymous with “taking in infor mation.” “Yes, I lea rned all about that at the training yesterday. ” Ye t , taking in infor mation is only distantly re l at e d to real learning. It would be nonsensical to say, “I just read a great book about bicycle riding—I’ve now learned th at.” Re a l learn ing gets to the heart of wh at it means to be human. Th ro ugh learn ing we re-create ourselves. Th ro ugh learn ing we become abl e to do so me th ing we neve r we re abl e to do. Through learn ing we reperceive the world and our relationship to it. Through learn ing we extend our c apacity to create, to be part of the genera-
For Position and Internal Use Only
tive process of lif e. Th ere is within each of us a deep hunger for this type of learnin g. As anthropologist Edwa rd Hall says, “Humans are the learning organism par exc e llence. The drive to learn is as strong as the sexual drive it begin s ear lier and lasts longer.” 5
Th is, then, is the basic meaning of a “learning organization”—an organization that is continually expanding its capacity to create its future. For such an organization, it is not enough merely to survive. “Survival learning” or what is mo re often ter me d “a daptive learning” is importan t—indeed it is necessary. But for a learning organization, “adaptive learning” mu s t be joined by “generat ive learning,” learning that enhances our capacity to create.
A few brave organizational pioneers are pointing the way, bu t the territory of bu i ldin g l ea rning organizations is still largely unexplored. It is my fondest hope that this book can accelerat e th at ex p loration.
PUTTING THE IDEAS INTO PRA CTICE
I take no credit for inve n ting the five major disciplines of this book. Th e five disciplines described below represent the experimentation, re s earch, writing, and inve n tion of hundreds of people. Bu t I have wo rke d wi th all of the disciplines for years, re f in ing ideas about them, collaborating on research, and introducing them t o organizations throughout t he world .
Wh e n I first entered graduate school at MIT I was already convinced that most of the problems faced by humankind concerned our inability t o grasp and manage the increasingly complex syste ms of our wo rld . Little h as happened since t o change my view. To d ay, the environment al crisis, the con tinuing gap between “have s an d have-nots” and consequent social and political instability, the persisting global ar ms race, the international drug trade, and the explosive U.S. bu d get, trade deficits, and consequent financial frag i lity all attest to a world wh e re problems are becoming increasingly complex and interconnected. Fro m th e start at MIT I was draw n to th e wo rk of Jay Fo rrester, a computer pioneer who had shifted fields to develop what he called “syst em dynamics.” Jay ma in tained that the causes of many pressing public issues, from urban decay to global ecological threat, lay in the very well-intentioned policies designed to alleviate them. These problems we re “actually systems” that lu re d policymakers in to interventions that focused on obvious
sy mptoms not underly i ng causes, which produced short-ter m be nefit but long-t er m malaise, and fostered the need for still more symptomatic int er ve ntions.
As I began my doctoral work, I began to m eet business leaders wh o ca me to vi sit o ur MIT group t o learn about systems th inking. Th es e were thoughtful people, deeply awa re of the inadequacies of preva i lin g way s of ma naging. Unlike most academics, th ey were engaged, not detached intellectuals, and many were wo rking t o bu i ld new types of organizations—decentraliz ed, nonhierarchical organizations dedicated to the well-being and grow t h of employees as well as to success. Some had crafted radical corporat e ph ilo sophies based on core values of freedom and responsibility. Oth er s had deve l oped innovat ive organization designs. All shared a commitme nt and a capacity to innovat e that I found lacking in other se ctors. Gradually, I came to realiz e why bu siness is the loc us of inn ovat i on in an open society. Despite whateve r ho ld past think ing may have on the business mind, business has a freedom to expe rime nt mi ssing in the public and education sectors and, often, in nonprofit organizations. It also has a clear bottom line, so that ex p er ime nts can be eva l uated, at least in principle, by objective cr it er ia.
Bu t why we re they interested in systems thinking? Too of ten, the most daring organizational experiments were fo u ndering. Local autonomy produced bu s iness decisions that were disastrous fo r th e organization as a whole. “Team bu i lding” exe rc ises focused on better relationships among pe ople who often still held r adically different mental models of the business system. Companies pulled together during crises, and then lo st all thei r inspirat i on when business improve d. Organizations which started out as booming successes, with the best p ossible intentions towa rd cust omers and employees, fo u nd t hemselves trap pe d in downward spirals that got wo r se the harder they t ried to fix them.
Wh e n I was a student and young professor, we all believe d th at the tools of sy stem s thinking c ould make a difference in th es e companies. As I worked with different companies, I came to see why sy stem s thinking was not enough by itself. It needed a new type of ma nageme nt pr actitione r to really make the most of it. At that time, in the mid-1970s, th ere was a nasce nt s ense of wh at s uch a manageme nt practitione r c ould be. But it had not y et crystalliz ed. It began to do so with the for mation of a “CEO group” that met regularly at MIT starting around 1980 that included William O ’Brien of Ha nover Insurance, Arie de Geus of Shell, Edwa rd Simon from He rm an Mil ler, and Ray Stata , CEO o f Analog Device s. Th e g roup “Gi
continued for ove r a d ecade eve n tually draw i ng participants f rom Ap pl e, Fo rd, Harley-Davidson, Ph ilips, Po l aroid, and Tra m me ll Crow.
Fo r over twenty-five years I have also bee n i nvo l ve d in deve l oping and con ducting leadership workshops, which have introduced people from all walks of lif e to the fif th discipline ideas that grew out of our work at MIT. Th es e ideas combined initially with In novat i on Associate’s path-breaking work on building shared vision and personal mastery and the workshops continue t oday as part of the global Society for Organizational Learning (SoL). When The Fifth Discipl ine wa s or iginally published, ove r fo ur thousand ma nagers had attended these workshops and they were in fact the “target audience” to wh o m the book was aimed. (When it became ap pa re n t that many more people were using the book as an introduction to organizational learning, we created The Fi fth Discipline Fieldb ook in 1994, think ing t hat a book of practical tools, sto ries, and tips might in fac t b e a better introduction.) Over the course of these experiences the initial focus on corporat e se nior exe c utives broadened, as it be came evident that the basic disciplines of sy stems thinking, personal mastery, men tal models, team learn ing and sha re d vision were re levant for teachers, public ad min istrat o rs and elected officials, students, and parents. All were in leadership po sitions of importan ce All were in “organizations” that had still untapped potent ial for creating their future. All fe lt th at to tap that potent ial required developing their own capacities, that is, learning.
So, this book is for the learners, esp ecially those of us interested in th e ar t and practice of collective learning.
Fo r ma nagers, t his book should help in identif yin g the s pecific practices, skills, and disciplines that can make building learning organizations less of an occult art (though an art none th eless).
Fo r pa re n ts, this book should help in letting our children be our teachers, as well as we are theirs—for they have mu c h to t ea ch us ab o ut learning as a way of lif e.
Fo r ci tiz ens, the dialogue about why contemporar y organizations are not especially good le arners and about what is required to build learn ing o rganizations reve als some of the tools needed by c om munities and societies if they are to become more adept learners
2 DOES Y OUR OR GANIZA TIO N
HA VE A LEARNING DI SAB ILITY?
Few large corporat i ons live eve n half as long as a pe rson. In 1983, a Roya l Dutch/Shell study found t hat one-third of the fir ms that had been in the Fortune “500” in 1970 had vanished. 1 Shell estimated that the ave rag e li fetime of the largest industrial enterprises is less than forty years, ro u ghly half the lif eti me o f a human being! Since then this study has be en repeated by EDS and several other corporat i ons, and se rved as a point of re f erence in Ja m es Collins’ Good to Great, published in 2001. The chances are fifty-fifty that readers of this book will see their present fir m disappear during their working career
In most c om panies that fail, there is abu n dant evidence in advance that the fir m is in trouble. Th is evidence goe s unheeded, howeve r, eve n when individual managers are awa re of it. Th e organization as a whole cannot recogniz e impending threats, und er st and the implications of those threats, or come u p with alternatives
Pe r haps under the laws of “survival of the fittest,”t h is con tinual death of f ir ms is fin e for societ y. Painful though it may be for the
employees and owners, it is simply a turnove r of the economic soil, re d istributing the resources of production to new companie s and new cultures. But what if the high corporat e mo rta lity rat e is on ly a sy mptom of deeper problems that aff lict all companies, not jus t the ones t hat die? What if eve n th e most successful companies are poor learners—they su rvive bu t neve r live up to t heir pot en tial? What if, in light of wh at organizations could be, “excellence” is actually “mediocrity”?
It is no a ccident that most organizations learn poorly. Th e way they are designed and managed, the way people’s job s are defined, and, most importantly, the way we have all been taught to think and interact (not only in organizations but more broadly) create fundame nta l lear ni ng disabilities Th es e disabilities operat e de spite the best effo r ts of bright , committed people. Often th e h arder they try to solve problems, the worse the results. What learning do es occur takes place despit e thes e learning disabilities—for they pervade all organizations to some degree.
Learn ing disabilities are trag i c in children, especially when they go undetected. They are no less trag i c in organizations, wh e re they also go largely undetected. The first st ep in curing them is to b eg in to identify the seve n le arning disabilities:
1. “I AM MY POSIT ION”
We are trained to be loya l to ou r jobs—so much so that we confuse them with our own identities. When a large American steel company began closing plants in t he early 1980s, it offered to train the displaced steelwo rke r s for new jobs. But the tr aining neve r “t ook”; the wo r ke r s drifted into une mployment and od d jobs instead. Psychologists c ame in to find out why, an d found the steelwo rke r s suff ering from acute identity crises. “How could I do anything else?” asked the workers “I am a lathe operat o r. ”
Wh e n asked what they do for a living, most people de sc ribe the tasks they perfor m eve ry day, not the purpose of the greater enterprise in which they take part. Most see themselves within a system ove r which they have lit tle or no inf luence. They d o their job, put in their time, and try to cop e w ith t he forces outside of their control. Conse quently, they tend to see t heir responsibilities as limited to the boundaries of their position.
Many ye a rs ago, ma nagers from a Detroit auto maker told me of
stripping down a Jap a nese import t o understand why the Jap a nese we re abl e to ac hieve extraordinary precision and reliability at lower cost on a particular assembly process. They found the same standard type of bolt used three times on the engine block. Each time it mounted a different type of component. On the American car, th e sa me assembly re q uired three diff erent bolts, wh i ch required three diff erent wrenches and three different inventories of bolts—making the car much slowe r an d more costly to asse mble. Why di d the Americans u se three separat e bo lts? Because the design o rganiz ation in Detroit had three groups of engineers, each responsible fo r “their” component only. T he Jap a nese had one designer responsible fo r th e entire engine mounting, and probably mu c h more. Th e irony is th at each of the three groups of American engi neers considered their work succ essful because their bolt and assembly wo rke d ju st fine.
Wh e n people in organizations focus only on their position, they have little sense of re s ponsibility for the results produced when all positions interact. Moreover, wh e n results are disappointing, it ca n be very difficult to know why. Al l you can do is assume that “someone screwe d up.”
2. “THE EN EMY IS OUT THERE”
A friend o nce told the story of a boy he coached in Little League, wh o af ter dropping three f ly balls in right field, threw down his glove and marched into the dugout. “No one can catch a ball in that darn field,”h e sa id.
Th ere is in each of us a propensity t o find someone or something outside ourselves to blame when things go wrong. Some organiz ations elevat e this propensity to a commandment: “Thou shalt alway s fi nd an external agent to blame.” Marketing blames manufacturing: “The reason we keep missing sales targets is that our qualit y is not competitive. ”M a nu f acturing blames en gi neering. En gi neering blames marke t ing: “If they’d only quit screw i ng up our designs and let us design the products we a re capabl e of, we’d be an ind ustry leader.”
Th e “ enemy is out there” sy ndrome is act ually a by-product of “I am my position,”a n d the nonsystemic way s of loo king at the world that it fosters. When we focus only on our position, we do not see how our own actions extend beyond the boundary of that position.
Wh e n t hose actions have consequences that come back to hurt us, we misperceive these new problems as externally caused. Like the person being chased by his own shadow, we cannot seem to shake them.
Th e “ Enemy Is Out There” sy ndrome is not limited to assigning bl a me within the organization. During its last y ears of operation, the once highly suc cessful People Express Airlin es slashed prices, boosted marke t ing, and b ought Fro n tier Airlin es —all in a frantic at te mpt to fight ba ck against the perceived cause of its demise: increa singly aggressive competitors. Ye t , none of th es e move s arrested the company’s mounting losses or corrected its core problem, service quality that had declined so far that low fares were its only re m aining pull on custome rs
Fo r ye ars American c om panies who had lost marke t sh are to foreign competitors blamed cheap foreign wag es, labor unions, governme nt regulators, or cu stomers who “betraye d us” by bu y ing products from someone else. “The enemy is out there,” howeve r, is almost alway s an incomplete story. “Out there” and “in here” are usually part of a single sy stem . This lea rning disability makes it almost impossible to detect th e l eve rag e we ca n use “in here” on problems th at stradd le the b oundary between us and “out there. ”
3. TH E ILLUSION OF TAKING CHARGE
Bein g “proactive” is in vog u e. Managers frequently proclaim the need for taking charge in facing difficult problems. What is typically me ant by this is that we should face up to difficult issues, sto p waiting for someone else t o do something, and solve problems before they grow into crises. In particular, being proactive i s frequently se en as an antidote to being “reactive”—waiting until a situation gets out of hand before taking a step. But is tak ing aggressive action ag a inst an external ene my really synonymous with being proactive? Once, a management team in a leading property and liability insurance company with whom we were wo rking got bitten by the proactive n ess bug. The head of the team, a talented vice president fo r cl aims, wa s ab out to give a speech proclaiming that the company wa s n’t go ing to get pushed around anymore by lawyers litigating more and more claims settlements. Th e fir m would beef up its own legal st affs o th at it co uld take more cases through t o trial by verdict, inst ea d of se ttling them out of court.
Th en we a nd some members of the team began to look more systemically at the probable effects of the idea: the likely fraction of cases that might be won in court, the likely siz e of cases lo st, the monthly direct and ove r head costs regardless of who won or lost , and how long cases would probably stay in litigation. Interestingly, the team’s scenarios pointed to increasing total costs because, given the quality of investigation done init ially on most claims, th e fir m simply could not win enough of it s cases to offset the costs of in creased litigation. Th e vice president tore up his speech.
All too often, proactiveness is reactiveness in disguise . Whether in bu s in ess or politics, if we simply become more aggressive fighting the “enemy out there,” we are re a cting—regardless of wh at we call it . Tr u e proactiveness comes from se eing how we contribute to our ow n proble ms It is a product of our way of thinking, not our emotional state.
4. TH E FIXATION ON EVENTS
Two ch ildren ge t into a scrap on the playg round and you come ove r to untangle them. Lucy says, “I hit him because he took my ball.” To m my says, “I took her ball because she won’t let me play with her airplane.” Lu cy says, “He can’t play with my airplane bec ause he broke the propeller.” Wi s e adults that we are, we say, “Now, now, children—just get along w it h each other.” But are we re a lly any different in the way we ex p lain th e entanglements we find ourselves caught in? We a re conditioned to see life as a series of eve nts, and fo r every eve n t, we think there is one obvious cause.
Conversations in organizations are dominated by concern with eve nts: last mont h’s sales, t he new budget cuts, last q uart er’s ea rnin gs, wh o ju st got promoted or fired, the new product our compet itors just announced, the delay that just was announced in our new product, and so on. The media reinforces an emphasis on shortter m eve nt s—aft er all, if it ’s more than two days old it’s no longer “news.” Focusing on eve n ts leads to “eve n t” explanations: “The Dow Jo n es ave rag e dropped sixteen points t oday,” announces the newspaper, “because low fourth- quart er profits were announced ye s terday. ” Such explanations may be true, but they distract us from seeing the lo nger-ter m patterns of change that lie behin d the eve n ts and from understanding the causes of those patterns.
Ou r fixation on eve n ts is actually part of our evo l utionary pro-
gramming. If you wanted to design a cave person for surviva l , ability to contemp late the cosmos would not be a high-r anking de sign criterion. What is imp ortant is the ability to see the saber-toothed tiger ove r yo ur left shoulder and react quickly. Th e irony is that, today, the primary threats to our surviva l , both of our organiz ations and of our societies, come not from sudden eve n ts but from slow, gradual processes: the ar ms race, environmental decay, the erosion of a society ’s public education sy stem , an d decline in a fir m’s design or product quality (relative to competitors’ qualit y) are all slow, gradual processes.
Ge ne rative learning cannot be sustained in an organization if people’s thinking is dominated by short-ter m eve n ts. If we focus on eve nts, the best we can eve r do is predict an eve n t before it happens so that we can react optimally. Bu t we cannot learn to create.
5. TH E PARABLE OF THE BOILED FROG
Maladaptation to gradually building threats to surviva l is so pe rvasive i n systems studies of corporat e fa ilu re that it has give n ri se to the parabl e of the “boiled frog . ’’ If you place a frog in a pot of boiling wat e r, it will immediately try to scramble out. But if yo u pl ace the frog in room temperat u re wat er, and don’t sc are him, he’ll stay put. Now, if the pot sits on a heat source, and if yo u gradually turn up t he temperat u re, so me th ing very interesting happens. As the temperature rises from 70 to 80 degrees F., the frog will do nothing. In fact, he will show eve r y sign of enjoying himself. As the t em perat u re gradually increases, the frog will be come grog gi er and groggier, until he is unabl e to cl imb out of the pot. Though there is nothing restraining him, the frog will sit the re and boil. Why ? Because the frog ’s interna l apparatus for sensing threats to surviva l is geared to sudden changes in his environment, not to slow, gradual changes
Th e Am er ican automobile industry h as ha d a long-standing case of boiled frog. In the 1960s, it dominated North American sales. Th at began t o change very gradually. Certainly, Det roit’s Bi g T hree did not see Jap a n as a threat to their surviva l in 19 62, when the Jap anese share of the U.S ma rket was be low 4 percent. Nor in 1967, when it was less than 10 percent. Nor in 1974, when it was under 15 percent. By the time the Big Three began to look critically
at their own practices and core assumptions, it was the early 1980s, and the Jap a nese share of the American marke t ha d risen to 21.3 percent. By 1990, t he Jap a nese share was approaching 25 percent, and by 2005 it was close r to 40 percent. 2 Given the financial health of the U. S. car companies it is u nclear whether this particular frog will eve r re gain the strength to pull itself out of the hot wat e r.
Learn ing to see sl ow, gradual processes re q uires slowing down our frenetic pace and paying attention to the subtle as well as the dramatic. If yo u si t and look into a tidepool, initially you won’t see mu c h of anythin g going on. However, if you wat c h long enough, after about ten minutes the tidepool will suddenly come to life. The wo rld of beautif ul creatures is alway s there, bu t moving a bit too slowly to be seen at first. The problem is our mind s are so locked in one frequency, it’s as if we can only see at 78 rpm; we can’t se e anything at 33-1/3. We will not avo i d the fate of the frog until we learn to slow down and see the gradual processes that often pose the greatest threats.
6. TH E DELUSION OF LEARNING FROM EXPERIENCE
Th e mo st powe r ful learning comes from direct experience. Ind eed, we learn eating, craw l ing, walking, and c om municating through direct trial and error—t hrough taking an action and seeing the conse quences of that action; then taking a new and different action. Bu t what happens wh e n we c an no longer obse rve the consequences of our actions? What happens if the primary consequences of our actions are in the distant future or in a distant part of the larger system within which we operat e ? We each have a “learning horizon,”a breadth of vision in time an d space within which we assess our eff ectiven ess. When our actions have consequences beyond our learnin g horizon, it becomes impossible to lear n from direct experience. He re in lies the core learning dilemma that confronts organiz ations: we learn best f rom experience but we neve r di re c tly ex p erience the consequences of many of our most important decisions . Th e m ost critical decisions made in organizations have sy stem wide co nsequences that stretch ove r ye ars or decades. Decisio ns in R&D have first-order consequences in marke t ing and manufacturing. Inve s ting in new manufacturing f ac ilities and processes inf luences qualit y and delivery reliability fo r a d ecade or more. Promoting the right people
into leadership po siti ons shapes strat e gy and organizational climate fo r ye ars. Th es e are exac tly the types of decisions where there is the least o pportunity for trial and error learning.
Cycles are part icularly hard to see, and thus learn from, if they last lo nger than a year or two. As systems-th inking writ er Drap e r Ka u ff ma n, Jr., poin ts out, most people have short me mories “When a temporary ove r supply of workers deve l ops in a particular field,” he writes, “eve r yo n e talks about the big surplus and young people are steered away from the field. Within a few years, this creat e s a shortage, job s go beggi ng, and young people are frantically urged into the field—which creates a surplus. Obviously, the best time to start training for a job is when people have been talking ab o ut a surplus for seve ral years and few others are entering it. That way, you f inish your training just as the shortage deve l ops.” 3
Tra ditionally, organizations attempt to sur mount the difficulty of coping with the breadth of impact from decisions by breaking themselves up into component s. They institute functio nal hierarchies that are easier for people to “get their hands around.” Bu t, functional divisions grow into fiefdoms, and what wa s on ce a conve n ient division of labor mu t at e s into the “stove p ipes” that all but cut offc o ntact between functions. The result: analysis of the most importan t problems in a co mpany, the complex issues that cross functional lines, becomes a perilo us or nonexiste nt exe rc ise
7. TH E MYTH OF THE MAN AG E MENT TEAM
Striding forward to do battle with these dilemmas and disabilities is “the management team,”t h e collection of savvy, experience d manag e rs who represent the organization’s different functions and areas of expertise. Tog e ther, they are supposed to sort out the complex cross-functional issues that are critical to the organization. What confidence do we have, re ally, that typical management teams can sur mount these learning disabilities?
All too often, teams in business t en d t o spend t heir time fighting fo r tu rf, avo iding anything that will make them look bad personally, and pretending that eve r yo n e is behind the team’s collective strategy—maintaining the appearance of a cohesive team. To keep up the image, they seek to squelch disagreement; people wit h serious re s ervations avo i d stating them publicly, and joint decisions are wat ered-down compromises ref lecting wh at eve r yo n e can live with,
or else ref lecting one person’s view fo i ste d on t he group If there is disagreement, it’s usually expressed in a man ner that lays blame, polariz es opinion, and fails to reve al the underly i ng differences in assumptions and experience in a way that the team as a whole could learn f rom.
“Most manage ment te ams break down under pressure,” w rites Ha rvard’s Chris Argyris—a longtime student of learning in manag e me nt teams. “The team may function quite well with rout ine issues. But when they confront complex issues that may be embarra s sing or threatening, the ‘teamness’ se ems to go to pot.” 4
Argyr is argues that most managers find collective inq uiry inherently threatening. School trains us neve r to ad mit that we do not know the answe r, and most corporat i ons reinforce that lesson by rewarding the people who exc e l in advo c at i ng their views, not inq uiring into complex issue s. (When was the last time someone was rewarded in your organization for raising difficult questions about the company’s current policies rat h er than solving urgent problems?) Even if we feel uncertain or ignorant, we l earn to protect ourselves from the pain of ap pe aring uncertain or ignorant. That ve r y process blocks out any new understandings which might threaten us. The conseq uence is what Argyr is calls “skilled in co mpetence”—teams full of people who are incredibly proficient at ke ep ing themselves from learning.
DI SABILITIES AND DISCIPLINES
Th ese learning disabilities have been wit h us for a long time. In The March of Fo l ly , Barbara Tuchman t races the history of devastating large-scale policies “pursued contrary to ultimate self-interest,” 5 from the fall of the Tro j ans through t he U.S involvement in Vi e tnam. In story after story, leaders co uld not see the consequences of their own policies, eve n wh en they were wa r ned in advance that their own surviva l wa s at stake. Re a ding between the lin es of Tu c hman’s writing, you can see that the fourteenth-century Va l ois monarchs of Fra nce suffered from “I am my position” disab i lit ies—when they deva l ued currency, they literally didn’t re a liz e they were dr iv i ng the new Fre n ch middle class towa rd insurrection. In the m id -1700s Brita in had a bad case of boiled frog . Th e British went through “a full decade,” w ro t e Tuchman, “of mounting conf lict with the [A mer ican] colonies withou t any [British official]
se nding a representative, mu c h less a minister, across the Atlantic . . . to find out what wa s en dangering the relationship . . .” 6 By 1776, the start of the American Revo lutio n, the relationship wa s ir revocably en dangered. El sewhere, Tuchman describes t he Roman Catholic cardinals of the fifteenth and sixteenth centuries, a trag i c manageme nt “team” in which piety demanded that they present an appearance of ag reement. However, behind-the-scenes backstabb ing (in som e cases, literal backstabb ing) brought in opportunistic popes wh o se abu s es of off ice provo ke d th e Protestant Refor mation.
More re c ently, historian Jared Diamond te lls simila r storie s of arrog a nce and blin dness leading to demise, o nly this time the victims are entire civilizations. Fro m th e Maya s to th e Easter Islanders, Diamond shows how powe r ful dominant empires collapse, often in re m arkably sh ort periods of time. Li ke failing organizations, most of those inside the empire sense that all is not quite right, but their instincts are to more strongly defend their traditional way s of doing things rat h er than to question them—let alone deve l op the capacity to change those way s 7
We live in no less perilous times today, and the same learning disab i lit ies persist, alo ng with t heir consequences. The five disciplines of the learning organization can, I believe, ac t as antidotes to these learn ing disabilities. Bu t first, we must see the disabilities more clearly—for they are often lost amid the bluster of day-to-day eve nts.
3
PRISONERS OF THE S Y STEM, O R
PRISONERS OF OUR OW N TH INKING?
In order to see the learning disabilities in action, it helps t o start with a laboratory experiment—a microcosm of how re a l organizations function, where yo u ca n see the consequences of yo u r decisions play out more clearly than is possible in real organizations. Fo r th is reason, we o ften invite people to take part in a simulation called the “beer game,” first deve l oped in the 1960s at MIT’s Sloan School of Ma nagement. Because it i s a laboratory replica of a real se tting, rat h er than reality itself, we can isolate the disabilities and their causes more sharply than is possible in real organizations. Th is reveals that the problems originate in b as ic way s of thinking and interacting, more than in peculiarities of organization structure and policy.
Th e beer ga me does this by imme rsing us in a ty pe of organiz ation which is rarely notice d but widely preva lent: a product ion/distribution sy stem , the kind responsible fo r producing and shipping consumer and commercial goods in all industrial countries. In this case, it’s a syste m for producing and distributing a single brand of