Title: "A Brief Walk into the Future: New Developments That May Reshape
Organizational Learning"
Title: "A Brief Walk into the Future: New Developments That May Reshape
Organizational Learning"
A small photo of Peter Senge: http://www.pegasuscom.com/GIFs/senge.gif
Note: This msg has my quotes and notes from Senge's talk which I enjoyed
very much. I don't have any intention of speaking for Peter; if you're
interested in the talk, I urge you to order the conference recording from
Pegasus and hear it first hand. The rest of this message contains my notes,
including some quotes that are close enough to Senge's words that I've
indicated them with quotation marks. None of these quotes have been checked
with him. At the end are links to books he mentioned.
-- Rick
-- Notes from Senge's Talk --
Most of our strategies for change come from the outside in. Re-org, new
strategies. In the hope that these will change things.
"The major premise underlying 20 years of work in organizational learning
is that orgs work they way they work because of the way that people work.
The way you and I work."
I've talked many times about organizational learning, and there are other
talks and sessions at the conference. The purpose of this talk is to
consider what else is going on the world might have important connections
to what we are doing here in organizational learning. Three items we'll
start off with.
- Governance
- Strategy
- Performance management and measurement
This is not just about the business world. How many not from business? (1/3
of the audience).
Dr. Demming first pointed out to me an important insight, "He said the
real issue is our prevailing system of management. We all learn how to
operate in our system in the first grade. Ask any kid. There's a boss...
and there are subordinates. Somebody has the answer, others don't. The game
is to get the answer. You know you've won when the boss tells you."
Governance, strategy, performance management and measurement are issues not
just in business.
Performance management. For anything you do, how do you know if it works?
We want to judge it by it's impact on business results. But, how do you
assess business results? An area of profound change starting to occur
having to do with perf measurement. We have all heard, "People will pay
attention to what you measure." One popular strategy is for people at the
top to impose a measure and targets and use these as the primary driver for
change.
The pre-eminent auto company is Toyota. Not much competition for this
honor. In terms of wealth creation and in terms of being emulated. Toyota's
market cap is equal to the sum of Ford, GM, and Chrysler. Every auto maker
has their own efforts to emulate the Toyota production system.
Toyota has *no* cost control system. None. That is, no standardized cost
control system used for the purpose of managerial control of costs. Yes,
they have lots of accountants. Lots of cost accountants.
Why do managers measure costs? So they can attempt to control costs and
thereby profit. We have more control over costs than over revenue, so 90%
of our efforts to control profit are by controlling costs. Toyota does not
do this.
H. Thomas Johnson, quite famous in accounting. A co-inventor of activity
based costing. Johnson and Kaplan, in _Relevance Lost_, say cost accounting
in business is one of the primary reasons for dis-investment.
See Johnson's paper on the Society for Organizational Learning's web page
[Here are some links:
Johnson's paper http://www.sol-ne.org/pra/pro/assessment/johnson.html
Johnson's slides http://www.sol-ne.org/pra/pro/assessment/slide.html
SoL's "Assessment" Conference http://www.sol-ne.org/pra/pro/assessment/
Society for Organizational Learning http://www.sol-ne.org ]
We call measures the 'hard' stuff, right? It's sobering to take a closer
look at how these 'hard' measures are obtained. They are very subjective.
They are incomplete and inadequate. Yet, we think of them as more 'real,'
spend most of our time on it. We regard this as the 'discipline of
management.'
Dr. Deming says that 97% of what matters cannot be measured. But it seems
that management spends most of it's time on measures. That is, managers
spend most of their time on what doesn't matter.
Since Gallileo, western scientific approach to measurement has been based
on separating things that are connected in order to measure distinct
properties. Gradually, the mechanical viewpoint extended to how we see
everything.
Newton discovered fundamental laws that govern motion. Unintended side
effects. In 20th century, we started seeing ourselves and our organizations
in this same light.
Look at Charlie Chaplan's movie, _Modern Times_. What happens when people
are treated as machines. The past 200 years are the 'machine age.' Machine
metaphor extended to everything. Thinking of us as machines. Thinking of us
as machines that need to be programmed.
Arie de Geus, in _The Living Company_ asks a simple question: What would be
the implications if we saw the company as a living being, as opposed to a
machine for making money.
Tom Johnson's zinger: "There is only one small problem. Nature does not
measure. Nature recognizes patterns... He means, you will find nowhere in
nature 98.6; instead nature cultivates capabilities to recognize complex
patterns."
It's not that Toyota doesn't measure. When they opened their plant in KY,
300 people came from Japan for a year in KY, living with the Americans.
Developing the capacity of that community to recog increasingly complex
patterns of activity in the production process. So that peole know when the
work is on track.
Toyota employs a lot of ergonomic experts. One said, "When workers finish a
two hour stint, they should come away feeling refreshed. Like the feeling
when you come out of a health club. You've worked hard, but you feel
better." It's extremely difficult for the American mindset to grasp this
notion.
Johnson has studied Toyota and Scania extensively. Scania is developing a
modularized approach to product design. Manufacturing all their products
out of a shrinking number of parts, measuring the total number of parts in
all their products. Fewer parts mean lower costs.
Much of our perceptual apparatus is on observing ratios... noticing 'more'
and 'less,' Not quantitative numbers. Swedish engineers developed a
philosophy of measurement based on ratio scales. Not quantiative in our
usual sense.
Other areas.
Governance. Another area in which there are profound winds of change.
Dee Hock. Visa. Designed to distribute power and authority. Here in America
for 100 years we have tried to redistribute wealth.... primarily through
taxes. Income distribution hasn't improved a whit. Dee makes a compelling
point, "There is no way an economic system can create an equitable
distribution of income and wealth while simultaneously concentrating
power." It's like end-point solutions to pollution.
We defend the system of concentrating power becuase of it's success in
creating wealth. The theory that a rising tide carries all boats.
But, Visa is the largest corporation in existence today in terms of created
wealth.
Concentrating power to generate wealth is not a law of physics. There are
lots of companies that are creating wealth in different ways.
I want to suggest there is something afoot about governance.
Example: The transformation of Shell Oil Company which has become a
network. Created a fundamentally different governance structure.
Grain of sand... Like the grain of sand in the oyster that irritates so
much that the pearl forms.
Here's the grain of sand in the governance story. I think the theory of
goverance that underlies Visa... the kernal idea... is the same as at
Shell. The same one we teach our kids at school, but they learn to ignore
it. The kernal is: "We hold these truths to be self-evident..." This was a
radical statement in the course of human history. Important because the
essence of all democratic theories is that power flows from ideas, not from
people.
Our corporations have mission and values statements. How many organizations
operate from the power that comes from these ideas? How many have recourse
when abuse of power oversteps those guiding ideas? When a human community
takes the principle that power flows from ideas...
Radical step is the notion that we could have a governance based on the
power of ideas.
The power to set strategy is one of the key concentrations of power... Has
been one of the unique domains of top management. Except... That the
counter examples are becoming overwhelming. Intel got into the microchip
market how? Top management insight? No... the idea came from middle
management.
Visa and Shell have hierarchies, but not hierarchies that concentrate
absolute power.
Best organizations listen for good ideas from all over, from all levels.
Gary Hamel says about strategy, "The bottleneck is in the top of the
bottle." He says that the most successful companies look for strategy
bubbling up from everywhere.
Yesterday, at a one-day conference on Sustainability here, we heard a
compelling statement of strategic re-direction. Ray Anderson, CEO of
Interface, largest mfr of commercial carpet. Their overarching vision is
never to sell another carpet. Instead, total recycying of every carpet, old
carpet broken down to create a new one. [Rick's Note: I think he means that
Interface will *rent* the use of the fibers, not sell the carpet.]
Purpose? It's the answer to 'Why are we here?' In last 30 years, this
question has disappeared from the table by an assumption that the purpose
of enterprise is not in question, it's obvious: to make money.
But Drucker said 40 years ago this was nonsense. Deming talks about deep
sense of common purpose. Money making is a consequence, not the purpose, of
enterprise.
Anderson, CEO of Interface, said, 'I've asked my people to join with me in
creating the next industrial revolution... Since the first industrial
revolution is not sustainable.'
Purpose taps the imagination...
"Our system of management, based on the purpose of maximizing shareholder
return, is very well designed to produce consistent mediocre results."
Do we believe that the last industrial revolution is sustainable? or not?
Do we believe that 2b people in China can live the way 250m people in the
US live? Do we believe that a system in which 97% of all our output by
weight becomes waste is sustainable.
The book _Ishmail_ ... If you jump off a very high cliff, it's an exciting
ride for a while!
Ray Anderson says, 'Nature generates no waste.' It's a totally closed system.
Paul Hawkin said yesterday, our society is a 'Take... Make... Waste' society.
The question I pose is, If you consider the second part of Ray's
statement... Because the industrial revolution is not sustainable... If
your view is that this is probably right... then: "How can we
simultaneously hold the view that it's not sustainable... but also a view
that it's not possible for it to change."
If we are part of nature, then must live by natural laws.
Americans live in a mythology of infiniteness... Yet, most of us hold a
view that this is is not sustainable.
Suppose you talk to parliament in 1750 that there will be a 500x growth in
productivity over 100 years. Today, there are 1b people looking for work
and not able to find it. We focus on maximizing out per person hour. The
real challenge is to maximize output per natural resource. And maximize the
meaningfulness of work.
Nature doesn't measure. Toyota has a way of measuring that's more
consistent with the way nature works.
We have a view that it can't change... But, it's changing all around us.
Living systems changing all the time. It can't occur in the mechanical way
we think about things. Not in the Newtonian billiard ball paradigm.
We are looney about leadership. When we say, we need leadership, we're
talking about top management. See if 'leadership' in your organization is
being used as a synonym for top management. That's looney. It's a statement
that we have no definition of leadership. If leadership means top
management, then we don't need the term. We don't need two words for the
exact same thing...
Was Picasso a leader? How about Mozart? Did they have organizations
underneath them?
Leadership begs for a definition that can stand on it's own two feet.
What if leadership is the capacity of a human community to create a new
future. If we saw leadership as connected to creating, bringing for new
possibilites and realizing new possibilities. That might be why we think
leadership does matter. Can a human community shape it's future. If so,
then it has leadership.
We say, we need leaders who can drive change. But, *what* do they drive?
When we say drive, we mean drive machines. Thinking that the peoople at the
top will make this machine change.
Have you ever tried driving your teen ager lately? If you garden, do you
drive things to grow? It's silly. in a machine world, hierarchy is
leadership. How is it that we can laugh at it and go back and do more of it
tomorrow?
We see the world as a machine, see leaders as driving the machine, think
that change only when someone causes something to change, since a machine
can't change itself.
A technical definiton of a living sys is that it is self-creating.
A human community creates itself. Cannot be driven. If we try, we'll get
predictable results.
Gardeners don't use carrot or stick. "They attend to the host of conditions
that can keep growth from occuring. Nutrients... Water... temperature...
access to sunlight, space for the leaves to spread out."
Two features of how growth occurs in nature. If we understood these... 1)
Seed must have the potential to grow. Or more precisely, the seed in it's
medium must have the potential to grow. A reinforcing growth process. All
growth in nature starts small, no exceptions in nature.
In business, we'll do two pilots then try to roll it out to 100 plants.
Nature would grow 1,2,4,8,16, etc. Not jump from two pilots to the whole.
2) Second, need to understand what can keep it from growing.
Effective leadership strategies tend the things that can disrupt growth.
Such as fear, distrust, and quantitative measures that tell us what matters
is what we know doesn't matter.
A system of governance that concentrate power in the hands of a few and
discourages everyone else willl inhibit growth.
It's pretty simple.
I'll close with one more from Tom Johnson. A def of learning. Don't know
where it comes from. How do we know that we are learning? Are we undoing
the mechanical? Are we working more and more toward the nature. The
definitionis
learning is the appreciation and embodiment of how nature works.
Questions:
Q: What's that book on your podium?
A: A Tom Johnson recommendation, _The Wholeness of Nature_, by Bortoft.
Lindesfarne Press. An insightful treatment of where Western science has
gone. About Goethe, who worked in science... That science is about
cultivation of the intuitive capacity of the observer. That all we need to
understand is right in front of us, but we can't see it. About wholeness, a
principle of systems thinking. Goethe says, the universe is whole. Bortoft
was a student of David Bohm's.
[Host's Note: In association with Amazon.com
Relevance Lost, by H. Thomas Johnson and Robert S. Kaplan
http://www.amazon.com/exec/obidos/ASIN/0875842542/learningorg
Also, Relevance Regained, by H. Thomas Johnson, 1992
http://www.amazon.com/exec/obidos/ASIN/0029165555/learningorg
The Wholeness of Nature : Goethe's Way Toward a Science of Conscious
Participation in Nature (Renewal in Science) by Henri Bortoft, 1996
http://www.amazon.com/exec/obidos/ASIN/0940262797/learningorg
Goethe on Science : A Selection of Goethe's Writings
by Jeremy Naydler, Henri Bortoft
http://www.amazon.com/exec/obidos/ASIN/0863152376/learningorg
Ishmael, by Daniel Quinn
http://www.amazon.com/exec/obidos/ASIN/0553375407/learningorg
...Rick]
--Richard Karash ("Rick") | <http://world.std.com/~rkarash> Speaker, Facilitator, Trainer | email: Richard@Karash.com "Towards learning organizations" | Host for Learning-Org Discussion (617)227-0106, fax (617)523-3839 | <http://www.learning-org.com>
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