The Essentials of Theory U

At its core, Theory U comprises three main elements: 1. A framework for seeing the blind spot of leadership and systems change 2. A method for implementing awareness-based change: process, principles, practices 3. A new narrative for evolutionary societal change: updating our mental and institutional operating systems (OS) in all of society’s sectors

Theory U identifies four different ways (or sources from) that action and attention come into the world. They arise from a quality of awareness that is (1) habitual, (2) ego-systemic, (3) empathic-relational, or (4) generative eco-systemic. The essence of leadership is to become aware of our blind spot (these interior conditions or sources) and then to shift the inner place from which we operate as required by the situations we face. This means that our job as leaders and change makers is to cultivate the soil of the social field. The social field consists of the relationships among individuals, groups, and systems that give rise to patterns of thinking, conversing, and organizing, which in turn produce practical results. Social fields are like social systems—but they are seen from within, from their interior condition. To shift from a social system perspective to a social field perspective, we have to become aware of our blind spot, the source level from which our attention and our actions originate. That source level fundamentally affects the quality of leading, learning, and listening.

Theory U revolves around a core process of co-sensing and co-shaping emerging future possibilities. But it is much more than that. The grammar and the method outlined in this book work as a matrix, not as a linear process. Some of the leadership capacities that are at the heart of the U method include:

Suspension and wonder: Only in the suspension of judgment can we open ourselves up to wonder. Wonder is about noticing that there is a world beyond our patterns of downloading. •   Co-sensing: You must go to places of most potential yourself because it is in these connections that the seeds of the future come into the world. Connect with these places with your mind and heart wide open. •   The power of intention: The power of “intention” is key. In all presencing work, the deeper intention is the opposite of corporate indoctrination. It is about increasing, not decreasing, your range of possibilities. It is about strengthening your sources of self in a world that otherwise tends to tear us apart. It is about making you aware of your own sources of curiosity, compassion, and courage. •   Co-creating: Explore the future by doing, by building small landing strips for the future that wants to emerge. •   Container building: Create new holding spaces that activate the generative social field.

The problem with our current societal eco-systems is the broken feedback loop between the parts and the whole. Theory U offers a method for relinking the parts and the whole by making it possible for the system to sense and see itself. When that happens, the collective consciousness begins to shift from ego-system awareness to eco-system awareness—from a silo view to a systems view.

This matters because energy follows attention. Wherever we put our attention as leader, educator, parent, etc.—that is where the energy of the team will go. The moment we see the quality of attention shifting from ego to eco, from me to we, that is when the deeper conditions of the field open up, when the generative social field is being activated. My work with these and other methods of change over the past two-plus decades boils down to this: The quality of results achieved by any system is a function of the quality of awareness that people in these systems operate from. In three words: Form follows consciousness.

PART I A Framework for Seeing the Field

Even though not every one of these changes amounted to a tectonic shift, this much I know: today, anything can happen. I believe that the most important tectonic shift of our lifetime is not behind but right in front of us. That shift has to do with the transformation of capitalism, democracy, education, and self.

1 The Blind Spot

We live in a moment of profound possibility and disruption. A moment that is marked by the dying of an old mindset and logic of organizing. And one that is marked by the rise of a new awareness and way of activating generative social fields. What is dying and disintegrating is a world of Me First, bigger is better, and special interest group-driven decision making that has led us into a state of organized irresponsibility. What is being born is less clear. It has to do with shifting our consciousness from ego-system to eco-system awareness—an awareness that attends to the well-being of all. In many places around the world we can actually witness the awakening of this awareness and its underlying force: an activation of the intelligence of the heart. Groups that begin to act from such an awareness can, in the words of UC Berkeley cognitive psychologist Eleanor Rosch, “be shockingly effective.” The beginnings of this shift may seem small and insignificant in comparison with the vast challenges that we face worldwide. And in many ways they are. Yet I believe that they hold the seeds for a profound civilizational renewal that is called for in order to protect and further activate the essence of our humanity.

The Blind Spot There is a blind spot in leadership, management, and social change. It is a blind spot that also applies to our everyday social experience. The blind spot concerns the inner place—the source—from which we operate when we act, communicate, perceive, or think. We can see what we do (results). We can see how we do it (process). But we usually are not aware of the who: the inner place or source from which we operate (figure 2). Let me explain. I first stumbled onto this blind spot when talking to Bill O’Brien, the longtime CEO of Hanover Insurance. From his many years of leading transformational change, Bill summed up his greatest insight like this: “The success of an intervention depends on the interior condition of the intervener.”

Learning from the Future as It Emerges My first insight is quite elemental. There are two different sources of learning: (1) learning by reflecting on the past and (2) learning by sensing and actualizing emerging future possibilities. All traditional organizational learning methods operate with the same learning model: learning by reflecting on past experiences. But then I saw time and again that in real organizations most leaders face challenges that cannot be responded to just by reflecting on the past. Sometimes past experiences are not particularly helpful. Sometimes they are the very obstacles that keep a team from looking at a situation with fresh eyes. In other words, learning from the past is necessary but not sufficient. All disruptive challenges require us to go further. They require us to slow down, stop, sense the bigger driving forces of change, let go of the past and let come the future that wants to emerge.

Let me say this in different words. We have the gift to engage with two very different qualities and streams of time. One of them is a quality of the present moment that is basically an extension of the past. The present moment is shaped by what has been. The second is a quality of the present moment that functions as a gateway to a field of future possibilities. The present moment is shaped by what is wanting to emerge. That quality of time, if connected to, operates from presencing the highest future potential. The word presencing blends “sensing” with “presence.” It means to sense and actualize one’s highest future potential. Whenever we deal with disruption, it is this second stream of time that matters most. Because without that connection we tend to end up as victims rather than co-shapers of disruption. How can we connect to this second stream of time as individuals, as organizations, and as eco-systems? That exploration has guided my research journey over the past two decades. It has led me to describe a deep learning cycle that uses a different kind of process—one that moves us to the edges of the system, connects us to our deepest sources of knowing, and prompts us to explore the future by doing.

And just as the farmer cannot “drive” a plant to grow faster, a leader or change maker in an organization or a community cannot force practical results. Instead, attention must be focused on improving the quality of the soil. What is the quality of the social soil? It is the quality of relationships among individuals, teams, and institutions that give rise to collective behavior and practical results.

2 Theory U—Form Follows Consciousness

Theory U focuses on how individuals, groups, and organizations can sense and actualize their highest future potential. You are probably familiar with the philosopher René Descartes’s famous statement, “I think, therefore I am.” That’s not where we start from the Theory U vantage point. From a U perspective we would say, I attend (this way); therefore it emerges (that way). For example: the quality of my listening co-shapes how the conversation unfolds. Or, speaking more generally, the quality of results in any social system is a function of the consciousness from which the people in that system operate. Boiled down to three words, the idea can be expressed as form follows consciousness.

Making the System See Itself Over the past couple of decades I must have seen this happen hundreds of times: groups, sometimes large, sometimes small, going through a subtle shift in awareness in how they see, sense, and relate to each other, to their system, and to themselves. Figure 3 depicts the mindset shift at issue here: switching from seeing the system as something “out there” (figure 3a) to seeing the system from a perspective that includes one’s own self (figure 3b). When that shift happens on an individual level, we call it mindfulness. Mindfulness is the capacity to attend to the experience of the present moment while paying attention to your attention. When the same shift happens in a group, we call it dialogue. Dialogue is not people talking to each other. Dialogue is the capacity of a system to see itself. To see its own patterns. To see its own assumptions.

That capacity is, of course, also the essence of systems thinking: making the system see itself. Or, as we would say in the context of Theory U–based systems change: making a system sense and see itself.

First, there is a distinction between two types of cognition: normal (downloading of mental frames) versus a deeper level of knowing. And second, to activate the deeper level of knowing, one has to go through a three-step process similar to Arthur’s parachute example: •   Observe, observe, observe: connect to the places of most potential. •   Retreat and reflect: allow the inner knowing to emerge. •   Prototype: act from what emerges in the now.

FIGURE 4: The U Process—Three Movements

then, on the right-hand side, they are mirrored by their counterparts on the way up.

The U integrates two different views of time: The shape of the U is a bow to the Eastern cyclical view, and the arrow is a nod to the Western linear view of development, which, as the ecological crisis demonstrates, is equally relevant. Figure 5 combines these views and shows the core process of Theory U and the seven ways of attending to and co-shaping the world. Whoever goes through this process experiences the following subtle shifts of the cognitive social field:

Downloading: At the beginning there is a spark of becoming aware that moves us beyond downloading—beyond extending the patterns of the past. As long as we operate from downloading, the world is frozen by our old mental habits and past experiences; nothing new enters our minds. Same old, same old. •   Seeing: The moment we suspend our habitual judgment we wake up with fresh eyes. We notice what is new and see the world as a set of objects that are exterior to us, the observers. •   Sensing: The moment we redirect our attention from objects to source, our perception widens and deepens. This shift bends the beam of observation back onto the observer. The boundary between observer and observed opens up. •   Presencing: Entering a moment of stillness, we let go of the old and connect to the surrounding sphere of future potential. The boundary between observer and observed collapses into a space for the future to emerge. •   Crystallizing: As we let come and crystallize vision and intention, the relationship between observer and observed starts to invert. Envisioning happens from the field of the future (rather than from our ego). •   Prototyping: As we enact prototypes we explore the future by doing. The relationship between observer and observed continues its inversion. Enacting happens from “being in dialogue with the universe” (rather than from our ego). •   Performing: As we embody the new by evolving our practices and infrastructures, the relationship between observer and observed completes its inversion. The embodying happens from the context of the larger eco-system (rather than from the small “s” institutional self).

Three Instruments of Inner Knowing

An open mind is the capacity to suspend old habits of judgment—to see with fresh eyes. An open heart is the capacity to empathize and to look at a situation through the eyes of somebody else. An open will is the capacity to “let go” of the old and “let come” the new.

Shifting your mode of listening is life-changing. Shifting how you listen, the way you pay attention, sounds like a really small change. But here is the thing: Changing how you listen means that you change how you experience relationships and the world. And if you change that, you change, well, EVERYTHING. And it is truly amazing how quickly people can shift their way of listening and attending. But it does take work: practice, review, peer feedback, and more practice. To become a better listener, you first need to understand the four archetypes of listening (see figure 6).

FIGURE 6: Four Fields of Listening

The four types of listening reflect the underlying principles of the opening of the mind, heart, and will: •   Downloading: Listening is limited to reconfirming what we already know. Nothing new penetrates our bubble. •   Factual listening: We let the data talk to us and notice disconfirming information. Doing this requires opening the mind—that is, the capacity to suspend our habits of judgment. •   Empathic listening: We see the situation through the eyes of another. Doing this requires opening the heart: using our feelings and our heart as an organ of tuning in to another person’s view. •   Generative listening: We listen for the highest future possibility to show up while holding a space for something new to be born.

Three Enemies on the Journey Down the Left Side of the U

What makes this journey so difficult is that these gates tend to be guarded by three “enemies” (as I would say as an American) or three “inner voices of resistance” (as I would say as an European), each of which blocks the entrance to these deeper domains. The first enemy blocks the gate to the open mind. Stanford University’s Michael Ray calls this the Voice of Judgment (VoJ). Every creativity technique starts with this instruction: Suspend your voice of judgment. It is the critical starting point because without it we shut down the creative power of the open mind.

The second enemy blocks the gate to the open heart. Let us call this the Voice of Cynicism (VoC)—that is, all emotional acts of distancing. What is at stake when we begin to access the open heart? We must be willing to put ourselves in a position of true openness and vulnerability toward another, which is the opposite of distancing.

The third enemy blocks the gate to the open will. This is the Voice of Fear (VoF). It seeks to prevent us from letting go of what we have and who we are. It can show up as a fear of losing things. Or a fear of being ostracized. Or a fear of death. And yet dealing with that voice of fear is at the heart of leadership today: to hold the space for letting go of the old and for letting come, or welcoming, the new.

The first one is to avoid mindless action. Mindless action is when we blindly implement abstract ideas without any learning. The second challenge is the opposite of the first: to avoid an action-less mind, or “analysis paralysis.” Analysis paralysis is maybe the biggest enemy of all prototyping: We discuss things to death instead of exploring the future by doing. So these are the two biggest challenges: avoiding an action-less mind and mindless action. Thus the most important capacity on both sides of the U is to “stay with it.” It is important neither to intervene too frequently by jumping in, nor to disengage by turning another way. “Staying with it” means holding the space for something to be born that is not quite there yet—building and evolving the holding space for something new to develop and be born.

3 The Matrix of Social Evolution One of my most important insights is that there is a blind spot in learning and leadership. This blind spot concerns the sources from which our action and perception originate. The aim of the Theory U method is to orient our attention to these sources of action and thought. Our patterns of thinking, conversing, and organizing create a global world of social complexity that we enact moment to moment. How can we investigate the process of creating social reality? How can we catch the process of social reality creation in flight?

enact. That is the focus of this chapter. The U is more than just a process. It is a nonlinear field theory that works as a matrix or a field.

Over many years working with groups and organizations, I have identified four archetypes or qualities of social fields that exist on all levels of systems: from micro to mundo. They are summarized in the matrix of social evolution (figure 8).

The Horizontal Axis: System Levels

The Vertical Axis: Levels of Consciousness

Field 1: Habitual. When individuals, groups, or organizations operate with habitual field awareness, they interpret present situations based on their experiences and habits of the past. Field 2: Ego-system. When individuals or groups start to suspend past assumptions and seek to see things “as they are,” they enter a subject-object awareness in which they clearly differentiate between observer and observed. They begin to notice something new. Field 3: Empathic-Relational. When actors in a system redirect their attention from object to sources and engage in an empathic awareness, they sense reality from the viewpoint of other stakeholders. They begin to see from a new perspective. Field 4: Generative Eco-system. When actors let go of old identities, a new space of co-creative awareness opens up. Actions from such shared awareness have often been described as flow by high-performing dance and music ensembles and by sports teams. They co-create from a future potential that wants to emerge.

Attending The way I pay attention shapes how the social reality around me unfolds. I attend [this way], therefore it emerges [that way]. Why? Because energy follows attention. Wherever you put your attention as a leader, as an innovator, as a change maker, or as a parent, that is where the energy of the system around you will go—including your own energy. If the principle of energy follows attention is true, we need to cultivate and focus our attention. We all live in a culture where technologies and multitasking inhibit our capacity to sustain focused attention. The biggest enemy of our capacity to sustain attention is of course in our own pockets—the smartphones that help us in one moment and distract us in another. Research shows that a smartphone on your desk drains your brainpower even if it is turned face down and you do not even look at it.

Downloading. Whenever you sit in a meeting in which everything that happens confirms what you expected, then you are downloading. Downloading is neither good nor bad. It may be appropriate in one situation but not in another. It is just one type of listening. But if it is the only way you know how to listen, and if you happen to operate in an environment of disruptive change, then you are likely headed for trouble.

Factual Listening. Moving from downloading to factual listening is quite doable: Just pay attention to what is most surprising, most unexpected, or most interesting. Cultivate your curiosity and pay attention to everything that deviates from your earlier expectations (i.e., to disconfirming data). Capture these observations, for example, in a journal to make sure you do not lose them. Empathic Listening. Moving from factual to empathic listening requires you to step into the perspective of another person. Taking this step requires you to love the other person to activate the intelligence of the heart. Sometimes that might not be easy. In such cases, you can begin by finding something that truly interests you about the other person, something that sparks your appreciation. “Switching on” your heart in this way helps you activate your source of empathic listening.

Generative Listening. Moving from empathic to generative listening is the most challenging. It is something that you cannot force. You can create conditions for generative listening. The most important intervention at this level is this: Do nothing. Do not intervene. Do not disengage. Just stay with and hold the space for what wants to emerge.

When that deeper generative field is activated, we usually experience it as time slowing down, space opening, widening, the sense of self decentering, while the self-other boundary opens up to a collective presence from which the conversation seems to flow. What I often experience in a generative dialogue is that ideas emerge collectively. People no longer say “This is my idea.” Instead, the group engages in the art of thinking together where one idea builds on the other. The impact of this type of conversation can be profound, shaping or reshaping the course of one’s life.

Organizing Global organizations are a new species on the face of our planet—a species that in less than two centuries has progressed to rule the world. Organizations are essentially

geometries of power. They structure our collective decision making. When we look at the evolution of organizations, we see four different stages: centralized, decentralized, networked, and eco-system, which reflect different stages or qualities of how organizations operate. Again, the art is to develop tools that allow the organization to change and evolve into these different stages, depending on what is needed.

Centralized In 1.0 organizational structures, decision-making power is located at the top of the pyramid. It is centralized, top-down, often with formalized roles. These 1.0 structures work well as long as the guy (or core group) at the top is really good and the organization is relatively small and agile. However, once organizations or companies begin to grow, they need to decentralize in order to move decision making closer to the markets, customers, or citizens. The resulting 2.0 structures are defined by both hierarchy and competition. Decentralized In a 2.0 organizational structure, decentralization enables the source of power to move closer to the periphery. The result is a functionally, divisionally, or geographically differentiated structure in which decisions are made closer to the markets, consumers, communities, or citizens. The good thing about 2.0 structures is the entrepreneurial independence of all of its divisions or units, its accountability, and its focus on meritocracy. The bad thing is that no one is managing the interdependence, the white space between the units. Which brings us to 3.0 structures.

Networked In 3.0 organizational structures the source of power moves even farther from the center. It originates from beyond the traditional boundaries of the organization. The result is a flattening of structures and the rise of networked relationships. Power emerges from the relationships to multiple stakeholders across boundaries.

Eco-system Finally, 4.0 structures, or eco-system structures, operate by connecting and cultivating the entire living eco-system that is organized around a shared purpose. “Swarm” organizations and Agile or Teal-based organizations are all based on self-organizing circle structures in the context of shared purpose and institutional interdependency. As the decision making is being pushed even further to the frontline of organizations (empowering), these flattened and fluid structures of decision making only work well to the degree that the mindset of the participants has shifted from ego-system to eco-system awareness. This means that the decision-making circles develop the capacity to act from local knowledge while being aware of the cross-organizational interdependency and aligned by a shared purpose.

Society 1.0: Coordinate around Hierarchy

Society 2.0: Coordinate around Competition

Society 3.0: Coordinate around Interest Groups The great accomplishment of the laissez-faire, free-market economy is growth and dynamism; the downside is that it has no means of dealing with the negative externalities that it generates.

Society 4.0: Coordinate around Common Awareness of the Whole Twenty-first-century problems cannot be addressed with the twentieth-century vocabulary of problem solving. Each of the evolutionary stages described operates with a different state of awareness:

Moving down the matrix from level 1 to level 4 takes us through a process of opening and deepening. “Opening” means to take what is inside our microcosm and make it part of the larger macrocosm around us:

“Deepening” means to internalize what is outside, to deepen our own interiority. The combined process of turning inside out and outside in is what I refer to as inversion. To be an effective leader or change maker, we need to go through the same inversion: Open up to the intelligences that are surrounding us and deepen our own interiority.

What does such a generative field experience look like from a first-person perspective? The changes that my colleagues and I have experienced include the following (see also figure 11): •   Time slows down. “It was almost as if we were playing in slow motion” while the boundary between the present and the emerging future collapses, as Bill Russell put it. •   Space widens. In moments of profound shifts in group processes, participants often sense a widening of the surrounding collective space, particularly upward. •   The self-other boundary collapses. Russell wrote about the collapse of the boundary between his team and their opponents: “It would surround not only me and the other Celtics, but also the players on the other team, and even the referees.” •   The self begins to “de-center.” This awareness is sometimes also referred to as panoramic awareness. Russell seems to refer to a panoramic awareness of the entire field, including “all the opposing players.” •   Materiality changes. The quality of matter and sensual perception also shifts. For example, in moments when social presencing happens, workshop participants often report a “thickening” and “warm” quality of the light. •   Agency changes: from rule-repeating to rule-generating or “operating from the source.” Operating from the source often comes with the experience of a presence that is not me-centered but operates through me. •   Thinking changes: from habitual thinking to thinking from source: presencing.

The other driving force works from within: the spontaneous awakening of a new awareness, of a new sense of connection to each other, to the planet, and to our future possibilities. How to cross the threshold to our deeper sources of awareness is the focus of chapter 4.

4 The Eye of the Needle

They see themselves from a higher vantage point, and they look at the journey as a whole instead of as a series of daily situations. They recognize their habitual patterns, their deeper intentions, what matters most to them, their aspirations for themselves and for their community. In short, nothing is the same. Crossing that threshold means to be willing to let go. To let go of old patterns, assumptions, and even our old “ego-self.” Only then it is possible to step into our dormant potential, our emerging “Self.”

I had read a lot about systems thinking, but I had never thought about it this clearly and simply: The essence of systems thinking is to help people close the feedback loop between the enactment of systems on a behavioral level and its source on the level of awareness and thought.

When it began to fade, I started to think about it in terms of seeing the deeper sources of social reality creation, the deeper conditions from which social action arises moment by moment. What if the visible outcomes of the social field, the tangible actions, are a function of the social soil, of the interior conditions—that is, of the invisible part of the field?

That question put me on a path toward discovering the principles of Theory U, including the matrix of social evolution (figure 8). What is the essence of the matrix? It is the reintegration of matter and mind. Field 1 is based on a complete separation of matter and mind—the downloading of an empty, hollow, lifeless body of phrases and routines: rule-repeating behavior. Field 4 is based on the complete reintegration of matter and mind, which creates rule-generating behavior that becomes a vehicle for the future to emerge.

To pass through the eye of the needle requires three conditions: the opening of our mind, heart, and will. Open Mind means no judgment, allowing the Mind of the universe to operate through your thinking. Open Heart means no cynicism, allowing the Heart of the collective to operate through your feelings. Open Will means no fear, allowing the Intention of the emerging future to operate through your actions. No one has articulated this subtle shift at the bottom of the U better than Martin Buber, who wrote these words in I and Thou (1923): He must sacrifice his puny, unfree will, that is controlled by things and instincts, to his grand will, which quits defined for destined being. Then, he intervenes no more, but at the same time he does not let things merely happen. He listens to what is emerging from himself, to the course of being in the world; not in order to be supported by it, but in order to bring it to reality as it desires. (italics added)

From Reacting to Regenerating I tell these mini-stories to demonstrate how my relationship between system and self has morphed and transformed over the years. It started with the system as the enemy. Then it evolved from seeing my connection to the system, to seeing the cracks, to learning how to help change the system. The later stories of co-imagining, co-inspiring, and co-creating are all variants of the same type operating through what Martin Buber so eloquently talked about: “He listens to what is emerging from himself, to the course of being in the world; not in order to be supported by it, but in order to bring it to reality as it desires.” That type of attention focuses on both the inner and the outer; on holding the space for something that is wanting to be born to manifest. The slight difference among these three examples concerns the degree to which the future is co-defined. In the first example the future is largely co-defined (co-imagining), while the future in the second example is less (co-inspiring), and in the third example is least defined (co-creating).

In reality its more complex, more multi-layered, more back and forth. But I do want to draw your attention to this subtle source dimension that is often ignored: that the key leverage point for transformational change starts with attending to how you as a change maker relate to the system that you want to change and to the system that you want to give birth to.

PART II A Method for Consciousness-Based Systems Change

5 One Process, Five Movements: Innovating from the Future

1. Listen to What Life Calls You to Do The essence of the U process is to strengthen our ability to be present and consciously co-create. Just as Ed Schein’s approach to process consultation (PC) starts with the principles “Always try to be helpful” and “Always deal with reality,” the U process of presencing starts with the primacy of attention and intention: “Listen to what life calls you to do.”

2. Listen and Dialogue with Interesting Players on the Edges

system. As you proceed on your mini-journey, let yourself be guided by the field. Focus on emerging opportunities. The most important helpers, partners, and guides often turn out to be different from what you expect;…

3. Clarify Intention and Core…

“The quality of the creative design process,” one IDEO leader explained, “is a function of the quality of the problem statement…

4. Convene a Diverse Core Group around a Shared Intention Convene a constellation of players that need one another to take action and to move forward. The opposite of co-initiation is marketing—getting people to “buy in” to your idea. That almost never works because it is just your idea. So part of the art of convening these players is to loosen your own grip on the idea—without necessarily giving it up. You lead by painting a picture that is intentionally incomplete; you make a few strokes and you leave lots of blank space so that others can make a contribution. In this way you shift the power dynamics from individual to shared ownership, and from ownership…

5. Build the Container And the quality of that shared intention largely depends on the quality of the container, the holding space that shapes and cultivates the web of relationships. The most important leverage point for building a high-impact container is right at the beginning, when you set the tone, when you evoke and activate the field. Container building includes outer and inner…

Practices Here are a few core practices that I rely on in my role as convener or facilitator, particularly during the co-initiation stage of the work. Practice 1 Start the day with an intentional silence. Intentional silence or mindfulness allows you to let go of the noise and everything that is not essential, and to connect with the purpose and intention that you want to be in service of. That attunement sets the tone for the day. Practice 2 End each day with four or so minutes of observation, as if you are looking at yourself from outside. Pay attention to how you interacted with others and what other people wanted you to do. Do this nonjudgmentally. Just observe. Over time, you will develop an internal observer that allows you to look at yourself from someone else’s point of view. Practice 3 To activate your generative listening, you have to fall in love with the person you are listening to. Sometimes that is not so easy. In those cases, switch on your abundant appreciation for and loving interest in the other person (or some aspect of her) within yourself. This is an inner attitude that we can intentionally activate. If you are unable to do this, then at least begin by creating a welcoming place for that other person in your heart. Practice 4 When you co-initiate with potential partners, always remember to: •   Clarify your intention to serve the…

When convening a core group, consider including key players and “crazy” activists—that is, people who would give life and soul to make it work—as well as people with no voice in the…

Co-sensing: Seeing Reality from the Edges of the System

The essence of co-sensing is getting out of one’s own bubble. Our virtual bubbles (social media echo chambers), our institutional bubbles (organizational echo chambers), and our own affinity bubbles (the kind of people we like to hang out with) keep us in the world of downloading: same old, same old. At its core, co-sensing is about immersing yourself in new contexts that matter to your situation and that are unfamiliar to you.

The key is to immerse yourself in the particulars of the field. Studying your customer is not enough. You must become your patient, your customer, the marginalized member of your community.

Outcomes of Co-sensing Whatever you do in the co-sensing phase, make sure that you generate the following:

1. A revised set of driving forces that reshape the system at issue 2. A revised set of core questions 3. A set of insights into opportunities related to each of them 4. A set of personal connections to these opportunities 5. A core team that is “switched on” to sensing profound opportunities 6. A mapping of the systemic barriers that keep the system on its current track 7. An improved capacity for building generative stakeholder relationships

Principles 6. Build a Highly Committed Core Team

Here is a checklist for a kickoff event that brings the core team together for the first time. To create focus and commitment, clarify: •   What—what you want to create •   Why—why it matters •   How—the process that will get you there •   Who—the roles and responsibilities of all key players involved •   When and where–the road map forward

7. Take Learning Journeys to the Places of Most Potential Learning journeys connect people to the contexts and ideas that are relevant to creating the possible future. The deep-dive journey moves one’s operating perspective from inside a familiar world—the institutional bubble—to an unfamiliar world outside that is surprising, fresh, disturbing, exciting, and new. A deep-dive journey is not a benchmarking trip. It is designed for participants to access a deeper level of emerging reality by observing hands-on practices through total immersion. It incorporates a combination of shadowing, participation, and dialogue.

8. Observe, Observe, Observe: Suspend Your Voice of Judgment and Connect with Your Sense of Wonder Charles Darwin, the father of modern evolutionary theory, was known to keep a notebook with him to capture observations and data that contradicted his theories and expectations. He was well aware that the human mind tends to quickly forget what does not fit into its familiar frameworks.

9. Practice Deep Listening and Dialogue: Connect with Your Mind and Heart Wide Open

I once asked UC Berkeley’s Eleanor Rosch, “How can I connect with the whole?” She said, “Through the heart.” The heart, she explained, “in any contemplative tradition is not an emotionality but a deep yogic centerpoint.” The point of deep listening is to use your heart and feelings as organs of perception. It is then, as Rosch puts it, “that the perception begins to happen from the whole.”

10. Collective Sense Making: Use Social Presencing Theater and Embodied Knowing

Another practice is called Voices from the Field. We sit or stand in a circle and speak from the authentic voice of the people that we have met. Someone might say, “I am a social entrepreneur, and I have a very clear vision but cannot communicate it well.” We do this one by one. Then, when all voices have been heard, the individual participants make entries in their journals about what they have observed and heard, and then take a thirty-minute dialogue walk with a partner, share their observations and reflections with each other, and return to discuss the emerging themes. Or we sit in a circle and map the entire stakeholder system inside that circle. Then people spontaneously stand up and speak as if they are the stakeholder whose authentic voice they want to bring into the room. We call this process a “current-reality movie.” The only rules are that you cannot step into your own role and that whatever you enact has to reflect your actual experience. With this process you learn how your own role is seen and experienced through the eyes of others.

But unlike downloading mechanisms, co-sensing mechanisms use the power of shared seeing and dialogue to tap unused resources of collective creativity.

Practice 1 At the end of each day, spend four minutes in the evening reviewing how you engaged in empathic listening (open mind and heart) and generative listening (open mind, heart, and will). If you cannot identify a single instance of deep listening, take note of that, too.

Here is how you differentiate the four levels of listening: Listening 1—Habitual: Your listening happens from what you know, from your inner commentator, not from the person in front of you. Your focus is on reconfirming what you already know. Listening 2—Factual: Your listening focuses on the actual person in front of you. Your inner commentator is fading. You notice what is different. Your focus is on disconfirming data. You see something new.

Listening 3—Empathic: Your listening happens from the other person. You begin to see the situation through her eyes. You use your heart as an organ of perception, for tuning into what another person feels, thinks, and wants to say.

Listening 4—Generative: Your listening happens from and holds the space for something essential to become present or to manifest. Time slows down, and the boundary between you and the other begins to collapse. Practice 2

Here, for example, are four questions that newly promoted directors of a global company use when they interview their stakeholders: their bosses, their customers, their teams, their network: 1. What is your most important objective, and how can I help you realize it? (What do you need me for?) 2. What criteria will you use to assess whether my contribution to your work has been successful? 3. If I were able to change two things in my area of responsibility within the next six months, what two things would create the most value and benefit for you? 4. What, if any, systemic barriers have made it difficult for people in my role or function to fulfill your requirements and expectations? What is getting in our way?

Presencing: Connecting to the Highest Future Potential After deeply immersing yourself in the contexts of most potential, the next movement focuses on connecting to your deeper source of knowing—the sources of creativity and Self. Presencing, the blending of sensing and presence, means to operate from the source of one’s highest future possibility in the now.

“How do you help people access their true creativity?” Ray responded, “In all my programs I basically do the same thing. I create a learning environment that allows my participants to address the two root questions of creativity: Who is my Self? and What is my Work?” The two questions resonated deeply. “Know thyself” appears in all great wisdom traditions.

And I remember when Master Nan told me in 1999 that in Chinese philosophy, “If you want to be a leader, you have to be a real human being.” He also shared his interpretation of Confucius’s essay “The Great Learning,” which says that to become a great leader, “you have to cultivate your own opening process.” The full transcript of the interview with Master Nan, “Entering the Seven Meditative Spaces of Leadership,” is available at the PI website www.presencing.org.

14. Follow Your Journey: Do What You Love, Love What You Do Michael Ray of Stanford University frames this principle as “Do what you love, love what you do.” His motto captures what I have heard many successful creators and innovators say: To access your best creativity, you have to go on a journey—a journey in which you follow your bliss, your feeling, your felt sense of an emerging future. You must trust that sense more than all the good advice you get from other people, which may also be valuable.

“If we have a dominant circle practice,” explained Anne, another member of the Circle of Seven, “it has to do with holding.” The women described three conditions of listening that enable a collective holding space to emerge. The first one they call “unconditional witnessing.” According to Anne, “The quality of witnessing or holding that we’re talking about here is identification with

Something like: the eyes through which you see, the heart through which you feel, the ears with which you listen are not personal. So there is very little projection onto the situation. There is little intent other than opening to what life wants to have happen right then. There’s sensitivity without manipulation. A spirit of nonjudgment and blessing.” The second one is “unconditional love.” “The focus of energy drops out of the head and into the heart in the room, because the opening usually happens when somebody’s heart really opens, and definitely when the field is identified. The energy field has to drop. There is a blessing that comes with impersonal love,” Anne explained.

The third condition is “seeing the essential self.” Noted Barbara, “I see through that wound to the truth of her. So it’s where I place my awareness that does the work. It’s a discipline of attention that has to do with how I see the people who are described by others in the circle.” Leslie added, “We have an agreement to see the essential self that we call the no-mess-up clause. No matter what one of us does, she can’t mess up as far as the others are concerned. So the intention is placed on the essential self. We have a shared belief that one of the greatest forms of service to people is to see their essential selves—that somehow through my seeing that, they experience more of themselves.”

The second condition of possibility was people’s willingness to go to the edge of the abyss, to let go of fear—and take the leap into the unknown.

Outcomes of Co-creating 1. A set of refined prototypes—living microcosms of the future—that have generated meaningful feedback regarding the guiding questions and objectives of the lab 2. A set of connections with stakeholders and partners that are relevant for taking the prototype to pilot and scale 3. Enhanced leadership and innovation capacities for dealing with disruptive innovation 4. A team spirit that could help change the leadership culture in the company 5. Creative confidence among the team members to take on big and complex projects

Principles 16. The Power of Intention: Crystallize Your Vision and Intent

You could do almost anything with just five people. With only one person, it’s hard—but when you put that one person with four or five more, you have a force to contend with. I think that’s what entrepreneurship is all about—creating that compelling vision and force.”

17. Form Core Groups: Five People Can Change the World Nick Hanauer’s view may seem a bit too American, male, and “tech entrepreneur”–centric. Yet, I believe he is right. Whenever I have seen or participated in a profound episode of change, it always boils down to the same core phenomenon: a small group of people who are deeply committed to a shared purpose and intent. It might take a few more than five people to change the world. But that core group radiates an intention to the world that has the power to attract people, opportunities, and resources that make things happen. Then momentum builds. The core group functions as a vehicle for the whole to manifest. 18. Create a Platform or Place Innovation happens in places. In nature, before the caterpillar transforms into a butterfly, it needs the shelter of the cocoon. Cocooning is a key activity of the creative process; the cocoon is the holding space that is needed for profound innovation. Also incorporate a “milestone structure” that forces the team to produce prototypes early on and generates fast-cycle feedback from stakeholders. Build in access to help from peers and experts that enables the team to go through the rapid-learning U cycle almost every day. 19. Build a 0.8 Prototype A prototype is a microcosm of the future that you want to create. Prototyping means to present your idea (or work in progress) before it is fully developed. The purpose of prototyping is to generate feedback from all stakeholders about how it looks, how it

feels, how it matches (or does not match) people’s needs and aspirations, and then to refine the assumptions about the guiding project. The focus is on exploring the future by doing rather than by analyzing. As the folks at IDEO have put it, the rationale for prototyping is “to fail often to succeed sooner” or to “fail early to learn quickly.”

20. Iterate, Iterate, Iterate: Always Be in Dialogue with the Universe Do not get stuck on the initial form of your idea. Always learn from the feedback of the universe. Hone and iterate your idea using each interaction. This principle has been effectively described and framed by Alan Webber, the co-founder of Fast Company. As he notes, “The universe actually is a helpful place. If you’re open in relation to your idea, the universe will help you. It wants to suggest ways for you to improve your idea. Now, that said, the universe sometimes offers suggestions that suck. Part of the adventure is listening to those ideas and suggestions and trying to make your own calculations about which ones are helpful and which ones are harmful.”

21. Seek It with Your Hands: Integrate Head, Heart, and Hand As the master coach puts it in the novel and 2000 movie Bagger Vance when helping a golfer who has lost his swing: “Seek it with your hands—don’t think about it, feel it. The wisdom in your hands is greater than the wisdom of your head will ever be.”

My hands know. That is the key to operating on the right-hand side of the U. Moving down the left-hand side of the U is about opening up and dealing with the resistance of thought, emotion, and will. Moving up the right-hand side is about intentionally reintegrating the intelligences of the head, the heart, and the hand in the context of practical applications. Just as the inner enemies on the way down the U deal with the Voice of Judgment, the Voice of Cynicism, and the Voice of Fear, the barriers on the way up the U are the three disconnected ways of operating: •   Mindless action: executing without learning •   Action-less mind: analysis paralysis •   Blah-blah-blah: oversharing, talking without embodied change The three barriers share the same structural feature: Instead of balancing the intelligence of the head, heart, and hand, one dominates (the head in analysis paralysis; the will in mindless action; and the heart in oversharing).

Practices Practice 1: Listen to the Voice of the Future Physicist and educator Arthur Zajonc developed this practice, which he describes as follows. “I’ll be in a board meeting where the energy is tough and maybe I’m up against some hot issue. I don’t know how to deal with it. I find myself in those times letting go. It’s a practice of saying, ‘Okay, we’ve had full, bloody attention on this thing. We’ve really turned over a lot of stuff.’ Then I kind of sit back and expand in nonfocal awareness. Empty out. Sometimes I even pretend there’s an invisible person next to me.

Practice 2: Listen to the Universe Step 1: Take three minutes at the end of each day to write down the suggestions the world has made to you that day, without judging them as good or bad.

Step 2: Write down one or two questions that follow from those suggestions that relate to current challenges in your work. Step 3: The next morning, take five or ten minutes to write down the answers to the questions you put on paper the night before. If a stream of ideas comes through, go with the flow. Step 4: Complete the “journaling” by exploring the possible next steps: What would it take to further investigate, test, or prototype your ideas?

Practice 3: Select Ideas for Prototyping Ask these seven “R” questions as you select and evolve an idea for prototyping: 1. Is it relevant? Does it matter to the stakeholders involved? Is it truly relevant individually (for the persons involved), institutionally (for the organizations involved), and socially (for the communities involved)? 2. Is it revolutionary? Is it new? Is it transformative to the system? 3. Is it rapid? Can you do it quickly? Can you develop experiments right away with enough time to get feedback and adapt (and thus avoid analysis paralysis)? 4. Is it rough? Can you do it on a small scale? Can you do it at the lowest possible resolution that allows for meaningful experimentation? Can you do it locally, to let the local context teach you how to get it right? 5. Is it right? Can you see the whole in the microcosm that you are focused on? Does this idea allow you to put the spotlight on the most critical variables? You have to choose your focus so that you can see the core issue of the system. You cannot, for example, ignore the patients in a health study, the consumers in a sustainable food project, or the students in a school project. 6. Is it relationally effective? Does it leverage the strengths, competencies, and resources of the existing networks and communities? 7. Is it replicable? Can you scale it? Any innovation in business or society hinges on its replicability and whether it can grow to scale. In the context of prototyping, these criteria favor approaches that activate local participation and

ownership and exclude those that depend on massive infusions of external knowledge, capital, and ownership.

Co-shaping: Grow Innovation Eco-systems The movement of co-shaping focuses on scaling the new while growing and evolving innovation eco-systems for collective impact. The problem with today’s societal eco-systems is the broken feedback loop between the parts and the whole. The essence of consciousness-based systems thinking, aka Theory U, is to relink the parts and the whole by making the system sense and see itself—by closing the feedback loop between collective impact and shared awareness. At the end of the day, all of the application stories in this book rely on this one methodological backbone.

But we know that these three means on their own will not be able to provide the upgrade of our governance mechanisms that is called for today. Therefore the emerging fourth coordination mechanism is critical: acting from shared awareness—acting from seeing the whole. The development of that collective capacity requires cultivation, practice, and enabling infrastructures. And that is what this fifth movement of the U, co-shaping, is about. Let us begin by talking about the prototypes. Each prototype goes through many iterations. As it evolves, it retains the best features of its earlier forms but changes in other ways in order to improve. The next question is: How can we use what we learn in these small-scale experiments and apply it to the evolution of the whole?

Outcomes of Co-shaping 1. Reviewing prototype initiatives 2. Sharing key learnings 3. Deciding which prototypes/ideas to advance to the pilot phase 4. Widening the focus from prototype to evolving the eco-system as whole 5. Infrastructures that allow the eco-system to see itself 6. A set of bottlenecks that, if removed, allowed the new to go to scale 7. Newly formed generative partnerships and alliances for scaling the new 8. A new narrative that links the work with societal or civilizational renewal

Principles 22. Create Enabling Infrastructures That Allow the System to Sense and See Itself

These two examples demonstrate how “making the system sense and see itself” can change the coordination dynamics among the players in a field, moving them toward eco-system awareness.

23. Create Massive Capacity-Building Mechanisms Two things that are missing in society today are (1) infrastructures for seeing from the whole and (2) massive capacity-building mechanisms for co-sensing and co-creating future possibilities. Practice fields are the key to building that capacity. No symphony orchestra or professional soccer or basketball team can achieve world-class excellence without practicing. Likewise, leaders and change makers need tools and practice fields in which to learn to use their tools effectively.

PART III A Narrative of Evolutionary Societal Change

Theory U is three things (1) a framework, (2) a method, and (3) a movement. What I mean by movement is a new narrative of social, economic, and cultural evolution that applies to all sectors and systems, and that aims at bridging the ecological, social, and spiritual divides.

6 Upgrading Society’s Operating System

To address these challenges, we need to step back and look at the bigger system. We need to update the mental and structural operating code. To use the language of smartphones, instead of just creating another app, we need to upgrade the entire operating system (OS). This chapter focuses on that larger narrative. How can we upgrade the economic, democratic, and educational operating systems in our societies? How can we make these systems sense and see themselves?

Economy 4.0

The Solution: Update the Economic Operating System

Societies have responded to these dysfunctionalities by creating institutional innovations such as labor and environmental standards, social security, and the Federal Reserve System, in which market mechanisms are suspended where they are not useful.

We looked at many key variables and concluded that, if they were leveraged simultaneously, the result would be an update of the economic operating system that could shift our system from ego- to eco-system awareness. I call these variables “acupuncture points” because they function like pressure points do on our bodies: When activated, they can have a regenerative impact on the whole system.

The Matrix of Economic Transformation: Seven Acupuncture Points These are the seven acupuncture points: Nature, Labor, and Capital (the three classical production factors); Technology and Management (the two more recent additions to the modern production function); Consumption (the user side of the equation); and Governance (how to coordinate the whole thing).

The media have a key role to play in the shift to a 4.0 democracy. Maintaining a democracy without independent media is like trying to breathe without oxygen. You may be busy grabbing for air, but the effort is not doing you any good. It will bring down the system. The current problem with our media is twofold: there is too much dependence on special interests and too much focus on the absencing rather than the presencing side of the equation.

Cross-Sector 4.0 The disruptions in this century so far are symptoms of three deeper structural problems: •   The inability to generate well-being for all (the economic divide) •   The inability to generate real participation for all (the political divide) •   The inability to create generative learning opportunities for all (the cultural divide)

Food: From Organics to Living Eco-system Presence In the agriculture and food sector, there has been a shift from: •   OS 1.0, traditional ways of farming, to •   OS 2.0, science-based industrial agriculture, to •   OS 3.0 model of sustainable farming practices, to •   OS 4.0 agriculture that goes way beyond food production by cultivating farms as places of economic, ecological, social, and spiritual-cultural renewal—healing the living eco-systems.

Finance: From Extractive to Generative Capital

OS 3.0, impact investing and more responsible use of money—that is, more awareness of the positive and negative externalities. Most foundations, impact investors, and venture philanthropists share these ideas and goals. Still, their projects and programs rarely address the root causes of our failing systems, which brings us to

OS 4.0, generative capital, defined by an intentional focus on the longer-term impact and on regenerating the creative, social, and ecological commons. Why did Whole Foods get sold to Amazon? For the same reason Seventh Generation got sold to Unilever: because the investors wanted to see the money—in other words, because the intention of the capital owners focused on extraction, not on serving the long-term impact on the whole. Which brings us to governance.

Governance: From Competition to ABC (Awareness-based Collective Action) Historically, the 1.0 mechanism was hierarchy and centralization; the 2.0 mechanism came with the rise of markets and competition; and the 3.0 mechanism took the form of negotiation among organized stakeholder groups.

7 Returning to the Roots

Forty years ago, my home burned to the ground. Today it is the world that is on fire. If I have learned anything from my grandfather and from the various experiences of disruption, it is this: When disruption happens, there are two options: •   You can turn away, close down, and move toward absencing: enacting prejudice, hate, and fear; or •   You can open up and turn toward presencing: embodying curiosity, compassion, and courage.