From the Founding Editor

EDITORIAL

W

elcome to issue 2 of Reflections. We have learned a great deal in launching a new journal and, hopefully, you will see in each successive issueevidence of our own learning.
Deliveredby Ingenta
We all know that start-ups reveal errors ofvarious sorts
no mattertohow
Society
Organizational
hard one tries to avoid them and we discoveredthat wefor
madea gigantic one. Learning
What happened is that we ended up runningIP:
the209.6.165.251
original unedited and, in
Date: 2012..01..01..19..12..
many ways, unintelligible transcript of Don Michael’s
interview with Otto
Scharmer in issue 1 of Reflections. Don had graciously spent time fixing it up
and we had an edited version that should have appeared in print, but alas it
was the unedited one that appeared. We will, of course, learn from this how
to put in additional check points to avoid anything like this from happening
again. Don says “Please don’t read the one in the journal, it often does notmake sense.” We join him in asking you to read the edited version which isfull of the insights we promised you. It is available on our web site at www.solne.org/michael.
I want to use my editor’s introduction in each issue to think out loud alittle bit and try some ideas out on you, the readers. For example, we want tofocus some issues of Reflections on specific topics, such as “Requirements fora Sustainable Environment,” “Different Forms of Systems Thinking,” “The Role of Culture in Learning and Change,” “The Practice and Art of Change Agentry,” and so on. If
you have ideas for topics, suggestions for papers, even the energy to volunteer to be aguest editor, let us know. We have the freedom to be nontraditional, so don’t be afraid
to make suggestions that are “out of the box.”
I also want to share with you my own excitement in launching this journal. The
meetings of our editorial group are great fun, especially as we feel the freedom to becreative. Creativity and innovation are clearly fun, but the conditions for innovation totake hold are complex and should not be ignored. On the personal level, I have noticed
that my ability to be creative is very much dependent on having other areas of life
under control. If work, family, or personal arenas are in turmoil, it is harder to be creative. Check this out in your own experience.
The implication is that we need to understand the realities that operate in our own
psyches and in our environments, and we need to get them under control. One of the
aspects of the environment that we understand least, and therefore have least control
over, is the cultural assumptions that operate in our various membership and referencegroups. Those tacit and taken-for-granted assumptions can be both an aid and a hindrance to innovation and, therefore, need to be understood and managed. I will press
our editorial committee and board to stay focused on culture so that we do not unwittingly try to do things that are counter-cultural and, therefore, not feasible. If what wewant to do is desirable enough, and if it is counter-cultural with respect to some important constituencies, then let us face squarely the need to change culture and to look atthat kind of change realistically.

Ed Schein

REFLECTIONS, Volume 1, Number 2

1

Contributors

2

Russell L. Ackoff is chairman of the Board of Interact, the Institute for Interactive
Management.
John Seely Brown is chief scientist, Xerox Corporation and Director of its Palo Alto
Research Delivered
Center (PARC).
by Ingenta to
Pille BunnellSociety
is a Canadian
biologist with two
decades’ experience as a practitioner infor Organizational
Learning
systems ecology,
adaptive management, and environmental literacy.
IP: 209.6.165.251
Dori Digenti ispresidentof Learning Mastery, an education and consulting firm focusedDate:2012..01..01..19..12..
on collaborative learning, global teams, and change management.
Paul Duguid is a consultant at the Xerox Palo Alto Research Center and at the Universityof California, Berkeley.
Rafael Echeverrìa is a scholar, consultant, writer, and a principal of Newfield Consulting in Spain and Venezuela.
John Ehrenfeld is director of the Technology, Business and Environment Program at MIT.
J. Wil Foppen is Dean and Director of the Rotterdam School of Management at Erasmus
University, Rotterdam, The Netherlands.
Arie de Geus is a former executive at Royal Dutch Shell and currently a Visiting Fellow
at London Business School.
Silvia Gherardi is currently an associate professor in Sociology of Organization at the
Dipartimento di Sociologia e Ricerca Sociale of the University of Trento, Italy.
Charles Handy is a world renowned business philosopher, formerly an oil executive anda business economist with Shell International, and a professor of management at the
London Business School.
Elizabeth Handy is a portrait photographer based in London. Her recent book, The New
Alchemists, co-authored with her husband, is a study of creative people and entrepreneurs in London.
Frances Hesselbein is the chairman of the Board of Governors of the Peter F. Drucker
Foundation for Nonprofit Management and serves on many other corporate boards.
Betsy Jacobson is president of Learning Design Systems, a consulting firm based in San
Diego, California.
John Kao is founder and CEO of The Idea Factory located in San Francisco, California.
Victor Leo is System Dynamics and Organizational Learning Manager at Ford Motor
Company.
Marcial F. Losada is the co-founder and executive director of Meta Learning, a consulting company that specializes in team productivity and organizational learning located in Ann Arbor, Michigan.
Manuel Manga is an international consultant who focuses on leadership, language, andlearning.
Humberto Maturana is a Chilean biologist with a lifelong passion for the nature of life,
evolution, language, cognition, and reality.
Donald N. Michael is a professor emeritus of planning and public policy at the University of Michigan.
Wanda J. Orlikowski is associate professor of Information Technologies and Organization Studies at the MIT Sloan School of Management.
C. Otto Scharmer is a lecturer at the MIT Sloan School of Management and University of
Innsbruck, Austria, and a research partner at the Center for Generative Leadership.
Herbert A. Simon is Richard King Mellon University professor of computer science andpsychology at Carnegie Mellon University. He is the recipient of the Alfred Nobel
Memorial Prize in Economic Sciences and the National Medal of Science.

Volume 1, Number 2, REFLECTIONSContributor sJohn D. Smith is a consultant who has written about hamburger stands, data quality, theWeb, and people’s daily walks to work.
Emily Sper is a free-lance graphic designer, photographer, and communications consultant in Boston, Massachusetts.
Chris Unger is a principal investigator at Harvard University.
Etienne Wenger is a globally recognized thought leader in the field of learning theory
and its application to business.
Joel Yanowitz is a consultant to executive teams on leadership and change, Managing
Director of Innovation Associates, an Arthur D. Little company, and a Vice Presidentof Arthur D. Little, Inc.

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IP: 209.6.165.251
Date: 2012..01..01..19..12..

3

REFLECTIONS, Volume 1, Number 2

LETTER TO THE EDITOR

Reflections on Reflections

4

In today’s rapidly changing technological environment, our institutional structures are
woefully lagging. Although the term transformation is used frequently in all forms of
public discourse,very few
Deliveredby managers
Ingenta tofully grasp the profound implications of thesechanges on their
institutions.
More importantly,social interactions appear to be stressfulSociety for Organizational
Learning
and combative
ratherthancooperative
andsynergistic.
For me, this journal provides a
IP: 209.6.165.251
common meeting
place
for
thoughtful
researchers,
practitioners,
and consultants to make
Date: 2012..01..01..19..12..
a difference. Very few publications strive to provide a common ground from which effective action can be derived or from which a synergy of purpose can be discerned. Most
try to represent a special interest and thereby hope to alter the course of events in theirfavor. It’s not traditional or acceptable to announce that much is unknown regarding oursocial institutions and, because of serious implications to society, we seek the contributions of others not aligned or specialized in our own field of study. It runs counter toconventional wisdom and society strictures. Because organizational learning is an emerging field, this journal can play an enormously important role in providing a forum for research, application, and professional development.
I am unaware of any journal that strives to combine researchers, practitioners, andconsultants together for the purpose of making our institutions more effective in thetwenty-first century. With rare exception, neither Sloan Management Review nor Harvard
Business Review attempts to develop theory or test its propositions in operational settings. Both publications provide very interesting stories, but they are declaratory in nature, offering ten steps to success, five basic competitive actions, or recipes on careerdevelopment. I do enjoy reading these publications, because they condense a big volume
of information into few pages . . . but they are not about bringing a diverse communityof people together to learn and jointly discover what’s possible and beneficial. With
these two journals, I’m a passive passenger; in Reflections, I’m both a passenger and amember of the crew.
Although SoL’s research community could provide ample material to fill a journal,
the practitioner and consultant voices need to be heard. The three “voices” of the journal demonstrate that synthesis and community provide important knowledge about institutional change and human behavior. I and many of my business colleagues are very
dedicated to the creation and dissemination of organizational learning theory, methods,
and tools to the broader business community and general public.
From a businessperson’s point of view, the editorial structure is especially interesting. The people represented on the editorial board represent “the best and the brightest.”
The work of the editor is the key to this project. You need to hold contributors to two
standards: (1) Does the article contribute to the purpose and principles of SoL? and (2)Is the article written in both style and content to provide insight for the three customersof the publication: researchers, practitioners, and consultants? The object of Reflections
is to help the community further develop its understanding and wisdom concerningwhat’s necessary for our institutions to fully contribute to a healthy, productive, andsustainable society.
Sincerely,
Victor Leo
Ford Motor Company

Volume 1, Number 2, REFLECTIONSEDITORIAL

In This Issue
Edgar H. Schein and K aren AyasD

ear Reader—It is with great pleasure that we bring you our second issue. We will fol
low the pattern of presenting some classics, some features, and a variety of personal
items in different formats.

Delivered by Ingenta toSociety for Organizational Learning
In this issue,IP:
we 209.6.165.251
continue to mix old work that is still relevant with new work. Don
Date:one2012..01..01..19..12..
Michael has beenof the most seminal thinkers of the last four decades, so we will
Classics

continue to expose readers to his most profound and prophetic work. In particular, weshould note his sense that more information does not necessarily produce more knowledge or wisdom. In fact, it might work in reverse. The more information we get, the lesswe know. In our other classic, we have one of the great thinkers, Herbert Simon, elucidate what it would take for an organization to learn, and to think about this in very fundamental terms of how new knowledge is created, stored and passed on in organizations.
As usual, we present commentaries by people who are less academic by profession tostimulate dialogue. Frances Hesselbein and Arie de Geus comment on the relevance ofMichael’s then “new competence” to the society’s view of competence in the world welive and work in today. John Kao and Wil Foppen show the relevance of Simon’s analysis to contemporary concerns, especially to management education.

Features6

As features, we present a mix of conceptual and practical, previously published and newwork. One of our purposes in the journal is to explore the creation, dissemination, andutilization of knowledge. John Seely Brown and Paul Duguid explore different conceptions of knowledge, especially the distinction between “know-what” and “know-how.”
The whole question of whether know-how can be transmitted except face-to-face in communities of practice emerges as a central issue. Wanda Orlikowski and Etienne Wenger
not only comment on, but elaborate, and to some degree, disagree with some of the conclusions of the Brown and Duguid article. Wenger’s book which deals with these issues
is reviewed later in the journal.
We then switch to something very practical from Dori Digenti who has experienced
and studied knowledge transmission in collaborative consortia and analyzes the conditions for such learning to occur. Russell Ackoff raises some important questions about
this form of learning, and Digenti replies. We hope that this kind of “confrontive” dialogue can occur in this journal and that we can work toward clarity rather than brushing issues under the rug. Silvia Gherardi continues to explore the relationship between
management, organizations, and learning in her entertaining commentary and highlights
the obstacles to translating collaborative learning into practice.
Finally, we return to a body of thinking that was launched by Maturana at the SoL
annual meeting last year. Seldom has one person’s speech occasioned so much interest,and seldom have we seen so many “commentaries” that were themselves importantanalyses in their own right. Humberto Maturana and Pille Bunnell in their second essayin the series explore “love” as the only emotion that expands intelligence and ManuelManga shares his curiosity about how one might “operationalize” love. The comments
offered by Rafael Echeverrìa and Marcial Losada (in response to the essay published in
our first issue) raise some issues, deepen our understanding, and invite you the reader
to join the conversation.

Volume 1, Number 2, REFLECTIONSSCHEIN AND AYASNext, we invite you to meet Charles Handy, a former MIT Sloan Fellow, manager, professor, educational administrator, and radio personality who has since become one of theworld’s most profound and entertaining pundits. Otto Scharmer interviewed him four
years ago and we wish to share some of Handy’s observations as he reflects on why organizations exist, why they learn, and how they learn. This interview is especially important in that it presents an overview of several of Handy’s influential books andexplores his crucial concept of “Federalism” as an organizational form.
We close this section with two shorter pieces: Chris Unger’s reflections on what wevalue in life; and Betsy Jacobson’s invitation to reconceive balance and experience it as
the ability to reflect, feel appreciation and set boundaries.

In This Issue

PeopleDelivered by Ingenta toSociety for Organizational Learning
209.6.165.251
Finally, we bring you three book reviews. TheseIP:
reviews
are all exceptional contributions
Date: 2012..01..01..19..12..
to the field in their own right. John Ehrenfeld’s passionate
and concerned voice raises moreNews & Views

important issues than what the book Natural Capitalism fails to address. His review is a
wake-up call: Are we aware of what it would really take to create a sustainable future?
Once again, please write or e-mail us your suggestions and recommendations. Let
us know what you think. We thank Vic Leo for his reflections and hope you will also
assume the role of a participant rather than a passive observer. Send all mail electronically to pubs@sol-ne.org or to Editor, Reflections: The SoL Journal, 222 Third Street,
Suite 2323, Cambridge, MA 02142

7

REFLECTIONS, Volume 1, Number 2

CLASSIC

Competence and Compass ion
in an Age of Uncertainty
Donald N. MichaelIn an era of widespread social turbulence, the efforts of individuals and institutions to assert and exercise control over societal circumstances are increasingly seen to be counter-productive. A different perception of the nature of existence, and a recognition that inability to control is not necessarily a sign ofweakness or incompetence, could help nourish the emergence of more humane
and worthy modes of personal behavior and public regulation.

Donald N. Michael

The belief persisted that increased power to alter the environment brought increased control over it. This belief, still far from dead, is a manifest delusion.
First, as every engineer knows, the difficulty of devising any physical control
system lies not only—usually not chiefly—in generating enough power but also
in generating enough information. Since the material world is a system, anychange in the given is bound to have numberless, often unpredictable, repercussions throughout the system; so even if the effect of the intervention is to bringunder control the variable which is directly affected, the total system is likely tobe less predictable than before, while all learned skills based on the former“given” are depreciated. Further, these interventions, and the further interventions to which their unpredicted results are bound to lead, are likely to be selfmultiplying. The rate of change increases at an accelerating speed, without acorresponding acceleration in the rate at which further responses can be made;and this brings even nearer the threshold beyond which control is lost.
—Sir Geoffrey Vickers1

8

Published in “World Future Society Bulletin,”
January/February 1983.
©1981 Donald N. Michael

It is a grand irony of our culture that one of its most basic premises—that
more information leads to more knowledge, which in turn leads to more power
to control—has turned on itself. Instead, we confront the undeniable fact that
more information has led to an ever-increasing sense that things are out of control. Information about environmental deterioration, economic disarray, toxic
wastes, national security, the dissolution of the family, or the stumbling of theschools all point in the same direction: we are unable to control our society,informally to guide it or formally to regulate it, into performing the way we—
any group of “we’s”—would want it to perform. What is more, the more information available, the less people are inclined to assign legitimacy to theinstitutions or organizations described by the information. On the one hand, theinformation reveals ineptitudes in practice and fumblings of purpose if not immoral or illegal actions. On the other hand, information provides the grounds
for conflicting interpretations of what is going on and what should be done,
thereby deepening the conclusion that nobody really knows what to do or how
to control the situation. The consequent endemic distrust and delegitimation inturn undermine efforts to gain control for attaining desirable ends or even formaintaining reliable norm settings, thereby amplifying the indicators of incompetence. Finally, information in the form of future studies strongly implies
that things are highly unlikely to be more controllable in the years ahead.

Volume 1, Number 2, REFLECTIONSMICHAEL
Competence and Compassion in an Age of Uncertainty

For those whose roles define competence as the ability to control outcomes, and that includes most managers
and administrators in conventional organizations, thisstate of affairs is increasingly disturbing, upsetting bothpublic performance and private well-being. Two responses
are typical: for some, dogged efforts to force or more intensively seek control; for others, a beginning reperception of
the relation of humans to each other and to their worldthat moderates the aspiration to control. To those in thelatter group (in which I include myself) it is increasingly
evident that the conventional passion for control results inbehavior and norms that are antithetical to human development in a turbulent world.
Of course, there have always been a few wise administrators and executives who are comfortable in the knowledge that things are mostly out of hand and who, throughtheir wisdom, manage to keep things tolerably balanced if
not optimized. My impression is that such wise balancers
and optimizers are comparatively rare in the United States
and that, regardless of personal philosophies, those responsible for a leader’s public image present him as if hewere in fact in control. That Chief Executive Officers andother senior administrators often, by choice or necessity,
make decisions based on hunch or intuition is obscured
behind clouds of data projections and public relations verbiage aimed at convincing everybody that the organization
recognizes causes and controls them to good effect.
In the following paragraphs I will describe some typical behavior associated with efforts to control and some of
the counterproductive consequences of those efforts all
too evident today and certain to be even more counterproductive tomorrow. To understand why so much effort andstatus are devoted to attempts to control, I will propose a connection between
Newtonian/Cartesian epistemology and the dominant definition of competence in the West, chiefly practiced and promulgated by white males. In thisway we can better appreciate the potential utility of a much older and morepervasive way of balancing and optimizing; that chiefly ascribed to and practiced by women and many non-Western cultures.
I will use as examples some pervasive devices used in management, in thepolitics of management, and in politics per se to maintain the illusion in self
and in others that the “target” situation is controllable or is under control.
Probably the most widely practiced device is that of partitioning: delineating “a social problem” and splitting it into parts, allocating them to different disciplines, offices, and functions. Each effort then is bounded and insulated fromthe conceptual and operational ambiguities, impasses, and evidences of ignorance that would bedevil those working on their “part” if inputs, outputs, andthroughputs were not so insulated. Instead, their “appreciative sets”2 usually protect them from even recognizing thatsuch unexamined connections exist.
A sense of felt control over a problem is often attempted by laying a synthesizing effort over the separate
components. In fact this usually becomes a summarizing
rather than synthesizing task since little or no validated
theory overarches or coordinates the insulated perspectives applied to the
problem by those working on its parts.
Does the systems approach offer a way to attain control that overcomesthe inadequacies of the partitioning process? When the “problem” or “situation” is a stable one or one that transforms according to known relationships

From The Next Choice: Contr ols orConnections by Tony Richardson
and Jack Macneish, Don’t Press,
1995.

More information has led to anever-increasing sense that things
are out of contr ol.

REFLECTIONS, Volume 1, Number 2

9© Bachrach

MICHAEL
Competence and Compassion in an Age of Uncertainty

10

Frances Hesselbein

Commentary
by Frances Hesselbein
Donald Michael’s view out the window in
1981 sounds like a report from thismorning’s newspaper. We are still (and perhaps forever) living in a world of accelerating change and social turbulence. Michaelpresents the Newtonian-Cartesian point ofview as the basis for the then widely held
understanding of competence. He suggeststhat a “new competence” might lead to amore compassionate society.
Society’s view of competence today ismuch more influenced by the ideas Michaelposes as “new.” The interconnections andcomplexities of the world today (illustrated
in a snapshot by the World Wide Web) are
understood by most. At the same time,
acceptance of uncertainty and the need toembrace conflicting perspectives has also
grown. Finally, a reliance on learning has
been spreading throughout society. Lifelong
learning is no longer a phrase used to describe the practices of an emeritus professor.
Lifelong learning is now the goal and necessity of executives and professionals in all
fields.
Michael’s view of a “new competence” hasin many ways come to pass since 1981. Therealso remains a desire for results in changing
the lives of people and society. These changes
are not produced by the command and controlof the once “competent” leader but rather by
the example, inspiration, and direction of a“how-to-be” leader. This leader, working incollaboration with individuals and organizations, uses mission as the guiding star to provide groups of individuals with a common
purpose. This leader works within an organization that understands the discipline of innovation and knows that careful communication
with customers can provide insight that leads
to new dimensions of performance. This leader
unleashes the energy and capabilities of thesepeople to make real changes in the lives ofpeople, their families, and communities.

then indeed the systems approach often does provide more control—within
whatever is designated as “the system.” But we do not understand the processes of social change in turbulent and complex situations that exist in ourworld. We discern and agree on very few stable, reliable, or transformational
relationships, and, for the most part, we lack concepts for describing turbulent change. The systems approach therefore does not add controllability inprecisely those areas where one would most like it to. Note, for example, thedismal record of econometric models. Moreover, if systems analysis and synthesis have any influence, by that very fact they are likely to contribute still
another variable to the essentially unpredictable societal emergence.3
Belief in the ability to control is also abetted by another important version ofdividing up the problem: turf protection. Not only do strong boundaries aroundsubunits of organizations protect their members from the uncertainties that would
otherwise arise, they also reduce the risk that outsiders might detect insufficiencies in the subunits’ grasp on reality. In this way both insiders and outsiders canbetter preserve their sense of things being under control since each knows little
about how well or poorly the other actually is able to match intent to outcome.
Assigning sole responsibility to the individual for what happens in his or
her life also helps perpetuate the belief that control is attainable. According tothis norm, an unfulfilling life is due to the individual’s failure to control life
situations rather than to any flaw in the concept of controllability itself. In recent years this emphasis on the individual’s total responsibility has been endorsed from a new quarter. Several of the self-actualization philosophies, suchas EST, categorically assert that one is responsible for everything one is or isnot. While this dogma discourages blaming others for circumstances one
might in fact alter—not control—it also encourages the antisocial attitude that
another’s difficulties are solely their own responsibility to control. This attitude also removes the anxiety that might be aroused trying (and perhaps failing) to help another control their environment. (The other extreme is, ofcourse, to explain the absence of individual fulfillment as a failure of the social system to control adverse impacts on the person.)
These conventional norms and behaviors that serve to reinforce belief inthe controllability of the social world are increasingly counter-productive intimes of social turbulence. Those whose competence is defined to include thecapability to control find themselves caught between hubris and despair with
anxiety a constant companion and “burn-out” a frequent destiny.4 Others frustrated by undesired or unexpected outcomes, seek greater control outside thelaw (e.g., the Watergate break-in, aircraft hijackings, etc.) or by recourse to
single issue voting, injunctions, referenda, and endless adversarial confrontations in and out of the courts.
In a world where everything is connected to everything else, narrowing
the issue according to the special preconceptions of persons, groups, or officesin the expectation that in that way control can be attained distorts what otherwise is a constructive societal regulative process into one where, increasingly, everything blocks everything else. Even when the sought-for outcome isreached the reverberating consequences eventually undermine the control attained.5 What is more, when partial definitions of a problem are exposed rather
than hidden, they generate disagreements. This enlarges the scope of the problem, and, given the present low trust of big organizations, counter-claims byproponents of each partial definition that theirs is the true description of thesocial problem or the true approach to solving it can only deepen distrust.
Uncertainty about where to locate the problem boundaries cannot be acknowledged, so each party’s position must be put forward with great conviction.
This is because acknowledging uncertainty means acknowledging that one isunsure what causes different effects, and hence is unable to control the situation, or “solve” the problem. But this posturing is becoming increasingly shortsighted. By refusing to admit uncertainty about the nature of a situation andwhat can be done about it, institutions and leaders are only inviting scorn andVolume 1, Number 2, REFLECTIONSMICHAEL
Competence and Compassion in an Age of Uncertainty

repudiation as proliferating information exposes evidence of ineffectiveness,
confusion or worse.
What is the origin of the belief that social circumstances are controllable,
and, when did we start defining competence as the ability to attain that control? Historically kings, merchant princes, and the like have sometimes effected social control—or the semblance of control—through coercion or
charisma. But, here, I will attend to an interlocked psychological and epistemological source of that belief because it exacerbates the special problems ofliving in our turbulent world, namely: the world view elaborated and reinforced by the physics of Newton, the philosophy of Descartes, and an evenolder legal tradition that emphasized private rights.
The Newtonian/Cartesian view sees the world as comprised of separate
things, particles, and of the relationships between them. Cause is separate from
effect (as are the “things” that cause the “things” that bear the effect). Subject
is separate from object, fact from value. Relationships among things are linear;
they begin and they end. This “particulate” condition was conferred on naturalprocesses because Newtonian science showed that things behaved lawfully;
their performance was repeatable and predictable, and that if one had theknowledge of causes and effects, one could control effects
by controlling the causes that produced them. Knowledge
for attaining such control was scientific in character, discovered in the laboratory where cause and effect could be
separated and where controlled experiments could be undertaken to illuminate the relationship. (Or, more revealingly, the only phenomena studied in the laboratory were
those in which cause could be separated from effect.) In
this way, scientific/technical information led to knowledge, which in turn led to the power to control outcomes.
Most conspicuously this world view demonstrated its utility in situations where
hard technology was the controlling agency: either technology controlled causes
so as to produce a specific effect or its production was the effect desired, in response to a specific cause.
Since scientific knowledge was expected to dissolve all accretions of religion,
ritual, and ignorance from whatever source, resulting in universal enlightenment,
the Newtonian/Cartesian world view also served as the epistemic model for human society even though underlying causes and effects and lawful relationships
had not been “scientifically” demonstrated. That is, individual and social processes were, and still are, believed to be the products of the causal interactions
among “variables” within and between persons, groups, institutions, organizations, etc., each of which is separate from the others. Thus, the competent leader,administrator, or manager was one who could deal, or at least endeavor to deal,
with the human condition in the same spirit and with the same intention to control as the technologist or engineer. (This approach had the added advantage ofbeing completely compatible with behavior based on the cruder, more widely dispersed world view that might makes right.) This spirit and intention is nicely exemplified in the aspiration to solve social problems through “technological fixes.”
That is, the situation would be fixed both in the sense that it would now “work,”
and in the sense that it could be expected to remain in the desired end state. Bothoutcome and process would, as a result, be under control.
As the beliefs of the Age of Enlightenment were promulgated and disseminated, ascribing to science and technology unlimited ameliorative power to freehumankind from its constraints, males were most exposed to these beliefs throughtheir activities in industry, business, and government, under circumstances that
demonstrated their utility and, hence, their validity. Since much of what preoccupied males was directly or indirectly the result of technological applications, andsince these “worked,” males came to embody these beliefs, practicing them when
they could and affirming them always. In such a heady atmosphere of successful
efforts to control (in part “successful” because those who were victims rather than

Assigning sole r esponsibility to theindividual for what happens in his or
her life helps to perpetuate the belief
that contr ol is attainable.

REFLECTIONS, Volume 1, Number 2

11

MICHAEL
Competence and Compassion in an Age of Uncertainty

12

beneficiaries of technological control were routinely ignored or discounted), there
was every reason to suppose that the same world view and definition of competence would hold true under any and all societal circumstances: a competent person could, through information, gain the knowledge needed to discover the causes
and effects of the human condition and to control them.
Under such norms errors became failures and these are evidence of incompetence: they demonstrate a failure to apply correct knowledge andthrough it to exercise control. In a male-dominated world, operating by thisdefinition of competence, one’s self-image is closely tied to and tested by successfully exercising control. Besides seeking to demonstrate ability to control
it is also very important to deny to one’s self and surely to others evidence that
one is not in control. The behavior and norms described earlier embody thisdenial whatever else they might express.
In summary, white, Western, males have incorporated into their definitionof competence the myth that the world is fully controllable through information about cause and effect. One ironic result of this world view has been an
enormous transformation of the world into one that both is and appears to be
increasingly less controllable. In today’s world information undermines reliability and predictability by stimulating emergent human phenomena whether
these be the secondary effects of a technological fix, of an idea, or of a welfare program. It is a world in which information increasingly demonstrates thatthings aren’t going as intended. The result is two-fold. On the one hand, there
is retrenchment by those who would control, an effort to deny their impotency
by more intense efforts to control. On the other, there is beginning to emerge
in some men another world view and a different definition of competence—
one long practiced by women and in certain non-Western cultures, amongpeople who have never claimed to possess certainty of control, in part because
they have seldom had the opportunity to do so.
Like all myths humans contrive to make sense of the mystery of being, theone that defined reality as a world of particles causally related, was a systemof deceptions, useful, indeed powerful for some purposes, but unavoidably
arbitrary and dependent for its viability on not noticing, not appreciating, whatelse was happening that didn’t fit.
What is defined as cause or effect is a highly arbitrary excerpting from aseamless web, from a fuzzy image. What to differentiate as in need of control
and what to characterize as being controlled are socially given: they depend on
the appreciative set of those doing the differentiating and those “controlling”
from their various points of leverage. In earlier days, those seeking to control
could ignore with considerable impunity that which they were deliberately or
inadvertently indifferent to or ignorant about pertaining to the uncontrolled consequences of their acts. When recognized at all, these were the “externalities.”
Also, because knowledge and instrumentation were less sophisticated, feedback
from “technological fixes” was so slow (or so incomplete) as to give the illusionthat things were indeed fixed, and under control with boundaries holding. (Thisillusion was especially strong in males whose faith in the myth of control often
included a need to believe it in order to protect their self-identity.)
But the human condition is, to an unknown degree, inherently unpredictable because it emerges unrepeatable, out of itself. It is morphogenetic:
memory and consciousness and their consequences are irreversible, contrary
to the dynamics that define the behavior of Newtonian particles. This emergent quality is immediately obvious in the arts, in science, in politics, and ininterpersonal relations (even though in the latter, especially, we often try topretend it isn’t so). Neither an individual nor a society can be reset to zero,
wiping out both what has happened and the effort to wipe it out; this is especially evident in societies rich in information. The human condition is to some
unknown degree non-homeostatic; it does not revert to equilibrium—which
circumstance fatally flaws extant economic theory and much theory in the behavioral sciences—along with their “technological fixes.”

Volume 1, Number 2, REFLECTIONSREFLECTIONS, Volume 1, Number 2

MICHAEL
Competence and Compassion in an Age of Uncertainty

What then comprises the “new competence” appropriate to a world where
uncertainty and complexity make it counter-productive to reward the old competence?
First, we need to accept that we can seldom deliberately change thingsfrom state A to B since we really don’t know what it is that we are changing.
States A and B are only arbitrary parts of an unknown totality; we do not knowwhat we are not attending to. Since A and B are inherently fuzzy concepts, so
too must be the concept of what is to be changed. Hence whatever we do is by
way of affecting a situation instead of changing it. This term conveys an appropriately more tentative sense of capability to intervene decisively than isassumed when we imply or expect the competence to change a situation in acontrolled manner. Viewing existence in this way, we may also avoid the despair and the fury that sometimes results from the frustration of trying to control change in a world in which it is increasingly evident that everything isconnected with everything else and uncertainty grows as does information.
Second, we need to live with and acknowledge uncertainty. It is commonplace to observe that people can only deal with so much uncertainty before theyseek security in God, technology, or charisma. This is probably true at somelevel; but what if uncertainty were accepted and shared as our common condition and acknowledged by leaders rather than being denied by them in order tosustain the belief that certainty is attainable through their vision and judgment?
Surely we can tolerate much more uncertainty when we have others to share it
with. Misery loves company; and, when shared, it can also increase capability.
But why should a person or organization run the risks of sharing their uncertainty? One reason is that acknowledging and sharing uncertainty is necessary for learning. Neither we ourselves nor our associates, nor the publics thatneed to be involved if they are to learn to make responsible demands, can learn
what is going on and might go on if we act as if we really had the facts, werereally certain about all the issues, knew exactly what the outcome should/could
be, and were really certain that we were attaining the most preferred outcomes.
Moreover, when addressing complex social issues, acting as if we knew what wewere doing simply decreases our credibility. A critical requirement for effective
authority, public or personal, is some kind of shared belief, a fundamental (ifqualified) trust in the capability, reliability and responsibility of institutions. But
studies show that this is not the prevailing state of mind today and that distrustof institutions and authority figures is increasing. The very act of acknowledging uncertainty could help greatly to reverse this worsening trend.6
Third, we need to see the world as “both/and” rather than “either/or.” Theslack has gone out of our ethical system because of its unavoidable internal contradictions and because its injunctions become their own opposites—this is theperipeteia the ancient Greeks warned of—when one or another separate value(like freedom or equality) is excessively forwarded for the purpose of making it
the sole controlling value of society or of a person’s life. In an either/or epistemology of separate things, including separate values, this leads to single-issue
voting, exploitive and self-righteous adversarial tactics, and frantic efforts to findsalvation through emphasis on self, all of which are progressively counter-productive. Furthermore, increased information removes the comfort of ignorance about
the consequences of separate actions and about the connectedness of conditions.
At the same time, lacking an appropriate world view, we are left ignorantof the structure of connectedness. People who perceive the world as both/and(i.e., connected) rather than either/or (i.e., separate) have the potential to express more tolerance and compassion toward themselves and others. If we cansee ourselves as connected, yet ignorant of most of the connections, then we
have little choice but to be compassionate: updating an observation of an earlier day, “There, through the grace of God, go I.”
Acting with compassion means acting with the recognition that: (1) nobody, including oneself, really knows what they are doing, certainly not interms of the consequences of their acts, which is what most “doing” is directed

13

MICHAEL
Competence and Compassion in an Age of Uncertainty

toward: (2) everyone is, to some profound degree, living in illusions, believing
in the “factness” of what comprises their world rather than recognizing that welive in an arbitrarily constructed social reality; and (3) everyone is in one way
or another struggling to cope with the existential questions of life, death, andmeaning. Under these circumstances everybody needs all the clarity they canmuster regarding their ignorance and finiteness, and all the support they canobtain in order to face the upsetting implications of what their clarity illuminates for them. A compassionate person is one who, by accepting this situation, can provide that kind of support toward self as well as toward others.
Living compassionately would also free people from the pressures to act as
if they really knew what they were doing and how to do it. That is, I would knowthat I don’t know and I would know that others who knew they were ignorant,
would also know that I don’t know. In particular, living more compassionately
would reduce the need to hide errors of the sort that arise from actions intended
to control (i.e., actions based on presumed knowing). Instead, actions intended
to affect something would be based on shared and acknowledged ignorance thatmust accompany any body of knowledge. And it would reduce the need to act
over-cautiously and conservatively out of fear or being caught out in a mistake,of being unable to control. Accepting this ignorance and its associated vulnerability would reduce the need for those defensive, self-protecting, interpersonal andpolitical posturings that make it so hard to act responsibly and compassionately.
Essentially, what this means is that the way to regulate well in times ofgreat uncertainty is by learning rather than controlling. Not learning the answers to known questions that serve the intent to control but learning whatquestions about balancing and optimizing now merit asking and then learning how those questions might be answered provisionally—until the present moment emerges into a newcontext of questions.
There is increasing evidence that people feel morecompetent and are in fact more contributive, creative, andproductive when they participate in decisions affecting
their own life way. Doing so requires learning about theirlife way. The research jargon has it that their sense of “feltcontrol” increases and that therein lies the reward of suchparticipation. I suspect though that it is the engagement
itself, “the maintenance of relationships in time,”7 that is
actually the reward. At any rate, in an uncertain uncontrollable world, joint
participation in creating, unfolding, and affecting that world is the precondition for engendering trust, for learning, and for accepting and practicing responsibility.
This mode of participation, called co-creation or co-production, is a wayof affecting one’s world and of learning about it—and about one’s self—that ispracticed by many mothers (and by some fathers) and by all good teachers. But
its successful practice requires openness to the unexpected: vulnerability. Neither process nor outcome are controllable in the old sense: the norms of cocreation preclude individual attempts to gain control of the joint creative effort.
Individuals or organizations learn little if defenses are up, if vulnerability
is avoided, if, instead, the context is controlled, or if one seeks to control inorder to exclude information that exposes the limits of control. Living vulnerably requires that the sense of being in control be replaced by a sense of being
cared about. Nurturing, and being cared about, in Western culture, have traditionally been the roles performed by women. However, nurturing is not an
ability possessed only by women, as some non-Western cultures evidence, andas growing numbers of Western men demonstrate too. Men in Western society are beginning to acknowledge their need to nurture and be nurtured. I am
somewhat hopeful that we can continue to move this way because the needfor nurturing is also coming to be acknowledged—though I do not know how
widely—among senior executives and administrators, among those very lead-

We do not under stand the pr ocessesof social change in our turbulent
and complex world, so the systems
approach does not add contr ollability
in those ar eas.

14

Volume 1, Number 2, REFLECTIONSAuthor’s Note
This article was to be a contribution to a proposed festshrift volume for my friend andcolleague, Geoffrey Vickers. His ideas—eg. appreciation, balancing and optimizing, regulation, relationship maintenance—are profoundly important for understanding the processes and purposes for learning. They influence me to this day. So it is truly a privilege
to share our intertwined preoccupations with this readership.
— DNM

MICHAEL
Competence and Compassion in an Age of Uncertainty

ers and decision makers who no longer find it possible to control or who nolonger find self-respect in pretending they are in control.
Adopting the norms and behaviors just described will not transform theturbulent world we face into one of permanent stability. But increasing awareness of the emergent quality of human life, engendered by the density of information, combined with a move toward, and a focus on these norms andbehaviors could engender something else. Some other set of circumstances
could arise from adopting a different definition of competence. This “something else” might be a world in which at least some of the turbulence associated with the epistemology, norms, and behaviors of control gives way to othercircumstances more to our liking. This would not necessarily be a more controllable world but at least it should be a more livable one, in which thesenorms and behaviors engender and express a “concern to be reliable to eachother.”8 The conventional endeavor to control might then become a special
technique useful in certain contexts now unspecifiable.9

Notes
1. Sir Geoffrey Vickers, “Ecology, Planning and the American Dream,” in The Urban
Condition, Leonard Duhl, ed. (New York: Basic Books, 1963), p. 101.
2. Vickers, The Art of Judgment (New York: Basic Books, 1965), chapter II.
3. Donald Michael, “Planning’s Challenge to the Systems Approach,” in Futures Research:
New Directions, H. Linstone and W. Clive Simmonds, eds. (Reading, Mass: AddisonWesley, 1977). For the most part, turbulent processes have not been modeled eventhough the outcomes are often predictable. In the physical sciences, turbulent systems
tend to self-destruct, to approach equilibrium, or, in certain instances, to stabilize as
more complex systems, as Ilya Prigogine has shown. But for humans today, it is the turbulent processes per se that are crucial, because we live in and by them. Whether turbulent conscious processes operate or can be conceptualized in the same way asmaterial or materially constrained phenomena, remains to be seen. Prigogine apparently
believes they can. Meanwhile, Michael Polanyi’s argument that the properties of thewhole transcend those of the parts and can be recognized only after they emerge merits
much pondering. (See Polanyi’s The Tacit Dimension, New York: Doubleday, 1966.)
4. William Bryan, “Preventing Burnout in the Public Interest Community,” The NRAG
Papers, 3, #3, Fall, 1980 (publication of the Northern Rockies Action Group, 8 Placer
Street, Helena, Montana 59601).
5. Vickers, “Ecology, Planning, and the American Dream,” in Duhl (1963), p. 101.
6. Michael, On Learning to Plan—and Planning to Learn (San Francisco: Jossey-Bass,
1973), pp. 108–143 [Alexandria: Miles River Press, 1997].
7. Vickers, The Art of Judgment (1965), p. 33.
8. Vickers, Freedom in a Rocking Boat (Middlesex, U.K.: Penguin Books, 1970).
9. The establishment of government regulatory agencies at the request of businesses inorder to keep the free-enterprise system functioning is one historical example of theemergence of limited control as a useful technique in a specific context.

Commentary by Arie de Geu s
I am not as pessimistic as Don already was in 1981, when he wrote in Competence andCompassion in an Age of Uncer ainty that schools, family, society, and other institutions
were out of control in the sense that they were malfunctioning, because nobody reallyknew what to do about them or how to control them.

REFLECTIONS, Volume 1, Number 2

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Competence and Compassion in an Age of Uncertainty

16

Arie de Geus

On the contrary, I am even more pessimistic now than Don was then, because no one
can ever control an institution or any other association of living systems in exactly thesame way that one can control a machine or any other inanimate object. Institutions ofhuman beings cannot be controlled because they are, themselves, living beings. And,unlike inanimate objects, living beings have a will. This means that they cannot be managed and controlled by actions based on causality. The will interferes with the causeand-effect relationship, which is the basis for much thinking about control.
Don reached his conclusion about absence of control on the premise that the Information Age is leading to more and more knowledge about institutions and their leaders,which in turn is leading to a loss of legitimacy and trust. In short, in 1981 he concluded
that things were out of control and unlikely to be any more in control in the future(which, for the purposes of this commentary, is now). That is bad news for managers
and everyone else who define competence as the ability to control outcomes.
About the same time that Don was writing—and I being one of the managers he waswriting about—Francisco Varela taught me a never-forgotten lesson in management
and planning when he quoted to me the opening line of Machado’s poem:
Life is a path that you beat while you walk it,
And it is only on looking back that you will see the path.
Ahead of you ther e is uncharted terr ain...
The Machado “walk” is bad news for all those people who try to predict the future sothat they can decide where to steer their institutions. Although, in retrospect, the “walk”
seems to tie in neatly with what one is, in fact, doing every working day—so neatly alreadydescribed by Minzberg—a strategy was emerging: a path you beat while you walked it!
Machado’s and Minzberg’s message brings bad news and good news. Underlying it is abasically optimistic view that life is self-organizing. And—no surprise from the author of abook called Learning to Plan and Planning to Learn —Don Michael arrives at the same conclusion. This is what we need so that we can acknowledge uncertainty and live with it, because the way to regulate in times of uncertainty is by learning rather than controlling.
Don brilliantly demolishes myths and the underlying yearning that even today continues
to characterize so much of management literature and training courses and consultants’advice about leadership.
Since Don wrote his article in 1981, learning has emerged as an alternative way tomanage the relationship between living beings and their environment. Or, to put it differently: Every system that moves and is concerned with managing its development andthe evolution of its species discovered learning eons ago!
Management, a relative latecomer to an under standing of living systems, is only now
beginning to discover that the real competence of steering whole systems through uncertain and unpredictable environments requires changes in the paradigm of control, andthat these changes are gradual and take time! For example, Don’s second condition for the
new competence is the need to acknowledge and live with uncertainty . One way to do thiswas developed by Herman Kahn at the Hudson Institute and later during the 1970s by theShell Group Planning Coordination. This way is referred to as scenario planning . One construct of “scenario planning” is to present management with several possible, internallyconsistent futures, rather than a single future. At Shell, more than 10 years passed before
top management stopped asking for the most likely scenario or—typical among adherentsof the old competence—asking for the probability of each scenario.
Don’s final observation is that in an uncertain, uncontrollable world, joint participation in creating and affecting that world (where one makes one’s future, rather thansimply undergoing it) is a precondition for engendering trust and for learning. Today,
joint participation is still far from common practice in a business world just beginningto emerge from the consequences of re-engineering. As a basic condition for managing
a business more effectively and more profitably, it has a long way to go before it will beestablished in a majority of organizations.

Volume 1, Number 2, REFLECTIONSBounded Rationality andOrganizational Learning

CLASSIC

Herbert A. Simon

This paper was originally published in a special issue of Organization Science. Editors
Cohen and Sproull (1991) wrote: “The genesis of this special issue was a conference heldin May 1989 at Carnegie Mellon University where some of the papers included were firstpresented.... Both the conference and this volume have provided opportunities to celebrate
Jim March, who has altered the understanding of organizations everywhere in the world
with the equally powerful forces of his scholarship and his friendship.” Herbert Simon’s
paper is one of the invited essays to this volume “which seeks to account for both the triumphs and failures of people confronting a world complex beyond rational mastery.”As I understand it, the manifest function of this gathering is to discuss the topic oforganizational learning, whereas the latent function is to honor James March. Or is
it the other way around? In either case, it is a valuable and pleasurable undertaking.
Shakespeare subdivided human life into five major stages. We can refine the latter portion of his scale by taking note, at any given time in our lives, of whom we are just thenhonoring. Not long after we received our Ph.Ds., it was time to honor our teachers, as they
began to reach the appropriate level of dignity for such accolades. A couple of decades
later, we found ourselves honoring our contemporaries and colleagues. Still later, those of
us who are lucky enough to survive have the opportunity of honoring our students.
Of course, Jim March was never my student. (In my memory of him, back to ourearliest acquaintance, he never exhibited that quality of docility that befits students.)
Nevertheless, I did offer him his first job, and he did accept. Offering was easy. I met him
in New Haven, and had dinner with him, and reached an immediate decision. I probably had to clear the decision with the Dean, Lee Bach, but in those happy days wedidn’t worry about faculty committees, so it didn’t take long. I recount all this as evidence of my sound judgement and ability to learn very rapidly. But it wasn’t very hard,at that dinner, to learn that I was dealing with a young political scientist of unusualpromise. And how right I was!

Herbert A. Simon

17

The Organizational Level
One can question whether this anecdote serves as an example of organizational learning—my assigned topic. It was learning by an individual that had consequences for an
organizational decision—it provided new factual decision premises that led to an offer.
But we must be careful not to adopt too strict a definition of organizational learning, or
we will define our topic out of existence, thereby denying the legitimacy of this conference. All learning takes place inside individual human heads; an organization learns in
only two ways: (1) by the learning of its members, or (2) by ingesting new members who
have knowledge the organization didn’t previously have.
But what is stored in any one head in an organization may not be unrelated to whatis stored in other heads; and the relation between those two (and other) stores may havea great bearing on how the organization operates. What an individual learns in an organization is very much dependent on what is already known to (or believed by) othermembers of the organization and what kinds of information are present in the organiza-

Reprinted by permission, Herbert A.
Simon, Bounded Rationality and Organizational Learning, Organization
Science, volume 2, number 1, February 1991. Copyright 1991, The Institute of Management Sciences(currently INFORMS), 901 Elkridge
Landing Road, Suite 400, Linthicum,
MD 21090.

Volume 1, Number 2, REFLECTIONSSIMON
Bounded Rationality and Or ganizational Learning

18

tional environment. As we shall see, an important component of organizational learning is internal learning—that is, transmission of information from one organizational
member or group of members to another. Individual learning in organizations is verymuch a social, not a solitary, phenomenon.
However, we must be careful about reifying the organization and talking about it as“knowing” something or “learning” something. It is usually important to specify wherein the organization particular knowledge is stored, or who has learned it. Depending on
its actual locus, knowledge may or may not be available at the decision points where it
would be relevant. Since what has been learned is stored in individual heads (or in files
or data banks), its transience or permanence depends on what people leave behind themwhen they depart from an organization or move from one position to another. Has what
they have learned been transmitted to others or stored in ways that will permit it to be
recovered when relevant?
The justification of a conference on organizational learning, exemplified in the papers already presented, is that human learning in the context of an organization is verymuch influenced by the organization, has consequences for the organization and produces phenomena at the organizational level that go beyond anything we could infer simply by observing learning processes in isolated individuals. It is those consequences andthose phenomena that we are trying to understand here. And my task is to show how
some of those consequences and phenomena arise from the fact that human rationality
is very approximate in the face of the complexities of everyday organizational life. Alongthe way, I will have some comments on ways in which we can do research and thereby
gain new knowledge about these phenomena—learn about organizational learning.
Let me perseverate for a moment on that term “organizational level.” Readers of thebook, Organizations (1958), that Jim March and I wrote more than 30 years ago havesometimes complained that it was not a book on organizations at all but on the social
psychology of people living in an organizational environment. The complaint was usually registered by sociologists, and was not without merit.
We need an organization theory because some phenomena are more conveniently
described in terms of organizations and parts of organizations than in terms of the individual human beings who inhabit those parts. There is nothing more surprising in
the existence of those phenomena than in the existence of phenomena that make it
convenient for chemists to speak about molecules rather than quarks. Employing amore aggregate level of discourse is not a declaration of philosophical anti-reductionism, but simply a recognition that most natural systems do have hierarchical structure,and that it is sometimes possible to say a great deal about aggregate components without specifying the details of the phenomena going on within these components.
Hence, in what follows, I will have little or nothing to say about the mechanism thatenable an individual human being to learn, but will focus on the ways in which information is acquired by organizations, is stored in them, and is transmitted from one part ofan organization to another. I will be concerned with what are usually called emergent
phenomena at the organizational level, and hope that sociologists will find this essay
more “organizational” than was our book.

The Structure of Roles
For purposes of discussing organization learning, organizations are best viewed as systems of interrelated roles, and that is the way I have been viewing them here. How can
we conceptualize roles so as to make this concept useful for organization theory?
The point has perhaps not been emphasized in the sociological literature as often
as it should be that a role is not a system of prescribed behaviors but a system of prescribed decision premises. Roles tell organization members how to reason about the
problems and decisions that face them: where to look for appropriate and legitimate informational premises and goal (evaluative) premises, and what techniques to use in processing these premises. The fact that behavior is structured in roles says nothing, one
way or the other, about how flexible or inflexible it is.
Each of the roles in an organization presumes the appropriate enactment of the otherroles that surround it and interact with it. Thus, the organization is a role system.

Volume 1, Number 2, REFLECTIONSSIMON

Organizational Learning and Innovation

Bounded Rationality and Or ganizational Learning

Since the organizations I know best are universities, and since I have not engaged in recent years in any systematic organizational research, I will have to draw upon my university experiences for most of my examples of organizational learning phenomena. Let
us take the case of a university that wants to innovate along some dimension of educational practice—perhaps by building its instruction around the Great Books, or by focusing on something it calls liberal-professonal education. I’ll use the latter example, which
is closer to home.
The graduate schools from which a university draws its new teachers are organizedin disciplines, some of which are saturated with the values of liberal education (and transmit them to their students), others of which are devoted to professional education. There
are no disciplines, to the best of my knowledge, that fly the banner of “liberal-professional” education. Clearly, a university that wishes to implement this kind of instruction
is faced with a major learning problem for its new (and probably its old) faculty members.
It has no chance of accomplishing its goal without substantial education, and reeducation,of its inductees. Moreover, the reeducation is not a one-tie task but a continuing one, unless the educational climate of the environing society changes so that it begins to produce
graduates already indoctrinated with the desired goals.

Effects of T urnover
Turnover in organizations is sometimes considered a process that facilitates organizational innovation—getting out of the current rut. But in the case before us, where theorganization is trying to distance itself from general social norms, turnover becomes abarrier to innovation, because it increases training (socialization) costs. To preserve its
distinct culture, an organization of this kind may try to train its own personnel from theground up, instead of relying on outside institutions to provide that training. Such inbreeding will have other organizational consequences. (I state these conclusions very
confidently, but they should really be stated as researchable hypotheses.)
Contrast this with the organization that finds in its environment training organizations
that share a common culture with it. The Forest Service, in Herbert Kaufman’s (1960) classical account of it, is such an organization, counting on Schools of Forestry to provide itwith new employees who are already indoctrinated with its values and even its standard
operating procedures. The same thing occurs, less precisely but on a larger scale in suchprofessions as engineering, where there are close links between the engineering colleges
and the industries, with a feedback of influence from industry to the engineering curricula.

An Experiment on Stability

REFLECTIONS, Volume 1, Number 2

19© Emily SperIf turnover is sufficiently low, organizational values and practices can be stabilized by
the fact that each new inductee finds himself or herself confronted with a social system that is already well established and prepared to mold newcomers to its procedures.
This phenomenon can be produced in the laboratory (and I believe actually has been
produced. But I cannot put my hands on the appropriate
reference).
In a certain experimental paradigm in social psychology (often called the Bavelas communication network)
different patterns of communication are induced in fiveperson groups. In one pattern (the wheel) one member ofthe group serves as leader or coordinator and all the othermembers communicate with him or her, and not directlywith each other. In another pattern (the circle) the members are arranged in a symmetric circular network, eachmember communicating only with the two who are immediately adjacent. The groups are performing a task that
requires them to share information that is given to themembers individually (Bavelas 1950).

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Bounded Rationality and Or ganizational Learning

Now consider two groups whose members are A1, A2, A3, A4, A5, and B1, B2, B3,
B4, B5, respectively, where the A’s are in the wheel pattern and the B’s in the circle pattern. After they are thoroughly trained in the task, we open all the communication channels so that each member can communicate directly with all the others in that group. Ifthey are under sufficient pressure to perform rapidly, the first group will likely continue
to use the wheel pattern of communication and the second group the circle pattern.
After a number of additional trials, interchange A1 and B1. One would predict thatthe groups would continue to use their respective patterns. After a few more trials, interchange A2 with B2, then A3 with B3, and so on until the original wheel group is populated by B1 through B5, and the original circle group by A1 through A5. We would
predict that the A’s would now be communicating in a circle pattern and the B’s in awheel pattern. As I said, I believe the experiment has been run, but I do not know where
the results were published. If it works as predicted, it demonstrates an emergent property of an organization—a persistence of pattern that survives a complete replacementof the individuals who enact the pattern.
Let us return to the topic of organizations that deviate from their surrounding cultures. The example of the deviant university can be extended to virtually all organizational innovation. Among the costs of being first—whether in products, in methods ofmarketing, in organizational procedures, or what not—are the costs of instilling in members of the organization the knowledge, beliefs, and values that are necessary for implementing the new goals. And these costs can be exceedingly large (as they are in the case
I used as my example). The tasks of management are quite different in organizations thatcan recruit employees who are prefashioned, so to speak, than they are in organizations
that wish to create and maintain, along some dimensions,
idiosyncratic subcultures.
A major topic, therefore, in organizational learning is
an understanding of the mechanisms that can be used toenable an organization to deviate from the culture inwhich it is embedded. As my university example suggests,
this topic can be examined in the field, and particularly ina historical vein, by following the course of events in organizations that are identified as distancing themselves along one or more dimensions
from the surrounding culture. If we are concerned about the imprecision of case studies
as research data, we can console ourselves by noting that a man named Darwin was able
to write a very persuasive (perhaps even correct) book on the origin of species on thebasis of a study of the Galapagos Islands and a few other cases. To the best of my recollection, there are no statistics in Darwin’s book.

Turnover of per sonnel is a gr eat
enemy of long-term or ganizational
memory.

20

Organizational Memory
The process of retaining unique traits within an organization is a part of the more general
phenomena of organizational memory. Since much of the memory of organizations isstored in human heads, and only a little of it in procedures put down on paper (or held incomputer memories), turnover of personnel is a great enemy of long-term organizational
memory. This natural erosion of memory with time has, of course, both its advantages anddisadvantages. In the previous section I emphasized one of its disadvantages. Its advantage is that it automatically removes outdated irrelevancies (but without discriminating between the relevant and the irrelevant). Leaving aside the erosion problem, how are we tocharacterize an organization’s memories?
Research in cognitive psychology in recent years has made great progress in understanding human expertise (Simon 1981, Chapter 4). What has been learned can besummed up in a few generalizations. First, expertise is based on extensive knowledge—
no knowledge, no expertise. A world-class expert in any field (several domains have beenstudied in some detail) holds in memory some 50,000 chunks (familiar units) of relevant
information. (The 50,000 should not be taken too literally, but it is correct within an order of magnitude.)This body of knowledge is stored in the form of an indexed encyclopedia, which istechnically referred to as a production system. Associated with each chunk is a set of cues

Volume 1, Number 2, REFLECTIONSSIMON
Bounded Rationality and Or ganizational Learningwhich, whenever evoked by a stimulus, will provide access to that chunk in semantic
memory. The memory content may be of many kinds: the name associated with the cue,
information about the cued phenomenon, things to do about it, and so on. The physician
who sees the symptom (the cue) is reminded of the name of a disease often associatedwith it, information about the likely course of the disease, possible medical action to cure
it, additional tests that would increase the reliability of the diagnosis, and so on.
Armed with knowledge stored in his or her production system, the expert is prepared(but only in the domain of expertise) to respond to many situations “intuitively”—that is,by recognizing the situation and evoking an appropriate response—and also to draw on
the stored productions for more protracted and systematic analysis of difficult problems.
We know also that no one—literally no one—becomes a world class expert in any
professional domain with less than ten years of full-time dedication to learning, to acquiring the 50,000 indexed chunks organized in the production system. The evidence forthis time requirement is overwhelming, and child prodigies provide no exceptions(Bloom 1985; Hayes 1989, Chapter 11).
Against the background of this picture of expertise, the memories of an organization can be represented as a vast collection of production systems. This representation
becomes much more than a metaphor as we see more and more examples of human expertise captured in automated expert systems. One motive for such automation, but certainly not the only one, is that it makes organizational memory less vulnerable topersonnel turnover.

Ingesting Innovation s from Without
My previous example had to do with organizations trying to retain their identities in aworld of alien ideas, fighting the threat of increasing entropy that comes with the ingestion of personnel. The other side of the coin is the problem of assimilating innovations
that originate outside the organization, or that have to be transmitted from a point oforigin in the organization to points of implementation. Here, let me take the research anddesign process as my example, but again in the context of universities. The translation
to corporate situations will follow.

Research as a Learning Mechanism
So-called research universities usually proclaim that they have a dual mission: to create
new knowledge and to transmit that knowledge to their students. Research accomplishes
the former, and instruction the latter. Of course the real pattern is much more complicated than that. In the first place, the new knowledge produced by research is usually
not initially transmitted to students at the same university, but to researchers throughout the world, mainly by publication. In the second place, most of the knowledge transmitted to students in a university is not produced at that university. Is there really any
reason why the research (which is one process of learning) and the instruction (anotherlearning process) should go on in the same institution?
When we examine the research process more closely, we see that it differs rather
fundamentally from the usual description. In any given research laboratory, only a tiny
fraction of the new knowledge acquired by the research staff is knowledge created bythat laboratory; most of it is knowledge created by research elsewhere. We can think ofa research scientist as a person who directs one eye at Nature and the other at the literature of his or her field. And in most laboratories, probably all laboratories, much
more information comes in through the eye that is scanning the journals than the eyethat is looking through the laboratory microscope.
It is probably true, and certainly widely suspected, that in any field of research alarge fraction of the less distinguished laboratories could vanish without seriously reducing the rate at which new knowledge is created. Does that mean that these dispensable
laboratories (dispensable in terms of the creation of knowledge) do not pay their way?
The conclusion does not follow if the main function of a laboratory is not the creationof knowledge but the acquisition of knowledge. In military parlance, we would label
such laboratories intelligence units rather than research units. They are units of the or-

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Bounded Rationality and Or ganizational Learning

ganization that are specialized for the function of learning from the outside world (andperhaps, incidentally, sometimes creating new knowledge themselves).
As a matter of fact, in our more honest moments in universities, we sometimes recognize the intelligence function of “research.” When we are asked why we require faculty members who are primarily teachers to publish in order to gain promotion or tenure,
we answer that if they do not do research, they will not remain intellectually alive. Theirteaching will not keep up with the progress of their disciplines. It is not their research
products that we value, but their engagement in research which guarantees their attention to the literature—to the new knowledge being produced elsewhere.
It can be highly disfunctional for a laboratory to live with the belief that its main product is the new knowledge produced by its in-house research. Such a belief produces the
NIH (Not Invented Here) phenomenon, with a consequent reinvention of many wheels.

R & D and Manufacturing© Emily Sper22

The problems of organizational learning have just begun when an intelligence unit extracts some possibly relevant new knowledge from the environment (or invents it itself).
The problem of developing new products from (local or imported) research ideas andof carrying them to the stage of successful manufacture and marketing is a classical organizational problem of this kind. A successful product must satisfy a whole range of
constraints, the knowledge of which may originate in many parts of the organization.
Among these are constraints on product characteristics determined by end use andmarkets, constraints determined by manufacturing considerations, and constraints determined by natural laws over and above those involved in the nuclear concept.
End Use and Market Constraints. An idea for a better mousetrap originating in a research laboratory has to satisfy the needs and demands of real-world markets. Researchand development is usually conceived to begin with a key scientific idea which is elaborated through a development process. The development process annexes a succession of
constraints to the initial research idea, continually modifying the idea until it satisfies them(or until it appears that they cannot be satisfied). Acquiring knowledge of the appropriate
constraints is an important learning process, since that knowledge is generally widely distributed throughout the organization and elsewhere, and is seldom all available to the research and development staff at the beginning of the process (Simon 1976, Chapter 17).
In some industries, control gear would be an example, a considerable fraction of ideas
for new products originates with a knowledge of customers’ needs and problems—thenature and uses of the equipment to be controlled. In these cases, the sales engineers need
to be incorporated in the intelligence process that initiates new product development. Here
there is a reverse flow of instruction from the usual conception of the R & D process.
In whichever direction the ideas flow through the organization, it is clear that nothing will happen unless they do flow. Normally, the learning associated with a new product must be highly diffused through the organization—many people have to learn manythings, and such lateral diffusion and transfer is far from automatic or easy. It must overcome motivation obstacles (I have already mentioned the NIH syndrome), and it mustcross cognitive boundaries.
Manufacturing Constraints. A common complaint
about contemporary American practice in new productdesign is that the design process is carried quite far before
manufacturing expertise is brought to bear on it. But easeand cheapness of manufacture can be a key to the prospects of a product in competitive markets, and failure toconsider manufacturability at an early stage usuallycauses extensive redesign with a corresponding increasein the time interval from initial idea to a manufactured
product. These time delays are thought to be a major factor in the poor showing of many American industries incompeting with the Japanese.
We know some, if not all, of the conditions for making communications between designers and manufactur-

Volume 1, Number 2, REFLECTIONSAcquiring New Problem Repr esentations
In my earlier discussion of a culturally deviant organization, I contrasted the way inwhich roles (decision premises) are acquired in such an organization from the way inwhich they are acquired in an organization that builds upon the culture of the society thatprovies it with new members.
In my discussion of research and development, I examined the ways in which newdecision premises may be injected into organizations and diffused through them. In neither discussion did I distinguish sharply between learning that brings new knowledge tobear within an existing culture and knowledge that changes the culture itself in fundamental ways. I would like to turn now to that distinction (which clearly is a relative, andnot an absolute one).
In the literature of problem solving, the topic I am now taking up is called “problem
representation.” In the past 30 years, a great deal has been learned about how people
solve problems by searching selectively through a problem space defined by a particular
problem representation. Much less has been learned about how people acquire a representation for dealing with a new problem—one they haven’t previously encountered.
Two cases must be distinguished: (1) The learner is presented with an appropriate
problem representation, and has to learn how to use it effectively. That is essentiallywhat is involved when organizations, already formed, ingest new members from an alienculture, (2) the organization is faced with a totally new situation, and must create a problem representation to deal with it, then enable its members to acquire skill in using that
representation. In the extreme case, a new organization is created to deal with a newtask. A new problem representation, that is to say, a role system, is created.

Creating an Or ganization
Some years ago I was fortunate enough to have a grandstand seat at the creation of the Economic Cooperation Administration, the U.S. governmental organization that administered
the Marshall Plan of aid to Western European countries. In that process, which extended
through most of the year 1948, competing problem representations emerged from the very
first days, each implying a quite different organization structure, set of organizational roles,
from the others. These problems representations were not made out of whole cloth, butarose from analogies between the presumed task of the ECA and other tasks that were familiar to the inventors of the representations from their previous training and experience.
For example, some participants in the planning drew an analogy between the ECA
and wartime organizations that had supplied essential goods to the allies. Others thoughtof it as an exercise in investment banking. Others were reminded of the theory of international trade balances. From each of these views, a set of organizational roles could be
inferred, and each such structure of roles was quite different from the others. Which representations took root in which parts of the burgeoning organization depended heavily
on the cultures from which these parts recruited their new members.
I have told elsewhere the story of how this competition was resolved (Simon 1976,
Chapter 26). One technique used was to disseminate a document that presented one of

REFLECTIONS, Volume 1, Number 2

SIMONBounded Rationality and Or ganizational Learninging engineers effective. Each group must respect the expertise of the other, and mustacknowledge the relevance of that expertise to their own problems. Moreover, each musthave a sufficient knowledge and understanding of the others’ problems to be able tocommunicate effectively about them. Experience shows that these conditions are unlikely to be satisfied unless members of each group (or a sufficient number of membersof each group) have had actual experience with the activities and responsibilities of theother group. In typical Japanese manufacturing practice, this shared understanding andability to communicate is brought about by extensive lateral transfer of engineers in thecourse of their careers.
These examples will illustrate some of the kinds of learning involved, some of the
problems of bringing it about, and some of the mechanisms for solving those problems
when an organization brings in innovations from outside or tries to transport them fromone organizational unit to another.

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Bounded Rationality and Or ganizational Learning24

the representations (the one based on the balance of trade analogy) persuasively, and which mapped out its organizational implications. Another technique was to starve out the units dedicated to other representations by denying
them new personnel.

Why Representation Matter s
In my remarks thus far I have said only a little about bounded rationality—
about the limits upon the ability of human beings to adapt optimally, or evensatisfactorily, to complex environments. Attention to the limits of human rationality helps us to understand why representation is important, and how policy
statements imply representations. About a decade ago, the U.S. Steel Corporation began to contract its steel operations and todivert a major part of its capital to the acquisition of assets in the oil industry. The motivationof these moves was a particular representation of
the corporation’s purposes.
If, a few years ago, you had asked executives of U.S. Steel what the corporation’s goals
were, they might have answered: “To manufacture and market steel efficiently and profitably.”
If you had persisted further, they might evenhave agreed that profit was the “bottom line.” But it would have been hard or
impossible for them to describe the company without strong emphasis on its
focus on steel. Their views might have been paraphrased: “We are out to makeprofits, but the way for us to make profits is to be an efficient steel manufacturer. That is a domain in which we have knowledge and expertise, and inwhich we can make good decisions.”
For the conglomerate that U. S. X. has become, an entirely different representation is required. The corporation has product divisions that can still be
described in ways that resemble the earlier corporation—the world “steel” applying to some divisions, and “oil” to others. But in the new representation,these divisions are only components operating within a larger framework inwhich the fundamental policy is to invest available funds in the directions thatwill yield the greatest returns. Within that framework, new expertise is required: essentially the expertise of an investment banker.
It should not be surprising that under these conditions we often see massive turnover of personnel at all levels. It is often cheaper and quicker to import
the new expertise and dismiss the old than to engage in massive reeducation.

Among the contents of or ganizational
memories perhaps the most important
are the r epresentation of theorganization itself and its goals.

Conclusion
In this paper, my intent has been to show how concepts that have arisen in contemporary cognitive psychology for describing human learning and problem
solving processes, and human expertise, can be applied to the analysis of organizational learning. I have made no attempt to be complete or comprehensive in
my account. Instead, I have been satisfied to present some examples of how specific organizational situations can be understood in terms of these concepts.
Along the way, I have made a few comments on research strategy. I haveremarked on how experiments may be useful for studying mechanisms. But
above all else, I have emphasized the role of careful case studies in researchon organizational learning. By “careful,” I mean studies that explore the contents of important organizational memories, the ways in which those contents
are accessed (or ignored) in the decision making process, and the ways inwhich they are acquired by organizations and transmitted from one part of anorganization to another. Among the contents of organizational memories perhaps the most important are the representation of the organization itself andits goals, for it is this representation (or representations, if it is not uniform

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Bounded Rationality and Or ganizational Learning

throughout the organization) that provides the basis for defining the roles of organization members.
If organization theory finds it useful to draw upon some of the ideas that have emergedin cognitive psychology, it will be advantageous to borrow also the terminology used in
discussing these ideas. Without working toward a higher level of consistency in terminology than prevails in organization theory today, it will be difficult or impossible to cumulate
and assemble into a coherent structure the knowledge we are gaining from individual casestudies and experiments. We will be continually reinventing wheels. That is a luxury wecannot afford. The happy band of researchers on organization theory is sufficiently small
to be kept fully occupied discovering and verifying the theory just once.

Acknowledgments
This research was supported by the Personnel and Training Programs, Psychological Sciences Division, Office of Naval Research, under Contract No. N00014-86-K-0768.

References
Bavelas, A. (1950), “Communication Patterns in Task-Oriented Groups,” Journal of Acoustical Society of America, 22, 725-730.
Bloom, Benjamin S. (Ed.) (1985), Developing Talent in Young People. New York: Ballantine Books.
Hayes, John R. (1989), The Complete Problem Solver. (2nd Ed.). Hillsdale, NJ: Erlbaum.
Kaufman, Herbert (1960), The Forest Ranger. Baltimore: Johns Hopkins Press.
March, James G. and Herbert A. Simon (1958), Organizations. New York: Wiley.
Simon, Herbert A. (1976). Administrative Behavior. (3rd Ed.). New York: Macmillan.
(1981), The Sciences of the Artificial. (2nd Ed.). Cambridge, MA: MIT Press.

Commentary by J. Wil Foppen
Herbert A. Simon’s explorative analysis of organizational learning is a rich source for reflection andlearning. The awareness of the limits of man’s ability to deal with organizational complexity stimulates greater understanding.
From hindsight, this 1991 article continues to set a research agenda for organizational learningand knowledge management beyond the millennium. The title implies the key concepts: human approximations and organizational emergence.
It is tempting to paraphrase Simon’s observations, but the result would be a less clear wording of
their strengths. I recommend a close reading of his arguments.
The article is a great knowledge management agenda that deals with both the richness of
Sveiby’s New Organizational Wealth as well as with a recent HBR analysis on intra-corporate
knowledge sharing within consultancies. There is more. Simon’s 1991 notes on U.S. Steel are a prelude to the core competencies debate, which helps to compete for the future. Meanwhile, his
insightfulness in social psychology relates to several of the “Palo Alto” contributions to learning.
I would like to highlight two elements, given their immediate relevance for universities today.
 To ensure that universities will not lose their value and intellectual capital, the high turnover of nontenured faculty has to be transformed into productive co-operation between core and virtual faculty.
 Acknowledgement that the intelligence function of research will contribute to the integration ofcore and virtual faculty. My experience shows that virtual faculty serves the intelligence function
better than tenured faculty serves research.
As the dean of a business school, I was inspired to try to project Herbert Simon’s approach on
management education and its bounded rationality. Hopefully, this kind of transformation contributes to a continuing discussion on limitations and opportunities for (deep and broad) learning inorganizational contexts.1

Management and Education
Man’s deep probings into nature and different forms of society have created many problems, whichin themselves, partly because of the way in which they have been dealt with, have led to a far
greater need for management.

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J. Wil Foppen

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Bounded Rationality and Or ganizational Learning

26

This development underlines what has by now become the social importance of management and,of course, its reproduction via management education. Management is pivotally important in modern
society. For this reason, no matter what, reflecting about management, certainly at univer sity level, isof great relevance to management practice. Apart from the question of whether management’ s claimthat it is indispensable is valid or not, what counts is the fact that practically everyone believes it is.
Participants in career-oriented educational programs may safely assume that their performancelevel is likely to improve. Management education, indirectly emulating what happens elsewhere intraining courses for established professions, follows those courses’ example by supplying knowledge
and skills in functional areas.
That no management training program can replace experience goes without saying. What participants in a management training program can do is acquire the competence to make maximum
use of their experiences, where a knowledge of perspective and the development of reflective andcritical faculties can be helpful. Open and objective discussions can also contribute greatly. This approach aligns with features of “liberal education.”A second link between education and managers’ achievements lies in an improved ability to deal
with change. After all, if in order to implement change one were solely dependent on managing
culture, things would move too slowly. 2 Education is more effective. An educated manager will beless inclined to be easily shocked by what is new, and stimulated to view change as a constant.
The paradox is that, on the one hand, management education aims to make management more
effective, but on the other, it can, perhaps by definition, give no exact description of how toachieve this. “The paradox is that it is only by concern for broader goals, only by taking our eye off
the ball, that education will prove to be useful. What seems to be required is some sleight of hand,some deception whereby we appear to give the client what they want, while we work to our own
conception of what they need.” 3
In other words, what is required is a trick, a form of deception by which it appears as if the clientis getting what he/she wants, while what happens is exactly what management education has
deemed necessary.
La Fontaine words the essence of this process strikingly in one of his fables:“The children (presumably) were too lazy to earn a living by working in the fields, as their father
wanted them to. So he told them instead that there was a treasure buried in the ground. Eager
to get rich in a hurry, they overturned the soil in an unsuccessful search for the treasure, and indoing so made it so fertile that they indeed got rich.” 4Hall of Mirr ors
Academic thinking on management takes place in a hall of mirrors. Management theories are a socially “managed” claim on a body of knowledge whose component parts contribute to the reinforcement of the very same dominant planning principle that the academics want to help unmask.
In fact, the management of an organization and the organization of management thinking are
mirror images of each other. They reflect and reinforce the surrounding system of dominant values
and prevailing symbols. This mutual relationship is neither readily recognized nor acknowledged.
Nor is much attention paid to what this might mean with respect either to theorizing about management or to educating for it. 5
Much current thought on planning, management, and knowledge thus represents a reality it hascreated itself. In this “Newtonian” vision, causational thinking and the state of rest and stability determine what is considered normal and should remain so. Movement is nothing more than thetransition from one stable state to the next. Change, movement, and transformation are merely
stepping stones and side issues. They are not essential parts of “true” reality.
Once again, we must become familiar with the fundamental mobility of reality: “It is movement that
we must accustom ourselves to look upon as simplest and clearest, immobility being only the extreme
limit of the slowing down of movement, a limit reached only, perhaps, in thought and never in nature.”6
If one assumes the primacy of movement and process above static entities and permanence, thiswill have radical consequences for grasping and understanding the process of managing, and forthe andragogical agenda of management education.
Notes
1. Foppen, J.W., Knowing about Value; Management Learning as Knowledge Management, Eburon,
Delft, 1998.

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2. Kotter, J.P. and Heskett, J.L., Corporate Culture and Performance, The Free Press, New York, 1992.



3. Thomas, A.B. and Anthony, P.D., “Can Management Education be Educational?” in French, R. andGrey, C. (eds.), Rethink Management Education, Sage, London, 1996: 22.

Bounded Rationality and Or ganizational Learning

4. Elster, J., Sour Grapes; Studies in the Subver sion of Rationality, Cambridge University Press, Cambridge, 1983: 54.
5. Chia, R., “Process Philosophy and Management Learning: Cultivating ‘Foresight’ in Management
Education,” in Burgoyne, J. and Reynolds, M. (eds.), Management Learning: Integr ating Perspectives
in Theory and Pr actice, Sage, London, 1997: 72.
6. Bergson, H., An Introduction to Metaphysics, MacMillan, London, 1913: 44.

Commentary by John K ao
I read “Bounded Rationality and Organizational Learning” while sitting at my crescent-shaped desk
at the Idea Factory, located in SOMA (south of Market area) in San Francisco’s multimedia gulch,
ground zero of the new economy.
There doesn’t seem to be much bounded rationality in this part of the world. E-Bay, Amazon, andYahoo have market caps in the stratosphere. The town is filled with 20- and 30-something entrepreneurs with a “dot-com” idea and great dreams that they hope will lead to the next big thing.
And yet, Herbert Simon’s article, written in the pre-e-commerce era, seems remarkably prescientof the issues faced every day in this brave new world. Here, organizations seem temporary, rather
than enduring. Increasingly, they seem like temporary housings for the DNA of great ideas. How canthey then achieve the learning and the flexibility not only to survive but to triumph? If the only asset you have is the ability to reinvent your competitive advantage over and over again, as pundits
in the new economy would have it, the ability to foster the collaboration that is at the heart of organizational learning—the ability to create, represent, and share knowledge—become crucial. And in
this regard, the web fundamentally changes the notion of knowledge, allowing us to truly apply“knowledge at the decision-point where it is relevant.”
These days, talent has a choice as never before. Being in the place where you can do your best
work becomes the strange attractor in a business world increasingly shaped by the war for talent.
That place must enable collegiality, interaction, learning, and meaning. But how does an organization persist in making meaning for its members when transience is increasingly the norm, with allits financial as well as hidden costs? How should organizations, in Simons’ words, “instill in members of the organization the knowledge, beliefs and values that are necessary for implementing new
goals.” This is especially important when medium (and production value) are as important as message. I was quoted recently as saying that no one stormed the barricades during the French Revolution because they received a memo. These days, we need story-telling, production value, drama,
design, and appeal in order to make meaning within our organization. This is especially true with a
new generation that cut their teeth on movies , MTV, and the graphic style of Wired. Equally important is Simon’s assertion that we acquire new decision premises by seeing things differently. Strategic foresight isn’t just an intellectual exercise: It requires story-telling and drama in order thatperceptions may change in the interests of innovation.
And in an era in which it may be more expedient to “import new expertise and dismiss the old,”how do organizations create institutional memory? How do we represent knowledge in such a waythat it can be shared and remembered? Much of the answer to this set of questions may come fromthe discipline of design, a field that has always known how to embody ideas so that they can beshared, reshaped, and recrafted in an ongoing cycle of prototyping and iteration.
“Bounded Rationality and Organizational Learning” surprises us with its relevance to the concerns of the new economy: the impact of technology on collaboration, the need for the integrationof design and strategic thinking into the practice of innovation, and defining the “how-to” ofknowledge creation, representation, and sharing.

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John Kao27

FEATURE

Organizing Knowledge
John Seely Br own and P aul Duguid

TJohn Seely Brown

28

Paul Duguid

First printed in California Management Review, Vol. 40, No. 3, Spring
1998. Reprinted by permission.

he firm, taken for granted in the conventional economy, appears to have a
doubtful future in the information economy. The new technologies that are helping todefine this new economy are simultaneously battering the venerable institutions of theold economy—the press, broadcast media, universities, even governments and nations
are all under threat. Enthusiasts suggest that no formal organization need or shouldcome between the empowered individual and Marshall McLuhan’s amorphous “global
village.” So it’s not surprising to hear that cyberspace has served notice on the firm thatits future, at best, may only be virtual.
Many such predictions favor a “transaction cost” view of the firm. Transaction costs
are portrayed as the glue that holds an organization together, and many of these arethought to derive from inefficiencies in communication. Thus, it is easy to conclude thatthe new communications technologies might drive transaction costs so low that hierarchical firms will dissolve into markets of self-organizing individuals.
Recently, however, through the work of Ikujiro Nonaka and others, a “knowledge-based”
view of the firm has risen to counter the transaction-cost approach. Knowledge-based arguments suggest that organizational knowledge provides a synergistic advantage not replicablein the marketplace. Thus its knowledge, not its transaction costs, holds an organization together. The knowledge-based view provides vital insight into why firms exist (and will continue to exist) and thus why organizing knowledge is a critical part of what firms do.
While knowledge is often thought to be the property of individuals, a great deal ofknowledge is both produced and held collectively. Such knowledge is readily generated
when people work together in the tightly knit groups known as “communities of practice.” 1 As such work and such communities are a common feature of organizations, organizational knowledge is inevitably heavily social in character. Because of its social
origin, this sort of knowledge is not frictionless. Beyond communities, locally developed
knowledge is difficult to organize. The hard work of organizing knowledge is a criticalaspect of what firms and other organizations do.
There are those who see the organization as primarily the unintended consequenceof individuals acting in isolation and who believe that an organization’s central challenge
is to discover knowledge. Once found, such arguments tend to assume, knowledge
should travel easily. However, organizations are often replete with knowledge (and also
deeply embedded in larger fields or “ecologies” of knowledge). The critical challenge,
from this perspective, is to make this knowledge cohere.
It is easy to assume that knowledge-based arguments apply only to what are recognized as “knowledge” firms. These are firms (in software or biotechnology, for example)
whose market value far outstrips their conventional assets and rests instead on intellectual capital. The transaction-cost view, it might seem, still applies to every other form oforganization. This, however, is not the case. All firms are in essence knowledge organizations. Their ability to outperform the marketplace rests on the continuous generationand synthesis of collective, organizational knowledge. 2 For all organizations, the cultivation of this knowledge—often an implicit, unreflecting cultivation—is the essence of developing a core competency to maintain the organization and resist its dissolution.
The organizational knowledge that constitutes “core competency” is more than“know-what,” explicit knowledge which may be shared by several. A core competency
requires the more elusive “know-how”—the particular ability to put know-what into practice.3 While these two work together, they circulate separately. Know-what circulates with
Volume 1, Number 2, REFLECTIONSEnds of Organization
Self-Organizing Systems
Disintermediation, demassification, and disaggregation have become the watchwords ofcyberspace. New technologies are apparently breaking collectives down into individual
units. (Indeed, it sometimes seems that the only large aggregates needed for the “thirdwave” will be very long words.) Any form of coherence and coordination beyond the individual, it is predicted, will be the effect of self-organizing systems. 5
Undoubtedly, in the hands of prominent economists like Kenneth Arrow or Friedrich
Hayek, analysis of self-organizing “catallaxies” has helped reveal the very real limits offormal organization.6 In particular, they have helped show the folly of planning economies or ignoring markets. They do not, however, necessarily reject planning or nonmarket behavior on a more local
scale. Nor do they prove, as some would have us believe,that deliberate organization is somehow vicious, unnatural, and anti-market. As Hayek himself noted, within spontaneous catallaxies, goal-oriented organizational planning
is important.
Curiously, many who argue for self organization often
sound less like economists than entomologists: bees, ants,
and termites (as well as bats and other small mammals)
provide much of the self-organizing case. In a related vein, others draw examples from “artificial life,” whose systems are themselves usually modeled on insect- and animal-like behavior.7 While these provide forceful models, it’s important to notice their limits. Humans
and insects show many intriguing similarities, but these should not mask some importantdifferences.
In particular, most champions of complex adaptive systems, particularly those of
artificial life, overlook the importance to human behavior of deliberate social organization. It is well known that humans distinguish themselves from most other life forms by
the increasingly sophisticated technologies they design. It is less often noted that theyalso distinguish themselves by designing sophisticated social institutions. To pursue theanalogies from entomology or artificial life much further, we would need to know whatmight happen if bugs decided to form a committee or pass a law or artificial agents organized a strike or joined a firm.
Ants moving across a beach, for example, do exhibit elaborate, collective patterns
that emerge as each individual adjusts to the environment. In this way, they reflect important aspects of human behavior—of, for example, the uncoordinated synchronicity ofsunbathers on the same beach seeking the sun or trying to keep the blown sand out of
their sandwiches. But, unlike the sunbathers, ants don’t construct coastal highways toreach the beach; or beachfront supermarkets to provide food; or farms to supply thesupermarket; or coastal commissions to limit highway building, supermarkets, and farming; or supreme courts to rule on the infringement on constitutionally protected private
property rights of coastal commissions; or, indeed, constitutions or property rights at all.
Thus, while ants easily fall victim to diminishing provisions of their local ecology,
humans do not. By organizing collectively, people have learned to produce more foodout of the same areas of land, to extend known energy resources and search for newones, to establish new regions for human endeavor, and to design the very technologies

BROWN AND DUGUIDOrganizing Knowledge

relative ease. Consequently, of course, it is often hard to protect. (Hence the current crisis in intellectual property laws.) Know-how, by contrast, embedded in work practice(usually collective work practice) is sui generis and thus relatively easy to protect.4 Conversely, however, it can be hard to spread, coordinate, benchmark, or change.
The recent vogue for knowledge management must encompass not simply protecting intellectual property in canonical knowledge organizations, but fostering this more
complex form of organizational capital. In practice, this sort of fostering is very muchwhat good managers do, but as knowledge production becomes more critical, they willneed to do it more reflectively.

A core competency r equires the mor eelusive “know-how”—the particularability to put “know-what” into
practice.

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BROWN AND DUGUIDOrganizing Knowledge

that are now paradoxically invoked as the end of organization. In all such cases, organization has helped to foster and focus humanity’s most valuable resource: its infinitely
renewable knowledge base.
But perhaps most significantly of all, humanity has relied on organization not merely
to harness advantage, but to ward off disasters produced by the downside of self-organizing behavior. For example, establishing and continually adjusting socially acknowledged
property rights have limited the “tragedy of the commons.” Establishing certain trading
regulations has prevented markets from spontaneously imploding. Such institutional constraints help channel self-organizing behavior and knowledge production in productive
rather than destructive directions. This ability may be one of humanity’s greatest assets.
It is easy to cite the undeniable power of spontaneous organization as a way to damn
formal organization. However, it makes no more sense to demonize institutions than it
does to demonize self-organizing systems. Rather, each must be deployed to restrain theother’s worst excesses. That challenge is profoundly difficult, facing as it must the complex, reflexive feedback loops that social institutions create. These make human organization quite different from that of other species (and consequently make social sciences
different from natural sciences).

Institutions and T echnology
If institutions are endemic to human society, then it seems a mistake to set them in opposition to technologies or economies as some of the cybergurus do. Indeed, a glanceback to the last great period of technological innovation suggests the importance of institutions. The end of the nineteenth century gave us the telegraph, the train, the car, thetelephone, the airplane, the cinema, and much more. Yet
it has been argued that the incredible creative energies of
the nineteenth century are evident less in industry, engineering, or the arts than in the new kinds of social institutions that developed (among which are the limited liability
corporation, the research university, and the union).8
Moreover, Nobel economist Douglass North suggests that
it was the absence of suitable institutions that caused thecentury-long lag between the dawn of industrial revolution
and the late-nineteenth century’s dramatic technologicaland economic expansion. Similarly, business historian Alfred Chandler claims that halfof this expansion resulted from organizational, not technological innovation.9
So, while the changing economy may indeed be suffering from the drag of “secondwave” institutions, as Alvin Toffler suggests, it doesn’t necessarily follow (as Toffler’s wired
disciples often seem to think) that therefore the third wave will not need institutions at all.
One clue to today’s “productivity paradox” (which notes that the increasing investment in
new technology is not yet showing up in increased national productivity) may well be thatsociety is still struggling to develop third-wave institutions adequate for a new economy.10
If nothing else, these examples suggest a complex relationship between organizations and technologies which crude juxtaposition of new technologies and old institutions oversimplifies. It is often pointed out that the arrival of printing technology in theWest profoundly destabilized the Catholic church, the dominant institution of its day. But
even here, the direction was not simply against institutions. Printing allowed other institutions, the university in particular (and, in some arguments, the modern state) to flourish. And today, while communications technologies have dispersed power and control
in some sectors, leading to disaggregation and empowerment, in others they have clearly
led to centralization and concentration. Francis Fukuyama points, for instance, to theextraordinary success of firms like Wal-Mart and Benetton, both of which have used technology to centralize decision making and disempower their peripheries. In other sectors(communication in particular) the trend has also been toward concentration.
More generally, the relationship between improving technologies and shrinking organizations has not been linear. The telegraph, typewriter, and telephone—which
launched the communications revolution—allowed the growth and spread of the giant
firms of industrial capitalism as well as the proliferation of small businesses. Similarly,

However, it makes no mor e sense todemonize institutions than it does todemonize self-or ganizing systems.
Rather, each must be deployed torestrain the other’ s wor st excesses.

30

Volume 1, Number 2, REFLECTIONSOrganizational Advantage

BROWN AND DUGUIDOrganizing Knowledge

today the emergence of small, adaptable firms may not point in any simple way to market disaggregation. Research into small firms and start-ups highlights the concept of the“embedded firm.”11 These arguments indicate that many important relations between
firms, let alone within firms, are not ultimately self-organizing, market relations. Increasingly, they reflect complex interorganizational networks. Even where interfirm relations
are extremely competitive, cross-sector cooperation and agreements are often highly significant. In the cutthroat world of silicon chip manufacture, for example, firms continuously cross-license one another’s patents and even engage in joint research through
SEMATECH, a supraorganizational body. The classic antithesis between hierarchy (thefirm) and market—even when hedged with the notion of “hybrids”—seems inadequate
to describe what is going on. To understand them, we need better insight into what organizations do, and how knowledge plays an important part.

The firm has a future because it provides an important means of knowledge generation.
In particular, it gives rise to types of knowledge not supported in a marketplace of individuals linked only by market relations. It also plays an important role in the development and circulation of complex knowledge in society—circulation that is too readily
assumed to be friction free.

Know-How and the Community of Pr actice
Knowledge is usually thought of as the possession of individuals. Something people carryaround in their heads and pass between each other. Know-what is to a significant degree
like this. Know-how is different.
Know-how embraces the ability to put know-what into practice. It is a disposition,
brought out in practice. Thus, know-how is critical in making knowledge actionable andoperational. A valuable manager, for example, is not simply one who knows in the abstract
how to act in certain circumstances, but who in practice can recognize the circumstances
and acts appropriately when they come along. That disposition only reveals itself whenthose circumstances occur.
Such dispositional knowledge is not only revealed in practice. It is also created outof practice. That is, know-how is to a great extent the product of experience and the tacit
insights experience provides. A friend and lawyer once told us that law school—with its
research, writing, and moot courts—prepared her for almost everything she encounteredin her work. It did not, however, prepare her for what she did most: answer the phone.
That ability—the ability to deal in real time with critical situations, demanding clients,
and irrevocable commitments, putting the knowledge she had acquired in school to effective use in practice—she was only able to acquire in practice itself. Her own and hercolleagues’ ongoing practice has created an invaluable reservoir of dispositional knowledge, which she calls on (and improves) all the time.
Experience at work creates its own knowledge. And as most work is a collective,
cooperative venture, so most dispositional knowledge is intriguingly collective—less heldby individuals than shared by work groups. This view of knowledge as a social property
stands at odds with the pervasive ideas of knowledge as individual. Yet synergistic potential of certain people working in unison—a Gilbert and Sullivan, a Merchant andIvory, a Young and Rice, or a Pippin and Jordan—is widely acknowledged. In less-exalted
work places, too, the ability of certain groups to outstrip their individual potential whenworking together is a common feature.
Shared know-how can turn up quite unexpectedly. Julian Orr, a colleague at Xerox,
studied the firm’s “Tech Reps,” the technicians who service machines on site. These technicians work most of the time in relative isolation, alone at a customer’s office. And they
carry with them extensive documentation about the machines they work with. They would
seem to be the last people to have collective dispositional knowledge. Yet Orr revealed that
despite the individualist character of their work and the large geographical areas they often have to cover, Tech Reps take great pains to spend time with one another at lunch orover coffee. Here they continuously swap “war stories” about malfunctioning machines

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BROWN AND DUGUIDOrganizing Knowledge

that outstripped the documentation. In the process of telling and analyzing such stories,
the reps both feed into and draw on the group’s collective knowledge. 12
Orr describes an extraordinary scene in which one technician brought in another to help
tackle a machine that had defied all standard diagnostic procedures. Like two jazz players
involved in an extended, improvisational riff, they spent an afternoon picking up eachother’s half-finished sentences and partial insights while taking turns to run the machine
and watch it crash until finally and indivisibly they reached a coherent account of why themachine didn’t work. They tested the theory. It proved right. And the machine was fixed.
This case and Orr’s study as a whole suggest that, even for apparently individual
workers armed with extensive know-what, collective know-how can be highly significant. More generally it supports the notion that collective practice leads to forms of collective knowledge, shared sensemaking, and distributed understanding that doesn’t
reduce to the content of individual heads.
A group across which such know-how and sensemaking are shared—the groupwhich needs to work together for its dispositional know-how to be put into practice—
has been called a “community of practice.” In the course of their ongoing practice, themembers of such a group will develop into a de facto community. (Often, the community, like the knowledge, is implicit. Communities of practice do not necessarily think ofthemselves as a community in the conventional sense. Equally, conventional communities are not necessarily communities of practice.) Through practice, a community of practice develops a shared understanding of what it does, of how to do it, and how it relates
to other communities and their practices—in all, a “world view.” This changing understanding comprises the community’s collective knowledge base. The processes of developing the knowledge and the community are significantly interdependent: the practicedevelops the understanding, which can reciprocally change the practice and extend thecommunity. In this context, knowledge and practice are intricately involved. (For a related argument, see Nonaka’s celebrated “Knowledge Creation Spiral.”)13
This picture of knowledge embedded in practice and communities does not dismiss
the idea of personal, private knowledge. What people have by virtue of membership in
a community of practice, however, is not so much personal, modular knowledge asshared, partial knowledge. 14 Individual and collective knowledge in this context bear on
one another much like the parts of individual performers to a complete musical score,
the lines of each actor to a movie script, or the roles of team members to the overall
performance of a team and a game. Each player may know his or her part. But on its
own, that part doesn’t make much sense. Alone it is significantly incomplete: it requires
the ensemble to make sense of it.15

Communities of Pr actice and Or ganizations
32

If in many situations, work and knowledge do not readily decompose into the possessionof individuals but remain stubbornly group properties, then markets themselves do notreadily reduce to homo economicus, the idealized individual. Nonmarket organization(the community of practice) may be a salient factor of market activity.
Does this suggest that, if nonmarket organization is needed at all, it is only at thelevel of community of practice? that everything else can be done in the market? On thecontrary, most formal organizations are not single communities of practice, but, rather,hybrid groups of overlapping and interdependent communities. Such hybrid collectives
represent another level in the complex process of knowledge creation. Intercommunal
relationships allow the organization to develop collective, coherent, synergistic organizational knowledge out of the potentially separate, independent contributions of the individual communities. The outcome is what we think of as organizational knowledge,embracing not just organizational know-what but also organizational know-how.
Cross-community organization is important because it helps to overcome some of the
problems communities of practice create for themselves. For instance, as Dorothy LeonardBarton points out, isolated communities can get stuck in ruts, turning core competencies
into core rigidities. When they do, they need external stimuli to propel them forward.16
Communities of practice, while powerful sources of knowledge, can easily be
blinkered by the limitations of their own world view. In a study of technological innova-

Volume 1, Number 2, REFLECTIONSDivisions of Labor and Divisions of Knowledge
Search and Retrieval
In many ways the relationship between communities of practice and organizations presents a parallel to that between individuals and communities of practice. Yet there are important differences in the way knowledge moves in each relationship.
Organizing knowledge across hybrid communities is the essential activity of organizational management. It is also difficult, though why is not often appreciated. Certainly,
most managers will acknowledge that getting knowledge to move around organizations
can be difficult. In general, however, such problems are reduced to issues of information flow. If, as the saying goes, organizations don’t always know what they know, thesolution is seen to lie primarily in better techniques for search and retrieval. Given theopportunity, information appears to flow readily. Hence the belief that technology, which
can shift information efficiently, can render organizations, which shift it inefficiently,
obsolete. A great deal of hope (and money) is thus being placed on the value of Intranets.

REFLECTIONS, Volume 1, Number 2

BROWN AND DUGUIDOrganizing Knowledge© Emily Spertion, for example, Raghu Garud and Michael A. Rappa
show how even the most sophisticated of knowledge workers can fail to recognize quite damning evidence. 17 New
knowledge often requires new forms of evaluation, andwhen the two are produced together, knowledge, belief,and evaluation may only reinforce one another, while
evaluation independent of that belief appears irrelevant.
Garud and Rappa’s study explores this self-deluding/self-reinforcing social behavior in highly technological communities, where counterevidence is usually assumed to beeasily capable of overwhelming belief. Obviously, suchproblematic interdependence between belief and evaluation
is even more likely in areas where what counts as evidence
is less clear-cut and where beliefs, hunches, predictions,and intimations are all there is to go on—which, of course,is the case in most areas of human behavior.
Markets offer one very powerful way to punish selfdeluding/self-reinforcing behavior or core rigidities once
these have set in.18 Such punishment tends, however, to be severe, drastic, and reservedfor organizations as a whole. Organizations present an alternative antidote, which works
more readily at the community level and is both more incremental and less destructive.
By yoking diverse communities—with different belief systems and distinct evaluative
practices—together into cohesive hybrids, organizations as a whole challenge the limitsof each community’s belief. This process generates knowledge through what Hirshhorn
calls the “productive tension” or Leonard-Barton “creative abrasion,” forcing particularcommunities beyond their own limits and their own evaluative criteria.
Thus while markets punish those who produce bad ideas (or fail to produce at all),organizations work to produce beneficial knowledge out of social (rather than market)
relations. The productive side of organizational tension, drawing on the experience ofpeople throughout an organization, produces knowledge that requires systemic, not individual explanation. It adds value to the organization as a whole (and redeems thoseotherwise intractable battles between designers and engineers, sales and marketing, or
accounting and almost any other division).
As most people know from experience, cross-divisional synthesis is itself an achievement. But organizations must reach beyond synthesis to synergy. In so doing, they bothdraw on and continuously create their unique organizational know-how—their ability to
do what their competitors cannot. For this they must produce true, coherent organizational knowledge (which is quite distinct from an organization’s knowledge—the scattered, uncoordinated insights of each individual in its community of practice).
Organizations that fail to achieve this particular synthesis are most likely to fall prey tomarket alternatives.

33

BROWN AND DUGUIDOrganizing Knowledge

Intranets are indeed valuable, but social knowledge suggests that there is more to consider both with regards to search and retrieval.
The distribution of knowledge in an organization, or in society as a whole, reflects
the social division of labor. As Adam Smith insightfully explained, the division of labor
is a great source of dynamism and efficiency. Specialized groups are capable of producing highly specialized knowledge. The tasks undertaken by communities of practice develop particular, local, and highly specialized knowledge within the community.
From the organizational standpoint, however, this knowledge is as divided as thelabor that produced it. Moreover, what separates divided knowledge is not only its explicit content but the implicit shared practices and know-how that help produce it. In
particular, as Garud and Rappa’s example suggests, communities develop their own distinct criteria for what counts as evidence and what provides “warrants”—the endorsements for knowledge that encourage people to rely on it and hence make it actionable.
(Warrants are particularly important in situations in which people confront increasing
amounts of information, ideas, and beliefs; warrants show people what to attend to andwhat to avoid.) The locally embedded nature of these practices and warrants can makeknowledge extremely “sticky,” to use Eric von Hippel’s apt term.19
If the division of labor produces the division of knowledge, then it would seem reasonable to conclude that the market, used to coordinate the division of labor, would serve
to coordinate the division of knowledge. But markets work best with commodities, and this“sticky” knowledge isn’t easily commodified. Within communities, producing, warranting,and propagating knowledge are almost indivisible. Between communities, as these getteased apart, division becomes prominent and problematic. Hence, the knowledge produced doesn’t readily turn into something with exchange value or use value elsewhere. It
takes organizational work to develop local knowledge for broader use. Development ofknowledge in the organization is a process somewhat analogous to the way a film production company takes a story idea and, stage by stage, develops it into a movie.
Thus, ideas of “retrieving” locally developed knowledge for use elsewhere doesn’t
address the whole issue. Furthermore, organizations, while they may help get beyond“retrieval,” present problems with the antecedent problem of search.

Organizational Blindness

34

Organizations, as economists have long realized, offer an alternative to markets. Insteadof synchronizing goods and labor through markets, they do it through hierarchy. This
allows them to overcome some of the stickiness arising from the indivisibility of knowhow and practice. Nonetheless, in the organization of knowledge, hierarchical relations
unfortunately introduce their own weaknesses. Hierarchical divisions of labor often distinguish thinkers from doers, mental from manual labor, strategy (the knowledge requiredat the top of a hierarchy) from tactics (the knowledge used at the bottom). Above all, amental-manual division predisposes organizations to ignore a central asset, the value ofthe know-how created throughout all its parts.
For example, the Xerox service technicians develop highly insightful knowledge
about the situated use (and misuse) of the complex machines they service. As suchmachines encounter a wide range of locations (some hot, some cold, some dry, somehumid) and an inexhaustible range of uses (and abuses), the possible combinations
make it impossible to calculate and anticipate all behaviors and problems that mightarise. Knowledge about these only emerges in practice. Yet mental-manual divisions tend
to make this knowledge invisible to the organization as a whole.
In an analysis of the importance (and anomalous position) of technologists in themodern work place, Stephen Barley has argued forcefully that the knowledge potential
in the practice of such front-line employees must eventually force organizations to reconsider the division of labor and the possible loci of knowledge production. As Henry
Chesebrough and David Teece point out, “some competencies may be on the factory
floor, some in the R&D labs, some in the executive suits.” The key to organizational
knowledge is to weave it all together. Successful organizational synthesis of knowledge
requires discovering knowledge as it emerges in practice. That can’t be done if when andwhere to look are predetermined ex ante.20

Volume 1, Number 2, REFLECTIONSREFLECTIONS, Volume 1, Number 2

BROWN AND DUGUIDBringing this knowledge into view is only a first step, however. Restricted search paths
alone are not the problem, significant though these may be. Organizations that set out toidentify useful knowledge often underestimate the challenge of making that knowledge
useful elsewhere. Robert Cole’s study of Hewlett-Packard’s approach to quality, for example, shows how the firm successfully pursued “best practices” throughout the corporation. The search, however, assumed that, once these practices were identified, theknowledge (and practice) would spread to where it was needed. In the end, HP was quite
successful in identifying the practices. It was not, however, so successful in moving them.21
Some knowledge moves quite easily. People assume that it is explicit knowledge thatmoves easily and tacit knowledge that moves with difficulty.22 It is, rather, socially embedded knowledge that “sticks,” because it is deeply rooted in practice. Within communities,
practice helps to generate knowledge and evince collective know-how. The warranting
mechanisms—the standards of judgment whereby people distinguish what is worthwhileand valid from what is not—inhere in the knowledge. Consequently, trying to move theknowledge without the practice involves moving the know-what without the know-how.
Due to its social origins, knowledge moves differently within communities than it
does between them. Within communities, knowledge is continuously embedded in practice and thus circulates easily. Members of a community implicitly share a sense of whatpractice is and what the standards for judgment are, and this supports the spread ofknowledge. Without this sharing, the community disintegrates.
Between communities, however, where by definition practice is no longer shared,
the know-how, know-what, and warrants embedded in practice must separate out forknowledge to circulate. These divisions become prominent and problematic. Different
communities of practice have different standards, different ideas of what is significant,different priorities, and different evaluating criteria. What looks like a best practice in
California may not turn out to be the best practice in Singapore (as HP found out).
The divisions between communities tend to encourage local innovation, as Adam
Smith recognized, but they also encourage isolation. Anyone who has spent some time
on a university campus knows how knowledge-based boundaries can isolate highly productive communities from one another. That it is very hard to get sociologists and mathematicians to learn from one another is obvious. What is sometimes less clear is thatbiochemists can’t always share insights with chemists, economic historians with historians, economists with the business school, and so forth. Different precepts and different attitudes, shaped by practice, make interchange between quite similar subjects
remarkably difficult, and thus they invisibly pressure disciplines to work among themselves rather than to engage in cross-disciplinary research. Over time, disciplines increasingly divide rather than combine.
On the campus, however, work across different communities has been relatively
unimportant. In the past, few have expected a campus as a whole to produce synthesized, collective insight. Physicists work on physics problems; historians on history problems; and except when they come to blows over the history of physics the two, like mostother departments, lead predominantly independent lives.
Firms, by contrast, cannot afford to work this way. When they get to the point they areso loosely connected that there is no synthesis or synergy of what is produced in their various communities—when, as Teece and colleagues argue, there is no “coherence”—then afirm has indeed lost its edge over the market. The firm then needs either to work towards
synergy or divest until it achieves coherence.23 Indeed, firms are valuable exactly to the extent that, unlike universities, they make communities of practice that expand their vision
and achieve collective coherence. Consequently, the problematic between relationship is a
critical organizational feature—and one that demands significant organizational investment.
It is a mistake to equate knowledge and information and to assume that difficulties
can be overcome with information technologies. New knowledge is continuously being
produced and developed in the different communities of practice throughout an organization. The challenge occurs in evaluating it and moving it. New knowledge is not capable of the sorts of friction-free movement usually attributed to information. Moreover,Within and Between

Organizing Knowledge

Beyond Sear ch and Retrieval

35

BROWN AND DUGUIDOrganizing Knowledge

36

because moving knowledge between communities and synthesizing it takes a great dealof work, deciding what to invest time and effort in as well as determining what to act
upon is a critical task for management.

Stickiness and Leakiness
The “leakiness” of knowledge out of—and into—organizations, however, presents an interesting contrast to its internal stickiness.24 Knowledge often travels more easily between
organizations than it does within them. For while the division of labor erects boundaries
within firms, it also produces extended communities that lie across the external boundaries of firms. Moving knowledge among groups with similar practices and overlapping
memberships can thus sometimes be relatively easy compared to the difficulty of moving it among heterogeneous groups within a firm. Similar practice in a common field canallow ideas to flow. Indeed, it’s often harder to stop ideas spreading than to spread them.
A study of interorganizational work by Kristen Kreiner and Majken Schultz suggeststhat the tendency of knowledge to spread easily reflects not suitable technology, but suitable social contexts. They show how many of the disciplinary links between business andacademia are informal. They argue that the informal relations between firms and universities are more extensive and probably more significant than the formal ones. Informal
relations dominate simply because they are easier, building on established social links.
Formal inter-firm relations, by contrast, can require tricky intrafirm negotations between
quite diverse communities (senior management, lawyers, and so forth).
Studies of biotechnology support this view. A study by Walter Powell reveals
biotechnologists working extensively across the boundaries of organizations. Some articles
in this field have more than one hundred authors from different (and different types of) institutions.25 Their extensive collaboration undoubtedly relies on communications technologies. But these are available to researchers in other fields where such collaboration does notoccur. Biotechnology is distinct in that being a relatively young, emerging field, its researchers are significantly linked through personal connections. The field is not as tight as a local
community of practice, but nonetheless relations are dense enough and practices sufficiently
similar to help knowledge spread. While a field is small and relatively unfragmented, practitioners have a lot in common: their training, their institutional backgrounds, their interests,
and in particular the warrants with which they evaluate what is important from what is not.26
People connected this way can rely on complex networks of overlapping communities, common backgrounds, and personal relationships to help evaluate and propagate
knowledge. In such conditions, practices are fairly similar and consequently the barriers
between different groups are relatively low.27 In such knowledge ecologies, knowledge
that is sticky within organizations can become remarkably fluid outside of them, causing great difficulties for the intellectual-property side of knowledge management. The
challenge of plugging these leaks is significant. But cutting off the outflow can also cut
off the inflow of knowledge. Living in a knowledge ecology is a reciprocal process, withorganizations feeding into each other.

Towards an Architecture for Organizational Knowledge
The way ecologies spread knowledge helps point to some of the ways that organizations
can help to propagate knowledge internally and develop an enabling architecture for organizational knowledge. Social strategies for promoting the spread of knowledge between
communities can be described in terms of “translation,” “brokering,” and “boundary
objects”—terms developed by the sociologists Susan Leigh Star and James Griesemer.28

Translator sOrganizational translators are individuals who can frame the interests of one community interms of another community’s perspective. The role of translator can be quite complex andthe translator must be sufficiently knowledgeable about the work of both communities to beable to translate. The powerful position of translator requires trust, since translation is rarely

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entirely innocent (translators may favor the interests of one group over another deliberately
or inadvertently). Yet, participants must be able to rely on translators to carry negotiations
in both directions, making them mutually intelligible to the communities involved. The difficulty of doing this makes translators extremely valuable and extremely difficult to find.
External mediators and consultants are often called in to provide such translation.

BROWN AND DUGUID

Knowledge Br okers

The role of in-firm brokers, in contrast to that of translators, involves participation rather
than mediation. They are a feature of overlapping communities, whereas translators work
among mutually exclusive ones. In an analysis of the diffusion of knowledge across networks, sociologist Mark Granovetter noted that overlaps are hard to develop in communities with very strong internal ties. These tend to preclude external links. Thus Granovetter
argued for the “strength of weak ties,” suggesting that it was often people loosely linked
to several communities who facilitated the flow of knowledge among them.29
As almost all communities within an organization overlap, those who participate in
the practices of several communities may in theory broker knowledge between them.
Trust is less of a tendentious issue than with translation. Brokers who truly participate
in both worlds, unlike translators, are subject to the consequences of messages they
carry, whatever the direction.

Organizing Knowledge

Boundary Objects
Boundary objects are another way to forge coordinating links among communities, bringing them, intentionally or unintentionally, into negotiation. Boundary objects are objectsof interest to each community involved but viewed or used differently by each of them.
These can be physical objects, technologies, or techniques shared by the communities.
Through them, a community can come to understand what is common and what is distinct
about another community, its practices, and its world view. Boundary objects not only help
to clarify the attitudes of other communities, they can also make a community’s own presuppositions apparent to itself, encouraging reflection and “second-loop” learning.30
Contracts are a classic example of boundary objects. They develop as different
groups converge, through negotiation, on an agreed meaning that has significance forboth. Documents more generally play a similar role, and forms and lists that pass between and coordinate different communities make significant boundary objects. Plans
and blueprints are another form of boundary object. Architectural plans, for instance,
define a common boundary among architects, contractors, engineers, city planners, costestimators, suppliers and clients. Severally and collectively these groups negotiate theirdifferent interests, priorities, and practices around the compelling need to share an interpretation of these important documents.
To help produce intercommunal negotiation, organizations can seed the border between communities with boundary objects. The idea-fomenting metaphors that Nonaka
describes draw some of their power by being boundary objects. 31 They work withingroups to spark ideas. Once a group has found one metaphor particularly powerful, that
metaphor may also serve to foster understanding between groups.

Business Pr ocesses as Boundary Objects: Enabling and Coer civeBusiness processes can play a similar role. Ideally, processes should allow groups, throughnegotiation, to align themselves with one another and with the organization as a whole.
Business processes can enable productive cross-boundary relations as different groups
within an organization negotiate and propagate a shared interpretation. In the right circumstances, the interlocking practices that result from such negotiations should cohere
both with one another and with the overall strategy of the company. The processes provide some structure, the negotiations provide room for improvisation and accommodation,and the two together can result in coordinated, loosely coupled, but systemic behavior.32
Many business processes, however, attempt not to support negotiation but to preempt it, trying to impose compliance and conformity through what Geoffrey Bowker and

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BROWN AND DUGUIDTechnology Issues

Organizing Knowledge

Susan Leigh Star call “frozen negotiation.” Here Paul Adler and Bryan Borys’s discussionof “enabling” and “coercive” bureaucracies suggests the importance of enabling and coercive business processes. The first produces fruitful intercommunal relations and, in thebest case, widespread strategic alignment; the second is more likely to produce rigid organizations with strong central control but little adaptability.33

As noted earlier, the ease or difficulty of moving knowledge is a reflection of its social context. Technologies inevitably have an enormous role to play, but they play it only to theextent that they respond to the social context. The desire to disaggregate, disintermediate,and demassify, however, is more likely to produce socially unresponsive behavior.
A good deal of new technology attends primarily to individuals and the explicit information that passes between them. To support the flow of knowledge, within or between
communities and organizations, this focus must expand to encompass communities andthe full richness of communication. Successful devices such as the telephone and the fax,
like the book and newspaper before them, spread rapidly not simply because they carried
information to individuals, but because they were easily embedded in communities.

Supporting the Informal

38

One important issue for technology involves the way the local informality found withincommunities differs from levels of explicitness and formality often demanded between
communities—much as the slang and informal language people use among immediate colleagues differ from the formal language of presentations or contracts. The demands for formality demanded by technologies can disrupt more productive informal relations. For
instance, in many situations, asking for explicit permission changes social dynamics quite
dramatically—and receiving a direct rejection can change them even further. Consequently, people negotiate many permissions tacitly. A great deal of trust grows up aroundthe ability to work with this sort of implicit negotiation. Direct requests and insistence ofrights and duties do not work well.
Technologies thus have to include different degrees of formality and trust.34 The
range will become apparent as different types of “trusted systems” begin to emerge. At
one end are systems that more or less eliminate the need for social trust. They simply
prevent people from behaving in ways other than those explicitly negotiated ahead oftime and constrained by the technology. Everything must be agreed (and paid for, usually) ex ante. For high-security demands, such technologies will be increasingly important. People are glad they can trust bank machines and Internet software servers. But if
new technologies ask people to negotiate all their social interrelations like banking relations, they will leave little room for the informal, the tacit, and the socially embedded—
which is where know-how lies and important work gets done.
This choice between formality and informality will have repercussions in the designof complex technologies. But it also has repercussions in the implementation of suchthings as corporate Intranets and mail systems. Increasingly, workplaces seek to control
the sorts of interactions and exchanges these are used for. Yet these systems in many
ways replace the coffee pot and the water cooler as the site of informal but highly important knowledge diffusion. Limiting their informality is likely to limit their importance.

Reach and Recipr ocity
As continual chatter about the global information network reminds us, information technology has extensive reach. Markets supported by this technological reach spread further
and further daily. However, it is a mistake to conclude that knowledge networks, which
require a social context, will spread in the same fashion. Technology to support the
spread of new knowledge needs to be able to deal not with the reach involved in delivery so much as with the reciprocity inherent in shared practice. The ability to supportcomplex, multi-directional, implicit negotiation will become increasingly important.

Volume 1, Number 2, REFLECTIONSBROWN AND DUGUIDOrganizing Knowledge

The Internet provides an interesting example of the way people retrofit information
technology to enhance its social capacities. It was designed primarily so that computers
could exchange electronic information and computer users could exchange files. Early inits development, though, some insightful programmers at Bolt Beranek and Newman
piggy-backed e-mail on the protocol for transferring files. This highly social medium superimposed on the fetch-and-deliver infrastructure planted the seed that would transform
this scientific network into the social network that has flourished so dramatically in thelast few years. E-mail still accounts for the bulk of Internet traffic. Similarly, the World
Wide Web has been the most recent and dramatic example that further accelerated thesocial use of the technology. Its designer, Tim Berners-Lee, a programmer at the CERN
laboratories in Switzerland, saw that the Internet was much more interesting if used not
simply for exchanging information between individuals, but to support “collaborators . . .
in a common project.” That social imperative, quite as much as the technology, has driven
the Web’s extraordinary evolution.35

Interactivity, Participation, Learning
One of the Net’s greatest assets is that it is interactive and thus has the potential reciprocity to foster knowledge and learning. On campuses, conventional classes now regularly
increase not so much reach as reciprocity by using Web pages and listserves (communal
mailing lists) to do this. Similarly, well-designed corporate intranets, which supplement
more conventional communication, do the same. In particular, these help present and circulate boundary objects. New forms of multicasting, such as the “M-Bone” or Multi-Cast
Backbone, offer yet denser prospects for such interaction.36
When simply combined with reach, interactivity is often merely burdensome. To
cultivate true reciprocity (rather than babble), people often find it necessary to introduce limits on the reach. Listserves now increasingly restrict participation, Web sites demand passwords, andintranets erect firewalls. Imposing limits, however, canprove disadvantageous.
Reciprocity is a feature of what Jean Lave and Etienne
Wenger (who developed the notion of “communities ofpractice”) refer to as “legitimate peripheral participation.37
People learn by taking up a position on the periphery ofskilled practice and being allowed (hence the importanceof legitimacy) to move slowly from the periphery into thecommunity and the practice involved. New communications technologies provide intriguing forms of peripherality. They allow newcomers to“lurk” on the side of interactions in which they are not taking part and of communitiesof which they are not members. Students, for example, lurk on the sides of exchanges
among graduate students and faculty. Novices oversee the Net traffic among experts. Laveand Wenger also showed, however, how vibrant training programs die once newcomers
are cut off from such experienced practice. Closing lists to lurkers can have the same results. Consequently, the negotiation of access, of reach, and of reciprocity in such circumstances needs to remain a complex socio-technological challenge and not simply atechnological one.
The rewards of reciprocity are high. Technologies that can recognize and to someextent parse how relations within communities (where reciprocity is inevitable) differ
from those between communities (where reciprocity must be cultivated) may actually
help to extend reach between communities without disrupting reciprocity within. Understanding the challenges of the between relation should be a significant issue for new design—of both technologies and organizations.
Technology that supports not merely the diffusion of know-what, but the developmentof know-how and that allows for knowledge to be shared rather than marketed. Curiously,
this highlights a pervasive trajectory in the development of communications software, where
explicit design strategies for exchanging information are repeatedly subverted by users whopress for a social network.

Technology to support the spr ead of
new knowledge needs to be able todeal not with the reach involved indelivery so much as with the reciprocity
inherent in shar ed practice.

REFLECTIONS, Volume 1, Number 2

39

BROWN AND DUGUIDOrganizing Knowledge

Conclusion: Dialectical Thinking
The propagandists of cyberspace have a tendency to speak in terms of discontinuity. The
new, they always insist, will simply sweep away the old, so they confidently predict that
hypertext will replace the book. (Here they might do well to pay attention to The New
York Times’s confident prediction in the 1930s that the typewriter would replace the pencil. The pencil seems to have won that particular struggle.) Or, as in the issue at stake
here, the prediction is that communications technology will sweep away the firm.
Undoubtedly, the present technological revolution will sweep many familiar aspectsof life away. Nonetheless, sometimes it is useful to think in terms of “both/and” rather
than simply “either/or.” This seems particularly true when considering the effect of heterogeneous categories on one another, such as the effects of technologies on institutions.
Instead of thinking of individuals vs. institutions, or markets vs. firms, or start-ups
vs. large corporations, it may be more instructive to think of how the two are interlaced.
From this perspective, it does not seem as though disintermediation, demassification,and disaggregation are the only watchwords of the future. Community, practice, organization, network, and above all organizational knowledge and distributed know-how
are equally important.

Notes

40

1. For “communities of practice” see Jean Lave and Etienne Wenger, Situated Learning: Legitimate
Peripheral Participation (New York, NY: Cambridge University Press, 1993); John Seely Brown
and Paul Duguid, “Organizational Learning and Communities of Practice: Towards a Unified
View of Working, Learning, and Innovation,” Organization Science, 2 (1991): 40–57.
2. See, for example, Leonard-Barton’s portrayal of the “learning organization” and her example of
Chaparral Steel. Leonard-Barton, op. cit.
3. The distinction between know-what and know-how and the notion of “dispositional knowledge”
comes from Gilbert Ryle, The Concept of Mind (London: Hutchinson, 1954). Know-how may
appear to be little more than so-called “physical” skills, such as catching a ball or riding a bicycle. It is much more, however. For any student to “know” Newton’s second law in any meaningful way requires having the skill to deploy the law in an analysis of colliding objects. This
sort of knowledge, a disposition as well as a possession, emerges when called upon. It is evident, for instance, in such complex skills as talking, writing, and thinking or in negotiating withclients, overseeing employees, controlling production processes, developing strategy, conducting scientific experiments, fixing complex machines, cooking a meal, or writing computer programs. For the importance of dispositional knowledge, see S. Noam Cook and John Seely Brown,“Bridging Epistemologies: The Generative Dance between Organizational Knowledge and Organizational Knowing,” Organization Science (forthcoming).
4. As the CEO of Chaparral Steel told Leonard-Barton, “He can tour competitors through the plant,show them almost ‘everything and we will be giving away nothing because they can’t take ithome with them.’” Leonard-Barton, op. cit, p. 7.
5. See, for example, George Gilder, Life After Television (New York, NY: W.W. Norton, 1994) for
disintermediation; Alvin Toffler, The Third Wave (New York, NY: Morrow, 1980) fordemassification; Nicholas Negroponte, Being Digital (New York, NY: Alfred A. Knopf, 1996) for
disaggregation.
6. Friedrich Hayek, The Fatal Conceit: The Errors of Socialism (Chicago, IL: University of Chicago
Press, 1988). See, also, Friedrich Hayek, “The Use of Knowledge in Society.” American Economic
Review, 35 (September 1945): 591–30); Kenneth J. Arrow, The Limits of Organization (New York,
NY: W.W. Norton, 1974).
7. See, for example, Kevin Kelly, Out of Control: The New Biology of Machines, Social Systems, andthe Economic World (New York, NY: Addison-Wesley, 1994) for bees; Andy Clark, Being There:
Putting Brain, Body, and World Together Again (Cambridge, MA: MIT Press, 1997) for termites;
Richard Dawkins, The Blind Watchmaker (New York, NY: W.W. Norton, 1986) and Sherry
Turkle, Life On the Screen: Identity in the Age of the Internet (New York, NY: Simon & Schuster,1996) for artificial life.
8. Raymond Williams, The Long Revolution (New York, NY: Columbia University Press, 1961).
9. Douglass C. North, Institutions, Institutional Change, and Economic Performance (New York, NY:
Cambridge University Press, 1990); Alfred D. Chandler, The Visible Hand: The Managerial Revolution in American Business (Cambridge, MA: Harvard University Press, 1977.
10. Though for a qualified view of this argument, see Daniel E. Sichel, The Computer Revolution: An
Economic Perspective (Washington, DC: Brookings Institutions Press, 1997).

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BROWN AND DUGUIDOrganizing Knowledge

11. See Mark Granovetter, “Economic Action and Social Structure: The Problem of Embeddedness,”
American Journal of Sociology, 91 (1985): 481–510; Gordon Walker, Bruce Kogut, and Weijian
Shan, “Social Capital, Structural Holes and the Formation of an Industry Network,” Organization Science, 8 (1997): 109–112; Martin Kenney and Urs von Burg, “Bringing Technology Back In:
Explaining the Divergence between Silicon Valley and Route 128,” in preparation; AnnaLee
Saxenian, Regional Advantage: Culture and Competition in Silicon Valley and Route 128 (Cambridge, MA: Harvard University Press, 1996): Gernot Grabher, The Embedded Firm: On theSocioeconomics of Industrial Networks (London: Routledge, 1993).
12. Julian E. Orr, Talking About Machines: An Ethnography of a Modern Job (Ithaca, NY: ILR Press,
1996).
13. Nonaka and Takeuchi, op. cit., p. 72; Ikujiro Nonaka and Noboru Konno, “The Concept of ‘Ba’:
Building a Foundation for Knowledge Creation,” California Management Review, 40/3 (Spring 1998).
14. For views of personal knowledge, see M. Polanyi, The Tacit Dimension: The Terry Lectures, (Garden City, NJ: Doubleday, 1966); Ludwig Wittgenstein, Philosophical Investigations, G.E.M.
Anscombe, trans. (New York, NY: Macmillan, 1953); David Bloor, Wittgenstein: A Social Theoryof Knowledge (New York, NY: Columbia University Press, 1983); Thomas Nagel, The Last Word
(New York, NY: New York University, Press, 1997).
15. For a discussion of collective sensemaking, see Karl Weick, Sensemaking in Organizations (Beverly
Hills, CA: Sage Books, 1995); Karl Weick and K. Roberts, “Collective Mind in Organizations,” Administrative Science Quarterly, 38/3 (September 1993): 357–381.
16. Leonard-Barton, op. cit., especially chapter 2.
17. Raghu Garud and Michael A. Rappa, “A Socio-Cognitive Model of Technology Evolution: The
Case of Cochlear Implants,” Organization Science, 5 (1994): 344–362.
18. Garud and Rappa argue that in such cases, markets are actually quite inefficient means to challenge the interdependence of belief and evaluation—in part because markets, too, rely on evaluations provided by the blinkered technologies. Garud and Rappa, op. cit., p. 358.
19. Eric Von Hippel, “‘Sticky Information’ and the Locus of Problem Solving: Implications for Innovation,” Management Science, 40 (1994): 429–439.
20. Stephen R. Barley, “Technicians in the Workplace: Ethnographic Evidence for Bringing Work into
Organization Studies,” Administrative Science Quarterly, 41 (1966): 401–444; Henry W.
Chesbrough and David J. Teece, “When Is Virtual Virtuous? Organizing for Innovation,” Harvard
Business Review, 74/1 (1996): 65–73.
21. Robert Cole, The Quest for Quality Improvement: How American Business Met the Challenge(New York, NY: Oxford University Press, forthcoming).
22. Polanyi, op. cit.
23. David Teece, Richard Rumelt, Giovanni Dosi and Sidney Winter, “Understanding Corporate Coherence: Theory and Evidence,” Journal of Economic Behavior and Organization, 23/1 (1994): 1–30.
24. For the notion of leakiness, see R.M. Grant and J.-C. Spender, “Knowledge and the Firm: Overview,” Strategic Management Journal, 17 (1996): 5–9.
25. Walter W. Powell, “Inter-Organizational Collaboration in the Biotechnology Industry,” Journal of
Institutional and Theoretical Economics, 152 (1996): 197–215; Kristen Kreiner and Majken
Schultz, “Informal Collaboration in R&D: The Formation of Networks across Organizations,”
Organization Science, 14 (1993): 189–209.
26. To some degree, such fields resemble “social worlds.” See Anselm Strauss, “A Social World Perspective,” Studies in Symbolic Interaction, 1 (1978): 119–128.
27. See John Seely Brown and Paul Duguid, “The Knowledge Continuum,” in preparation.
28. Susan Leigh Star and James R. Griesemer, “Institutional Ecology, “Translations’ and Boundary
Objects: Amateurs and Professionals in Berkeley’s Museum of Vertebrate Zoology, 1907–39,”
Social Studies of Science, 19 (1989): 387–420.
29. Mark Granovetter, “The Strength of Weak Ties,” American Journal of Sociology (1976), pp. 1360–
1380; Granovetter’s argument presupposes that for knowledge to spread, groups cannot simply
be related as isolated individuals connnected by market; they (and, indeed, markets) must be
embedded in complex social systems. This argument appears more forcefully in his critique oftransaction costs cited above.
30. Chris Argyris and Donald Schön, Organizational Learning (Reading, MA: Addison-Wesley, 1978).
31. Ikujiro Nonaka, “The Knowledge Creating Company,” Harvard Business Review, 69/6 (November/December 1991): 96–104.
32. For the notion of “loosely coupled” systems, see Karl E. Weick, “Organizational Culture as a
Source of High Reliability,” California Management Review, 29/2 (Winter 1987): 112–127; J.
Douglas Orton and Karl E. Weick,” Loosely Coupled Systems: A Reconceptualization,” Academyof Management Review, 15/2 (April 1990): 203–223.
33. Geoffrey Bowker and Susan Leigh Star, “Knowledge and Infrastructure in International Information Management: Problems of Classification and Coding,” in LIsa Bud-Frierman, ed., Informa-

41

BROWN AND DUGUID
Organizing Knowledgetion Acumen: The Understanding and Use of Knowledge in Modern Business (London: Routledge,
1994), pp. 187–213; Paul Adler and Bryan Borys, “Two Types of Bureaucracy: Enabling and Coercive,” Administrative Science Quarterly, 41 (1996): 61–89.
34. For an insightful view of the interplay between the formal and the informal in the creation oftrust, see Sim B. Sitkin, “On the Positive Effect of Legalization on Trust,” Research on Negotiation in Organizations (1995), pp. 185–217.
35. Tim Berners Lee, “The World Wide Web: Past, Present, and Future, [available online]: http://
www.w344.org/People/Berners-Lee/1996/ppf.html
36. See John Seely Brown and Paul Duguid, “The University in the Digital Age,” Change, 28 (1996):
10–15; John Seely Brown and Paul Duguid, “The Social Life of Documents,” Release 1.0 (October 1995), pp. 1–12.
37. Lave and Wenger, op. cit.

Commentary by W anda J. Orlikowski

Wanda J. Orlikowski

42

Brown and Duguid, in their consideration of organizing knowledge, provide an important complement to contemporary discussions of “knowledge management.” By emphasizing practice, community, embeddedness, and interaction, Brown and Duguid remind us that knowledge is situated andsocial and, as such, its management within and among organizations is no simple matter. Indeed,
their essay calls into question the very notion of “managing” knowledge. Instead, translating,brokering, and negotiating knowledge are the relevant watchwords along with such notions ascommunities of practice, knowledge ecologies, and reciprocity. This distinctive vocabulary is an important contribution to our thinking about knowledge in organizations. Not only does it offer different images and metaphors of knowledge that effectively challenge our taken-for-granted
assumptions, it offers rich models for knowledge that provide alternative conceptions with which
we may proceed to work with knowledge—whether as practitioners, consultants, or researchers.
In my comments here, I will continue the spirit of exploring different conceptions of knowledge
and examine one of Brown and Duguid’s notions in more detail. In particular, I want to consider
their view of the relationship between know-how and practice as one characterized byembeddedness and to suggest an alternative reading. Such an alternative reading offers different
implications for what it will take to “share” knowledge within and across organizations.
Brown and Duguid adopt Gilbert Ryle’s distinction between “know-what” and “know-how,” arguing that the latter, as “the particular ability to put know-what into practice,” is “embedded inwork practice.” Because of its embeddedness in a set of practices, such knowledge is easily moved
among groups with similar practices but is “sticky” or difficult to move across communities ofpractice. The notion of know-how “stuck” in or to a set of practices is a vivid image ofembeddedness. However, it got me thinking about its appropriateness, because while it suggests a
deep dependence between know-how and practice, it nevertheless implies that the two are distinct
and that if the former could be made to be more fluid, whether through brokerage, translation, or
negotiation, it may be released from, and “propagated” without, the latter. My alternative reading
questions whether know-how and practice can be separated at all.
In his discussion, Ryle (1949) argues that knowledge is essentially a “knowing how,” a capacity toperform or act in particular circumstances. Using an example of a boy playing chess, he suggeststhat the boy can be said “to know how” to play chess if his action displays the rules of chess even if
he cannot recite them. Polanyi (1966) similarly argues that tacit knowledge is evident in our ability
to recognize faces in a crowd or ride bicycles even as we cannot articulate precisely how it is that
we do these. Thus, we recognize the know-how (the capacity to play chess or ride a bicycle) by observing the practice (of chess-playing or bicycle-riding). As Donald Schön (1983, p. 50) has noted,
the “know-how is in the action.”
However, the practice (of chess-playing, bicycle-riding, etc.) has no meaning apart from theknow-how that defines it. Remove the know-how of playing chess from the practice and you nolonger have anything recognizable as chess-playing practice. While we identify the know-how byrecognizing the practice, we similarly identify the practice by recognizing the know-how. The two
are not discrete and separable but mutually constitutive.
The image of knowledge embeddedness suggests that know-how may be placed within someexisting practice, where it then gets so thoroughly enmeshed with that practice that extraction andmobility are constrained. But if the know-how defines the practice (just as the practice recursively

Volume 1, Number 2, REFLECTIONS

References

Barrett, F.J. “Creativity and Improvisation in Jazz and Organizations: Implications for Organizational
Learning.” Organization Science 9, no. 5 (1998): 605–622.
Giddens, A. The Constitution of Society: Outline of the Theory of Structur e (Berkeley, CA: University ofCalifornia Press, 1984).
Polanyi, M. The Tacit Dimension (Garden City, NJ: Doubleday, 1966).
Ryle, G. The Concept of Mind (London: Hutcheson, 1949).
Schön, D.A. The Reflective Pr actitioner (New York: Basic Books, 1983).
Weick, K.E. The Social Psychology of Or ganizing (Reading MA: Addison-Wesley, 1979).
Weick, K.E. “The Collapse of Sensemaking in Organizations: The Mann Gulch Disaster.” Administrative
Science Quarterly 38 (1993): 628–652.
Weick, K.E. “Prepare your Organization to Fight Fires.” Harvard Business Review May-June, vol. 74, no. 3(1996): 143–148.

Commentary by Etienne W enger
Brown and Duguid’s eulogy of organizing is so carefully argued that it is difficult to add much tothe argument itself. So, I will merely highlight some implications of their analysis.
They set the stage with Chandler’s thesis that progress in transitional times like the Industrial
Revolution depends as much on social and institutional as on technological developments. Theiruse of Chandler’s thesis insinuates that we are again in such a transitional time. Yet, in their

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BROWN AND DUGUIDOrganizing Knowledge

defines the know-how), the notion of an a priori practice into which know-how gets embedded is
not sustainable. An alternative reading of the relationship between know-how and practice posits
know-how as constituted in practice, rather than embedded within it. In this view, any distinction
made between know-how and practice is an analytic convenience only.
Shifting from a view of know-how as embedded in practice to seeing it as constituted in practice allows us to understand Ryle’s “capacity to perform” definition of knowledge as a descriptionof practice. Social theorist Anthony Giddens (1984, p.4) similarly defines much of human knowledgeability as “inherent within the ability to ‘go on’ within the routines of social life.” By “goingon,” we continually produce and reproduce know-how through the practices that we engage in.
Such knowledge is inseparable from human agency.
There are at least two implications of shifting our focus from embeddedness to constitution inpractice. One is that the notion of knowledge stickiness, at least as it applies to know-how, may
need revision. Knowledge that is constituted in practice is not most effectively understood as“stuck” in or to that practice. That would be like saying that the words of this sentence are “stuck”
to it, when in fact they constitute it. Karl Weick’s (1979) notion of enactment may be a more apt
notion here. Knowledge constituted in practice can be seen to be enacted by that practice. Enactment replaces the impression of adhesion with one of activity. Sharing knowledge is now seen not
as a process of disembedding “sticky” knowledge from one community of practice and embedding
it in another; it is seen as enabling people in other communities to learn the activity that enacts
the knowledge. It is a process of developing the ability to perform.
Another implication is that knowledge constituted in practice is not a static or given capability but
an ongoing social accomplishment. Such knowledge does not exist “out there” (incorporated in external forms) or “in here” (inscribed in our brains) but is continually enacted through our everyday individual and collective action. As a result, it may be reinforced or changed through such action.
Recurrent practices indicate repeated enactment of similar know-how; hence the reinforcement of
this knowledge over time. However, as Schön (1983) effectively showed, knowledgeable action often
involves reflection and experimentation in action and, thr ough such in-the-moment reconstruction ofaction and thought, practices may be altered that change the know-how being enacted. The result islearning, an augmentation of the capacity to perform. Barrett (1998) and Weick (1993, 1996) similarly
argue that improvisation in practice is a powerful means of increasing organizational innovation,
learning, and resilience. From such a perspective, people change their knowledge when they have themeans, motivation, and opportunity to reflect on, experiment with, and improvise their practices.
In closing, let me note that I strongly support Brown and Duguid’s view of the importance of a
vocabulary around knowledge that includes notions of “community, practice, organization, network,and above all organizational knowledge and distributed know-how.” In my comments here, I have
tried to stress the equal importance of such notions as mutual constitution, enactment, reflectionin-action, learning, improvisation, and above all, human agency.

43

BROWN AND DUGUIDOrganizing Knowledge

Etienne Wenger

vigorous—and convincing—defense of organization as a principle of social development, they end
up understating the need to invent radically new organizational forms as we enter into a knowledge economy. Indeed, in speaking against the suggestion that “hierarchical firms will dissolve into
markets of self-organizing individuals,” they almost appear to present the hierarchical firm as theorganizational alternative to pure market mechanisms. I am certain that they do not intend such asimplistic contrast, but I think it is important to emphasize explicitly the amount of imaginationthat is now going to be required to invent the knowledge-based organization they are calling for.
For instance, the focus on communities of practice essential to organizing knowledge often runs
counter to established management practices in traditional organizational structures. The currencyof these communities is collegiality, reciprocity, expertise, contributions to the practice, and negotiating a learning agenda, not assigned authority or commitment to a predefined deliverable. Few
managers are in a position to appreciate (in both senses of the term) the subtle ways in whichthese communities can own the knowledge they steward, can enable learning across institutional
divisions, and can create value by ensuring long-term capability-development. Embracing the contributions of these communities means not just organizing knowledge in an abstract way but opening the organizational space to their sense of ownership and identity.
Similarly, boundary processes are often at odds with current organizational designs. In terms of
belonging, the work of brokering is very delicate. It requires an ability to be both in and out at thesame time: enough of an insider to be listened to and understand the context in which knowledge
is useful and outside enough to bring something truly new. The work of brokers is often difficult torecognize because it does not contribute directly to the core of any practice as defined by the existing communities. The occupational hazards of brokering are uprootedness and marginality. In traditional organizations, brokers run the risk of falling through the cracks or, worse, of falling prey tothe knife of efficiency-driven restructuring. Recognizing the work of weaving constellations ofcommunities requires a new set of values for most organizations.
Finally, not all boundary objects create bridges across boundaries that actually connect practices
in deep ways. It is useful to distinguish between different boundary characteristics for analyzing
the boundary effects of these objects in practice: Coordination: Can an artifact be interpreted in two different practices in a way that enables coordinated action? For instance, an elegant design may delight designers but say little to thoseconcerned with manufacturability.
 Transparency: How much access does the use of an artifact across boundaries provide into thepractices involved? For instance, forms such as tax returns enable coordination across boundaries (you know how to fill them out) but often afford no windows into the logic they are meant
to enforce.
 Negotiability: Are the coordination and the transparency one-way or two-ways? For instance, areengineering plan may be very detailed about implementation and explicit about its intentions
but may reflect or allow little negotiation between the per spectives involved.

44

To the degree that an organization relies on boundary objects for organizing constellations ofpractices in generative ways, it will have to create artifacts that combine all three characteristics.
The innovative potential of an organization lies largely in the texture of practices and boundaries
that shape its constellations of communities of practice (Wenger, 1998). But to realize this potential, organizations must be premised on the essential relation between knowing and belonging that
communities of practice embody. The kind of organization that is called for is closer to Charles
Handy’s notion of federation than to the kind of organization we are familiar with (Handy, 1989).
What would an organization look like if it took as fundamental building blocks the communities
of practice that steward the competencies critical to its purpose? How could it adopt multimembership as a productive design principle? What new relations of employment would be consistent withsuch premises? What kind of strategic discourse would have to pervade the organization for thesecommunities to participate meaningfully in the development of their or ganizational environment?
What forms of governance would foster this kind of participation? In a period of transition, realizing
the importance of organizing mostly implies a call to activate our organizational imagination.

References
Handy, C. The Age of Unr eason. (Cambridge, MA: Harvard Business School Press, 1989).
Wenger, E. Communities of Pr actice. (New York: Cambridge University Press, 1998).

Volume 1, Number 2, REFLECTIONSCollaborative Learning:
A Core Capability
for Organizationsin the New Economy

FEATURE

Dori DigentiThis paper concerns the practice of collaborative learning—a practice thatcomprises a vital organizational capability for the twenty-first century. By collaborative learning we mean the interaction of two or more people engaged in value-creating
activities based on improving, practicing, and transferring learning skills both within thegroup and to the organization or group of organizations to which a group belongs.
The intended audience for this paper includes managers and change agents working with organizations engaged in global markets and businesses. Today’s accelerated
business environment forces managers to engage in on-line learning (i.e., collaborative
learning is a business practice with development that is outpacing the creation of supporting theories). Collaborative learning employs experimentation, methods, and approaches that emerge from the present and evolve as they are practiced.
Why should change agents and their client organizations be concerned with collaborative learning as a practice, when alliances, partnerships, and mergers and acquisitions
are well-known and practiced collaborative forms? First, because collaborative learningcompetence enables organizations to deal with both the pace and direction of change as
they come; second, because collaborative learning builds boundary-spanning skills; andthird, because collaborative learning needs a practice field, a group in which learning experiments focused on building and enhancing interdependence through personal learning networks can take place. The collaborative learning cycle described next deals withthese areas.

Dori Digenti

45

Collaborative Learning as a Cor e Competency
In their groundbreaking Harvard Business Review article, Prahalad and Hamel (1990)
described the core competence of an organization as the collective learning in the organization, especially the capacity to coordinate diverse production skills and integratestreams of technologies. The steps they described were to identify the core competencies,
defined as those that (1) provide potential access to a wide variety of markets, (2) contribute to the customer benefits of the product, and (3) are difficult for competitors toimitate.
Many firms have made this process their guiding strategic imperative. One dramatic
example of a product-based core competency strategy is the recent history of Texas Instruments (TI). After the death of CEO Junkins in 1996, TI embarked on a rapid divestment of its non–core product lines. In 1998, this divestiture culminated in the sale of its
DRAM business to Micron, the final move in TI’s efforts to define its core competence
as digital signal–processing technologies. TI has made bold and concerted moves to define its core competence and redesign the firm in alignment with that strategy.

REFLECTIONS, Volume 1, Number 2© 1999 by the Society for Organizational Learning and the Massachusetts Institute of Technology.

DIGENTI
Collaborative Learning

The final stage of the Prahalad and Hamel process for defining core competence—that companies must reorganize to learn from alliances and must focus on internal development—is one that many leading firms have not fully considered in forming theircore competence strategy. Yet, learning from alliances and internal development is critical for viability in the technological changes that organizations face. How does one define a strategy that is based on learning from alliances, both internal and external, andfocus on internal development, without losing touch with market forces? This is wherecollaborative learning competence becomes a strategic advantage for companies thathave shifted to what has been termed the new economy.

Impacts of Technology and the New Economy on Organizations
We have reached the limits of the continuous improvement processes that have helped
U.S. organizations to enhance productivity, quality, and worker satisfaction over the lastroughly 20 years. Continuous improvement assumed that excellent products and services, supported by rational organizational structures and procedures, would yield ongoing profitability to sustain the organization. These beliefs were tied to an economy
wherein forces were linear, planned, and predictable.
Wired magazine’s editor Kevin Kelly (1997) has proposed a radical view of the new
economy—one in which companies will succeed only through counter-intuitive strategies that support and are supported by collaborative learning. In Kelly’s “New Rules of
the New Economy,” the following principles support a networked world: Shared knowledge and product capability increase profits for all.
 Beneath-the-radar trends explode as the focus of geometrical profits.
 Laws of product lifecycle are skewed.
 Prices for the best technology constantly decrease.
 Individual companies rise and fall, but the network remains intact.
 The best products are given away free.
 Continuous disequilibrium must be sought rather than cured.
Building on Kelly’s premises, let’s focus on technological change and the creationof the new economy. In the early 1990s, the World Wide Web and the Internet were not
key business tools. Now, at the end of the 1990s, it is difficult to think of a single area of
business that does not feel the impact daily of the Internet. To put a figure on the paceof technological change on the Internet: Web-based commerce has grown from close to$0 in 1993 to an estimated $22 billion in 1998. Marketing, sales, financial planning,project management, global operations—all have been changed by Internet technology.
Just as the Web was essentially unknown a few years ago, so the next technologicaldirection is unknown. In Massachusett Institute of Technology’s Media Lab haptic computing is transforming the sense of touch to digital form. Just as we have become accustomed
to receiving sound and images in digital form on the desktop, in the near future we will beable to transmit sensation and texture from one desktop to another. What impact will thishave on three-dimensional modeling, medical practice, materials science, and communication? Technology is once again far ahead of our ability to apply it meaningfully to the business at hand.
It is not only possible but likely that within a few years, average technology workers will spend most of their day in virtual environments, where haptics and other digitized sensory inputs take them out of normal reality for hours at a time. Already inJapan, commercial applications of virtual reality (VR) are springing up in virtual ski andgolf practice environments, VR interior design, and laboratories (Kahaner, 1994). Further
commercialization and applications will follow.
The impact of this ever-changing technological landscape on corporate strategy is
profound. Even the most bullet-proof product strategies and organizational structures
may become obsolete in a short time. Most organizations have a hard time shifting tothis new reality. Much of the work of managers and change agents going forward will
be to help firms to shift their energies from structure and planning to creation of thetypes of flexible learning structures that will support corporate survival in the twentyfirst century.

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REFLECTIONS, Volume 1, Number 2

Volume 1, Number 2, REFLECTIONS Acknowledge that they do not know where the next set of changes will take them
 Understand that today’s core technological or product competencies may be uselessin a few years
 Be convinced that the differentiating factor between success and failure in the faceof discontinuous change will be the ability to learn and collaborate (Nadler et al.,1995).

DIGENTICollaborative LearningThis new reality requires a different mindset. Managers need to question every assumption; invest in intangible assets of knowledge, people, and networks; and be readyto diversify and reconfigure rapidly. To create this new mindset, managers will need tooperate with certain givens:

Collaborative Learning Pr erequisites
For change agents to assist firms in embedding collaborative learning as a core competence, three prerequisites must be in place: collaborative capability assessment, collaborative organizational climate, and collaborative spaces.

Collaborative Capability Assessment
To build capability, change agents must understand collaborative learning as it currently
exists in the organization. Many firms are involved in multiple internal and external collaborations before they consider the possibilities of assessing capability and building
competency in the organization around those collaborations. Though most companies
engage in cultural compatibility analyses or at least consider reasonable fit before they
engage in partnerships, few have a clear sense of how collaboration works in their organization—of where the pockets of expertise lie or what models of collaborative activities
are being used internally.
Collaborative capability assessment allows an analysis of the organization’s attitude
toward collaboration and the existing systems, support, and persons involved in collaboration in the firm. The assessment is a tool for uncovering tacit knowledge about collaboration and for highlighting where in the firm there is lack of alignment around collaborative
goals. The collaborative capability assessment process involves certain factors:
 Organizational culture analysis (Schein, 1992)
 Interviews with those involved in collaboration across levels, functions, and divisions in the organization
 Collection and study of internal publications, memos, and executive speeches that
focus on collaboration
 Review of existing collaborative relationships
 Collection and study of training and development efforts that support collaboration
 Data about current rewards or recognition programs that focus on collaboration.
After the materials, information, and interviews have been gathered, they are analyzed to determine the strengths and weaknesses of the organization’s collaborative capability. This information provides the basis for building, enhancing, or transferring thecollaborative learning competency. It also produces data that can be used in building
stakeholder support for the collaborative learning competency.

Collaborative Or ganizational Climate
Once the manager or change agent understands the current state of collaborative learning in the organization, this information can be compared to guidelines concerning thecreation of an organizational climate that supports collaborative learning. According to
Edward Marshall (1995), a collaborative climate has four components:
1. Collaborative culture: a set of core values shaping business behavior, including respect for people; honor and integrity; ownership and alignment; consensus; trustbased relationships; full responsibility and accountability; and recognition andgrowthREFLECTIONS, Volume 1, Number 2

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2. Collaborative team processes: team formation process, team management process,self-sufficiency and renewal process, and team closing process
3. Collaborative structure: realigned human resources support and information systems
4. Collaborative leadership: ability to recognize many leaders, not just one; leadershipthat fulfills a number of functions—facilitator, coach, healer, member, manager,change agent
The change agent compares the collaborative capability assessment findings to theseclimate indicators and determines interventions that will address the gaps between current conditions and the new supportive climate.
British Petroleum (BP) is one example of an organizational climate that supports
collaborative learning. The company found that it was spending extensive corporate resources to send technical troubleshooters to far-flung operations to solve problems butthat technical knowledge transfer during these sessions was inadequate. To address thissituation, BP drew on new technologies in combination with human interaction skills
training to resolve many technical issues from a distance; it also created a catalog of technical resources accessible worldwide. The company invested $12 million in a pilot
project called the virtual teamworking (VT) program, which included desktop
videoconferencing; collaborative software (multimedia E-mail, shared applications, scanners, and electronic whiteboards); and behavioral coaching. Virtual teamworking
coaches were sent out to implement the installation of the equipment, but 80% of the
program’s time was spent on aligning the VT approach with the unit’s business goals,
teaching facilitation skills, and mentoring the group once the system was installed tomaximize the benefits of the investment. BP estimates that its VT approach saved it $30
million in the first year in which it was implemented, through reduced travel expenses,
quicker problem resolution, and less downtime on critical equipment. The learningtransfer that has taken place as a result of this investment undoubtedly has provided
further, less easily measured benefits.

Collaborative Spaces

48

BP’s VT program illustrates a company’s investment in building collaborative spaces. As
the pace of business interactions picks up, companies are challenged to find new ways
to deal with complexity without falling into the trap of reductionism and fragmentation(i.e., without dividing up problems and accountabilities in ways that work against seeing the entire picture). Cultural, technological, and stakeholder factors need to be dealt
with in collaborative relationships in a new way—in the creation and use of collaborative space. Michael Schrage (1990) describes a collaborative space as a “shared space thatis the place or the medium where people put up and play with the representations andmodels of their ideas.” Risk-taking and experimentation are encouraged, cultural assumptions are openly acknowledged, and all parties are willing to experience some level of
discomfort in working together.
Collaborative spaces involve not physical spaces but the collaborative process ofcreating models, of experimenting, and of improving them while engaging in ongoing
discussion and exchange of ideas. The process or model creates the focus and interestfor the collaborative team to build on. In this way, a collaborative space is the jumpingoff point for networks and collaborative relationships. The value creation comes from therelationships, which can carry through to subsequent collaborations.
The creation of a collaborative space can be likened to a temporary learning system(Seashore & Seashore, 1998), wherein a group has been brought together around specificlearning goals for a defined period . Explicit in the concept of the temporary learning system is the blending of completion of task and reflection on process, which occur in parallel. The group creates a collaborative space in which learning through process—voicing
insights, shedding assumptions, and noting direction, energy, and involvement of thegroup—is as important as the task. The premise of the temporary learning system is thatthe collaborative space must allow members to “get out of the box,” to combine linear andrandom insights, and to access the untapped energy for learning in the system, including
conflict, and to use that as a springboard for new discoveries.

Volume 1, Number 2, REFLECTIONSThe Collaborative Learning Cycle
To build, enhance, or transfer collaborative learning competence, the following cycle is
proposed as a road map. The model, as an ongoing learning practice, is presented as cyclical because each learning cycle leads to a reassessment of collaborative learning capability, at an increasingly fine-grained level of inquiry. The figure shows the phases of thecollaborative learning cycle (Figure 1).

DIGENTI
Collaborative Learning

The collaborative space is the container in this case for exploring learning technologies and methods that can move the organization toward its desired future.

Phase One: Collabor ative Capability Assessment
As mentioned, collaborative capability assessment provides data both for strengthening
collaborative capability in the organization and to be shared with other learning groups
for input, advice, and feedback.

Phase T wo: Cr eation of Boundary-Spanning Skills
The skill set that supports collaborative learning has been termed boundary-spanningskills (Digenti, 1998a). These skills allow the members of the collaborative learning group
to develop a shared vocabulary and to build skills in boundary crossing while they are
engaged in collaborative learning projects. The competencies for boundary work can beseeded through workshops and group study. At the same time, the competencies thathave the most relevance for a given firm will be determined over time through the practice of the boundary work itself. The boundary-spanning competencies should also form
the basis for mentoring new collaborators and for mentoring across organizational boundaries. Within the collaborative learning group, a “flying-geese” pattern emerges, where
members with more experience in working with learning approaches create “uplift” formembers newly entering. This creates opportunities for mentoring and peer teaching.
(See sidebar on page 50 for further discussion of the boundary-spanning skills and theirdevelopment at the 3M Corporation.)

Phase Thr ee: Pr acticing Collabor ative Learning
Collaborative learning is a practice, and therefore every opportunity for collaboration thatcreates value should be sought out. Naturally, certain types of work do not lend themselves to collaborative activities but, even in that case, individual contributors can benefit from collaborative
learning around methods and approaches. A number ofcollaborative learning technologies can be engaged inbuilding capability.

Parallel Learning Groups
Parallel learning groups are created to open new channelsof communication outside and parallel to the normal, hierarchical structure of each organization (Bushe & Shani,
1991; Zand, 1974). The groups cut across organizationallines horizontally and vertically, define their own boundaries and strategies, and bring new thinking and creative
energy to problems that have challenged normal decisionmaking processes. New behaviors and organizational
forms are practiced within the parallel group, with thehope of later transferring those new behaviors to the organization as a whole. Through its own processes, the grouplearns about boundary-spanning capabilities, collaboration, goal setting, and group development.

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Figure 1. The collaborative learning cycle.

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The parallel learning group should be composed of a diverse group of individuals,
from different divisions and functions, generations, and cultural and national backgrounds within the organization. This is critical if the group wants to avoid replicating
the traditional patterns and bureaucratic behaviors of the organization; in other words,
if its goal is real change. By “mixing it up” through diverse membership, the parallelgroup ensures that unheard voices, lack of hierarchy, and broad consensus become
norms of the group process. Over time, the parallel learning group becomes a source ofpeer teaching and mentoring on the process to the organization.
An example of the parallel learning group activity is the change agent program at
Siemens Nixdorf (SNI) (McGuire & Mohammed, 1996). This program consists of the annual formation of a parallel system of 20 to 25 professionals from the company; they
engage in a major change project and a 13-week change agent’s course. The group’s goal
is to replace SNI’s rigid corporate hierarchy with a more responsive and flexible organization. The program is intentionally fast-paced to force the participants to make quick
decisions. Each change agent in the program has an executive sponsor and a senior
manager mentor during the course of the program. Some program outcomes include institutionalization and expansion of job rotation programs, enhanced communications
strategy, and the creation of “one-company” vision that superceded divisional interests.

Boundary-Spanning Skill s

50Managers and change agents now work in multiple boundary-spanning situations. Internally,
managers must address functional, national culture, and subculture boundaries within a single
project team. In addition, customers and suppliers are increasingly party to product and market
decisions, so managers must be able to bring external perspectives to their own organizations
and be sure that internal barriers to fulfilling customer needs are addressed. In the past, themanagement of functional boundaries (project managers), national cultural boundaries (international managers), and subcultures (the “people” persons of the company) were separate; now allthese functions are handled by a single management. This creates the need for cross-disciplinary
boundary-spanning skills.
Boundary-spanning skills combine organizational learning, intercultural, and negotiationmediation approaches to provide managers and change agents with the tools they need to address multiple boundary situations and to create and manage the knowledge gained throughthose interactions. These boundary-spanning skills are double-loop learning, mediation-negotiation, systems thinking, peer learning-teaching, and intercultural relations.
3M Corporation, a world leader in innovation based on successful leveraging of internal andexternal relations and unparalleled technical expertise, began to build boundary-spanning capabilities as an outgrowth of its Tech Forum activities. The Tech Forum, a 7,000-member global association of 3M technical employees, has developed a number of internal boundary-spanningmechanisms and programs, including chapters based on technical areas of expertise. In late1997, Peter Fritz, former Tech Forum chair and technical manager in the abrasives division, began to see a need for building “conduits” for technical managers to advance linkages with counterpart technical managers in customer firms. He saw not only that there was a need forenhanced information flows at all levels of the company but that the information flow must betransformed to sharing knowledge and learning strategies that increase customer regard andbuild strong intercompany relationships. The way to achieve these goals was through delineation and dissemination of boundary-spanning skills. As Fritz notes:
Boundary-spanning skills addr essed our needs to build dir ect, tech-to-tech communications
across company boundaries, and to impr ove our capacity for collabor ative learning fr om outside
the company. We clearly saw that systems that worked internally would need to be enhanced inorder to deal with our non-U.S. customer s, and with the connections and new ways of working
we were required to create to access our customer s’ “hidden needs.’’

In 1998, Fritz formed the corporate outreach committee to explore and begin promoting theneed for external perspectives at the technical worker level. “Our work with the boundary-spanning skills has been revolutionary in terms of the type of interactions we are having with external companies now,” he said.
Beyond “data exchange,” we ar e beginning to build the networks that shed light on our own
knowledge-gener ating activities. These learning r elationships highlight ar eas we should focus on,
and provide us with access to tools and ideas—innovative uses of the Internet and confer encing
software, for example—that ar e accelerating our tr ansformation to a networked or ganization.

Volume 1, Number 2, REFLECTIONSStudy Groups
The home of the study group method is the Japanese firm. According to a recent survey,
83% of large companies in Japan use study groups, and 59% of managers report satisfaction with study group results. The number and variety of study groups, more generally known as small-group activities (sho shudan katsudo), within the Japanese firm iscompelling. Small-group activities include no-error movements, level-up movements, bigbrother and big-sister groups, zero defect (ZD) movements, mini–think tanks, suggestion
groups, safety groups, workshop involvement movements, productivity committees, management-by-objectives groups, and workshop talk groups. All these may be discussed
under the general term study group.
Typical formats for study group process include members and teams studying thesame topic and sharing findings; each member and team studying a different topic andexchanging findings (similar to the “jigsaw” method described later); members and teams
meeting to discuss their firm’s processes and exchanging practices; and members andteams meeting with an external organization to study their process and discussing applications to their own firms.
The study group has two purposes: to learn about the topic chosen for study and todevelop the members’ abilities to work and learn collaboratively. The company in Japan
offers and supports the training programs for study group participation and usually coordinates them through a central study group secretariat. Study groups typically feature
rotating facilitation by a member. Though management may be involved, typically it isin the role of advisor. The groups meet regularly, often several times a month.
Much of the learning and information gathering in study groups takes place informally. In other words, study groups—for process improvement, new knowledge, or knowledge exchange—are so well accepted that it is commonplace for these groups to form,
function, and disband according to need at all levels of the organization. An example ofan interorganizational study group that the author is familiar with is the informal association of human resource managers of major Japanese firms. This group meets periodicallywith academics and government experts to discuss learning opportunities. One such groupheard from one of its academic advisors about General Electric’s (GE’s) Change Acceleration Process and asked GE Japan for a seminar about the subject. These are the types of
informal activities in which Japanese interorganizational study groups engage.
Leader’s Circles
Leader’s circles focus on personal development through peer learning, mentoring, and counseling involving problem-solving activities. The leader’s circle meets monthly, and each member has 20 to 30 minutes to present a problem or issue. Presenters then hear focused
feedback, questioning, support, and relevant materials—whatever members agree is helpful.
All circle members decide the goal on which they will work. Each one commits to implement
the advice given in the circle before the next meeting and to report on changes that resulted.
To ensure that the group’s goals remain focused, each meeting closes with a process review.
The method requires little external facilitation and can adapt to crowded schedules.

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A case from the author’s consulting practice showed that creation of a parallel learning group needs to be based first on a firm grasp of organizational learning principles(Senge, 1990; Argyris & Schön, 1978). These principles are best learned through workshops that include exercises that allow the group to grapple with the principles and create its own internal case examples. The parallel group, in attempting to establish newnorms, can experience “slipping” between new norms and old cultural habits. Part of thisslippage is due to the need to navigate the organizational system to accomplish tasks,
which necessarily pulls the members back to old forms of behavior. Direct access to senior management and the ability to pass over typical chain-of-command requirements
support the parallel group in creating a successful practice field.
An example of this type of direct senior management access is seen in Sharp’s emergency technical research and development (R&D) teams—cross-functional teams that can
respond rapidly to perceived technological “threats” and report directly to the president.
Direct access to senior management allows the parallel group to practice and experimentsuccessfully with the new desired behaviors.

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Reciprocal Teaching Groups
Reciprocal teaching is a method of group learning based on the principle of distributed expertise and peer learning and teaching. The method involves the formation of small researchgroups, each responsible for a subset of knowledge of a larger field of inquiry. The small
groups complete their investigations and compilation of research, and then the entire groupconvenes to “jigsaw” into new small groups, where each group is composed of one member
from each research team. The new, jigsawed teams then report their findings to representatives from the other research teams. Jigsawing continues until every member of the entire
group has learned from every research team. Each member’s learning process is enhanced
through teaching and through answering questions, summarizing, clarifying, and predicting
the answers to further questions. Participants with particular interests are encouraged toconcentrate on one aspect of the subject of inquiry and become a community resource toothers. Reciprocal teaching, through verbal exchange and multiple team formation, the primary mode of instruction, presents members with challenges in problem solving, differingcommunication styles, and support and channeling of weaker and stronger learners.
Wisdom Councils
A wisdom council is 12 to 24 people randomly selected to come together as a temporary
learning system. The purpose of the council is to determine the pulse of the organizationand to act as a subset of the whole to determine key issues or obstacles—neededchanges—in the organization. The participants can come from any level or job functionin the organization. Like a jury, they seek a unanimous view. Unlike a jury, they use an
open-space approach to determine their own agenda. Generally, through the assistanceof a facilitator, the council engages in dialogue to uncover collaborative breakthroughs.
The goal of the council is to create and announce a unanimous, nonbinding statementthat articulates the informed wisdom of the people. The council then disbands, and newparticipants create the council the following year.
The wisdom council represents a structured, time-limited period of reflection for theorganization. Through inquiry and probing, it begins to uncover the underlying issues that
represent common concerns in the organization. For example, in a county public works
department, the wisdom council determined that the critical issue was workload, which
it proposed to resolve by hiring additional workers or creating more free time during theday. Finally, however, the council realized that the underlying issue was that the workers
did not feel that they were respected in their jobs. This brought forth some creative solutions and was empowering for the council members and the organization as a whole.
Because wisdom councils’ statements are unanimous, they are powerful. Though
they do not suggest specific change projects, they can shift the direction of the organization to examine issues more closely.

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Phase Four: Capturing and Disseminating Learning
Capturing and disseminating learning is the most challenging aspect of collaborative
learning. How should learning be generalized and made most useful to the organization?
Typical approaches include after-action reviews and postmortems using internal publications to publish successful collaboration stories and creation of Internet or database resources. All are useful approaches. Change agents should also consider unorthodox
approaches, such as the creation of a group statement or manifesto concerning collaborative learning needs and results. Humor and drama are also powerful communicators of thecollaborative learning imperative. Humor combined with graphics makes an especiallypowerful impact. Possible approaches include a company comic strip or single-frame political cartoon (as evidenced by the popular newspaper comic strip character, Dilbert).
Graphical humor is a compelling way to communicate ideas.

Phase Five: Cr eating V alue
If the activity of collaborative learning is not disseminated to the organization, systemicchange and improved collaboration will not result. Change agents must facilitate closedloop processes, 1 where they actively seek feedback and engage the learning that they have

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received through collaborative activities. Without “working” the learning in the system,
it remains the property of a few and cannot benefit the whole system.
An example of a closed-loop process in collaborative learning would be to completea phase of learning and to disseminate that learning through mentoring and peer teaching forums. Feedback from those activities then helps the organization define the next
learning focus for collaborative activities. In short, the outcome of the implementation
phase—“We focused on this, this is what we learned, we have disseminated that learning through various channels, and we have received their feedback”— creates new input to the next collaborative learning effort.

Phase Six: Enhancing Inter dependenceThis stage of the collaborative learning cycle is the most challenging for U.S. organizations because of American cultural inhibitions around mixing business and personal relationships. For collaborative learning to continue, however, members must develop asixth sense, or awareness, of how to create strong networks among current and former
collaborators. Change agents will need to foster and encourage that awareness.
As technology and change gain momentum, no professionals can claim enoughmental bandwidth to maintain learning in all the necessary endeavors they are engaged
in. An organization can sustain its collaborative learning only by building interdependence among members. This is where the personal learning network (PLN), born of series of learning collaborations, can be a valuable tool for enhancing and building
interdependence (Digenti, 1998a).
The PLN consists of relationships between individuals where the goal is enhancementof mutual learning. The currency of the PLN is learning in the form of feedback, insights,
documentation, new contacts, or new business opportunities. It is based on reciprocity anda level of trust that each party is actively seeking value-added information for the other.
How do you build a PLN? First, it is important to overcome the hesitation around “using” people. If you are building a PLN, you will always be in a reciprocating relationshipwith the others in the network. Ideally, you should feel that your main job in the network
is to provide value-added information to those who can, in turn, increase your learning.
There is no “tit-for-tat” formula for this exchange (see further about the learning contract,
if a more formal arrangement seems appropriate), so any fears of using or being usedshould be allayed.
Follow these steps to build your PLN: Develop a mind map of your learning objectives (Buzan, 1996). For example, if you
are an expert in group process and have a network of colleagues who support yourlearning in that area, that part of your map is “filled out.” Perhaps you are weak inInternet technology, however, and would like to develop learning partners who
could not only bring you up to speed but commit to keeping you informed aboutlate-breaking technology and act as a resource for you in that area. Here, you havea learning area but no contacts: It needs to be filled out. Determine who is currently
in your network of contacts and how they fit into your PLN.
 Develop a plan for building up the areas in which you would like to learn. This canbe done by building on existing contacts, through professional societies, throughmembers of your firm, or through networking meetings. Engage in regular, valueadded communications with the members of your PLN while you are expanding new
contacts. You must be continually aware of new learning or data that will be valuable to members of your PLN. This is the key to enhancing interdependence.
To have a truly valuable PLN, investments in time and resources are essential. Thisrequires an extension of the typical transactional business mind-set. If, as a business
manager or change agent, we “do the deal” and fail to consider building our PLN, wehave lost much of the value of our interactions. This is particularly true in the activities
of collaborative learning, where each project we engage in should enhance and broaden
the PLN of each member.
Formalizing the PLN is possible through the use of learning contracts (Knowles, 1991).
The learning contract includes outlining learning objectives, learning activities, learning

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resources, and evaluation. It may also help to outline the roles of each party in the contract and to set the duration of the project. Each party should then sign the contract to symbolize his or her commitment. This type of simple agreement is helpful for building the PLN
when trust, time usage, or need to document the learning accomplishment are issues.
If the organization has adopted a collaborative learning imperative and the members of
the organization are building their PLNs within and outside the organization, the key sticking point of transfer and dissemination of value-added learning is largely eliminated. To sustain the effort, interdependence and deepening of collaborative relationships lead to newlevels of assessment: How can the collaborative learning process be made faster, better, more
inclusive, more targeted to emerging needs? This begins anew the collaborative learning cycle.

Summary
Far from being a sole source of organizational revitalization and strength, collaborative
learning is one aspect for managers and change agents to consider in helping organizations build sustainability. Collaborative learning can change the way employees address
their jobs, their company, customers, and even their competition but by itself cannot“save” the organization. However, given the challenges in global economies and technological change, those organizations that can learn effectively in collaboration will be well
positioned to survive and prosper.

Note
1. The term closed-loop process is borrowed from engineering and recycling usages, where closedloop refers to the fact that the inputs to the system loop are dependent on the outputs of that same
system. For example, a plastic milk jug (output) is built of recycled plastic material from used milkjugs (input). This is in contrast to an open-loop system, where inputs and outputs are independent of each other. In the case of value creation of a collaborative learning effort, the feedback
from those to whom the learning was disseminated must be an integral part of the input for the
next cycle of collaborative learning. The other origin for the term closed-loop process is from theJapanese yarinuki, which is the process of complete follow-through in a process or cycle.

References

54

Argyris, C., and D. Schön. Organizational Learning: A Theory of Action Perspective. (Reading, MA:
Addison-Wesley Publishing Company, 1978).
Bushe, G.R., and A.B. Shani. Parallel Learning Structures. (Reading, MA: Addison-Wesley Publishing Company, 1991).
Buzan, T. The Mind Map Book. How to Use Radiant Thinking to Maximize Your Brain’s Untapped
Potential (New York: Plume/Penguin Publishing, 1996).
Currie, A.P. “Video Tools and Supporting Philosophy Make Knowledge Management Lively at BP,”in Practice (1998): 11.
Digenti, D. “Zen Learning: A New Approach to Creating Multiskilled Workers.” MIT Japan Program
Working Paper (1996): 96-29.
Digenti, D. “The Learning Consortium Sourcebook” (unpublished manuscript, 1998a).
Digenti, D. “Toward an Understanding of the Learning Community.” Organization Development Journal 16, no. 2 (1998): 91–96.
Kahaner, D. “Kahaner Report on Virtual Reality Technology in Japan.” Via Kahaner Reportlistserve, 1994.
Kelly, K. “New Rules for the New Economy.” Wired Archives 5.09, September 1997.
Knowles, M. Using Learning Contracts (San Francisco, CA: Jossey-Bass, 1986).
Marshall, E. Transforming the Way We Work: The Power of the Collaborative Workplace. (New York:
Anacom Books, 1995).
McGilly, K., ed. Classroom Lessons: Integrating Cognitive Theory and Classroom Lessons. (Cambridge, MA: MIT Press, 1996).
McGuire, J.F., and A. Mohammed. “The Change Agent Program at Siemens Nixdorf,” Harvard Business School Case Study 9-396-203, 1996.
McNamara, C. MAP for Nonprofits Leaders’ Circles. (Minneapolis, MN: MAP for Nonprofits, 1997).
Nadler, D.A., R.B. Shaw, and A.E. Walton. Discontinuous Change: Learning Organizational Transformation. (San Francisco: Jossey Bass, 1995).

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Collaborative LearningNonaka, I. and T. Takeuchi. The Knowledge-Creating Company. (New York: Oxford University Press,
1995).
Prahalad, C.K. and G. Hamel. “The Core Competence of the Corporation.” Harvard Business Review, (1990).
Rough, J., et al. Community Building: Renewing Spirit and Learning in Business. (San Francisco:
New Leaders Press, 1995).
Schein, E. Organizational Culture and Leadership. (San Francisco: Jossey Bass, 1992).
Schrage, M. Shared Minds: The New Technologies of Collaboration. (New York: Random House, 1990).
Seashore, E. and C. Seashore. “Use of Self” Course, National Training Labs, Bethel, ME, (1998).
Senge, P. The Fifth Discipline. (New York: Doubleday/Currency, 1990).
Zand, D.E. “Collateral Organizations: A New Change Strategy?” Journal of Applied Behavioral Science, 10, no. 1 (1974): 63–69.

The donkey is—or was until a few decades ago—an animal common to all Mediterranean countries.
In folklore, the donkey symbolizes stubbornness, hence the Italian saying: “You can lead a donkey towater but you can’t make it drink.”
The relationship between management, organizations, and “collaborative learning” is similar to
the relationship between the peasant, the donkey, and water. There is absolutely no doubt—or atleast there is general agreement—that learning constitutes, and will constitute, a strategic corecompetence for organizations, just as the donkey needs water.
Digenti precisely defines the “water” for business organizations in the “new economy.” It is, shewrites, “learning from alliances, [which] is critical for viability in the technological changes we arefacing.” The strategic problem is how to learn from alliances (internal and external) without losing
contact with the market in the “networked world” that char acterizes the new economy. Digenti depicts a networked world in which various factors are at work:© Antonio Str ati

Commentary by Silvia Gher ardi

Silvia Gherardi

 Shared knowledge and product capability increase profits for all.
 Beneath-the-radar trends explode as the focus of geometric profits.
 Laws of product lifecycle are skewed.
 Prices for the best technology constantly decrease.
 Individual companies rise and fall but the network remains intact.
 The best products are given away free.
 Continuous disequilibrium must be sought rather than cured.
Digenti argues that in this scenario, a strategic advantage is collaborative learning competence.
By this she means “a business practice whose development is outpacing the creation of supporting
theories.” What makes her argument particularly interesting is the idea that collaborative learning
is already a business practice. The challenge—as intellectual as it as practical—is to develop a bodyof knowledge that can translate this idea into practice. Digenti proposes a “collaborative learning
cycle.”
Without going into details of the phases involved in the creation and re-creation of collaborative
learning, I will emphasize only the first phase, “collaboration assessment,” because this phase makes
explicit a premise on which Digenti bases her interpretative model.
As the Greek philosophers have taught us, to have knowledge we should know what we do not know.
With regard to organizations, before attempting to introduce a work practice based on collaborative
learning, it is important to understand an organization’s attitude toward collaboration and understandexisting systems of collaboration within that organization. Digenti calls this phase “a tool for uncovering
tacit knowledge about collaboration.” Once again, when authors examine the process of knowledge
building and learning, they encounter the iceber g of tacit knowledge. If the incognito of tacit knowledge (and of what constitutes skill or competence) were only a cognitive problem, it could be solved by
the techniques and technologies of rational thought: One would merely make what is tacit explicit, on
the assumption that nothing is lost in the procedure. But how much do we organizational scholars
know about collaboration and its forms, so that we can be sure that explicating the premises of this interpersonal (more than organizational) relationship does not kill the collaboration, thereby proving to be
counterproductive? I raise this doubt to undermine the omnipotence of the idea that we scholar s oragents of change (or both) hold of organizations. The imperative for managerial knowledge is to control
design and rational knowledge, but organizational life is shrouded by mystery and secrecy.

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Digenti seems to be aware of these gray areas, because she argues that managers who want totranslate collaborative learning into practice must change their mindset:

Collaborative Learning They must acknowledge that they do not know where the next set of changes will take them.
 They must understand that today’s core technological and product competencies may be obsolete in a few years.
 They must be convinced that the differentiating factor between success and failure in the face of
discontinuous change will be the ability to learn and collaborate.
In other words, it is subjectively important for management that the people in their own or ganizations and others in the network collaborate and produce knowledge that is useful (value-creating) for the organization and the network. Here, I believe, the recalcitrance of organizations and theresistance of human beings enter the scene. And not only these, since the limited ability of organizational knowledge to handle themes, such as learning, knowledge, collaboration, and trust, is also
important.
I see two main obstacles to translating collaborative learning into practice. First, collaborationand learning are relational concepts: They take place within social relations and emotional relationships. When the relationship is asymmetrical—as work relationships are, by definition—the reciprocity of the collaboration is annulled. Is an explicit contract enough to make the exchange fair? Or do
the terms learning and collaboration reflect the paradoxical injunction (as in, “be spontaneous”)
discussed by Watzlawick? The problem, more ethical than organizational, is understanding how andto what extent a work contract can induce individuals and groups to accept learning and continuous change. A management that seeks to control its workforce’s cognitive capacities challenges theboundaries between public and private. The transparency of industrial relations is at stake and withit the question of power relations.
Second, knowledge and power are a single phenomenon; there is never one without the other.
Knowledge is the basis of power, and power restricts monopolies of knowledge. The act of defining
what constitutes value-creating learning, and for whom this value is created, is itself the expressionof a power structure. Moreover, power relations operate through cultural relations, which may value
differently the distance of power or the egalitarian social relation, both in society and in organizations. When knowledge is produced and travels through cultures, the hierarchy destroys it, thus devaluing the knowledge of the powerless (defined by class, gender, or race).
I believe that the main difficulties that learning raises for the community of organizational
scholars reside in the resistance of social relations to being managed. But this should not dissuade
us from developing and experimenting with techniques that bring our metaphorical donkey to thewater, accepting that it may or may not drink. Neither should we think that replacing the donkey
with technology will solve the problem.

Commentary by Ru ssell L. Ackoff

56

Russell L. Ackoff

There are only two sources of learning: others and experience. The others from whom one can learn
have either learned what they know from others, or they have learned from experience. But alllearning originally derives from experience. Despite this, the bulk of the literature on learning organizations is about learning from others. Dori Digenti’s article falls into this category.
There is relatively little literature about learning from experience and making it available to other s inand out of an organization. This worries me, because no amount of sharing of ignorance can produce
knowledge. What assurance is there that the alleged knowledge shared in collaborative relationships isvalid? Saying so does not make it so. In other words, generally speaking, the evaluative aspect of learning is not treated adequately in treatment of transmission and sharing of learning from and with others.
It is for this reason, for example, that we suffer much more from an overabundance of irrelevant
information than from a shortage of the relevant. Technology is currently contributing much moreto the generation of irrelevant information than relevant. Though capable of filtering irrelevant information and selecting what is relevant, little effort goes into it. The technologists involved aremuch more interested in doing the wrong thing more efficiently than in doing the right thing.
Peter Drucker once differentiated between doing things right and doing the right thing. Doing
things right has to do with efficiency, hence knowledge. Doing the right thing has to do with effectiveness, hence wisdom. Much of the knowledge I see being transmitted and shared is about efficiency, noteffectiveness. The righter we do the wrong thing, the wronger we become. Correcting an error when

Volume 1, Number 2, REFLECTIONSDIGENTICollaborative Learning

doing the wrong thing makes us wronger. Therefore, it is much better to do the right thing wrong—because error correction in this context makes things righter—than to do the wrong thing righter.
For example: the so-called health-care system is not a health-care system but a sickness-anddisability care system. Regardless of the intentions of the servers within that system, those servers
must preserve or create enough illness and disabilities to enable the system to survive. The worst
thing that could happen to this system is that everyone becomes healthy . Improving the current
system makes it worse! A good deal of research-produced evidence supports this, for example, thelarge amount of unnecessary surgery and testing, maltreatment, and excess treatment that produce or exacerbate illness; hospital-transmitted infections; and harmful effects deriving from interactions of prescribed drugs. Collaborative sharing of knowledge about improving the current
system is more often than not counterproductive.
How can collaborative learning be made to focus on the rightness of what is being done rather
than the rightness of the way it is being done? And what can be done to encourage the literature
to turn in this direction?

Author’s Response
I see learning from experience and learning from people as two sides of the same coin.
An individual’s knowledge derives partially from experience and partially from received knowledge. We are still making the transition from acknowledging only academic learning—where I learn
a set of facts from an acknowledged expert (whose knowledge is assumed to be valid), become anexpert, and in turn teach that knowledge—to acknowledging experiential and peer-based learning
as well, where I engage in mutual exploration (learning from experience) with a group of individuals (learning from people). It is difficult for academics to trust this type of learning activity, where
no institution or credential states that our knowledge is valid.
But unless we engage in collaborative learning, there is no process for revealing and using tacitknowledge. The knowledge resident in one individual’s head can, unbeknownst to that individual,
hold the key to a new approach or innovation for another individual or group. Only through groupinteraction does this tacit knowledge become useable. As change accelerates, it is this current ofideas embodied in networks of people that can create positive affects in the organization.
Yet, I wholeheartedly agree with the belief that learning from others could take us further into
the “hall of mirrors” that Ackoff describes through the example of the health care system. How canorganizations avoid reinforcing the wrong types of learning, and then spreading them aroundthrough collaborative learning?
First, there are issues of trust to deal with in a peer learning effort, as mentioned above. It seems
clear that collaborative learning groups must develop awareness of organizational blind spots sothat learning leads to positive change. To do so, they must seek inputs from outside their own system, as Edgar Schein has stated. But here also, a group of organizations can get caught—trapped—in “data exchange” only. That is, organizations can meet together to build networks and exchange
information, perhaps resulting in more efficient practices, but never go deep enough to effecttransformational change. It requires a real interest in understanding the cultural blind spots (as one
manager described it, “put windows in the tunnel”), and commitment and individual skill training inboundary spanning. It is also a velvet revolution, in that the process is slow, incremental, peerbased, and subtle. It flies in the face of our expert-based “zap” approaches that offer change in systems, not mindsets.
A group of organizations that share the same industrial focus (as in the healthcare system example) will be challenged to break out of their industrial mindset. They may tend to reinforce thestatus quo, rather than develop a commitment to transformational change. This is where the societal level of learning could be useful. That is, industry groups as a collective must also actively seek
external feedback and input on basic assumptions, and then have the requisite systems skills to beable to process those inputs.
In summary, for collaborative learning to be effective, it must incorporate learning strategies at
the individual, group, organizational, interorganization, and societal levels. Structured properly,
these levels of systems can act as checks on the validity of what we are learning. And a learning
strategy must include ways for the learning taking place to be accessible to each of those levels in
an iterative process. We need to develop the organizational and societal mechanisms for this sortof dense learning to take place.

REFLECTIONS, Volume 1, Number 2

57

The Biology of Business:
Love Expands Intelligence

FEATURE

Humberto Matur ana and Pille Bunnell

This paper is part of a series based on a presentation made by Humberto
Maturana at the Society for Organizational Learning Member’s Meeting,Amherst, MA, in June, 1998. Some material has been added in the desire ofmaking this installment more readable outside the context of the SoL presentation (available on the Web Site of the Society for Organizational Learning at
http://www.sol-ne.org/res/wp/maturana/).

Humberto Matur ana

In the second essay, I will talk about something that is usually considered inappropriate in a business context: I will talk about emotions. You will see thatemotions are fundamental to what happens in all our doings, including ourbusinesses.
There is something peculiar about human beings: We are loving animals.
I know that we kill each other and do all those horrible things, but if you lookat any story of corporate transformation where everything begins to go well,innovations appear, and people are happy to be there, you will see that it is astory of love. Most problems in companies are not solved through competition,
not through fighting, not through authority. They are solved through the only
emotion that expands intelligent behavior. They are solved through the only
emotion that expands creativity, as in this emotion there is freedom for creativity. This emotion is love. Love expands intelligence and enables creativity.
Love returns autonomy and, as it returns autonomy, it returns responsibility
and the experience of freedom.

We Are Loving Animals

58

Pille Bunnell© 1999 by the Society for Organizational Learningand the Massachusetts Institute of Technology.

Once in a lecture, I said that we are loving animals, and a question arose: “Are
we animals?” I answered, “Yes, we are animals, but we are loving animals.”
Most animals are loving animals to some extent. What is peculiar about us human animals is that we have expanded this emotion in our manner of living.
All mammals live in a loving relationship with their mothers during theirinfancy. Our distant ancestors began to orient their manner of living aroundextending this mammalian mother-child relationship. In enjoying and conserving the pleasure of this intimacy, our ancestors found themselves living insmall close groups that were centered around the mother-child bond. By conserving the pleasure of intimacy with each other, they extended the domains
and the duration in which consensual behavior took place. Occasionally, ourancestors would use sounds and gestures as a part of this consensuality and,sometimes, the sounds and gestures became the ground for further coordinations, and a minimal operation in the form of language would arise. Whensuch operations began to be conserved from generation to generation throughthe learning of the children, the foundations for languaging as a way of living
were laid.

Volume 1, Number 2, REFLECTIONSMATURANA AND BUNNELL

Love Is OrdinaryNow, I am going to tell you what love is, not as a definition, but as an abstractionof the coherences of our living—and I pretend that this is all that one needs toknow. Love is the domain of those relational behaviors through which another (aperson, being, or thing) arises as a legitimate other in coexistence with oneself.
The dynamics I have abstracted is how we act, whether or not we reflect
on it. Suppose that you are walking in the countryside, and you encounter a
spider. What if you exclaim “A spider!” and immediately stomp on it, making
sure it is thoroughly squashed? What would your companion comment? Something like “You don’t love spiders” or “You don’t love animals” or “You hatespiders, don’t you!” And all those expressions belong to the negation of love;the spider does not arise as a legitimate other in coexistence with you.
Aggression is that domain of relational behaviors in which another is negated as a legitimate other in coexistence with oneself. But if you say in wonder, “A spider! Look at it! Let’s be careful not to step on this beautiful spider,”your companion might comment “You sure love animals! Even spiders!” You
don’t have to take it into bed with you to love it. Taking the spider to bed
would not be loving it. The fact that you let the spider be a spider where spiders live shows that you love it: You let the other arise as a legitimate otherthrough your behavior. It is your behavior that makes it so that you movearound the spider so it can coexist with you.
We talk about love as if it were special and rare, something difficult toachieve, but it is a really ordinary thing. But it is special in a different way:
When the emotion of love is there, vision expands. Many, many, many years
ago, I was walking with one of my sons, Alejandro, who was about seven then.
We were going through a field of thistles, and I was opening a space with mystick by batting the thistles aside. Suddenly, my son asked, “Father, why don’t
you love thistles?” And there I was, stopped, suddenly seeing what I was doing. And when I stopped being aggressive toward the thistles, I saw them:beautiful violet flowers! I could see a path between them without destroying
them. But the point is that at seven, Alejandro knew exactly the nature of love
as a relational behavior. So, we learn this as children—we don’t need philosophy or science or anything.

Emotions Characterize Action
If you think about what happens in your daily life (remember, this is biology,
not philosophy), you will notice that we normally use the word emotion to connote a domain of relational behavior. Emotions specify kinds of relational behaviors. If you say somebody is angry, you know immediately what kinds ofrelational behaviors this person can participate in and what kinds he or she isincapable of while angry. If you say someone is ambitious, you know immediately what kinds of relational behaviors he or she can and cannot participate
in. We all know this; we are experts in detecting emotions, whether or not weare consciously aware of this.
When you distinguish a particular behavior, you distinguish the emotion.
If you want to know the emotion, you look at the behavior. If you want toknow what kind of behavior it is, you look at the emotion. Behavior and emotion are both ways of pointing at relational dynamics; they entail different

REFLECTIONS, Volume 1, Number 2

The Biology of Business

Language evolved in us humans because we began to live in the pleasure of
intimacy in a way that conserved this way of living. We developed language because we became the loving animals. Humans are those animals that have expanded living in love. We have become dependent on love in the sense that we
become ill of body and soul if love is interfered with. Sometimes conditions arise
in our culture so that some bad ideas persist in spite of their badness. I thinkcompetition is one of those bad ideas that is destructive, and yet it persists.

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MATURANA AND BUNNELL
The Biology of Businesslooks, different ways of grasping these dynamics. As we speak of this dynamic,
we do what language enables us to do (that is, we make an object of either
the emotion or the behavior and, having done so, we can look at it). But you
do not have to think about this, you already practice it in daily life: You know
when your friends are angry, when they are joyful, sad, or indifferent. And you
know immediately, either by looking at the behavior or by looking at the person. We are expert at seeing emotions. It is because it comes so easily to us
that we do not see that this is the case; there is usually nothing that triggers
us to reflect on the relational dynamics of emoting.
When we talk about emotions, we usually refer to the way we feel under
different emotions, rather than what we do. Our bodies do have different configurations in different emotions. We can “touch” ourselves and refer to how
we find ourselves under the different emotions as different feelings. Thus, weeasily characterize emotions by the feelings that accompany the particularbody dynamics that specify what we can do and what we cannot do. This does
not mean that the emotions are body dynamics or that they take place in the
body. Emotions take place in the domain in which they occur, and where theyoccur is in the relation.

Emotions Determine Intelligence60

Different emotions take us along different paths; we live different histories according to our emotions. There is a book called Emotional Intelligence thatspeaks of emotions as a particular kind of intelligence and, in a way, emotions
are related to intelligence. I think intelligence is something very basic, a particular kind of phenomenon that has to do with the plasticity for participationin changing behavior and changing relations. Rigid behavior, behavior that
does not flow with evolving circumstances, does not appear intelligent. It is theplasticity of consensual flow that we refer to when we speak about an intelligent being. For example, when we say that an animal is intelligent, we are saying that it has entered into a flow of consensuality, a flow of plastic behavior,
with us. When we say a person is intelligent, we refer to the plastic flow ofwhatever relationship the person is participating in, including relationships invarious conceptual domains. Of course intelligence requires a central nervous
system to take place, but it does not take place in the brain, it takes place inbehavior. Intelligence is a basic phenomenon that has to do with the plasticity
for participation in changing relations.
How emotions relate to intelligence is that emotions change the possible
expanse of intelligent behavior. Fear restricts intelligence toa very narrow view; it concentrates attention in a particular
way and constrains the relationship to a particular orientation. Similarly, ambition and competition restrict attention,
vision, and intelligence. Forgive me for saying so, but if you
think about it, you will see that this is indeed so.

We Are Equally Intelligent
I claim that from a biological point of view we humans are
all equally intelligent, and this is the case because we livein language. The fundamental neuronal plasticity needed
for living in language is so gigantic that we are fundamentally equally intelligent. This plasticity is not at all the same
sort of thing that computers have; the computers we useare computing machines, not intelligent machines. They do
not have the plasticity for participation in changing behavior and changing relations that comprises intelligence. Ourlanguaging brain is enormously plastic, able to generate

Volume 1, Number 2, REFLECTIONSLove Is Visionary
How is it that love expands intelligence? It has to do with vision—not eyesight
but that which we mean when we exclaim, “I see!” Let me give you an example
from daily life. You may have heard something like this enacted in a play, or
you may have lived it yourself. A man comes home from work and, after a little
while, his wife complains, “You don’t love me anymore! You didn’t notice that
I’ve done my hair!” What is her complaint? Her complaint doesn’t have to dowith her hair or her beauty; it has to do with not being seen, not arising in thelegitimacy of her existence with the other.
By the way, this business of the legitimacy of the existence of the other
does not mean you have to like, or want to be near, the person, being, or circumstance to love it: It means that you have to let it be, to see it.
There is an interesting television series called “McGyver;” you may haveseen it. McGyver is the hero in this series; he knows many things, like all of us
do. He knows some physics, chemistry, anthropology, architecture...all sorts ofthings. And, in several episodes, he finds himself trapped somewhere with acompanion. They may be in a cave or in a barn that is about to be burned down,something like that; the point is, they are trapped. His companion may have thesame kind of knowledge about physics, chemistry, etc., but is frightened and despairs: “My goodness, we are trapped, we’re going to run out of air!” or “Thebandits are going to come and kill us!” But McGyver? No, McGyver is not frightened, he fully accepts his situation as legitimate. He loves his situation, and thus
he can see and, as he can see, he can see this little wire here, and this little thing
there, and all his knowledge is at hand to make something that opens an escape.
If you are fearful, you cannot see; your knowledge is not available, and your intelligent behavior is diminished.
I could have said, “McGyver respects his situation,” and you could thinkof it that way. But you might see that with respect, McGyver might remain alittle more aloof and would not as easily engage with all the little details that
become the tools for his escape. To respect something means that there is aparticular relational domain that you accept as legitimate, but you are not necessarily open to the legitimacy of all the relational domains which that personor being or circumstance entails.
What I have just said you can check in your own daily life. We continuously live change in the availability of our knowledge, change in our possibilities of plasticity in our relations as modulated through our emotions. I do notthink there are different kinds of intelligence. I think emotions modulate thedomains of intelligent behavior in which we can operate, and hence our intelligence is expanded or diminished according to our emotions. The only emotion that broadens vision and expands intelligent behavior is love.

REFLECTIONS, Volume 1, Number 2

MATURANA AND BUNNELL

Manuel Manga

Commentary
by Manuel Manga
I am impressed by the writings of otherconsultants who want to contribute to making organizational life more humane andmore productive, and to bring dignity,
meaning, learning, and community into theworkplace. As a consultant, often I am frustrated by the fear, mistrust, and insecurity
that exist in organizational life. So, when I
read the invitation to comment on
Maturana’s “Love Expands Intelligence,” I
was excited, but I was also cautious about
whether or not my colleagues and clientswould hear me. Will this be another fad, likethe quality movement? Or a sixth discipline?
Maturana provides us with a new epistemology and a new ontology of human beings as emotional and languaging beings,
and the impact of these two theories on human relations. This is a new foundation fromwhich to understand human beings and organizational life. This gives us a new perspective from which we consultants canobserve and facilitate the design of morehumane and learning organizations. Rather
than seeing emotions as barriers to humanrelations, which is the commonsense interpretation of emotions, Maturana claims thatemotions constitute how we coordinate ouractions and our relationships. In a sense,
Maturana is taking us into our biologicalroots (living systems) of human understanding and human relations.
As a consultant, I claim that we should
pay attention to this topic of “love” because
Maturana’s definition of love speaks to afundamental human characteristic, not a fador ideal. His “biology of cognition” can provide us with an epistemological and ethicalfoundation on which to build humane,learning, productive, and sustainable organizations. Building on that foundation, we candiscover other key dimensions of organizational learning. Many other writers of organizational life have suggested ways toimprove and make organizational life morehumane. Writers such as Deming, Covey, andSenge have presented new values, new principles, and new disciplines in their efforts totransform organizations. Maturana offers touse our understanding of ourselves as living

The Biology of Businessendless recursions in language, creating endlessly new domains of living. Sure,
there are individual variations in realizing this fundamental plasticity according
to whether we have had some malnutrition in our development or brain damage or disease or whether we have lived a life that has put us in situations ofconstraint, despair, or rejection.
Our cultural belief that intelligence is something that some people haveand others lack limits what we can do together. Sometimes, a parent, a teacher,a manager, or a CEO will realize this. If a manager acts in the premise that“people are competent,” he or she immediately initiates a change. If you wantto achieve something that involves other people, you have to accept that weare all equally intelligent or you will not trust that the others will act competently. If you want autonomous and coherent behavior, you need only open aspace of love, and intelligence appears there. You don’t have to do anything
but accepting that the other is equally intelligent as you, even as he or she has
a different experience, lives in a different way, or has different preferences.

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MATURANA AND BUNNELL
The Biology of Businesssystems, and as emotional (loving) andlanguaging beings as a new foundation onwhich to apply those disciplines and principles and to build organizational learning.
As a consultant, I am curious about how
one operationalizes love. I invite you, thereader, and other consultants, to generate aconversation about how to operationalize
love. I can see myself changing my professional title from Organization Design Consultant to Love Consultant. Why not? At
least it would get a conversation going. It
will take courage to speak about love, andto transform the current climate of fear in a
lot of our organizations, especially after all
the downsizing and other change fads.
I suggest the following steps in looking
at how to operationalize love:a. Change the mental model by introducing
the “biology of cognition,”b. Introduce emotions as a legitimate concept, as Daniel Goleman does in his book,Emotional Intelligence.
c. Introduce love as a key principle of leadership, just as Covey speaks about otherprinciples of leadership such as integrity
and trust.
d. See love as an equalizer in human relations.
e. Explain love the way Maturana does, “asthe only emotion that expands human
intelligence and learning.” That’s goodenough for me.
I think we are breaking new ground here
on which to generate loving and learning organizations. I would like to join Pille Bunneland Humberto Maturana in conserving ourhumanness, and being part of a culturalchange in which love shows up in spontaneous ways in organizations and in life.

62

Interfering with Vision
McGyver could see his situation as he let it be whatever it was. To see, one must
let it be. But this is not always easy as we live in a particular human culture. A
culture is both a rich domain of human living in the present and a historic domainof human living in which some things have been hidden as others have arisen. The
problem with culture is inherent in another peculiar human thing: language. As
language began to be lived, we began to live in language by constituting objects,
and categories of objects (a new object), and relationships (another kind of object)between objects. With all this, we could begin to reflect (as we made of our circumstances an object) and we could invent purposes and intentions (yet anotherkind of object). This doesn’t take place as just a mental exercise, it happens as a
lived world: We live this world of objects and relationships among objects as ourhuman world, our culture. As long as we live the purposes and intentions we havecreated as a plastic participation in various relationships in a way that does not
distort what we do, it does not matter. If we make these rigid and demand thateverything we do fit the rigid structure we have devised, or if we focus our attention on the purpose too closely, we distort our ability to live that which we desired
when we distinguished what we wanted as a purpose.
This is, again, a biological discussion, not a philosophical one. This matter ofattention resulting in distortion is based in the operation of the nervous system.
The nervous system is a network of neuronal elements, which operates on excitations and inhibitions. Every movement we make entails excitations and inhibitions.
In the most simple way, if I contract a muscle, other muscles (the antagonists) are
inhibited. Further, there is inhibition within the process of contraction of any given
muscle. The point is that this play between excitation and inhibition happens inevery movement: Every movement is being inhibited as it occurs. This is why, if
you are learning karate and you want to break a brick, you have to aim below thebrick. If you aim at the brick, the force of the blow will be diminished because inhibition takes place before the intended movement is completed.
The coordination of excitation and inhibition is involved in all neuronal
activities, including what we call thinking. It is in our neurobiology that attention on what we do inhibits what we do. This is why learning a task involves
relaxation—not in terms of becoming limp or falling asleep but in terms of relaxing your attention, your intent of controlling what you are doing. As you
relax your attention on the doing but proceed in an understanding of what you
do, you allow the actual doing to take place in a manner that uses the circumstances as a reference that guides what you are doing. As you become morerelaxed, your doing becomes more fluid, and as it becomes more fluid it becomes more pristine and, as it becomes more pristine, it becomes more beautiful, more
comfortable, and more perfect.
As notions such as purpose, intention, or aim arise,
they become part of what we do. As they become part ofwhat we do and we begin to attend to them as if they had
a concrete existence, this dynamics of interfering with ourdoing through our attention to what we do takes place, toa greater or smaller degree. Envy, fear, ambition, and competition narrow our attention and our vision and thus restrict intelligent behavior.
As I said above, sometimes conditions arise in our culture so that some bad ideas persist in spite of their badness. I think competition is one of those bad ideas that is
destructive, and yet it persists. Humans are those animals
that have expanded living in love. We have become dependent on love in the sense that we become ill of body andsoul if love is interfered with. The only emotion thatbroadens vision and expands intelligent behavior is love.

Volume 1, Number 2, REFLECTIONSMATURANA AND BUNNELL

Reflections on Maturana
Maturana’s talk at the SoL annual meeting last year and the appear ance of the fir stessay in the series “Biology of Business” by Matur ana and Bunnell is gener ating important and inter esting conver sations of “co-inspiration.” What follows ar e two contributions to this conver sation.

REFLECTIONS, Volume 1, Number 2

The Biology of BusinessI would like to comment on Humberto Maturana and Pille Bunnell’s article, “Biology ofBusiness?” (Reflections, vol. 1, issue 1), and on what Maturana is telling us.
I regard Maturana as an outstanding thinker, someone who, I am convinced, will
profoundly change the way we will understand living systems and knowledge in the future—and make groundbreaking contributions to systems thinking. His influence on my
own theoretical approach, the ontology of language, has been decisive, and I havedrawn extensively on his notion of the observer. My presentation last November at theAssembly of the World Academy of Art and Science was precisely on the importance ofMaturana’s notion of the observer as a fundamental concept for developing more effective ways of living together peacefully in a global world.
Reading and understanding Maturana, however, is not always easy; at least, this has
been my experience. When reading his writings, it is important to distinguish his explanations from his way of explaining. His explanations refer to his answers; his way of
explaining refers to the process that generates those answers. One of Maturana’s outstanding contributions has to do with the fact that not only are his answers highly
original but so is his way of getting to them. Maturana has not only a systemic theory,
he also has a systemic way of thinking that is present in the way he develops his arguments. I call this systemic phenomenology .
Therefore, when we read Maturana’s works, we are dealing simultaneously with two different but intertwined domains: what Maturana is “saying,” and what he is “doing” while
he is saying what he says. Both domains offer learning opportunities, but the reading canbe hard, sometimes even quite difficult. I know from experience that his writings often demand a long digestion process to grasp their full meaning. Sometimes, after I have listened to him or read him for the first time, I am disoriented. I have a sense that somethingimportant was said, but I do not clearly understand what that may be. I can grasp some of
his claims but not others. I have as many doubts as insights. I also reflect for quite a while.
My experience has been that, after a while, many of Maturana’s points that initiallycreated confusion start making sense, and many of my doubts dissipate. Often, after I
raise an objection, I find that Maturana has shown me a much wider picture than what
I saw initially, a picture that resolves most of the concerns I had brought to his attention. So, I have learned to distrust my initial reactions and to grant him the privilege ofthe doubt. I have also learned that the best way for me to dissipate my initial criticisms
has been precisely to raise them.
To my understanding, Maturana claims that we human beings try to make sense of
the present we live in by generating explanations. To explain something means to establish some coherences regarding our observations of what goes on in the present. Different kinds of coherences generate different kinds of explanations. These include both
historical coherences, and coherences that result from interactions that are taking place.
Whenever we resort to explanations based on historical coherences, we propose aparticular kind of story that we call history. We choose an origin, and we link that origin, through a process of transformation, to our observations of the present. Usually,
when we do this, we concentrate our attention on what changes throughout that process, but then we miss a fundamental aspect of the historical process. History, according
to Maturana, “is a process of transformation through conservation.” By concentrating
on change, we often miss conservation. Conservation is what makes a transformation
process a historical process. A historical process is a process undergone by an entity thathas been able to conserve, amid the changes it has undergone, whatever we may consider to be its identity.

Commentary by Rafael Echeverrìa

Rafael Echeverrìa

63

MATURANA AND BUNNELL“When, in a collection of elements, some configuration begins to be conserved, a spaceis opened for everything to change around what is conserved.” We can interpret thisfirst systemic condition in different ways. One possible interpretation simply restates
what was just said: “Something begins in the moment a configuration of relations
begins to be conserved, and ends in the moment that the configuration that defines it
stops being conserved.” Or, “all systems exist only as long as that which defines them isconserved.” This seems to be common sense.
Another possible interpretation displaces attention to the issue of identity, or to “thatwhich defines” a given entity. Maturana seems to be saying that what grants identity toan entity is a given configuration of its elements. As long as this configuration is conserved, the entity will exist, and the changes that the entity under goes will generate its
history. What is important, therefore, is to be able to specify the entity’s basic configuration in every historical explanation. If that configuration changes, the entity willdisintegrate or be transformed into an entirely different entity. This seems a more interesting interpretation.
Another possible interpretation of this basic principle seems more problematic. When
Maturana says, “When, in a collection of elements, a configuration begins to be conserved, aspace is opened for everything to change around what is conserved,” we cannot infer thatthe configuration that “has just begun to be conserved” cannot itself change and, ther efore,cannot stop being conserved, and that everything around what has begun to be conserved
will change. From the moment that “some configuration begins to be conserved,” anything
can happen: Anything can change, and anything can be conserved. If this is the case, thissystemic condition is not establishing anything. There are other possible interpretations of
this principle, and we may even have missed the intended and most important one.
Let’s move to the second systemic condition. Surprisingly, we are now told that in spiteof what was just stated, in the sense that all these systemic conditions have universal
validity and would apply “in any part of the cosmos,” this second condition actually does
not comply with that. We are warned that “the second systemic condition pertains to allliving systems” and that it will be worded as if “it pertains to humans in particular.”

The Biology of Business

Maturana claims that whenever we resort to historical explanations, we must keep inmind the systemic relationship between conservation and change. This relationship, hesays, rests on a few systemic conditions, all “valid in any part of the cosmos . . . including this earth and humans.” These systemic conditions, therefore, are granted universal
validity, and they should apply to any historical process, any entity. Let’s examine thetwo systemic conditions that are mentioned in Reflections, volume 1, issue 1.
First Systemic Condition

Second Systemic Condition
64“Human history does not follow the path of resources or opportunities. Rather, it follows the path of desires or, in more general terms, the path of emotions.” I have sometrouble with this principle. I am well aware that I could be blind to something important
regarding what Maturana is saying. The only way to find it out is by being honest about
my own confusion.
When discussing this principle, I realize that Maturana has not yet told us what heunderstands by “desires.” I take this to mean that he doesn’t think it is necessary toprovide such understanding because he is using the term in its ordinary meaning (themeaning granted by ordinary language). I assume that if he had thought that the term
desire should be given a different meaning, he would have provided it to us. However,
we can help ourselves with Maturana’s use of the term in different contexts within thesame text to get a better under standing of what he means by desire. When explaining
this second principle, Maturana asserts, “What happens is constructed moment by moment by the character of one’s living, always going in the path of well being, a choice ofcomfort, desire or preference.” Later, he states that “in the history of living every moment, every change, whether it resulted in survival or extinction, has arisen along apath of preferences.” He uses desires and preferences as interchangeable terms.
I have difficulty accepting this principle, even if I restrict its application to living systems. What does it mean, for instance, to say that the history of a tree follows the path

Volume 1, Number 2, REFLECTIONSMATURANA AND BUNNELL
The Biology of Business

of desires? What kind of desires would a tree have? What does it mean to say that a tree
“prefers” to grow in one direction and not in another? A tree will grow toward the sourceof light, but can we say that the tree “desires” light? This sounds anthropocentric to me.
It may make sense to say that the history of human beings may follow the path ofdesires—however, can we really claim it always does?—but to claim this is the path followed by the history of all living systems is difficult to accept. Unless, of course, we follow into the tautology of assuming that every action taken, every movement performed,
reveals an underlying desire to act or move the way one does. In this case, by definition
we are tightening desires together with actions and movements but, if we do, we cannot
use desires to explain action and movement without falling into a tautology.
Desires, preferences, and choices are reflective phenomena that only linguistic beings,
beings with the reflective capacity provided by language, can experience. When wemove into living systems with no capacity for reflection, those terms do not makesense. But even reflective living systems, as happens with human beings, act innonreflective ways, as the result of repeating socially learned behaviors. If we accept theexistence of nonreflective actions, can we then say that they follow the path of desires?
Maturana seems to acknowledge what I have just said. Further on in his article, hesays that
To choose, we need to live in language. Animals that do not live in language cannot
choose. To choose means to treat the circumstances as something you can look at fromthe domain of your desires, and act according to what you want, wish, or prefer.

Are we missing something her e? If we look again at this second systemic condition,
we see that Maturana equates “the path of desires” with “the path of emotions,” but theway he himself deals with emotions doesn’t allow him to make this equation. Emotions,according to Maturana, refer to an observer of relational behaviors. They are what allow
an observer to distinguish a particular domain of behavior. Therefore, emotions do notbelong to the entity that finds itself acting, unless this entity is reflecting on its own actions. Maturana separates emotions from feelings: Emotions are not what we feel. That
is why he is able to assert that “behavior and emotion are both ways at pointing at relational dynamics; they entail different looks, different ways of grasping these dynamics”(italics are mine). How can we then say that “history follows the path of emotions?”
Is this what Maturana is pointing to? We don’t know. Only a broad discussion of his
article can help us better understand what he is speaking about. In doing so, we will not
only learn from him; we may also learn from ourselves. This commentary has been
intended as an invitation for an open discussion about what Maturana is telling us andabout its relevance for deepening our understanding of the way living and social
systems operate.
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Commentary by Mar cial F. Losada
Humberto Maturana often reminds us that he is speaking as a biologist, not as a philosopher. Nonetheless, his reflections on who we are from a biological perspective havea depth and scope that far transcend the biological realm. They remind us not only of
who we are, but also of who we can be and how we can learn together.
Maturana distinguishes three periods in history—biosphere, homosphere, androbosphere—according to what is conserved. What is conserved defines what is stable,
and specifies what can change. In the biosphere, what is conserved is living. The
homosphere is the period we are living now, where what is conserved is human beings.
As we became humans, two characteristics appeared that differentiated us from otherliving beings and made the homosphere possible: language and the capacity to love.
The robosphere has the potential to reduce our degrees of freedom. Robots and circumstances act in complementary ways. We create robots, but our circumstances evolve
along with ourselves.
As we exist in language, we can reflect. Reflection consists of regarding the circumstances in which we are as objects, and looking at them. Language gives us the ability
to do that. We can regard our present as an object and look at it. Living in language, we

REFLECTIONS, Volume 1, Number 2

Marcial F. Losada

MATURANA AND BUNNELL
The Biology of Businesscan always choose where we want to go and what we want to be. But to go wher e wewant to go, we need a space. If there is no space, we find ourselves in prisons. Thus, if
we want to create humans as robots in the sense that we not only specify the behaviors
that we expect from them but also specify the circumstances in which they will live, we
generate unhappiness, suffering, and resentment. As we release these restrictions—lethumans be humans—then creativity, cooperation, and “co-inspiration” appear. If we also
realize that we don’t need control, we have freedom and responsibility.
Emotions modulate the domain of intelligent behavior in which we operate. Hence,
our intelligence is expanded or diminished according to our emotions. Different emotions constitute different domains of relational behavior. The emotion of love implies
that we really see the other; the other has presence for us. There are no demands, no expectations. As we let the other be, the other begins to see us also as persons, and canlisten to us. If we truly listen, then the other person can become a co-creator with us,
and we can learn together.
For Humberto Maturana, learning is a transformation in living together, on how we
can live with others. A few years ago, a book that he wrote, El Sentido de lo Humano(Dolmen Ediciones, Santiago de Chile, 1994), had a great impact on my understandingof learning and teaching. It includes a poem titled “Plegaria del Estudiante” (“Prayer of
the Student”) that I have clumsily translated and abbreviated (for which I ask for
Humberto’s forgiveness). I offer it in this commentary as a reflection on how we can live
and learn together:
Don’t impose on me what you know.
I want to explore the unknown
And be the source of my own discoveries.
Let the known be my liberation, not my slavery.
The world of your truth can be my limitation;
Your wisdom, my negation.
Don’t instruct me; let’s learn together.
Let my richness begin where yours ends.
Show me so that I can standOn your shoulders.
Reveal yourself so that I can be
Something different.

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You believe that every human being
Can love and create.
I understand, then, your fear
When I ask you to live according to your wisdom.
You will not know who I am
By listening to yourself.
Don’t instruct me; let me be.
Your failure is that I be identical to you.

Volume 1, Number 2, REFLECTIONS

Conversation withCharles Handy

PEOPLE

C. Otto Scharmer

C. Otto Scharmer: Professor Charles Handy, what underlying questions does your work
address?
Charles Handy: Well, I think I am trying to help people understand how the world aroundthem is changing. I am not a futurologist, I am not trying to predict. I really am looking at
the way I think things are evolving in the world, which is a bigger question than just organizations. It has to do with societies, it has to do with values, and it has to do with individuals as well. But a key part of that is what is happening to organizations and how
they are going to have to adapt or respond to a very different world that I see coming up.
One of the big questions that interests me at the moment is: Why do organizations
exist? What are they for? Who are they for? What does success mean? When you say, “It
is a great organization,” what does that mean? I am interested in trying to see the relationship between individuals and the organization. Is an individual in some sense ownedby the organization or is the organization just a collection of independent individuals?
What rights do the individuals have against the organization, and what rights does theorganization have? If you say, “An organization has to respond,” what does that mean?
Does it mean that the individuals in the organization have to change or does it mean thatthey are just a structure and the organization has to change and the direction of the organization has to change? So, these are the sorts of questions.
I really believe that if we are going to make sense of the future and make the future
work better for us in all respects, we have to understand what is going on around us.
So, my books are not research-based: They are suggestions. And I know that suggestions
are useful only if people say, “Aha! I recognize what you are talking about. I see that now
in what is around me.” So, I am trying to conceptualize, I suppose, people’s half-understood feelings. And in order to do my work, I have to meet with organizations. I have totalk to people, and then I have to read—not always books about organizations, but biographies, histories, and things like that. I am looking for ways to interpret the world as
it is going on and as I think it is.

REFLECTIONS, Volume 1, Number 2© Elizabeth Handy

Charles Handy is one of the world’s best known authors and lecturers on management,change, capitalism, and society. He has been an oil executive, a business economist, a Professor at the London Business School, and Chairman of the Royal Society of Arts. Hyped
as a “management guru,” Charles Handy, a Fellow of the London Business School, can be
more aptly regarded as a philosopher for our modern age. His books have sold millions ofcopies world-wide. In his most recent book, The Hungry Spirit (published by Broadway
Books), Handy explores more of the issues covered in this interview. Other books include
The Age of Unreason and The Age of Paradox, both published by Harvard Business School
Press. He and his wife, Elizabeth, a portrait photographer, live in London, Norfolk, andTuscany. Elizabeth Handy, Charles Handy’s wife, joined the conversation and commented
from time to time. Conducted in 1996, the conversation was part of a worldwide interview
project with 25 eminent thinkers in leadership and management, sponsored and co-developed by McKinsey & Company. The conversation took place at the MIT Center for Organizational Learning, Cambridge, MA.
Charles Handy

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C. Otto Scharmer© 1996 Charles Handy and C. Otto
Scharmer

SCHARMERCharles Handy: Well, I think you can somehow make sense of much that is going on,
but then you have to make up your own mind, and each organization has to make up its
own mind. The good thing about this rather more chaotic world that we are entering intois that it allows a lot of freedom, both for individuals and for organizations to take control of their own destiny. And that means that they have the responsibility to work out
the future they want. So, what I mean by understanding is understanding the chaotic
nature of the world. It is not fixed, it is not programmed, it is not laid down that it will
evolve in a particular way. We can shape it; we can change it. It is that kind of understanding, the understanding of why it is like that. The piece of paper is blank, you canwrite on it what you want.
I suppose I try to suggest some of the things that people might write on the paper,
some of the aims they might have in life, but I can’t tell them which is right and whichis wrong. I have argued, for instance, that in general I think organizations should strive
to last forever—that it should be their attempt to be immortal. They will probably not
succeed, but one of the interesting things that is given to institutions but not to humanbeings is that they can last forever—at least for hundreds of years. The college I went to
at Oxford is 670 years old. That is close to immortality.

Conversation with Charles Handy

COS: On the one hand, you just said, “We have to understand what is going on,” and on
the other hand, in your more recent writings, you point out that it is not possible to understand what is going on. So, how do these relate to each other?

COS: But isn’t that a little bit of the Western way of religious conceptualization, so thatyou strive for eternal life rather than the more cyclical approach, which could mean tohave a rebirth or to have several lives within one institution?
Charles Handy: You could interpret this in different ways. I would argue that in order tobe immortal you have to re-create yourself all the time. So, you can say that is a form ofreincarnation.
COS: I see.
Charles Handy: The same soul goes on, only in different bodies. This is a dangerous wayof thinking, because it would say that you must allow yourself to die, whereas I think that
if you want an organization to thrive, the aim should be to stay alive. But in the process you
will have to change dramatically every so often. I mean, my college at Oxford is in no way
the same. Some of the buildings are the same, but what goes on there is quite different.
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COS: So, you think just the other way around: that the institutional body remains thesame but that the soul is changing or transforming.
Charles Handy: Mitsui has lasted 600 years. It has changed its nature dramatically, but
its name remains the same. They say that the essence has stayed the same. At any one
time, it is the will to preserve the essence of the organization that people are striving for.
What they do with that essence—the actual outward form, the products they sell, theprocesses they use, people—those can change. I am not sure if I can distinguish which isthe soul and which is the body. But, what I am sure of is that if you don’t strive to keep
something alive, then it is too easy to give up. It is too easy to treat it as a temporary phenomenon, a piece of property that you want to develop and sell.
The organizations that I admire are the ones that have managed to change radicallyand managed to stay alive...a paradox. In order for us to do that—to change, to survive,
to last beyond the grave—you have to be profitable, you have to generate money, and you
have to keep your financiers happy. You have to keep your customers happy. You have togenerate new products. You probably have to change the structure quite often to makenew alliances, to grow, or to shrink. All these things have to happen. So, to stay the same,
you have to change. This is the interesting dilemma and a very important one. Think about
it: If you keep mending your sock until none of the original sock is still there, is it still thesame sock? Most people would say yes, because it has been such a continuous process.

Volume 1, Number 2, REFLECTIONSSCHARMER

Elizabeth Handy: And it is really for the people that the organization continues?
Charles Handy: Well, that is a very good question. I mean, in the American ideology ofcapitalism, it is not for the people in the organization; it is for their financiers. That will
not be enough to sustain the organization, because the easy way to satisfy the financiers
is to sell the organization. So, it is rather like my sock: You mend the sock to keep thesock going. Even at the end, when you changed it so often that it is not the same sock,
still in a way, it is the same sock. But, you wouldn’t bother to mend the sock unless you
wanted to go on using that sock—you would just throw it away. So, the whole motivation for change, it seems to me, and therefore for learning, development, and growth, isthat we want to continue as long as possible.

Conversation with Charles Handy

Certainly the reason that you mend the sock is that you want the sock to survive. And thereason you change the organization is that you want the organization to live on.

COS: With regard to the big question you mentioned—why do organizations exist? what
are they for? who are they for?—what are your key findings?
Charles Handy: Well, findings is not the kind of word that you can really use to describe
what I do. Suggestions is as far as I would actually go.
COS: Okay.
Charles Handy: The suggestion that business organizations are essentially the property ofthe shareholders and that the shareholders are the people who have paid the money forthem is the kind of understanding that underpins Anglo-American capitalism. I do not thinkthat that is a sustainable concept of the organization, and I have suggested that it is nowadays much more sensible to regard organizations as living communities of people, because
the principal assets of a modern business organization are literally its people. This was not
so a long time ago. The principle assets were bricks and mortar or machines or boat or materials of some sort, and you hired people to make them work for you. But now, the physical assets are perhaps one-tenth of the value of the company.
So, if organizations are communities, then it is wrong toregard communities of living people as being owned by anybody. Let’s talk the right sort of language: People don’t own
other people in a modern democratic society. If this suggestion is taken seriously, it again raises big questions about therelationship between the stockholders and the employees.
COS: And other stakeholders.

People don’t own other people ina modern democr atic society . If
this suggestion is taken seriously ,it again r aises big questions about
the relationship between thestockholder s and the employees.

Charles Handy: And other stakeholders, but those are theprincipal ones that are affected. The employees have to begiven more rights, and the stockholders have to have less power, because the stockholders are not particularly interested in this community living forever. They are only interested, really, in making money out of it or at least getting their money back. Some of theresearch says that the stockholders do actually take a longer term view than people think,but I still don’t think they are particularly concerned with the existence of the organization beyond 5 or 10 years, maybe. Even the employees of a community don’t really look
much beyond the grave. They really, really want the company to exist as long as their lifetime in that community. I think that it has to be a much longer term view than that, actually, to give the company the drive that I think you need for learning, adaptation, andlong-term investment.
COS: So, what would such a constitutional foundation actually look like?
Charles Handy: It would be a constitution based on a set of rights. I am arguing that thefinanciers have certain rights. They would be rights equivalent to people who hold a

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SCHARMER
Conversation with Charles Handy



mortgage on your house. They are entitled to a rate of return, and if you do not pay themthat rate of return or if the value of the house sinks below or gets close to the value ofthe money they gave you, then they are entitled to move in and sell the house. But, justbecause the house is getting more expensive, worth more money, they cannot step in andsell the house and take the property.
COS: Okay.
Charles Handy: Similarly, the members of the community have certain rights. They, as individuals, as assets, cannot be sold to someone else without their consent. So, mergers byagreement are possible, takeovers by agreement are possible—but no forced takeovers.
Members’ rights do not extend to having a lifetime of work with the organization; that has
to be by contract. But, the contracts would probably be for 10 or 15 years or something likethat. Within those contracts, they have other rights. I think they have a right to share in
the rewards of working for the organization, the profits of the organization—again, to benegotiated. In return, they have responsibilities, which essentially are to keep the organization well positioned for eternal life. They have the responsibility not to get rid of all its
assets: not to squander its money, not to squander the resources of its people. They haveto keep bringing new people in, keep developing the talents of the organization so that they
can hand on the bat, the trusteeship of the organization, to the next generation. They havethat responsibility. So, these things can be defined constitutionally, or should be.
COS: Who would be the owner of such a—Charles Handy: There would be no owner.
COS: There would be no owner?
Charles Handy: The word does not apply. No one owns acountry. No one owns a town.
COS: So, it would be a community asset.
Charles Handy: It is a different mind-set. I am not looking
at the organization as a piece of property. Clearly, the assets are owned by the organization, like the buildings, but
the research and the international properties are owned by
the organization and not owned by any set of individuals.
It doesn’t need to be. So, rather than thinking of the stockholders as owning it, they have provided money and they
have rights in return. It is a different way of talking about
it. It is a different conceptualization. Actually, this is the
only real motivation there is for continual change, development, growth, and learning. Otherwise, it will always be
expedient, something that is profitable for me and usefulfor the organization in the short-term. The thrust has to bebecause it is long-term, and I think that the organization
should believe this.

© Elizabeth Handy

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COS: If a company is not something you buy and sell,what implications does this have for the concept of having employees whom you pay? Doesn’t that mean that theconcept of employee is to be rethought in terms of becoming more an entrepreneur and sharing the outcomes?
Charles Handy: Yes, more like a partner. They get a salary,as if it were, an advance on their share of the added valueof the organization, and if the advance is not enough, they

Volume 1, Number 2, REFLECTIONSCharles Handy: Yes, they have entered into a voluntary agreement to work and to increase
the added value of this organization. They receive a monthly payment in advance of that. If
you want to get into more of the implications for practical things, I am not saying that thismembership or partnership status is given to everyone. You have to have been around for a
bit to have shown your worth to the organization, to be valued by them, to be committed toit, and then you become a member. So, the numbers in the core of the organization who are
effectively members or partners is really relatively small, and much of the organization’s
work is then delivered to it by smaller organizations, who also have partners, plus outside
individuals who are called in and part-time workers who do not have the status of members.
And that is what you begin to see happening. They don’t call it that yet, but they
are giving more and more people a share of the bonuses. They are giving more and more
people stock option schemes. They are effectively creating membership mechanisms.
And what I am doing is conceptualizing what they are aiming for, though they don’tknow it. And I am saying that the stock exchange is becoming more and more of a betting ring in which you don’t really own when you buy a share—you are not really buying a share of the ownership. You are really taking a bet that this organization is goingto do well, and your bet will be worth more money in 10 years’ time.

Conversation with Charles Handy



COS: And you are saying they’re not employed by anyone.

SCHARMER

will get a little more at the end—a bonus. Yes, they are partners. I call them members. I
don’t like the word employee; that implies that they are employed by someone.

COS: Do you see any structural changes in regard to the company-customer and the company-community relationships?
Charles Handy: The customers: I don’t see much need for change, because it is self-correcting. If you don’t take proper account of your customers, they will leave you. So, customers have rights built into the market contract. They don’t need to be represented inany formal sense inside the company. Their views should always be dominant, because
without customers there is no point in going on if we’re talking about a business or, indeed, a hospital or school for that matter. I think the same applies to suppliers. If you aresensible, you will make sure that their interests are aligned with your interests.
The surrounding community is a more debatable point. I would argue that if an organization sees itself as lasting for 100 years and it really believes that or wants to last for
100 years, it will take an interest in its surrounding community. I mean, longevity—the lure,
the desire to be immortal—makes you take it seriously. If you are only going to live in ahouse for 3 years, you won’t really care about the local schools. If you are going to makeyour life there and you want your children to live there, you will take it more seriously. So
again, if we adapt this view that we last forever, these things self-correct.
COS: In rethinking what organizations are all about, new structures or new realities emerge
in regard to relationships between organizations. So, how can different types of organizations, like family firms, small or medium-sized companies, survive along with giants?
Charles Handy: Well, I think the interesting thing is thatthese days small things can do very well, provided they arelinked into big things. The richest country in Europe is
Liechtenstein; the second richest is Luxembourg.
COS: Yes, good point.

. . . small things can do very well,provided they ar e linked into big
things.

Charles Handy: They have survived because they have a cohesion, but in a bigger context. Quebec, if it had separated from the Canadian federation, would actually have donevery well in my view, because they would have negotiated a looser relationship with theCanadian federation, and the cohesiveness of being a Quebecois would have given thema new energy, and so on.
So, what is happening, it seems to me, is that organizations are looking for the kind

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SCHARMERConversation with Charles Handy

of cohesiveness and energy and excitement that you get from being small, but also wanting the great benefits of being large. And really, it is this that drives my concept of federalism as being the appropriate business model and societal model. I do actually thinkthat federalism is a way of allowing small things to ride on the back of big things so thateverybody benefits. Federalism is a negotiated arrangement that is centralized, in somerespects, decentralized in other respects. It is both-and. In what respects it should be centralized and in what respect it is decentralized has to be negotiated.
COS: So you see federalism not only as a concept for organizing within corporations but
also as a concept for organizing between corporations.
Charles Handy: Oh, absolutely. Federalism basically arises because separate organizations wish to organize together. In order to get back to where they were or should havebeen, organizations have to dismantle themselves into federalism. And that proves very
difficult to do, because it is moving from monarchy or centralized rule to a much moredispersed system of power. And no monarch willingly gives away power.
COS: Unless they are named Gorbachev.
Charles Handy: Unless they are named Gorbachev, facing disintegration; or unless they
are, as Gorbachev would claim, visionary; or unless they are effectively about to fallapart anyway and clinging onto something. But the normal way the federations arise isthat small states come together and say, “We need each other.” And so, I really see federalism as the appropriate mechanism for small organizations to actually organize, as
you say, between organizations.
COS: Couldn’t that be a confederation, rather than a federation?
Charles Handy: A confederation is not enough in my view. A confederation is a voluntary association with no center, so it has its uses, but it falls apart under any kind of attack. Federation is a system in which the individual states have actually granted certain
powers to the center.
In a business situation, the ultimate power resides in these small organizations only ifthey have yielded power into the center. They don’t want to break away, because then theylose the advantages of bigness, but if the center is too overpowering, it pulls things toomuch. But yes, you’re absolutely right. The difference between a confederation and a federation is crucial, and I am not saying that confederations are much use; it is the federations.

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COS: The concept of federalism has two main structural components. One is the verticaldimension, where the concept of subsidiarity is applied, and the other one is in that morehorizontal dimension, where you are arguing for a differentiation between different functions, like the legislative, the executive, and the judicial function. I would be particularlyinterested in the latter dimension, because it seems to me the most crucial one and it is
not really conceptualized in our current institutions.
Charles Handy: Well, it is very important. Federalism is about a balance of power, always, between the center and the parts. And it is all about the parts giving authority to
the center to do things. Therefore, it is very important that you separate out these functions. For instance, the legislature—let’s call it, for businesses, the policy-making body—has to be done by a body that is representative of the parts. Of course, the actual policies
are drafted and put up, posed as possibilities by an executive, but in the end the decisions on policy have to be taken by a representative body. Now, that body is representative of the member states, it is not representative of the shareholders. So, I am not talking
about the board; the board is something else again.
COS: That would essentially be a completely new institution.
Charles Handy: Well, in some cases, it’s already there in a management team, if the man-

Volume 1, Number 2, REFLECTIONSSCHARMERConversation with Charles Handy

agement team is made up of the heads of the main operating units. In some cases, itwould be new but, in many cases, it exists as an informal arrangement. Businesses call
together a strategic conference once a year, they bring together the top 300 people in theorganization, and they outline their strategy ideas. This is an informal sounding arrangement. I would like to formalize it, because the important thing is that states own the policies, psychologically own them, because they contributed to the decision. Only then can
the executive carry these things out, only then can the executive really operate efficiently.
If it is an imposed strategy by the executive on the constituent bodies, as it is often at the
moment, there is endless trouble, really.
And then there is the judicial function: This is what you might call the inspectorate.
Think of the people who actually see that things are done as they should be done. That
if we say that we are an ethical corporation, we are. If we say that we maintain thesekinds of qualities, we do. If we say that we pay people in a sort of way, we do. It is asmall body, but it should again be independent.
In a monarchy, to get power you concentrate all thesethree functions in one person. So, you make the policy, you
carry it out, and you check the stuff. That is too much concentration of power. In the federal system, the individualorganizations will not give that much power to the center.
The center doesn’t like giving these things away, but if they
exist, they have to. And you may have a board of outside
people representing the shareholders, to make sure that their interests are looked after.

Federalism is about a balance ofpower, always, between the centerand the parts.

COS: Which of the functions you described would that be?
Charles Handy: It would be different. The board is not necessary, in my view, because
the market should automatically take care of that. The share price goes down, etc. At the
moment, it seems to me that the structures of capitalism are inefficient. The board is supposed to take the long-term policies, but the board is supposed to represent the shareholders, and the shareholders are interested in their medium-term earnings per share. So,
I don’t think they are the right body to take the decisions for the whole community. And
the executive at the moment is supposed to be the servant of the board (i.e., the servantof the shareholder), and that doesn’t seem to be the right relationship.
COS: And the right relationship would be servants to—Charles Handy: To the policy-making body, which is the representative body of all the states.
COS: And then the executives would be elected by that body?
Charles Handy: Appointed.
COS: Do you see, then, each individual performing only one of the three roles you described? Or do you see this as three parallel action spaces, and each individual could playin one, two, or even in all three of these arenas?
Charles Handy: Well, to some extent, it is parallel action spaces. For instance, one member of one of the states could be a member of the inspectorate, as I call it, or the judicial
review body. But, if somebody is a member of all three, that makes him too powerful.
The thing is to spread power around, but concentrating the actual execution of that powerin small, compact teams in the center and then in the individual states. Unless the individual business units get involved in the general policy making, they will in the end drift
away or find other federations to go to if they don’t have some power.
COS: This is a crucial point, isn’t it? Does it affect whether or not there is a rule for exiting the federation?
Charles Handy: Well, you can have rules, but if you can’t enforce them, they are not

REFLECTIONS, Volume 1, Number 2

73

SCHARMERConversation with Charles Handy

much use. There are five elements to federalism and we have talked about two:
subsidiarity (responsibility at the lowest point) and the separation of functions at thecenter. But there are three more, of which perhaps the most important is interdependence.
The way you hold parts, the individual states, into the whole is not just through a contractual constitution but because they would not survive very easily outside. Several of
the functions that they need in order to perform effectively are done by other membersof the federation. We can’t actually take Massachusetts out of the United States, because
the state needs the corn grown in Kansas or financial operations on Wall Street or whatever. There is an interdependence, and it is very important to structure that in. There is acoordinating device which insures that no one particular business unit could do it all by
itself. Of course, there are also inefficiencies in coordinating, but it does mean that it ismore difficult to break away, unless there’s another federation that also has those same
coordinating devices. But not only does that stop breakaways; it also means that you feelthat you have to invest in the total federation, because you get something from it as wellas giving something to it. This is this other idea of twin citizenship. You have this emotional commitment to your individual unit, but you also have an emotional commitment
to the whole federation.
COS: The last issue that I would like to address involves both the concept of paradox andhow to deal with paradoxes and the concepts of the multiple cultures, as you argued for
in Gods of Management. You described four different modes of doing things or four different modes of cultures, and it is very intriguing to me, seeing how they emerge and reemerge in different relationships and different realities. What is the underlying conceptthat makes the integration of these diverse concepts possible?
Charles Handy: While I think they are related, I think there are two different issues. I
don’t think I have dealt with the question of paradox as well as I would like. What I am
trying to say is that there is almost a necessity of contradictions in life. In order to haveblack, you have to have white. Otherwise, it doesn’t seem like black.
COS: And otherwise you don’t get color.

74

Charles Handy: You don’t get color. Leisure has no meaning unless there is also work oreffort. Valleys don’t exist unless there are hills. There is a logical necessity for opposites
or contradictions in life. And that applies throughout. We are used to it in the examples I
have just given. We have learned to live with black and white, even if we don’t like black.
But we don’t seem to have learned to live with that in the rest of the world. I’m trying to
say that in organizations, it is both-and, not either-or.
We have created an ideal form or organization whereby we say we can have, forinstance, total control in the center, and you can be an individual. People say, “Well,that’s not possible. If you control, obviously you don’t trust me.” I’m saying, obviously
you can, but you have got to live with the seesaw. You have got to live with the fact that
one time you need control and sacrifice your freedom, and another time you need thefreedom and sacrifice some control. Life is always like that. I think we have got to train
people to live with what looks like confusion but is actually the necessity to alternate
between valleys and hills all the time. You really can’t have both at the same time, but
you can have both in the same field.
COS: I see.
Charles Handy: I don’t think I explained it very well in the book, but it seems to be very
important: that you can have a very strong leader and very strong individuals. You probably have the two, not at the same time, but in the same place or the same field. But at
the same time, they fight against each other. So, sometimes the leadership has to actually let the individuals be strong. To some extent, that applies in the same way to theGods of Management, which I think is one of my most neglected books in America. I amvery fond of that book. It has the seeds of all of my other books in it, really. I am fond of
it because I think it helps people to understand the confusions of organizations quite

Volume 1, Number 2, REFLECTIONSSCHARMER
Conversation with Charles Handy

well. What I’m saying is that there are four very distinct
cultures or styles, management, or organization that you
can find pure examples of anywhere, really. And the reality is that they are all there at the same time. To be moreaccurate—in the same organization in the same field.
COS: Talking about your experience—the most crucial
challenge probably is to make these different cultures talkwith each other and understand each other and to makethem have a dialog within companies.
Charles Handy: There are two. The first challenge is tomake sure you have the right mix of cultures in the firstplace. The second is that they have to talk to each otherand live with each other. I guess the whole underlying
theme of my work is that if you understand differences,
you can behave more appropriately. If you understand,you feel less confusion; if you understand, you feel lessstress; if you understand, you can moderate your own behavior. If I know what dress is expected of me in a situation, I can dress. A lot of great problems with our children,for instance, who wanted to express their individuality intheir clothes when they were young teenagers, was getting
them to understand that in certain occasions, it was more
appropriate to dress like adults, even if they didn’t like it.
As they grew older, they began to understand that thatwasn’t actually denying their individuality, it was just that
it would be easier for other people to accept them and forthem to merge into the thing if they actually dressed in theright uniform. Understanding helped them change and adapt their behavior. This is whatthat book is all about: understanding and understanding differences. The paradox about
understanding is the necessity of contradictions.
And I don’t think understanding is enough. You have to do, and you have to reflect.
We haven’t talked about learning. Learning to me is experiment, it is curiosity, a question
full of life. Learning is experiment followed by reflection. And in that process, you needideas, you need concepts to explain, to experiment. And in my view, most organizations
are about experiments but without the questions, without the reflection, without the ideas.
Somebody said that learning is experience understood in tranquility. So, you haveto have the experience, and then you have to understand it. In order to understand it,
you have to have the urge to understand it. You have to have the questions in your mind,
the curiosity, and you have to have the ideas, the concepts that will explain it. And you
have to have the time, the reflection, to do it.
The discovery is the whole process. Learning is discovery, isn’t it? Discovery is curiosity, the stepping into theunknown, the experiment as well as the concepts and thetime to understand that experiment. It is the whole process of putting the pieces together which is what I think islacking in most organizations. The concepts are in a classroom somewhere or in a book; the experience is out there. The time for reflection is after retirement, and the curiosity perhaps never exists, because—© Elizabeth Handy

Learning to me is experiment, it iscuriosity, a question full of life.

Elizabeth Handy: There is no time.
Charles Handy: What I am trying to do, I suppose, is to provide the ideas and, to someextent, the curiosity. If I can make my books interesting enough to read, people start tothink. Now, there are concepts—and they use some but not others—which relate to theirexperience. What I can’t provide them with, of course, is a sort of enclosed space for allthese things to happen at once.

REFLECTIONS, Volume 1, Number 2

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SCHARMERConversation with Charles Handy

COS: Let me ask you one more question, which is: How does federalism relate to learning?
Charles Handy: Well, let me take a step back. I think a federal organization is an ideal
starting place for a learning organization, because it is not uniform. So, you can have a
lot of different ways of doing things in the same organization; people are allowed to bedifferent in many respects in a federal organization. They are coordinated in some respects, they have the same systems in many respects, but it is basically a coordinated setof experiments with all the different bits doing their different things. Now, you have tohave curiosity to turn that from experiments into learning. People have to want to knowwhat they are doing. You have to have concepts, and you have to have space for reflection, to think about it. Most federal organizations that I know don’t provide any of these.
Instead of curiosity, there is jealousy; instead of concepts, there are just presentations:“How we did it.” But it is harder to create a healthy curiosity rather than envy and jealousy in a nonfederal organization. In a bureaucratic organization, experiments are notallowed because they disrupt the system; it is untidy. They reject it. So, if you have designed a federal organization in which you have created curiosity, a range of experiments,
and a set of concepts which people can apply to explain the differences, that is learning.
COS: What are the most important questions for future research? What is relevant but unanswered?

76

Charles Handy: The big question for me now—and I think perhaps it has to do with myage as much as anything—is why? Why do we work so hard? Why do we have these organizations at all? Why are you so interested in improving them? Why do you want to makethem learning? Why am I living? Why am I working?
You know, these are old questions, but it seems to me that if I am demanding of thepeople in organizations that they work hard, that they learn, that they plan to make theorganization so good that it is worth handing onto the next generation, you have to know
why? What is so important about this organization? And the answer that it is making
money for the shareholders does not seem to justify people consuming their lives fortheir organization. There has to be a very good reason for people giving up their lives toorganizations. There has to be a very good reason, and I am not sure what it is. And I
think that until organizations find the answer to that, they will not have people learning
as much as they should. And until societies can articulate what it is that is important
about America, they will not hold the country together. People will get selfish.
Most of the organizations that I consider wonderful are not in business—and I can
see why. And actually, the organizations that are wonderful will continue even if they
are inefficient, even if they don’t learn very well. I am sure The Red Cross will be herein 100 years time, or MIT. I think overriding all their learning and everything is that they
have a reason, they have a mission, they know why they are here, and it is not just to
earn salaries.
I used to send my students into all these different organizations, and they would go
to banks and they would go to Ford, but they would also go to schools and to hospitals
and to prisons and to all sorts of places. And they always came back, these businessmen, totally surprised and excited by places like hospitals, primary schools, kindergartens, because they found organizations that had a reason to exist, and people believedin that reason. And these organizations might be terribly inefficient, but people wanted
to be there. And they would come away from businesses saying, “Well, it was very efficient, but there was no soul. People were there because they wanted to make money or
because it satisfied their partners.” Trying to explore why is what I am doing. It is research, it is thinking, it is suggestions. But I think in a way that it is more important thanlearning, if you want to have a great organization.
COS: Thank you very much.
Charles Handy: Thank you. It’s been great for me.

Volume 1, Number 2, REFLECTIONSIn 1992, my colleague and dear friend, Dr. Beverly Kaye, andI were asked to work with a Big Eight accounting firm on the
problem it had retaining women. The firm wanted more
women to qualify for partner positions, but studies showedthat somewhere in their fifth year of employment, women
dropped out in large numbers. The firm sensed that the problem was career development.
Very quickly into our diagnosis, however, we discoveredthat the problem of retaining women was really a metaphor
for a more organic problem of all employees hungry for “alife.” In effect, working for the company meant being married to it. People worked more than seventy hours a week
and traveled continually. The customer was “king.”
For some employees, particularly the high achievers, thisintensive work schedule was rewarding. For others, however,
and women in particular, it left no room for a “me” (not tomention a family). Many of these were leaving the firm forjobs with corporate clients where work demands seemed lessonerous, and things other than professional activities hadpriority. Because the firm’s culture included a serious work
ethic, the retention problem was not simple. Untangling it led
us to explore the dilemmas of balancing work and life.
Balancing work and family has been on organizational
agendas for years. It is on most leadership competency lists,
and many organizations have rewritten their value statements to include it. Some companies address it by building
gyms open to all employees at all hours. Some provide childcare, and a few, even elder care, on site or nearby. Somematernity-leave employment policies are for six months.
There are virtual offices and flextime, and voicemail and email links that enable employees to be almost anywhere andstill be in touch with the office. People who participate inprograms such as these are enthusiastic about them. But the
programs do not offer a more balanced life. They do not help“me” “get a life.”
The situation that these programs address is improperly
framed. Balancing work and family is miscast as a time-management issue. As employees, we look to our organizations
for permission to be a whole person. We assume that we cansolve work-and-family issues on a day-to-day basis. How canI pick up the kids and finish this meeting? How can I have a“fast track” career and also be a loving and concerned partner, wife/husband, father/mother, devoted son/daughter?
Employees want policies that let them manage their competing priorities, and organizations are responding to the problem as best they know how. But I do not believe that they are
addressing the fundamental issue of balance.
Each of us needs more self-esteem, a greater sense of
personal accountability, more resilience toward life and trust.
These are mindsets, not policies. They are deeply rooted in
our own sensibilities, and cannot be resolved by having moretime available for more activities, on the job or off it. At thesame time, I do not want to regard life balance as an either/or issue. I am not suggesting that our organizations employ
whole people with full lives who still need opportunities forcontinuous improvement and need to be treated with sensitivity. However, in the spirit of learning, some of our assumptions may be flawed.

REFLECTIONS, Volume 1, Number 2

The Ability to Reflect
Reflection tends to run
counter to our culture, which
supports action. It meanspausing, slowing down, looking at recurring patterns in
our own behavior. It is notnecessarily time-out, but it isa consciousness, an in-themoment of asking why we are
Betsy Jacobson
doing what we are doing, andif it is what we have always
done. If it is what we have always done, we are likely to hangon to it. And if that way results in a nagging sense of disjointedness, fragmentation, and incompleteness, then maybe we needto look inward for solutions, rather than look for them outside.
Balance means “to bring into harmony or proportion,equalize, to bring into equilibrium.” Our equilibrium is deeply
rooted in our patterns of behavior and belief. Reflection is an
opportunity to self-correct our course in terms of our thinking,feeling, and actions. It requires answering some hard questions.
Only when discontent creeps in—boredom, or too muchchange, or an unsettling event such as job loss, divorce, or
illness—do we step back and reflect. And often, this isn’t reflection at all, but problem solving, in which we act to alter
the situation or our feelings. Reflection combines introspection and “mindfulness,” by which I mean being fully awareof what is happening in the moment. Mindfulness does
double duty. For example, you give a performance review
and at the same time learn something about yourself. As parents, we warn our child of something and simultaneously
hear our own parents saying the same thing to us when wewere the child. This kind of reflection requires slowing down,
and noticing patterns by observing yourself in the moment.

What is of Value?

Betsy Jacobson



CHRIS UNGER

Reconceiving Balance

The Ability to Feel Appreciation
A corollary to the ability to reflect is the ability to feel andexpress appreciation. What about those kudos? When we getthem and take them in, we are energized. Do we appreciate
in words our partners’ support during a hectic stretch? Do wetalk about how sacrifices are part of shared goals? Can we talkabout what we feel grateful for in terms of progress we aremaking in our respective and collective lives? Conversations
like these bolster us during difficult times.
At the end of a long stressful meeting where differences
have been intense and crucial decisions have been made,does the team take the few minutes to rebalance itself by expressing appreciation for collective sacrifices, personal risks,
and the value each person has brought? These are not thankyous. They are expressions of a side of human feeling thatrarely surfaces at work. We desperately need appreciation forour self-esteem and ability to continue giving. Many of myclients suffer from what I call “recognition deprivation”© 1999 by the Society for Organizational Learning and the Massachusetts Institute of Technology.

77

CHRIS UNGERWhat is of Value?

(which is not found in a rewards-and-recognition program).
Recognition needs to come in the moment from the people
who can best give it. Feeling appreciation requires willingness to see that coworkers, bosses, and direct reports aremaking good faith efforts. It means acknowledging all ideas,
because the good and bad ones together make for the ones
that are breakthroughs.
Appreciation comes in many forms. Think about the lastoperations review meeting you attended. Remember thequestions you prepared for, and how questions were asked.
Some meetings I observe remind me of inquisitions. The way
people ask questions presumes the worst. In client groups
where we teach inquiry skills, participants often say that asking questions is a sign of weakness unless the questions areworded to uncover weakness. But good inquiry does not
undo; it enhances both parties’ quality of thinking. The way
we ask questions demonstrates our feelings of appreciation
for what is known, and what more can be known by thinking together. When questions seek to trip up and confoundrather than to appreciate, the experience leaves one gaspingfor ... balance. Tapping feelings of appreciation and gratitude
acknowledges progress made, and provides people with feelings of personal power. Personal power is an importantsource of feeling that one is in balance.

The Ability to Set Boundaries

78

Setting boundaries and saying no is critical for a sense of balance. Part of boundary setting is making and keeping commitments, and then letting others know what those boundaries
are. Boundaries are important both at work and at home.
Successful people think they are efficient and productive.
They are proud of their ability to multi-task—take vacation
with the family and get a few hours of work in the earlymorning; handle business calls at the pool watching the kids;
conduct business over a meal, or a few rounds of golf; take awalk together and at the same time develop a meeting agenda
or talk through a problem. Some of this multi-tasking is truly
the social side of business, but most of it is a lack of understanding the importance of setting boundaries for one’s wellbeing. Without boundaries, the ability to enjoy the kids, good
food, or exercise is diminished. Everyone loses. Call it quality time, but it is not quality if it is not mindful, aware, and in
the moment.
Setting boundaries for quiet time is essential. This is notreading a newspaper or a good book or watching TV. It istime to reflect, time to feel and notice what and whom you
appreciate. It is time that brings you back into balance, into
harmony. It can be a few moments on a commuter train withyour eyes closed, or a quiet moment when you get up in themorning or go to bed at night. It is time for the “me” that isotherwise missing.
Balancing work and family is a juggling act only if welook at it that way. Balance is an experience and a feelingsustained by our ability to reflect, feel appreciation, and set
boundaries. It requires us to be more accountable, but wemay be able to live better that way.

What is of Value?
Chris Unger
As I ponder the life of organizations, and how we all approach and attend to life,
every day ...I wrote this reflection last night and finished it this morning.
My partner, Robin
Pringle, and I have bee nmusing quite a bit on the influence of money to shape
the way we see and relate to
one another, ourselves, ourwork, and the development
Chris Ungerof our communities.
When I ask myself what
I truly care for, and value, it is not money. But money, as you
know, has seeped into our ways of valuing and action. Perhaps this does far more harm than good in the outcomes of
our interactions and what we create within and from ourcommunities.
The question that has caused me to stand back a bit andquestion some of what I do, and what we are doing in communities, and with each other, is: “If money were NOT a factor in anything you do—you don’t need it, you don’t use it,it’s not a part of how we relate and interact with one another—what would you do? And why?”This growing awareness within myself, at least, of how
so much of our interactions and concerns and awareness anddesign hover around the influence of money has started me
thinking if there were other ways to relate to money, andsubsequently with one another, and eventually what we create—socially, relationally, in products, services, etc.
What is the bottom line? How much does our attention
to the need to “make” money overshadow the question of“what sustains us?” in larger, more emotional, relational,
and community terms? Robin and I are asking, and thinking, about this question.
As I continue to develop our work around learning in organizations, personally I continue to uncover that my real
work is how to help others live their lives in joy, with joy,
and with personal meaning, in communities of care. Robinand I have been working with school communities on their
dreams, concerns, and the actions that can help them topaint their dreams into action.
So it comes to pass that I wonder about the nature andform of our schools...and what they are giving our children,and how they are shaping the view of themselves and their
possibilities of experience in life.
Furthermore, and perhaps even more to the point, I
think about how we all shape the experience of our lives
through the structures and forms of our everyday society.
And I continue to bend my mind around the question of why
things are as they are.
What, in our biology, in our state as living organisms, has
us do as we do—the rush of “buying,” the procedure of commerce and economics, that pits one against the other and allows for the disequilibrium of states of being, of self-worth, ofVolume 1, Number 2, REFLECTIONSCHRIS UNGERWhat is of Value?

(which is not found in a rewards-and-recognition program).
Recognition needs to come in the moment from the people
who can best give it. Feeling appreciation requires willingness to see that coworkers, bosses, and direct reports aremaking good faith efforts. It means acknowledging all ideas,
because the good and bad ones together make for the ones
that are breakthroughs.
Appreciation comes in many forms. Think about the lastoperations review meeting you attended. Remember thequestions you prepared for, and how questions were asked.
Some meetings I observe remind me of inquisitions. The way
people ask questions presumes the worst. In client groups
where we teach inquiry skills, participants often say that asking questions is a sign of weakness unless the questions areworded to uncover weakness. But good inquiry does not
undo; it enhances both parties’ quality of thinking. The way
we ask questions demonstrates our feelings of appreciation
for what is known, and what more can be known by thinking together. When questions seek to trip up and confoundrather than to appreciate, the experience leaves one gaspingfor ... balance. Tapping feelings of appreciation and gratitude
acknowledges progress made, and provides people with feelings of personal power. Personal power is an importantsource of feeling that one is in balance.

The Ability to Set Boundaries

78

Setting boundaries and saying no is critical for a sense of balance. Part of boundary setting is making and keeping commitments, and then letting others know what those boundaries
are. Boundaries are important both at work and at home.
Successful people think they are efficient and productive.
They are proud of their ability to multi-task—take vacation
with the family and get a few hours of work in the earlymorning; handle business calls at the pool watching the kids;
conduct business over a meal, or a few rounds of golf; take awalk together and at the same time develop a meeting agenda
or talk through a problem. Some of this multi-tasking is truly
the social side of business, but most of it is a lack of understanding the importance of setting boundaries for one’s wellbeing. Without boundaries, the ability to enjoy the kids, good
food, or exercise is diminished. Everyone loses. Call it quality time, but it is not quality if it is not mindful, aware, and in
the moment.
Setting boundaries for quiet time is essential. This is notreading a newspaper or a good book or watching TV. It istime to reflect, time to feel and notice what and whom you
appreciate. It is time that brings you back into balance, into
harmony. It can be a few moments on a commuter train withyour eyes closed, or a quiet moment when you get up in themorning or go to bed at night. It is time for the “me” that isotherwise missing.
Balancing work and family is a juggling act only if welook at it that way. Balance is an experience and a feelingsustained by our ability to reflect, feel appreciation, and set
boundaries. It requires us to be more accountable, but wemay be able to live better that way.

What is of Value?
Chris Unger
As I ponder the life of organizations, and how we all approach and attend to life,
every day ...I wrote this reflection last night and finished it this morning.
My partner, Robin
Pringle, and I have bee nmusing quite a bit on the influence of money to shape
the way we see and relate to
one another, ourselves, ourwork, and the development
Chris Ungerof our communities.
When I ask myself what
I truly care for, and value, it is not money. But money, as you
know, has seeped into our ways of valuing and action. Perhaps this does far more harm than good in the outcomes of
our interactions and what we create within and from ourcommunities.
The question that has caused me to stand back a bit andquestion some of what I do, and what we are doing in communities, and with each other, is: “If money were NOT a factor in anything you do—you don’t need it, you don’t use it,it’s not a part of how we relate and interact with one another—what would you do? And why?”This growing awareness within myself, at least, of how
so much of our interactions and concerns and awareness anddesign hover around the influence of money has started me
thinking if there were other ways to relate to money, andsubsequently with one another, and eventually what we create—socially, relationally, in products, services, etc.
What is the bottom line? How much does our attention
to the need to “make” money overshadow the question of“what sustains us?” in larger, more emotional, relational,
and community terms? Robin and I are asking, and thinking, about this question.
As I continue to develop our work around learning in organizations, personally I continue to uncover that my real
work is how to help others live their lives in joy, with joy,
and with personal meaning, in communities of care. Robinand I have been working with school communities on their
dreams, concerns, and the actions that can help them topaint their dreams into action.
So it comes to pass that I wonder about the nature andform of our schools...and what they are giving our children,and how they are shaping the view of themselves and their
possibilities of experience in life.
Furthermore, and perhaps even more to the point, I
think about how we all shape the experience of our lives
through the structures and forms of our everyday society.
And I continue to bend my mind around the question of why
things are as they are.
What, in our biology, in our state as living organisms, has
us do as we do—the rush of “buying,” the procedure of commerce and economics, that pits one against the other and allows for the disequilibrium of states of being, of self-worth, ofVolume 1, Number 2, REFLECTIONSCHRIS UNGER

we can adopt that will call us to question how things are as
they are, and wish them different? Are there new communities we could build, small—it seems the best way—that,through attention, awareness, and deliberate action andpractices, would allow, moreover, cherish, ways of being that
support the love and joy of life, and in that, each other?
Who was it that said, to make a difference people had
to change not only their actions, but their way of being? Thatto make a difference, one could not simply talk a great talk,or say that one should act in certain ways, or do certain
things...but one had to be in that way? Was it Ghandi? Was
it the Dalai Lama? Was it Martin Luther King?
I do not know. But I do know that when we begin to act
and be in certain ways different than the norm, with hearts
more open, with more care to what is life giving, and more
supportive and caring for one another, around who we are,and not just what we can become, or what we can produce,or how we can contribute to society in the way that it is now,
through a commercial state rather than an economy of loveand care...that things change in the presence of that person.
And that others sometimes change too. And that conversation, those new possibilities, can do a lot. But being in a newway, somehow, can tell more.
When do we stop talking about how things should be,or could be, and start living with these feelings of resonance,and designing our lives around their fulfillment? Now, andnot later. When the time is right. And the earth is still sweet.

What is of Value?

value, of place, and of access to the provisions that can enhanceor eat away at the experience of ourselves and our being?
I see so much attention and effort, in the name of one’s
work, given to the invention, design, and development ofgoods and acts that really, for the most part, have nothing to
do with the things I think we are losing most of: a sense ofcontentment, and peace, and love within each of us, andwith each other. The beauty of being, not just doing.
There is more time and human energy spent designingand developing and making the next best big black box, andcomputer, and car, and marketable dessert product, and fashion, than on looking at the light and how it changes acrossthe sky and landscape and hits the new leaves on springtrees, and how the kids are interacting with each other inways that create meaning and connections and joy for eachother, with the kinds of reflection and development of experience which, in my mind, truly matters in the long run.
What, in my own mind, matters most, so that when I cometo die, I can say that I have fully, and happily, lived.
How could we redesign the way we go about attending
to the experience of our lives, ourselves, and one another, byquestioning the present forms and structures which, in mymind, may have, in the end, have done us far more harm than
good? What are the dynamics at play? How do our biology,
and sociology, shape us to act and think and respond and create in certain ways?
Are there mindsets, and ways of being and seeing, that

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REFLECTIONS, Volume 1, Number 2

NEWS & VIEWS

Book Reviews
Natural Capitalism, Paul Hawken, Amory Lovins,
and Hunter Lovins, Little, Brown and Company, 1999
Review by John Ehrenfeld
With such a stellar set of authors, Natural Capitalism looks
like an undeniable hit. Hawken’s earlier book, The Ecology ofCommerce, provided impetus to the then-incipient transformation of the private sector to adopt new business practices
rooted in ecology and sustainability. Lovins broke into print
with a groundbreaking book, Soft Energy Paths in 1977 andchallenged the energy industry to begin to think in a fundamentally different way. Much of what Lovins argued for hascome to be in the form of deregulated and decentralized
forms of energy production and consumption.
Natural capitalism is presented as a new paradigm thatwould replace the old ways in which we tend to think about
the world today, especially the mind-sets of those who makeinvestment decisions relating to the nature of economic output. The primary target of the message appears to be businessleaders, although there is little mention of this until the very
last chapter. The four principles of natural capitalism are:

 Radical resource productivity
 Ecological redesign
 Service and flow economy
 Investing in natural capital80

The names are reasonably self-descriptive. Radical resource productivity is the most emphasized of the four. At
least half the book contains helpful hints about radically decreasing the energy and materials used to produce different
categories of products or services by factors of 20, 30, andeven 100, far beyond the factor four promoted in Lovins’ recent collaborations with von Weiszacker. And by the way,these opportunities are always profitable, with paybacks soquick that even hard-nosed capitalists would drool.
Ecological redesign suggests that product and service
systems should follow nature’s principles, including parsimony and closed loops. Several examples are combined witha new design process that would avoid the tunnel vision ofcurrent procedures that conceal the holism of nature fromdesigners and product developers.
The third item, service and flow economy, argues for replacing the purchasing of products that provide satisfaction tocustomers with purchases of services that provide equivalentsatisfaction. Products will still have to be made and marketed
but now to intermediary service providers. People who want togo from one place to another will still need (short of
teleportation) some sort of “vehicle.” The authors argue, as
many others have for some time, that if ownership of the artifacts is left with the seller of the services, the technologies thatwill be offered will be more robust and long-lasting and will
create lower impacts on the environment per unit of satisfaction. This strategy is now only slowly finding its way into themarket place. The comodification of what had been market of-ferings with broad consumer choice is an idea that is prevalent
today simply for economic reasons, but this approach to customer satisfaction is not without many problems. For example,“service providers” has become a pejorative in the world ofhealth care, as many of the features that consumers historicallysought are either not available or are priced out of reach.
Investing in natural capital means putting human andfinancial resources toward restoring and maintaining thenatural systems on which economies and the flourishing of
humans and other species depend. The authors point to theterrible shape of so much of the globe. They also recognize
key underlying problems, such as free ridership or perverse
taxes and subsidies, which lead to overusing these historically free or very cheap resources. Their solution is simply tochange the tax and subsidy structure to one that works.
Much easier said than done. It is an overly optimistic ornaïve belief that underlying assumptions are as easy to change
as corporate or consumer practices. The glibness with whichthese and other “solutions” are offered up is one of the shortcomings with the book. Some of the deep-seated problems
they point to are left unaddressed. Free ridership—the Tragedyof the Commons that Garrett Hardin wrote about so eloquently
some three decades ago—rests on a mental model of the world
as infinite. Those who would overuse a public resource are in
a conversation with themselves that says there will be plenty
left for everyone else even if I take a little bit more. Solutions
here require either some sort of coercive intervention, as
Hardin wrote, or the replacement of this world-view.
Likewise, each of the many proposals and solutions requires profound shifts in the everyday consciousness andnorms of decision makers at every level in all institutions, notjust in business. It takes more than instrumental innovations
or altered economic ground rules to bring about the world pictured in Natural Capitalism. Of course, getting more value forthe same investment is a norm so deeply entrenched that noteven the authors would meddle with it. Let me add here thatthe picture of the future they paint is not so nearly well elaborated as that of the mess we are now creating and living in.
For the audience of this journal, there is a more important
problem with the book. It is not about whether the ideas aregood or not but rather about why they haven’t already taken
hold up in the mainstream. In spite of its early dismissal of
utopianism, the book is deep down a utopian promise: Build
it, and they will come. Here are some ideas so self-evident thateveryone will pick them up and run with them but, unlike theeconomist’s proverbial $20 bill, few have done so although all
the ideas in this text are familiar to some extent to those now
in positions to make transformative business decisions. Yes,
there are a few structural problems, like perverse taxes andsubsidies and deeply entrenched ways of thinking about design, accounting and so forth but, to the authors, the solutions
are obvious and can easily be put in place.
Why, then, are there so few of these triple-bottom-line
practices—economy, ecology, employment, or some otherhuman dimension—out there? Some of those that are emphasized in the book are not, in fact, doing as well as portrayed.

Volume 1, Number 2, REFLECTIONSREFLECTIONS, Volume 1, Number 2

not it. Something happened on the way to the editor with thisbook. Whatever the authors intended to produce, the result
is a poorly organized, run-on text with an apparent editorial
view that if one piece of data is convincing, a thousand suchpieces will make the reader run out and immediately invest
in the brave new world that the authors’ picture.
Sustainability is barely evoked in the text. And if it is,getting there is merely doing what we already know is “profitable” for humans and for nature. It is here that I think theauthors have missed the boat. Natural capitalism is not aradical concept; it is a repackaging of some very good ideasthat have been generated in the past by the authors and also
by many others. The importance of taking the four elements
as a package is stressed but only at few places in the text. In
practice, I believe it would be exceedingly difficult to sell thewhole package. Perhaps that is why the authors, perhaps
unwittingly, have used a common marketing tool: creating acatchy slogan. Natural capitalism is always capitalized: I kept
expecting to find a service mark or trademark sign next to it.
Perhaps it would make more sense to sell the ideas one or no
more than several at a time.
Sustainability is deep down a radical idea. It is not some
utopian end-state and never can be. Although the ideas put
forth in Natural Capitalism are very important in putting astop to what most would agree are disastrous practices, they
do not promise anything like a sustainable world. Sustainability is nothing more than a possibility that human and otherlife can flourish on the planet forever. We can never know weare there, only that we are not, and must always continue tocreate the future world day by day. Such is the utmost in learning. Our mental models must always be open to change as wereflect on the world at hand. We need tools for and practice inthat reflective process. The norms that drive action need toshift from the ego-centered sources that have accompanied theevolution of the Enlightenment to a community andintersubjective foundation if the deeper, underlying causes of
unsustainability (mostly unmentioned in the book) are to beaddressed. Nothing much will change as long as the power
structures remain as they are. Do any of you really think that
equity will come about through trickle-down, alone? After all,that is what more profits mean to most.
Readers certainly should pay close attention to the solutions that are offered up in Natural Capitalism, but theyshould also be acutely conscious of what is missing. Manyknow how many times they have tried to lose weight by following the latest how-to book or employed the current hot
consultant to help find the winning strategy, only to observe
later that not much had changed. The members of SoL canmake an immense contribution to a sustainable future bypicking up the ideas of Natural Capitalism and adding thelearning environment that is absolutely critical if any of the
new practices are to become familiar in the everyday sense
so essential to sustainability.

Difficult Conversations, Douglas Stone, Bruce Patton,
and Sheila Heen, Viking Press (1999)
Review by Joel Yanowitz
Organizations have been described as complex networks ofconversations. Conversations have been described as the lifeblood of organizational life. We are all too familiar with thedifficulties of having truly productive, authentic interactions

News & Views

One of the stars, Interface Inc., has indeed created a novel
way of selling the service of its carpets instead of the carpet
itself. But, the book fails to mention that the company hascompletely failed to find a market for this idea. With only
one or two such contracts in place after several years of trying, the company still relies overwhelmingly on standard
sales of the carpet tiles they make. Lovins’ favorite subject—hypercars—dominates much of the book. These replacements for the current environmentally and sociallydevastating (and completely unnecessary internal combustion–powered) vehicles “are quickly becoming a reality,” according to the authors. My reading of what is happening is
not so sanguine. In spite of all the technological superiority
claimed for the hypercar, there is little sign of it on the roads
or even in the showrooms. The futuristic promise of concept
cars, always a big splash at world’s fairs and auto shows,takes decades to materialize, if ever realized at all.
Natural Capitalism is virtually entirely technological incontent: new machines, new policy instruments, new marketing structures, and so on. The benefits of adopting the efficient solutions that are sprinkled throughout the text aremeasured in percentage reductions, but the impacts of human activities on the ecological and social systems are always consequences of absolute effects. The now better than
90% reduction (factor 20+) of tailpipe emissions from thedinosaur vehicles we all drive today has been overwhelmed
by a larger-percent increase in vehicle miles driven, even in
the already affluent United States.
Only rarely do the authors hint at what it would take tomake such changes happen routinely at levels ranging fromindividuals and firms to whole societies, much less the wholeworld. All in the organizational learning world share somesense of the immense shifts in the structures that underlie
action that would have to be involved. The book fails to address (or really even mention) the changes in thinking and in
structure that must precede and follow a transition to thekind of world suggested by the authors. Who would invest innatural capital if they do not, first, appreciate the importanceof the natural world and, second, give up the [false] security
blanket of free ridership, leaving the job as always to someone else? How do we get organizations that have been doing
design forever throw out their entire process and replace itwith something completely foreign to them?
And we are also aware of the existing and problematiccommitments that powerful interests have in maintaining thestatus quo. The present rules favor the firms that play today’s
game best. The win-win opportunities may not be so numerous or convincing that they would be grabbed even if someof the more obvious barriers were removed. Philips Electronics recently withdrew their ecologically designed compact TV
for lack of market demand. In times past, utopian communities have sprung up full of worldly visions that broke throughthe then-limited faulty mental models and nonsystematic
thinking—but all eventually fall away. Such ideas have
moved from the border to the center only when the rules thatgovern societal action change.
As someone who has been laboring in the same fields
for as long as or longer than even the authors have, I foundit exceedingly difficult to write this review. I respect and admire the voice and passion they give to their beliefs here andin other venues, and I hope for nothing more than an eventthat provides a wake-up call to the world and adds a story
that contains the seeds of transformation—but this book is

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News & Views

82

within a high-paced, high-pressure work environment. Toomany conversations produce little more than superficial understanding or agreement and at times lead to significant misunderstandings and breakdowns in key relationships or activities.
Illuminating the complex causes of these nonproductive
interactions and providing a road map for handling thetoughest conversational challenges is an ambitious undertaking. As an experienced manager, coach, and consultant, I
was skeptical of any book’s ability to deliver on such a grandpromise. To complicate matters, the book’s scope is not limited to the professional arena. As the book cover states, it
includes “your boss, your kids, your spouse, your friends,
and your clients.” The authors of Difficult Conversations succeed in their task. They have written a clear and concise
book that bridges theory, tools, and action; provides concrete
examples; and leaves the reader with greater willingness andconfidence to engage in new approaches and behaviors.
What precisely are “difficult conversations?” We are all
faced with conversations we dread and find unpleasant. Thesemay concern high-stakes issues with uncertain outcomes,
where we care deeply about the people and issues involved,
or they may appear to be about small, unimportant issues thatnevertheless cause us to feel vulnerable or threatened. In
those situations, the authors describe a core dilemma: Do weavoid the conversation and hope that somehow it will improveor go away, or do we engage in the conversation, knowing thatdoing so might make things even worse?
Like any dilemma, choosing either alternative is unsatisfactory. We must learn a way to get beyond the either-or
trap of the dilemma. The authors suggest that the way out
lies not only in learning new skills and techniques but in
shifting one’s orientation. In order to break new ground andproduce fundamentally different results, the focus of one’s
conversation needs to shift from a “message delivery stance”
to a “learning stance.”
The second section of the book helps us understand what
is involved in adopting the learning stance by first decoding
what actually happens when difficult conversations go poorly.
We learn about three different parallel conversations that canbe distinguished in our communications. The “What happened” conversation focuses on what took place when, who
did what to whom, and who’s right and who’s to blame. In
parallel with the “What happened?” conversation, every conversation also has an emotional dimension. This “feelings conversation” is concerned with what I am feeling: Are thosefeelings valid and appropriate, do I acknowledge and sharethem, and how I deal with the other person’s emotions? Finally, we are introduced to the “identity conversation.” This is
our internal conversation about the meaning of the conversation and the situation in which it takes place: Am I competentor incompetent, a good person or bad, worthy or unworthy?
This internal identity conversation affects the degree to which
we stay centered or become anxious and off-balance.
The authors walk us through each of these three conversations, providing examples and frameworks for understanding and assessing our own situations. Here is where the shift
to a learning stance becomes more concrete.
In the “What happened?” conversation, the book explains
why and how we get into problematic arguments, why weeach see the world so differently, and how those different
world-views can keep us stuck in nonproductive interactions.
Shifting from delivering messages to learning provides an essential foundation for holding qualitatively different conversa-

tions. By genuinely seeking to understand how the other party
views what happened, we begin to see the gaps in our own
story and appreciate the validity of their different perspective.
In the “feelings conversation” section, the authors explore
a fundamental bind present in many of these conversations:
Expressing our feelings often seems inappropriate or counterproductive, yet not expressing feelings makes it difficult to listen to the other person. Our unexpressed feelings often
unavoidably “leak” into the conversation in ways that create
greater upset or misunderstanding. As with the “What happened?” conversation, the authors provide a framework for understanding how to deal with the “feelings conversation” froma learning stance and then provide concrete approaches thatbuild on some of the stories and examples provided earlier.
The “identity conversation” illustrates how difficult conversations threaten our identity as competent, good, lovablepeople. An approach is described to enable us to become
more grounded in our identity and maintain or regain ourbalance when our identity is threatened. While conceptuallysimple, their suggestions have great depth and need to bepracticed over time to support the shift to a learning stance.
Finally, the authors integrate our understanding of thesethree conversations in a step-by-step process that leads us fromunderstanding to action. Readers familiar with many of thetheory, tools, and frameworks of organizational learning willrecognize such concepts as the ladder of inference, the distinctions between advocacy and inquiry, and the challenge of integrating our internal unspoken conversation into actual
conversation. The book focuses on practical understanding andaction, based on the authors’ thorough theoretical knowledge.
While at times it may spread itself a bit too thin by covering theory and action in a wide variety of settings, the comprehensiveness of the book is a welcome change from more
simplistic or prescriptive approaches to addressing discrete
communication problems. It is well-written, enjoyable toread, and immediately usable by anyone attempting to create
fundamental organizational change.

Communities of Practice: Learning, Meaning, andIdentity, Etienne Wenger, Cambridge University Press(1998)
Review by John D. Smith
Even though the term is relatively recent, working with communities of practice has been central to the organizational
learning community’s work for many years. This note reviews
Etienne Wenger’s book, Communities of Practice: Learning,
Meaning, and Identity, uses the organizational learning initiative recounted in the AutoCo Learning History to illustratesome of Wenger’s ideas (appended at the end of the review
under the heading, Artifacts that Define Communities), andposes some questions that Wenger’s perspective raises for thedifferent communities of practice that make up the larger organizational learning community.
Communities of Practice develops a framework for thinking about learning that is useful for researchers and practitioners who are concerned with the growth of competence inorganizational settings. The topic is subtle and complex; attimes, reading this book is arduous. Wenger proposes that it
is in communities of practice that we learn, negotiate meaning, and develop identities. He argues that communities ofpractice can be described along three dimensions: mutual en-

Volume 1, Number 2, REFLECTIONSThe organizational learning community may be one of
the few communities fully capable of appreciating the deeper
challenges that are implicit in Wenger’s book. When Wenger
writes, “Learning is not a separate activity,” he is proposing avery different stance from what is implied when we talk casually about “becoming a learning organization.” Communities
of Practice does not prescribe an intervention. Rather, it provides a perspective on how people and their communities andtheir organizations already do learn. We might legitimately
argue that some organizations are not learning what theyshould, but that is very different from saying that they are notlearning at all. Here are some challenges and questions forresearchers, practitioners, and change agents that, from ourseveral different perspectives, we might consider embracing:News & Views

gagement, joint enterprise, and shared repertoire. The wonderful quips and quotidian examples that run through the bookremind readers that the topic is both ordinary and important.
It’s tricky to talk about a secret that’s in plain sight. I readCommunities of Practice as a call to reflection that will lead toaction. It is a philosophy book relevant to work and business.
The book begins with two extended narratives that describe personal experience and group interactions in a community of practice. These intimate vignettes ground theconcepts and arguments developed throughout the book. The
richness and complexity of the learning that insurance claims
processors engage in every day may be surprising and is certainly inspiring.
Communities of Practice will be interesting in different
ways to each of the different communities that constitute thelarger organizational learning community. It should be useful to researchers in that it intersects with much of our thinking while it is still distinct enough to yield new questions andnew insights. Its main contribution here is to identify andbegin to map out a stratum of experience and competencethat mediates between individual and social levels. For practitioners in organizations, the book points out that communities of practice are alive and making fundamental (butpossibly secret) contributions to organizational performance.
It provides a framework for thinking about which policies
and practices might be more community-friendly. For consultants and change agents, the book offers a perspective onorganizational learning (and resistance to learning) thatavoids the dualism between subject and object that can corrupt our work. Supporting communities of practice in organizations is an importa nt domain of participation inorganizational learning: organizations do not change withoutchanges to the communities of practice that constitute them.

Researchers: How can researchers play a leadership role inunderstanding how communities of practice produce
learning, meaning, and identity? Were we to see communities of practice both as subject and as intended recipients of the research artifacts we produce, would we think
differently about the research enterprise?
Practitioners: As communities of practice become a more
central element of organizational learning and knowledgemanagement practice, there is a strong temptation to reify
and reduce them, imagining that they can be “produced”
or “leveraged,” and that they should be accounted for or
managed like other assets. How can we appreciate the audacity of this simple goal to become friendly to communities of practice?
Change Agents: If we adopt the framework that Wenger
proposes, we face some subtle but important issues about
how we enter an organizational system and the beliefs

Artifacts That Define Communities
Learning histories are ideal vehicles for enlarging the peripheries of communities of practice, allowing successive
generations to join in a community’s conversations and inviting people with entirely different perspectives (such as
researchers or change agents) to join in conversations
about the politics of learning in a specific organizationalsituation. As devices for increasing the ability of the organizational learning community as a whole to be reflective,
their proper role is to capture collective experience so thatnew ideas can be tested and exercised more fully.
The “harmony buck” was a full-sized prototype of an
automobile that engineers could use to test how parts fit
together early in the design process. “The Learning Initiative at the AutoCo Epsilon Program, 1991-1994,” describes
how several different communities of practice, including
engineers, suppliers, and managers, worked to produce
the harmony buck. The story tells how those communities
used the harmony buck and were affected by the conversations that the new artifact triggered.
Engineer: “You could go down there anytime in the
day and there’d be ten to fifteen people around thisthing, all doing something different.”
The idea of “practice” focuses us on how all thosepeople are doing the same thing—becoming more compe-

REFLECTIONS, Volume 1, Number 2

tent. The harmony buck became the opportunity for negotiating meaning between individuals and communities. A
white board and a computerized concern (“problem”)
tracking system were a means for communication between
communities that saw themselves as quite separate.
Program Manager: “Whenever someone found a
problem on the harmony buck, it was written onthat board. And the rule was that you couldn’t evererase something from the board unless you had
placed a concern number behind it.”
Giving managers, suppliers and other communities
full access to the harmony buck and the repertoire of reflective activity around it enabled their participation at apoint where effective and economical learning and action
could still take place. One of the most interesting aspectsof the harmony buck story is that the innovation became
standard practice. From the perspective that Wenger proposes, this success would be attri buted to thecommunity’s full appropriation of a new reflective element into its repertoire. The negotiations around participation and the various artifacts enable learning. The
learning history plays the same role—allowing us to negotiate the meaning of our experience—for the organizational learning community.

83News & Views

that we bring along. What does it mean for us to commute back and forth between the community of change
agents (which defines our identity and competence) andthe communities of practice in a target organization(where we gain meaningful experience of organizationalchange)? What does our community need to become, tosupport this to-and-fro?

As a final argument for giving Communities of Practice a
careful reading, I would claim that Wenger’s approach makes
the following paradox a manageable one, where meaningfulaction becomes possible: “No community can fully design
the learning of another. No community can fully design its
own learning.”

Book Announcement s

84

The Learning History Library
Oxford University Press is proud to announce a new series,
The Learning History Library, edited by Art Kleiner andGeorge Roth, originators of the learning history concept.
These extended “living” case studies use an innovative format based on “the jointly told tale” to help narrate the storyof major intrafirm transitions. The learning history succeeds
in balancing traditional research with pragmatic imperatives
and powerful imagery and will ultimately prepare individuals
for similar experiences in their own firms.
Car Launch: The Human Side of Managing Change (July
1999, 224 pp; cloth $22.95) is the first book in The Learning
History Library series. This book explores the turmoil occurring in the automobile industry and shows how one company
was able to succeed dramatically even while facing the rigors
of open opposition. Told in the words of the people who were
there, with commentary by the authors and other observers,
this document was first commissioned by the firm (AutoCo)
to help production teams learn from each other across organizational boundaries. It also provides an “insider” look at relationships between subordinates and bosses. This story will
be of interest to any individual who is, or will be, engaged intransformation work and who wants to improve development
and manufacturing operations.
Oil Change: Perspectives on Corporate Transformation(1999, 224 pp; 10 illus,, cloth, $22.95) is the second book in
The Learning History Library series. It is the story of major
corporate change undertaken by Oil Co, a pseudonym for amajor international oil company, just after a time of layoffs
and cutbacks. Key people within the company tell this story,
using a technique developed at Massachusetts Institute ofTechnology’s Center for Organizational Learning. One hundred and fifty employees were interviewed at all levels of thecompany, from hourly workers to the executive council. They
worked in all primary Oil Co businesses: exploration and production, refining and retail, chemical and oil consulting. During this time, all the firm’s values came into questi on,
including its business practices, corporate governance structure, team management, and leadership style.

Organizational Learning and the Learning Organization:
Developments in Theory and Practice
Edited by Mark Easterby-Smith, John Burgoyne, andLuis Araujo
Sage Publications, 1999, paperback, 256 pp., $27.95
Organizational Learning and the Learning Organization provides an original overview of key debates within the field oforganizational learning from the perspectives of practitioners
and academics. The first part of the book concentrates on key
theoretical debates on organizational learning, while the second focuses on implementations with organizational settings
and their evaluations. The book aims to examine the interrelationship between ideas about organizational learning andthe learning organization—to see what practice can learn
from theory and vice versa.
Contributors include Mark Easterby-Smith and Luis
Araujo; Christiane Prange; David Sims; Marleen Huysman;
Bente Elkjaer; Hallie Preskill and Rosalie Torres; Nancy Dixon;
Matthias Finger and Silvia Bürgin Brand; Amy Edmondson andBertrand Moingeon; Karen Ayas; Frank Blackler, Norman
Crump, and Seonaidh McDonald; Elena Antonacopoulou.

Work-Based Learning: The New Frontier of Management
Development
by Joseph Raelin
Prentice Hall Business Publishing, 1999, paperback, 297
pp., $42.67
Previously offered by Addison-Wesley in the Organizational
Development series, this book will be helpful to anyone who
educates within the workplace or is interested in promoting
and delivering an alternative to standard training within
their organization. Loaded with examples from his twentyfive years as an educator and consultant, Raelin’s book shows
you how to learn while doing your own job. He demonstrates
how to invoke and then document the collective learning process to make it accessible to everyone— and even contagious—within an organizational environment.

The Corporate Culture Survival Guide
by Edgar H. Schein
Jossey-Bass Publishers, 1999, hardcover, 224 pp., $24.00
The Corporate Culture Survival Guide offers practicing managers and consultants involved in culture change programs apractical guide on how to think about corporate culture, what
culture is about, how culture issues vary with the stage ofevolution of an organization, and, most important, what is
involved in culture change and culture blending in mergers,
acquisitions and joint ventures. It presents models for how tothink about the change process, provides case illustrations,and has practical exercises in each chapter to help the manager think about culture issues.

Volume 1, Number 2, REFLECTIONS