Capitalism 3.0: An Institutional Revolution In the Making

06/05/2010 Wong AuditoriumOtto Scharmer, Senior LecturerDescription: C. Otto Scharmer points to what he calls a "blindspot" in
contemporary leadership research: the organization and management of
attention. He argues that there are different kinds of awareness or
attentiveness, that different problems require different qualities of or
approaches to awareness. Leaders who understand this can adapt
the structure of their awareness to optimize their approaches to
specific problems.

Scharmer claims we are
passing though a period requiring a new approach to awareness,
especially on the part of society's leaders. In these times,
leaders the need to navigate multiple deeply interlinked crises (such as
climate change, health care, and fiscal management), all of which
include a radical transformation in the relation of business to
society (which Scharmer calls "Capitalism 3.0"). He argues that
managing these crises requires a new target or focus for innovation:
"innovation at the level of the entire system" which requires a leadership that understands the nature of its
awareness, how that awareness is managed, and how it affects relations
with various collaborators and stakeholders.

One feature of this new understanding is a deliberate effort to "listen
outside the institutional bubble". A second is to set aside time to
"retreat and reflect". A third is prototyping various solutions,
"exploring by doing". He advocates recruiting collaborators in this
last effort, since the experience gained can inform and advance the

However the most important feature of the awareness required by our
present situation is what Scharmer calls "generative listening"
-- listening through the filter of the space of future
possibilities. He calls this "leading by listening".

In a stunning example of this type of leadership flexibility, Scharmer shows a video clip of a concert in which
conductor Zubin Mehta visibly steps back and forth through
several leadership roles with regard to soloist Placido Domingo,
sometimes leading and sometimes allowing himself to be led by
the tenor. He directs his own lack of direction. Scharmer believes
that the subtlety and skill demonstrated by that kind of listening can
find applications in many other contexts.About the Speaker(s): C. Otto Scharmer is a Senior Lecturer at MIT Sloan School of Management and the founding chair of ELIAS (Emerging Leaders for Innovation Across Sectors), an initiative focused on developing profound system innovations for a more sustainable world. ELIAS links twenty leading global institutions across the three sectors of business, government, and civil society. He also is a visiting professor at the Center for Innovation and Knowledge Research, Helsinki School of Economics, and the founding chair of the Presencing Institute, a research initiative on developing and advancing social technologies for leading innovation and change.

Scharmer has consulted with global companies, international institutions, and cross"sector change initiatives in North America, Europe, Asia, and Africa. He has co"designed and delivered award"winning leadership programs for client organizations including DaimlerChrysler, PricewaterhouseCoopers, and Fujitsu.

He is the author of numerous articles and books, including Theory U: Leading from the Future as It Emerges (2007) and Presence: An Exploration of Profound Change in People, Organizations and Society (2005), co"authored with Peter Senge, Joseph Jaworski, and Betty Sue Flowers.
Host(s): Sloan School of Management, MIT Sloan School of Management


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