Leading from the Emerging Future

From Ego-System to Eco-System Economies

C. Otto Scharmer (Author) | Katrin Kaufer (Author)

Publication date: 06/10/2013

Bestseller over 30,000+ copies sold

Leading from the Emerging Future

We must move away from an obsolete "ego-system" awareness that focuses entirely on the well-being of the individual-be it a single person, group, organization, or country-to an eco-system awareness that emphasizes the well-being of the whole.

  • By the author of the bestselling Theory U
  • Provides a profound new analysis identifying the underlying causes of the economic, social, and spiritual-cultural crises of our time
  • Offers a practical method that will enable leaders to address key challenges and create an economy that generates well-being for all

We have entered an age of disruption. Financial collapse, climate change, resource depletion, and a growing gap between rich and poor are but a few of the signs. Collectively, despite our best efforts, we are producing results that nobody wants.

Having worked in hot spots of societal innovation and conducted interviews with thought leaders, innovators, and change makers worldwide, Otto Scharmer and Katrin Kaufer argue that we need to jettison the old frames and habits of thought left over from the 19th and 20th centuries. Meeting the challenges of this century requires updating our economic logic and operating system.

We must move away from an obsolete "ego-system" awareness that focuses entirely on the well-being of the individual-be it a single person, group, organization, or country-to an eco-system awareness that emphasizes the well-being of the whole. To free ourselves from outmoded ways of perceiving the world, we need the capacity to sense and actualize emerging future possibilities, both individually and collectively. Scharmer and Kaufer here describe a method they call presencing (a combination of the words presence and sensing). It enables the development of institutional innovation and new leadership capacities so leaders can connect to the highest future possibility and become part of what brings it about.

Scharmer and Kaufer take readers on a thought-provoking journey filled with real-world examples that will help leaders and change makers transform and renew business, society, and the self. They present a proven program for developing leadership skills that will bring about innovation in all sectors and create an economy that works in more intentional, inclusive, sustainable, and inspired ways.

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Overview

We must move away from an obsolete "ego-system" awareness that focuses entirely on the well-being of the individual-be it a single person, group, organization, or country-to an eco-system awareness that emphasizes the well-being of the whole.

  • By the author of the bestselling Theory U
  • Provides a profound new analysis identifying the underlying causes of the economic, social, and spiritual-cultural crises of our time
  • Offers a practical method that will enable leaders to address key challenges and create an economy that generates well-being for all

We have entered an age of disruption. Financial collapse, climate change, resource depletion, and a growing gap between rich and poor are but a few of the signs. Collectively, despite our best efforts, we are producing results that nobody wants.

Having worked in hot spots of societal innovation and conducted interviews with thought leaders, innovators, and change makers worldwide, Otto Scharmer and Katrin Kaufer argue that we need to jettison the old frames and habits of thought left over from the 19th and 20th centuries. Meeting the challenges of this century requires updating our economic logic and operating system.

We must move away from an obsolete "ego-system" awareness that focuses entirely on the well-being of the individual-be it a single person, group, organization, or country-to an eco-system awareness that emphasizes the well-being of the whole. To free ourselves from outmoded ways of perceiving the world, we need the capacity to sense and actualize emerging future possibilities, both individually and collectively. Scharmer and Kaufer here describe a method they call presencing (a combination of the words presence and sensing). It enables the development of institutional innovation and new leadership capacities so leaders can connect to the highest future possibility and become part of what brings it about.

Scharmer and Kaufer take readers on a thought-provoking journey filled with real-world examples that will help leaders and change makers transform and renew business, society, and the self. They present a proven program for developing leadership skills that will bring about innovation in all sectors and create an economy that works in more intentional, inclusive, sustainable, and inspired ways.

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Meet the Authors


Visit Author Page - C. Otto Scharmer

Dr. Otto Scharmer, author of Theory U and co-author of Presence, is a senior lecturer at the Massachusetts Institute of Technology (MIT) and the founding chair of the Presencing Institute. He also is faculty chair of MIT’s IDEAS program and a visiting professor at Tsinghua University, Beijing. In 2012 he co-founded the Global Well-Being and Gross National Happiness (GNH) Lab, which links innovators from Bhutan, India, China, Brazil, Europe, and the United States in order to prototype profound innovations in government, business, education, and civil society. He has worked with governments, UN organizations, companies, and NGOs in Africa, Asia, the Americas, and Europe, and he has delivered award-winning leadership and innovation programs for clients including Alibaba, Daimler, Eileen Fisher, Fujitsu, Google, Natura, and PriceWaterhouse. Scharmer is currently a vice-chair of the World Economic Forum’s Global Agenda Council on New Leadership Models. He holds a PhD in economics and management from Witten-Herdecke University in Germany. He lives with his family in the Boston area. More information about Scharmer and his work can be found at www.presencing.com and www.ottoscharmer.com.



Visit Author Page - Katrin Kaufer

Dr. Katrin Kaufer is co-founder and research director at the Presencing Institute and research fellow at the Community Innovators Lab (CoLab) at MIT’s Department of Urban Studies and Planning. Her research focuses on leadership, social transformation, and socially responsible banking. She has consulted with midsized and global companies, nonprofit organizations, the World Bank, and the United Nations Development Programme. She currently works with the Global Alliance for Banking on Values, a network of twenty financial institutions that focus on relinking finance with a shared intention for positive social change. She also co-developed the Global Classroom concept at the Presencing Institute, an online learning platform that links live-streamed virtual classroom interaction with small-group dialogue and local action. Kaufer earned her MBA and PhD from Witten-Herdecke University in Germany. Her dissertation focused on socially responsible banking. She lives with her family in the Boston area. More information can be found at www.presencing.com.

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Table of Contents

Introduction: Breathing Life into a Dying System

1 On the Surface: Symptoms of Death and Rebirth

2 Structure: Systemic Disconnects

3 Transforming Thought: The Matrix of Economic

Evolution

4 Source: Connecting to Intention and Awareness

5 Leading the Personal Inversion: From Me to We

6 Leading the Relational Inversion: From Ego to Eco

7 Leading the Institutional Inversion: Toward Eco‑System

Economies

8 Leading from the Emerging Future: Now

Acknowledgments

Notes

Index

About the Authors

About the Presencing Institute

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Excerpt

Leading from the Emerging Future

1
On the Surface: Symptoms of Death and Rebirth

This chapter explores the symptoms at the tip of the iceberg of our current reality. We move from the toppling of tyrants to an exploration of the deeper fault lines that keep generating the disruptive changes of our time. We also look at these disruptive events from the viewpoint of change-makers: In the face of disruption, what determines whether we end up in moments of madness or mindfulness?

The Toppling of Tyrants

In the fall of 1989, two weeks before the Berlin Wall crumbled, we took an international student group to East Berlin, where we met with civil rights activists in the basement of a church. At one point, the professor who was with us, peace researcher Johan Galtung, put a prediction on the table: “The Berlin Wall will come down before the end of the year.” Everybody doubted that, including the people who were organizing the resistance against the East German regime. And we were all wrong. The Wall came down and the Cold War came to an end just months after that meeting.

Nearly two decades later, in the fall of 2008, the bankruptcy of Lehman Brothers, a global financial services firm, sent shock waves around the globe and within hours brought the financial systems of the United States and Europe to the brink of collapse. Today the remaining Wall Street megabanks and their European counterparts have survived because of massive taxpayer-financed bailouts from their governments. On October 11 of that year, the head of the International Monetary Fund (IMF) warned that the world financial system was teetering on the “brink of systemic meltdown.”1

In December 2010, Mohamed Bouazizi, a young fruit and vegetable seller in Tunisia, set himself on fire in protest of his treatment by police, who wanted to extract bribes from him and, when he refused, took away his merchandise and beat him. In January 2011, a twenty-six-year-old Egyptian activist, Asmaa Mahfouz, posted a video online urging people to protest the “corrupt government” of Egypt’s president, Hosni Mubarak, by rallying in Cairo’s Tahrir Square.2 With that video she sparked and inspired an uprising among the Egyptian population. A week later, on January 25, thousands joined her in Tahrir Square. Within days, the movement counted millions. At first the Egyptian police responded with brutality. But less than four weeks after Mahfouz had posted her initial video, President Mubarak resigned.

A month later, a 9.0 earthquake struck off the coast of Japan, generating a massive tsunami that killed more than twenty thousand people. The Fukushima Daiichi nuclear power plant was protected by a seawall designed to withstand a tsunami of 19 feet (5.7 meters). Minutes after the earthquake struck, a tsunami of 46 feet (14 meters) arrived, easily crossing the seawall and knocking out the plant’s emergency power generators. As a consequence, the radioactive fuel began overheating and put the plant on a path toward catastrophic meltdown.

As the year went on, the Arab Spring spread across the globe. Muammar Gaddafi was toppled in Libya. The Occupy Wall Street movement, which took inspiration in part from the Arab Spring, staged actions in more than a thousand cities across the globe.3

The collapse of the Berlin Wall, the demise of the Mubarak and Gaddafi regimes, the meltdown of the Fukushima Daiichi nuclear power plant, and the near-meltdown of the western financial system all share some features:

1. the end of an inflexible, centralized control structure, one that previously had been considered indestructible

2. the beginning of a spontaneous, decentralized grassroots movement of people letting go of their fear and waking up to another level of awareness and interconnectedness

3. the opening of some small cracks in the old system, followed by its crumbling and eventual collapse

4. the rebound of the old forces as soon as the memory of the collapse began to fade away; the old forces tried to obscure the actual root causes of the breakdown in order to extend their privileged access to power and influence (an example is Wall Street’s financial oligarchy)

We believe that these kinds of events will keep coming our way. These disruptive changes mark the beginning of a new era that we have entered as a global community, an era of increasing disruption. Sometimes such movements will give rise to movements that bring about profound change, and sometimes they will falter and fail. In many cases, as we discuss later in the book, these disruptions are already on their way. It is too late to prevent all of them. So where is our point of control? It is in how we respond to the impact that these disruptions have on how we work and live.

A disruptive change affects not only our outer world, but also our inner self. Such moments bring our world to a sudden stop. They may be terrifying, but they also constitute a great blank space that can be filled in one of two ways: by freezing and reverting to the patterns of the past, or by opening us up to the highest future possibilities. The second response—leaning into, sensing, and actualizing one’s emerging future—is what this book is about.

Presencing

At the moment when we reach the point of meltdown, we have a choice: We can freeze and revert to our deeply ingrained habits of the past, or we can stop and lean into the space of the unknown, lean into that which wants to emerge.

This second possibility—to lean into and connect to our highest future potential—we refer to as presencing. As noted in the introduction, the word presencing merges the terms presence and sensing. It means to sense and operate from the presence of an emerging future field. As we connect with this field of heightened awareness, our attention morphs from slowing down, opening up, redirecting, and letting go to letting come, crystallizing, and embodying the new. Figure 4 (see the introduction) summarizes this process.

The process of connecting to our Self, our highest future possibility, and moving toward action can be a sequence that we go through in an instant or over a period of many years. It is an archetype of the human journey. It is a process of opening up, of allowing something new to land, to emerge, and to come into reality through us.

A real-life example of this process was sparked by the video that Asmaa Mahfouz posted on January 18, 2011, which inspired people around the world. In it, she speaks from a place that transcends the three primary obstacles—doubt, cynicism, and fear—that prevent us from connecting to our source of deep presence and authenticity.

Instead of expressing doubt, which government propaganda tried to perpetuate, she speaks with great clarity. Instead of expressing cynicism, she speaks from a state of deep connection and empathy. And instead of expressing fear, which would isolate her, she speaks from a place of vulnerability, commitment, and courage:

Four Egyptians have set themselves on fire to protest humiliation and hunger and poverty and degradation they had to live with for 30 years. Four Egyptians have set themselves on fire thinking maybe we can have a revolution like Tunisia; maybe we can have freedom, justice, honor, and human dignity. Today, one of these four has died, and I saw people commenting and saying, “May God forgive him. He committed a sin and killed himself for nothing.”

People, have some shame.

I posted that I, a girl, am going down to Tahrir Square, and I will stand alone. And I’ll hold up a banner. Perhaps people will show some honor. I even wrote my number so maybe people will come down with me. No one came except three guys—three guys and three armored cars of riot police. And tens of hired thugs and officers came to terrorize us. They shoved us roughly away from the people. But as soon as we were alone with them, they started to talk to us. They said, “Enough! These guys who burned themselves were psychopaths.” Of course, on all national media, whoever dies in protest is a psychopath. If they were psychopaths, why did they burn themselves at the parliament building?

I’m making this video to give you one simple message: We want to go down to Tahrir Square on January 25th. If we still have honor and want to live in dignity on this land, we have to go down on January 25th. We’ll go down and demand our rights, our fundamental human rights.4

The first time Mahfouz went to Tahrir Square, she was, as she says, joined by three young men. The next time, a week after posting the video blog, she was joined by over fifty thousand protesters, and a week later, on February 1, over one million people protested peacefully. On February 11, the supposedly “unsinkable” regime was finished and Mubarak resigned.

This process of co-creating disruptive change is not a singular, isolated case. It is part of a much bigger picture that is starting to become visible now. We have seen similar efforts in several other sectors, systems, and cultures. The change-makers embarking on these journeys venture away from well-known paths and put themselves at the edges of the unknown. They are connecting to deep sources of knowing, sensing the future that wants to emerge. But more often than not, change leaders don’t talk about this deep personal zone of change because there is no widely understood or accepted language for doing so.

Mahfouz is a very visible figure at the tip of an iceberg that may represent, in the words of the author and activist Paul Hawken, “the largest movement in all of social history.”5 It includes grassroots civil society movements that have brought down the tyrant-led regimes in Egypt and Tunisia, the Communist-led regimes in Eastern Europe, and the apartheid regime in South Africa. The movement also includes a new breed of business entrepreneurs who create “hybrid” business enterprises that aim for a triple bottom line, combining profitability with a social mission and environmental objectives.

This new global movement has no name, no leader, no ideology, no single program, no single center. Instead people are sharing a new interior field, an emerging field of connection and consciousness, a collective concern about the well-being of all living beings, including our planet.

Absencing

Of course, presencing doesn’t happen if we are on autopilot. When confronting a moment of meltdown, instead of leaning into the future, we can also choose to revert to habitual patterns of the past. Mubarak did that on February 10, 2011, when he initially refused to step down. Erich Honecker and the East German Politburo did it in the early fall of 1989, trying to hold on to their crumbling system. The Wall Street banks did it on the brink of collapse, when they still couldn’t resist further expanding their power through, in the words of former IMF Chief Economist Simon Johnson, “a quiet coup.”6 The Catholic Church does it when, even in the face of the most heart-wrenching cases of child abuse, it holds on to its old institutional routines. But it’s not just them. We all do this when we refuse to let go of what worked in the past but no longer does.

Whenever we respond to the inner space of emptiness by downloading the old rather than by leaning into the new, we are embarking on and co-enacting a journey of social pathology that looks roughly like this: downloading, denying, de-sensing, absencing, deluding, destroying, and (eventually) self-destroying.

As shown in figure 5 in the introduction, the absencing journey is the inversion of the presencing journey. Instead of opening the mind, heart, and will, the absencing cycle holds on tightly to the past. It does not dare to lean into the unknown, the emerging future. As a consequence, the space of absencing throws us into a trajectory of denial (not seeing what is going on), de-sensing (lacking empathy with the other), absencing (losing the connection to one’s higher Self), delusion (being guided by illusions), and destruction (destroying others and ourselves).

A good illustration of absencing is what Hitler and the Nazis did to Central Europe and the rest of the world. Today, look at what we are doing collectively to our own planet. The fundamental pattern is the same.

Thus, being thrown into the space of absencing means getting stuck in the tyrannies of

1. One Truth (ideology)

2. One “Us” versus “Them” (rigid collectivism)

3. One Will (fanaticism)

The triple tyranny of “One Truth, One Us, One Will” is also referred to as fundamentalism. It’s the structure that people rose up against in World War II. Whether we talk about the struggle for decolonization and independence in the global South, the struggles against the apartheid system in South Africa, or the struggle against tyrannical regimes in Eastern Europe, Latin America, and North Africa, the deeper struggle in all these places has always been the same: People keep rising and fighting against the same tyranny that emerges from the fundamentalism of One Truth (a closed mind), One Us (a closed heart), and One Will (a closed will). That rigid worldview has led to social structures defined by three key features:

1. unilateral, linear communication

2. low, exclusion-based transparency

3. an intention to serve the well-being of the few

The alternative is not well defined, but could be sketched as follows:

1. multilateral, cyclical communication

2. high, inclusion-based transparency

3. an intention to serve the well-being of all

How to achieve the second model is a central topic of this book. And what is striking today is that most people on the planet would probably reject the first model, which merely reproduces widespread structural and cultural violence.7

The battle over the fundamentalism we are referring to here will not be won by defeating Al Qaeda. It’s a battle for the future of our planet. It will not be won by dropping bombs on other people. The primary battlefield of this century is with our Selves. It is a battle between the self and the Self: between our existing, habituated self and our emerging future Self, both individually and collectively. It is a battle between absencing and presencing that plays out across all sectors and systems of society today.

Moments of Madness and Mindfulness

What determines whether we as individuals, teams, institutions, and systems operate from the state of absencing or the state of presencing? What is the lever that allows us to shift from one state to the other? What can we do to move from madness to mindfulness?

Let us look at a concrete example. On April 26, 1986, an accident happened at reactor number four of the Chernobyl nuclear power plant in Ukraine. As the worst-case scenario started to unfold, the children and citizens of the city next door, Pripyat, received no warnings. Citizens of the region, Russian and European, were exposed to a cloud of nuclear radiation that first traveled north to Scandinavia and then covered almost all of Europe and its 500 million inhabitants.

Not only were Europe’s citizens not warned about the potential threat, even the top Soviet leaders in the Kremlin were in the dark. Mikhail Gorbachev, who at the time was general secretary of the Communist Party, recounts: “I got a call around 5 A.M. I was told there was some accident at the Chernobyl nuclear plant. The first information consisted of ‘accident’ and ‘fire.’ The information report was that everything was sound including the reactor. … At first, I have been told there was no explosion. The consequences of this information were particularly dramatic. … What had happened? A nuclear explosion, a cloud, serious contamination? It was Sweden that alerted us!”8

Gorbachev was told that the accident posed no threat to the surrounding environment and was under control. No one, according to Gorbachev, told him in these early days that a series of explosions had occurred in the core of the reactor and had blown the twelve-thousand-ton cover of the reactor into the air, releasing a highly radioactive vapor into the environment. Later, high radiation levels set off alarms at the Forsmakr Nuclear Power Plant in Sweden, over a thousand kilometers away. The Swedish government alerted its population about radioactive dust.

Although radiation was still emanating unchecked from the Chernobyl plant, the evacuation of citizens living next to the plant did not begin until more than twenty-four hours after the accident. Only after Gorbachev formed a commission of nuclear experts and gave them access to unlimited resources, people, and technology did a full-blown crisis response begin.

At the same time that this crisis response was unfolding, many of the old patterns of downloading continued to play out—with disastrous consequences. The nuclear experts met in a hotel next to the damaged power plant in a city that had been fully evacuated, thereby exposing themselves to high levels of radiation that at least some of them must have been aware of. Even the traditional May First celebrations were held in Kiev, the capital of Ukraine, less than one hundred kilometers away from the disaster area. Local high officials attended.

In a later interview, Gorbachev reflected on the reaction of the nuclear experts: “These were outstanding people, specialists. I could not believe they would do something [so] irresponsible, suicidal. The experts underestimated the situation. The old criteria weren’t any good anymore. There had been nuclear accidents before … [but] there had never been an accident of this scope. They [the nuclear experts] even thought the power plant would be back in service—by May or June.”9

Then, finally, when the full gravity of the nuclear catastrophe had sunk in, the Soviet Union mobilized five hundred thousand people in the battle to prevent an even bigger catastrophe. The decontamination and cleanup efforts continue today, consuming 5 to 7 percent of annual government spending in Ukraine (2003–05 figures).10

Another example of responding to a challenge by downloading old patterns of behavior was provided by the French Minister for Public Health and Social Security, Pierre Pellerin, who claimed that the cloud of nuclear fallout, which had reached all of Northern, Central, and Western Europe, had never crossed the borders into France. (France still derives over 75 percent of its electricity from nuclear energy, the highest percentage in the world.)

The Chernobyl catastrophe is a stark example of how downloading old behavior in a context in which it no longer fits results in patterns of denial, data distortion, delusion, destruction, and self-destruction. But the story does not end here. Gorbachev realized that if the melted nuclear core had reached the groundwater beneath the reactor, Europe might have become an uninhabitable wasteland. He says, “Chernobyl showed us the true nature of nuclear energy in human hands. We calculated that our most powerful missiles, the SS-18s, were as powerful as 100 Chernobyls. … And we had 2,700 of them, and they were intended for the Americans. Imagine the destruction. … Chernobyl convinced everyone, Soviets and Americans alike, . . . [of] the magnitude of the nuclear volcano our countries are sitting on. Not just our two countries, but the entire world!”11 A year and a half after Chernobyl, Gorbachev retired all of the Soviet Union’s nuclear warheads with a range of five hundred to five thousand kilometers.

Watching the catastrophic events of Chernobyl unfold, Gorbachev allowed his thoughts to slow down and his mind to become aware, to let go of the old military logic of MAD—mutually assured destruction—and to let the seeds of disarmament germinate and grow. These seeds ended up changing the course of world history for the better.12

This story raises an obvious question: How should the course of disruptive events, those beginning to shake up our planet as we speak, affect our thoughts and awareness as a global community today? What is it that we need to let go of? And what seeds of the future do we need to let germinate and grow?

Fault Lines

Natural catastrophes like volcanic eruptions, earthquakes, and tsunamis tend to happen along the fault lines of tectonic plates—that is, in regions where the earth’s tectonic plates meet and exert their massive force against each other. We can’t fully predict where or when major ruptures and eruptions will happen. But knowing the geography of the fault lines means knowing the zones of potential impact.

Social and economic breakdowns and eruptions are very similar in this regard. They tend to show up along the fault lines that divide the collective social body of our communities and societies. Again, we cannot fully predict when or where a disaster will occur, but understanding the space of possibility allows us to be much more attentive to subtle signals that foreshadow bigger events like the collapse of the Berlin Wall, the meltdown of the financial system, and the toppling of authoritarian regimes.

What is the geography of the major fault lines that divide the collective socioeconomic body—the sum total of human relationships—today? We believe that there are three major fault lines, concerning three principal relationships that we engage in as human beings: (1) our relationship with nature and our planet; (2) our relationships with one another; and (3) our relationship with ourselves. When these relationships rupture, they create three divides: ecological, social, and spiritual-cultural.

THE ECOLOGICAL DIVIDE

The ecological divide is the fault line in the relationship between humans and nature. In spite of significant improvements in eco-efficient production methods, all advances in increased resource efficiency have been overshadowed by the so-called rebound effect: that is, by higher levels of total output (GDP) that lead to higher absolute numbers of resource use. Today we overuse the regeneration capacity of our planet by 50 percent. If current trends continue, our overuse will grow to an unimaginable three planets by 2050.13 Of course, this is never going to happen, as severe ecological disruptions will set us on a different path. Nevertheless, it shows how irresponsible our current developmental path truly is. Here are some of the current and short-term symptoms:

Water. During the twentieth century, the global demand for fresh water increased sixfold, according to the United Nations Environment Programme (UNEP). This was accompanied by a reduced supply of fresh water. As a result, water is in short supply in countries where one-third of the world’s population lives. Moreover, about one in every five people on earth lacks access to safe drinking water.14

Soil. The loss of topsoil is largely irreversible during the course of a human lifetime. Soil forms at a rate of approximately one centimeter every one hundred to four hundred years.15 Yet, over the past forty years, soil erosion has caused nearly a third of the world’s arable land to become unproductive.16 This translates into two billion hectares of arable and grazing land worldwide, an area larger than the United States and Mexico combined.17

Climate. From 1995 to 2006, every year except one ranks among the twelve warmest years ever recorded.18 Carbon dioxide is at record levels in the atmosphere. In November 2012, the World Bank released a report warning that the world is “barreling down a path to heat up by four degrees [Celsius] at the end of the century.” The result would mean extreme heat waves, a likely sea level rise of 0.5 to 1 meter by the year 2100, with higher levels possible, and smaller island nations becoming unable to sustain their populations.19

Eco-systems. The Millennium Eco-System Assessment concludes that “over the past 50 years, humans have changed eco-systems more rapidly and extensively than in any comparable period of time in human history, largely to meet rapidly growing demands for food, fresh water, timber, fiber, and fuel. This has resulted in a substantial and largely irreversible loss in the diversity of life on earth.”20 About 60 percent of the eco-systems examined during this comprehensive four-year study were found to be degraded or were being used unsustainably.

According to the UNEP, which has made extensive efforts to put a price on the “services” humans derive from natural eco-systems, the ecological infrastructure of the planet is generating services to humanity worth over US$70 trillion a year, perhaps substantially more. “Mismanagement of natural and nature-based assets,” says UNEP Executive Director Achim Steiner, “is undercutting development on a scale that dwarfs the recent economic crisis.”21

THE SOCIOECONOMIC DIVIDE

With the financial crisis of the early twenty-first century, awareness of the socioeconomic divide within societies around the world has grown. The fault lines are increasingly visible. Globally, the richest 1 percent own 40 percent of the world’s wealth, while half of the world’s population own just 1 percent.22 This disparity is one of many that reveal the rapidly deepening socioeconomic divide. On the income side, the numbers are similar: The top 10 percent receive one-half of the world’s income.23

Although enormous progress has been made in lifting hundreds of millions of people out of poverty—particularly in Asia—the social divide has in fact deepened over the past thirty years, as evidenced by the following observations:

Hunger. One in eight people around the world go to bed hungry at night. Of those experiencing hunger, 98 percent live in developing countries.24

Poverty. Over 2.47 billion people live on less than US$2.50 a day; 1.3 billion people live in extreme poverty, meaning that they live on less than US$1.25 a day (in 2008 dollars).25 Their most basic needs go unmet.

Inequality. Recent research points to issues related to income inequality, including civil unrest, immigration and refugee crises, recession, and slow economic growth.26 In 2008, the International Labour Organization (ILO) conducted a global study of income inequality in more than seventy developed and developing countries.27 Key findings include that, in 70 percent of countries surveyed, the income gap between the top and bottom 10 percent of the population increased over the preceding twenty years.28

THE SPIRITUAL-CULTURAL DIVIDE

While ecological and social divides concern the split between self and nature and between self and other, the spiritual-cultural divide concerns the split between self and Self. One symptom of this split is our level of happiness and well-being, and related issues of burnout, depression, and suicide. Burnout and depression have increased over the past fifty years, even in countries where material standards of living have been rising rapidly.29

In the past forty-five years, suicide rates have increased by 60 percent worldwide.30 Suicide is the second leading cause of death (after accidents) among American high school and college students.31 On a global scale, suicide is among the three leading causes of death in the fifteen to forty-four age group.32 This shocking number is the tip of the iceberg of humans’ violence against themselves.

In a 2011 lecture in Vienna, I (Otto) asked the audience members to turn to their neighbors and talk about where in their life and work they were experiencing something that was dying and where they saw something beginning or wanting to be born. One executive of a large international company put his experience like this: “I notice an incipient gap between what my organization makes me do, such as running cost-cutting and downsizing programs, and what I really want to do with my work and life going forward.” He described his situation, saying that his organization required him to do things even when his personal feelings and thoughts would point in an opposite direction. But because those feelings and thoughts were not strong enough to convince him to change course, he kept going.

That incipient crack or gap is an important symptom of our current collective situation. Is this executive from Vienna a single case, or does he represent a much larger group? From our experience, we think it is the latter. For example, when I teach my class at MIT, roughly half the room is filled with midcareer executives from around the world. Early on in the class, I ask each participant to say what has brought him or her there. The comment I hear most often is something like this: “I am so underinspired by what my company asks me to do. The higher I climb on the corporate career ladder, the less inspired I get. I am here to learn how to reconnect with the sources of my energy and best work.”

These cracks between exterior demands and interior aspirations and needs matter because, if not attended to, they can quickly morph into something larger, including burnout, depression, or worse. Think about the functional elites of the socialist regimes in Eastern Europe during the early 1980s. They knew that there was something deeply broken in the system. And yet almost no one dared to look carefully at the cracks on the surface and investigate their deeper systemic causes. What the business executives in Vienna and at MIT described is a subtle, early-stage crack that, if ignored, will only grow over time. It is no less serious than the cracks in the broken socialist regimes before their collapse. If you start paying attention to these initial cracks—the fault lines—you will begin to recognize them as voices telling you that you need to change your life; and, yes, that all of us need to change our lives!

Three Divides, One Stream

The three divides that compose the surface of symptoms are highly intertwined. For example, the loss of meaning in life and work (the inner void) is often filled with additional material consumption (consumerism), which deepens the ecological divide by further depleting resources. The intensification of the natural resource stream flowing from the developing to the developed countries, and the waste streams flowing the opposite way, leads in turn to a deepening of the social divide.33 In short: inner void → consumerism → ecological divide → social divide.

While we spent most of the twentieth century addressing these problems one issue at a time, today we see that people are moving away from this approach. In particular, young people consider it common sense that these problems are not separate; they are three different aspects of one deeper issue. And they recognize that addressing the underlying issue will take a profound systems shift.

The process of becoming aware of this necessary system shift began in the last third of the twentieth century. During the late 1960s, ’70s, and ’80s, a new breed of civil society movements began to rise up. Vietnam War protests. Civil rights. Women’s rights. Social justice. Fair trade. Environmental action. Antinuke. Antiwar. Antiapartheid. Anti–authoritarian regimes. These were followed by more recent movements: climate action. Arab Spring. Occupy. Local living economies. Slow food. Slow money. All these movements were harbingers and catalysts of a broadening and deepening of global awareness.

But the problem with the first wave of civil society movements was that they tended to focus on only one or two of the three divides. Environmental activists largely ignored the social and consciousness dimensions of change. The social justice movement paid little attention to the environment or to consciousness. And New Age consciousness movements got lost in personal liberation instead of using awareness as a gateway to social transformation.

Our colleague at MIT, Professor Phil Thompson, provides a vivid example of this from his experience as deputy general manager at the New York City Housing Authority (NYCHA) in the early 1990s. Years before he began working at NYCHA, the housing authority had been required by the federal Clean Air Act to stop incinerating garbage and to bag garbage in low-income housing projects for weekly pickup. This move was celebrated by many in the environmental movement. But in order to free up the resources necessary to bag garbage for more than five hundred thousand people, NYCHA had to cut a host of programs, including youth programs, maintenance, and other needed services. At the same time, NYCHA staff received little support from environmentalists to address the problems facing residents of public housing and therefore did little to promote recycling or other environmental initiatives there. The unintended result was a host of angry and disenfranchised citizens with no motivation to participate in the environmental program.

We will not see any significant progress unless all three of the deep divides are approached in an integrated way. This combined approach is what we believe we see in the currently emerging second wave of civic and social-entrepreneurial initiatives all over the world. The rise of this movement, in which people spontaneously act from an awareness of contributing to the well-being of the whole, is an enormous source of hope for the future of this planet.

Conclusion and Practices

This chapter described the symptoms of our current landscape. We believe that we have entered an age of disruption in which individuals, institutions, and societies face new types of challenges that require them to let go of habitual ways of responding. These moments of opportunity invite us to sense and actualize emerging future possibilities. But if we fail to lean into this deeper process of presencing, we will become stuck in the patterns of the past, frozen in a reaction that throws us into the cycle of absencing (denying, de-sensing, deluding, and destroying).

JOURNALING QUESTIONS

Take a journal (or blank piece of paper) and write your responses to the questions below. Spend no more than one to two minutes answering each question. Number your responses.

1. Where do you experience a world that is dying (in society, in your organization, in yourself)?

2. Where do you experience a world that is waiting to be born (in society, in your organization, in yourself)?

3. Where have you experienced moments of disruption? And what did you notice about your own process of presencing or absencing?

4. How do the ecological, socioeconomic, and spiritual-cultural divides show up in your personal experience of work and life?

CIRCLE CONVERSATION

Assemble a circle of five to seven individuals and hold a first meeting to share the context that each person brings to the circle. Respond to the following:

1. Introduce your personal story with one or two formative experiences that shaped the person you are.

2. Where do you experience a world that is ending/dying, and where do you experience a world that is beginning/wanting to be born?

3. What do you consider to be the root causes and issues of our current crisis and the three divides?

4. What do you personally feel is going to happen over the next ten to twenty years?

5. What would you like to do right now in order to make a difference going forward?

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Endorsements

“A watershed! An inspiring, practical weaving of the inner and outer dimensions of the systemic changes so many around the world are now working toward.”
—Peter Senge, Senior Lecturer, MIT Sloan School of Management; Founding Chair, Society for Organizational Learning; and author of The Fifth Discipline

“Scharmer and Kaufer have succeeded in writing the book that has the potential to transform civilization from one based on a rapacious, ego-driven economics to a viable, ecological, awareness-based model. This is a must-read for anyone who cares. It may well be the single most important book you ever read.”
—Arthur Zajonc, President, Mind and Life Institute, and author of Meditation as Contemplative Inquiry

“Scharmer and Kaufer provide a creative and practical approach to shifting our economies. I see business as a movement, and this book shares that movement with the world, offering us inspiration to tap into the deeper levels of our humanity and urging us to transform the crises of our times.”
—Eileen Fisher, founder, Eileen Fisher, Inc.

“The shift to an eco-system economy is emerging everywhere around us. Otto's and Katrin's clarity in identifying that this shift requires change-makers to expand our thinking from the head to the heart has helped me to be more intentional in designing processes to awaken the hearts of entrepreneurs everywhere. This is a necessary condition for the emergence of the new economy.”
—Michelle Long, Executive Director, Business Alliance for Local Living Economies

“The purpose of business is to enhance the well-being of society. The 4.0 framework for transforming capitalism matters because it addresses a blind spot in our current discourse: how to create institutional innovations that could shift our economy from ego- to eco-system awareness at the scale of the whole.”
—Guilherme Peirão Leal, founder and Cochairman, Natura Cosméticos

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