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Capitalism 3.0: An Institutional Revolution In the Making

C. Otto Scharmer
June 5, 2010
Running Time: 01:18:01
About the Lecture

About the Lecture

C. Otto Scharmer points to what he calls a "blind spot" 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 relationship.

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.

    Lecture Details

  • Location: Wong Auditorium

“We collectively create results that no one wants. If you think about the outcomes, the bigger outcomes that we create, that’s true for most systems today. That’s the absence of leadership….But then some people say it's not just leadership, it’s a civilization crisis, in terms of rethinking the way we live and work together…That’s a problem we cannot solve with math. That’s a problem we can only solve if we develop another muscle in our intelligence, and that’s the muscle of deep self-reflection.”

C. Otto Scharmer

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About the Speaker

About the Speaker

C. Otto Scharmer

Senior Lecturer, Organization Studies
MIT Sloan School of Management

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.

About the Host

About the Host

MIT Sloan School of Management

The MIT Sloan School of Management, based in Cambridge, Massachusetts, is one of the world’s leading business schools — conducting cutting-edge research and providing management education to top students from more than 60 countries. The School is part of MIT’s rich intellectual tradition of education and research.

MIT Sloan began in 1914 as engineering administration curriculum in the MIT Department of Economics and Statistics. The scope and depth of this educational focus have grown steadily in response to advances in the theory and practice of management to today’s broad-based management school.

A program offering a master’s degree in management was established in 1925. The world’s first university-based executive education program — the MIT Sloan Fellows — was created in 1931 under the sponsorship of Alfred P. Sloan, Jr., an 1895 MIT graduate who was then chairman of General Motors. A MIT Sloan Foundation grant established the MIT School of Industrial Management in 1952 with a charge of educating the “ideal manager.”