Business as a Human Community

Interview with Peter Senge

Peter Senge is a senior lecturer at the Massachusetts Institute of Technology and founding chair of the SoL (Society for Organizational Learning) Council. He is the author of The Fifth Discipline: The Art and Practice of the Learning Organization, co-author of the three related fieldbooks and most recently Presence: Human Purpose and the Field of the Future.

SGI Quarterly: How and why should business be motivated to contribute to sustainability?

Senge: The "why" is kind of easy, because I think business is arguably the most powerful institution in our modern society. Whether we like it or not, it's a fact. The impact of businesses is really unique. They cross more boundaries, they are more global than any national government. The major issues in the world--energy, climate change, food, water, materials waste and toxicity--these cross all boundaries and in many ways are the key interdependencies between developed and developing countries. And business fits right in the center of that web of interdependence. So that's the "why."

The "how" is a lot trickier, because first off businesses have traditionally not focused on these issues, with the exception that many good businesses are naturally concerned about their impact on their local environment, both the communities in which they operate and the natural systems. In some sense, you could define a good business by its sensitivity to its environment. And that's not new: Businesses have historically been involved in their local communities, helped schools, etc.

The members of the business organization are citizens where they live. So, I think there's a long tradition of this sort of local responsibility. Some companies are better at it than others. Some are totally negligent. But usually the ones that survive for a long time are relatively more responsible and sensitive than those that aren't. I think the big shift is that now the sensitivity and awareness of your impact must be not just local but global.

The really tricky part is how corporations start to get engaged around these issues. Ultimately they're businesses, so they have to make it relevant to the business; they can't do this as philanthropic gestures. The companies that are doing this successfully see what they are doing as part of what it takes to be a good business. If you take a long enough view and you think broadly enough, today you really must think about your impact globally. And that's the key to the "how."

The Mythology of Business

SGIQ: You stress what might be called the organic model of the corporation.

Senge: If you go back far enough, it was quite common to think of a company first and foremost as a human community. Literally the word company derives from a French expression compaignier, sharing of bread, the same root as the word companion. So deep in the basic idea of a company is the idea that it's a human community, a group of people who are doing something together that has some meaning to them, something that makes a contribution that they care deeply about.

The problem has come in the last 50 to 75 years, particularly with the growth of business schools and large consulting firms. The dominant mythology has become that the purpose of the company is to maximize return on investors' capital. That starts you thinking about the company as a machine for making money. This has nothing to do with making a profit. You can't be a viable company if you don't make a profit. This has to do with what is primary and what is secondary. For a human community, profit is the consequence of being effective in pursuit of your purpose or mission. Or, is a company first and foremost a machine for making money, and the people and relationships among them is secondary, they are simply "human resources" needed by this machine.

It's not surprising that if we think in machine-like terms, we are going to be rather toxic to the larger living environment. But if we think of ourselves as a human community, a living system, then we are naturally concerned about our impact on the larger communities of which we are part. This is why a larger sense of responsibility has always been a hallmark of well-established, "good" companies: it's not that much of a stretch to realize that we don't want to destroy the living systems we operate in, because it will be contradictory to our own life. As a human community we have an ethical foundation based on our empathy and compassion for the larger living systems within which we as a living system exist.

But I think you have to appreciate the tremendous impact this new mythology of business as a machine has had the last 75 years or so. Today, it really is unquestioned and unquestionable for a lot of people. The very idea that the purpose of a company might be something other than returning maximum return to the shareholders can seem unquestionable. But many credible people have challenged this idea. Peter Drucker used to say: Profit for a company is like oxygen to a person, you have to have it or you're not in the game, but it has nothing to do with your purpose. Unfortunately business is run today by many people who went through MBA programs where they all learned the financial theory of the firm. It's simply a mythology, but mythologies often become reality for people.

As one company president put it, "Who would miss us if we were gone?" It's a great question. Because it brings things back to a very human level. Because it's not the investors. The investors will always find someone else to give them return on their invested capital.

Purpose and Fear

SGIQ: How can individuals and organizations better deal with fear of change?

Senge: I think in the same way we do it in our lives; it has a lot to do with relationships. Fear is a natural state. Life naturally creates conditions that induce fear. But, if we have a network of supportive relationships, people with whom we can talk and help one another, that's how we get through it. That, plus our own personal capacity to process or be with the fear and allow it to have its way but not completely control us. The two are always related: our personal capacity and our social context. I think that companies that get into big trouble with fear are companies that have really low levels of relationships. They don't do a good job of creating an environment where people feel connected to one another. And I'd say this is very common in business. If anything, it's more prevalent today than ever before, right to the top of the organization, to the CEO--people are often in a state of perpetual fear. They're afraid of losing their job, of looking foolish, of not making the next quarter's financial targets. Again, it's not the existence of this fear that is the problem, it's the inability to deal with the fear. And that does come down, in my opinion, to the quality of openness, the trust and relationships within organizations.

SGIQ: Is being with fear what you mean when you speak of the importance of "presence"?

In a sense, yes. But there is another feature of what we call presence, and that has to do with being open to the future. To the extent that one has little real sense of purpose or purposefulness, I think you're more vulnerable to fear. Because basically all you have is what you have, if you don't have some larger sense of purpose you're living into. So you're always potentially in a state of fear of losing what you have. A lot of resistance to change comes down to this: the fear of losing what I have.

I think this relates in very direct ways to ideas of attachment and nonattachment. To the extent that we are living our lives as a kind of process, as a continual unfolding, and there is a quality of mystery that we embrace, and uncertainty--we expect things to change, we expect to lose things that we hold precious. That doesn't mean it's easy, that we don't fight it, that we're not afraid from time to time. But the mystery and purposefulness create an additional dimensionality to our lives that is really important.

I think there is a lot of fear, even among very successful CEOs and entrepreneurs to the extent that they are isolated, and to the extent that there isn't a network of friends and colleagues with whom they can reflect on their personal journeys, talk about what matters to them, positive or negative. I think it's cultural to some degree. In contemporary Western culture, it's very easy to become isolated. I think there is often a kind of conspiracy of silence around the deeper personal dimensions of our lives and our leadership. So we can't talk about the fact that we can't talk about it.

Learning Organizations

SGIQ: Opening up to others is just seen as exposure, vulnerability that could be exploited.

Senge: I think that's a very specific fear, particularly for people in positions of leadership, but it's true for everybody. The most obvious example is in a company when something goes wrong and everyone starts pointing their fingers at somebody else. This is because it feels very risky to say, "I think we screwed up here," or even, "I screwed up here." And that goes right up to the top of the organization. It's so ironic if you think about it. For one thing, we're all human beings, which means we are continuously screwing up everything we do. And second, the same people who are petrified of acknowledging that they made a mistake love to talk about how important learning is. But what is learning but a process of discovering your screwups and getting better at not screwing up in that way?

SGIQ: I suppose that relates to the idea of sharing a vision toward which an organization or even a whole culture is moving.

Senge: There is a particular vulnerability that can go with speaking about vision because you can seem naive, romantic, idealistic. As you know, pragmatism and "toughness"--making tough decisions and all that--is very valued in business. So to have a commitment to something larger than yourself, and longer-term than your tenure, can seem very silly to a lot of people. And this is ironic, because I think it's one of the cornerstones to truly great organizations. They create an environment where people can be very grounded in the requirements of today and next month, and next quarter, and simultaneously be able to talk about what they imagine the organization has contributed and how they imagine it being in 30 years. To be an effective visionary you must also be connected to the realities of today.