Compendium on Senges’ The Fifth Discipline: The Art & Practice of the Learning Organization addresses the essentials of a healthy, growing organization. He asserts that when personal mastery, mental models, building shared vision, team learning, and systems thinking converge, a dynamic is unleashed to move any institution forward. For him, the often overlooked, fifth discipline is systems thinking.

This million-copy author exposes learning disabilities that evolve in organizations. One of these disabilities is a culture whereby employees tend to see themselves limited to their positions. When asked, these workers describe their position, not the purpose of the organization. As such, vast segments of the organization contribute little toward the final product, thus limiting the knowledge-pool to a handful of managers, disconnected from the actual daily production.

Senge’s second disability is the belief that problems are externally caused. One part of the organization blames another part for its inability to function. Or each will blame an outside entity. As such, each intradepartmental solution is perceived as lacking.

Third, Senge claims that when we take a linear approach to problem-solving, the vogue notion of being “proactive,” is in fact reaction in disguise. To him, true proactivity comes from seeing how we contribute to our own problems. He notes a leading property and liability insurance company, whose management team decided to be “pro-active” because of the toll litigation was taking on company profits. They would not wait for significant lawsuits, but would pre-empt them.

When the team noted the likely fraction of cases that might be won, overhead costs, time cases would stay in litigation, etc., the team decided that they could not win enough cases to offset the costs. Their proactivity was in fact reacting to a single cause, leading to creating other problems.
Next, the author asserts that a learning disability is evidenced when an institution fixes on events to deal with problems. A school would demonstrate this disability, as conversations are regularly centered around enrollment, test results, who was hired or fired, new curricula competing schools announced, etc.

According to Senge, ‘Maladaption to gradually building threats to survival is so pervasive in systems studies of corporate failure that it has given rise to the parable of the “boiled frog.”’ The fifth learning disability of any organization is failure to see slow, gradual processes. To be able to do this, he asserts that leaders must slow down their frenetic pace and pay attention to the subtle as well as the dramatic.

The sixth learning disability is the delusion of learning from experience. He asserts that we each have a “learning horizon,” a breadth of vision in time and space within which we assess our effectiveness. This is similar to Vygotsky’s, “Zone of Proximal Learning.”

When our actions have consequences beyond our learning horizon, it becomes impossible to learn from experience. He says this is the core dilemma, “the most critical decisions made in organizations have systemwide consequences that stretch over years or decades.” So, any short-term fix may be temporary or spin-off other problems that will not be seen for years to come.

Another common problem is that management teams tend to spend their time fighting for turf, avoiding anything that will make them look bad personally, and pretending that everyone is behind the team’s collective strategy. To keep up the image of cohesion, they squelch disagreement, people with serious reservations avoid stating them publicly, and joint decisions are watered-down compromises reflecting what everyone can live with, or else reflecting one person’s view foisted on the group. If there is disagreement, it’s usually expressed in a manner that lays blame.

Management tends to find collective inquiry inherently threatening. Management schools tend to train them to never admit they do not know the answers.

From outlining the various learning pathologies, Senge focuses attention on the problem of organizations suffering from linearity, trying to implement cause-and-effect solutions to complex environments. He contends that “problems originate in basic ways of thinking and interacting, more than in peculiarities of organization structure and policy.”

He exemplifies this problem by a game designed at MIT, called the “beer game.” In the game, the complexities of forecasting supplies in a demand fluctuation are shown by the interactions between a retailer, wholesaler, and manufacturer. Because each leader thought in linear terms, failed to perceive the impact of delays as well as the interrelatedness of each part of the supply- chain, each business wound up with a glut of supplies and net loss of profit.

From this, the reader is to learn three things:

1. Structure Influences Behavior. When placed in the same system, people, however different, tend to produce similar results. By observing the patterns of behavior, one breaks the grip of short-term reactiveness.
2. Structure in Human Systems is Subtle. The structure in complex living systems means the basic interrelationships that control behavior, this includes how people make decisions, the operating policies whereby we translate perceptions, goals, rules, and norms into action.
3. Leverage Often Comes from New Ways of Thinking. Generative learning requires a conceptual framework of systemic thinking, the ability to discover structural causes of behavior.

The author expounds on seven archetypes (recurring patterns of structure) of systems thinking. Once leaders are able to observe the archetypes, they are freed from previously unseen forces and ultimately master the ability to work with them and change them.

Balancing Process with Delay – A person, group, or organization, acting toward a goal adjusts their behavior in response to delayed feedback. If they are not conscious of the delay, they end up taking more corrective action than needed, or just giving up because they cannot see that any progress is being made. The management principle is that in a sluggish system, aggressiveness produces instability. Either be patient or make the system more responsive.
Limits to Growth – As in Newtonian theory, every action has an equal opposite reaction, a process feeds on itself to produce a period of growth or expansion. Then the growth begins to slow, and eventually inexplicably comes to a halt, and may begin to decline. As per educational theorist, Kurt Lewin, the management principal is NOT to push harder, but remove or weaken the source of the limitation.

Shifting the Burden – A short-term “solution” is used to correct a problem, with immediate results. As this correction is used more and more, more fundamental long-term corrective measures are used less and less. Over time, the

LAWS OF SYSTEMS THINKING

1. Today’s problems came from yesterday’s “solutions.”
2. In organizations, the harder you push, the harder the system pushes back. Called “compensating feedback,” well-intentioned interventions result in responses from the system that offset the benefit of the intervention.
3. Behavior grows better before it grows worse.
4. Errantly, leaders apply familiar solutions to problems, “sticking to what we know best,” which ultimately leads to the same results.
5. The cure can be worse than the disease. Ultimately leading to the demise of the company.
6. Faster is slower. All natural systems, from ecosystems to animals to organizations have intrinsically optimal rates of growth. This optimal rate is far less than the fastest possible growth. To artificially supercede the optimal growth itself creates inhibitors to growth.
7. Leaders must realize that cause and effect are not closely related in time and space. This is a major fallacy leading to wrong decision-making.
8. Small changes can produce big results, but the areas of highest leverage are often the least obvious.
9. Some of the knottiest dilemmas, when seen from the systems point of view, aren’t dilemmas at all. They are artifacts of “snapshot” rather than “process” thinking, and appear in a whole new light once you think consciously of change over time.
10. It is important to realize that systems have integrity. Their character depends on the whole.
11. There must be a culture that avoids blame, and scape-goating.
capabilities for the fundamental solution may atrophy or become disabled, leading to an even greater reliance on the symptomatic solution. The management principal is to focus on the fundamental solution. If symptomatic solution is imperative, use it only to by time while working on the fundamental solution.

Shifting the Burden to the Intervenor – This is when outside “intervenors” try to help solve problems. If outside help is needed, “helpers” should be strictly limited to a one-time intervention, or may be able to help people develop their own skills, resources, and infrastructure to be more capable in the future. The management principal is to “teach people to fish, rather than giving them fish.”

Eroding Goals – This is where short-term solutions involve letting a long-term fundamental goal decline. The management principal is to hold to the vision.

Escalation – Two people, departments, or organizations each see their welfare as depending on a relative advantage over the other. The management principal is to find ways for mutual winning.

Success to be Successful – This is where two activities compete for limited support and resources. The more successful one becomes, the more support it gains, thereby starving the other. The management principal is to look for overarching goals for balanced achievement of both choices. In some cases, break or weaken the coupling between the two, so that they do not compete for the same limited resources.

Tragedy of the Commons – Individuals use a commonly available but limited resource solely on the basis of individual need. At first they are rewarded for using it. Eventually, they get diminishing returns, which causes them to intensify their efforts. Eventually, the resource is either significantly depleted, eroded, or entirely used up. The management is to manage the “commons,” either through educating everyone and creating forms of self-regulation and peer pressure, or through an official regulating mechanism, ideally designed by participants.

Fixes that Fail – A fix, effective in the short term, has unforeseen long-term consequences which may require even more use of the same fix. The management principal is to focus on the long-term. Disregard short-term fixes, or only use it to buy time to work on a long-term memory.

Growth and Underinvestment – Growth approaches a limit which can be eliminated or pushed into the future if the firm, or individual, invests in additional “capacity.” But the investment must be aggressive and sufficiently rapid to forestall reduced growth, or else it will never get made. Oftentimes, key goals are lowered to justify underinvestment. When this happens, there is a self-fulfilling prophecy where lower goals lead to lower expectations, which are then borne out by poor performance caused by underinvestment. The management principal is if there is a genuine potential for growth. Build capacity in advance of demand, as a strategy for creating demand. Hold the vision, especially as regards assessing key performance standards and evaluating whether capacity to meet potential demand is adequate.

The problem with this approach is that decisions by leaders often create different problems by solving others. If organizations are going to flourish, a complex strategy, based upon the proper assumptions is essential.

Senge says, to understand the most challenging managerial issues requires seeing the whole system that generates the issues. The key principle, called “principle of the system boundary,” is that the interactions that must be examined are those most important to the issue at hand regardless of parochial organizational boundaries. For him, what makes it difficult to implement is the way that most organizations are set up to keep people from seeing important interactions.

In mastering systems thinking, we give up the assumption that there is an individual, or individual agent, responsible. For example, managers frequently fail to appreciate the extent to which their own expectations influence subordinates’ performance. This creates a “Pygmalion effect,” whereby the teacher’s opinion of a student influences the behavior of that student. In systems thinking everyone shares responsibility for problems generated by a system, including the observer.

This hands-on application of chaos theory in organizations, claims that only by leaders going through a paradigm shift whereby they are able to view a tapestry of concurrent patterns simultaneously, are these leaders enabled to lead their organizations over these disabilities.