Learning Organisations

Last week I introduced the idea that a “plan” need not be a statement of how we expect the future to be, but rather a framework for how we can learn about reality as we take conscious action in an uncertain, unpredictable and poorly understood world. This is the mode of planning that is required if we are to learn how to build an economy that provides enough for everyone. So when I talk about Government planning, I do not have in mind the “planned economies” of communist countries in the previous century. We need to embrace institutional learning within government, public life and society as a whole.

There is a huge literature on organisational learning, but arguably the most influential work is The Fifth Discipline: The Art and Practice of The Learning Organisation by Peter Senge. It must be emphasised that this is not some fringe, weirdo book. In 1997 Harvard Business Review identified it as one of the seminal management books of the previous 75 years, and in 2011 (over 20 years since it was first published) Time Magazine included it in a list of the 25 most influential business management books.

Senge presents 5 “disciplines” which he says are necessary to create a learning organisation:

  • Shared Vision
  • Personal Mastery
  • Mental Models
  • Team Learning
  • Systems Thinking

Senge’s work specifically concerns learning within individual organisations. This week I am treating the the country as a whole as an “organisation”, with the Government as its “Board of Directors”, and will show how all these concepts apply to our learning together, as a society, how to provide enough for everyone.

Shared Vision

In the ‘90s, “vision” and “mission” became two of the most annoying management buzzwords. Every organisation had a vision or mission statement, which seemed to be an excuse to write meaningless, incoherent sentences full of the latest trendy buzzwords. But some vision statements were powerful, and came true, sometimes to an almost chilling extent: “A computer on every desk and in every home running Microsoft software.” Senge has a lot of intelligent guidance about how to develop vision in an organisation such that it means something to employees and inspires them.

When we scale this up to the level of society, the cliched example of a leader setting a powerful vision is Kennedy’s speech about putting a man on the moon. Another example would be Martin Luther King’s “I have a dream” speech. Applying the idea in economic terms, Jeffrey Sachs (referred to two weeks ago) specifically promotes the need for a global mission to end poverty.

Right now, one of the most important and relevant economists working in the world is Mariana Mazzucato (whose work was briefly described earlier in the blog). She founded the the Institute for Innovation and Public Purpose (IIPP) at University College London (UCL), and from there is primarily promoting the concept of mission-orientated innovation.

In her earlier work (building on giants such as Reinert, Freeman and Perez) she demonstrated that the state has always played a role in promoting and nurturing innovation and economic progress, for example funding all the basic science that underlies all our technology. Understanding how our economies function means understanding this role that the state has always played. More recently, she has been advocating the need for government’s to step up to the mark and set a vision and mission for creating a world powered by sustainable, renewable energy.

This need still remains, but with the coronavirus crisis the more immediate need is for government’s to step in and sustain our economies through this crisis and rebuild them afterwards. We are all going to pay the price for not, as a global society, having learnt how to do this before now.

Personal Mastery

It’s not all up to the government. Nothing happens if people don’t act. Indeed, Senge suggests that a shared vision can only grow from personal visions. Hence, this approach resolves the dichotomy between collectivism and individualism. Individuals have to play their part and make their contribution, but they need to do so as part of a coherent, collective effort. The state, for its part, can achieve the most by unlocking the potential of its citizens through education, rather than directly trying to plan and control everything. I’ve previously used the analogy that the state is like a gardener, not an engineer – it needs to create the conditions in which the initiative of its citizens can thrive.

In an earlier post I made the point that for the political philosophy of individualism to have any validity whatsoever, there needs to be a process of education that ensures that all people have the intellectual capacity to use their personal liberty intelligently. This at the very least requires the ability to research and assess evidence, analyse a situation, and then make choices that follow logically from this, consistent with one’s own values. But I also pointed out that if we go back to the founding principle of socialism – that man is a social animal and human society is inherently cooperative – then the starting point for building societies based on this principle is providing education that develops the potential of everyone to participate and to contribute.

This is a matter of huge significance, and if it hasn’t struck you, read the last two paragraphs again. Modern politics is riven with crude dichotomies. We pick a side, and then believe everything that side promotes and reject everything from our opponents. This dynamic stops us from thinking rationally and from perceiving reality with an open and unbiased mind (a dynamic referred to in the final paragraph of the post on socialism). The combination of “shared vision” and “personal mastery” represents a way of thinking about society that resolves this dichotomy, and recognises the dynamic interplay between the individual and the collective, between a sense of shared, collective mission and personal responsibility for our contribution to society.

Mental Models

“Mental model” is a term for our internal model of how the world works (you may also come across the terms “mental map” or “conceptual framework” – they mean the same thing). These “models” (or “maps”, or “frameworks”) are continually evolving and changing, but most people are not conscious of this process. As I’ve stated before, most people do not consciously reflect on and decide what their “model” is. They gradually develop unconscious habits of thought, they soak up ideas from the society around them. Shared ideas about how society works become a political philosophy or ideology, a worldview, a defining element of culture, that in turn permeate society and limit the way that people see and understand the world around them.

This entire section of the blog is fundamentally about how the current dominant worldview has become the lens through which we all see the world, distorting our perception of reality. The facts about how our economies work, facts that can be gleaned by studying how our economic institutions and systems actually function and by studying the history of economic development in recent centuries, do not fit within this worldview. Hence, the conclusions reached by this blog run so far counter to what is commonly believed in British society, that I wrote this section of the blog to explain why so many false notions about the economy are lodged so deeply in people’s heads.

In this context, you can perhaps see why learning to become conscious of our mental models and then learning how to inspect them dispassionately and revise them consciously in the light of evidence is so important to a learning organisation. But the critical need for this has been made clear by recent global events.

First of all, immediately following the Brexit referendum in 2016, and during the subsequent US presidential election, journalists started writing about “post-truth politics” (a term coined many years before that was gradually gaining traction). It describes an approach to political debate that is not based on establishing facts and rational argument, but rather the repetition of talking points and slogans and appeals to emotion and identity. What is particularly shocking is that much of the reporting of this merely presented it as the way things are now – it wasn’t perceived as a national crisis.

Matters have come to a head with the politicisation of science during the current coronavirus crisis. There is such a desire among many people to criticise the politicians they don’t like that they look for flaws in the science that has guided decision-making. This Twitter thread by biologist Carl Bergstrom powerfully describes the careful and considered way that epidemiologists have approached their work, and how politicisation has distorted that debate in the media and on social media. It’s well worth reading in its entirety.

Financial Times Alphaville published a brilliant article on the misinformation that has been spread, and followed it up with this interview with Neil Ferguson of Imperial College London, highlighting the way the debate has evolved as more data comes to light.

What is notable is how aware these scientists are that they do not have sufficient data to make precise calls. Their predictions are actually ranges dependent on which assumptions in the models turn out to be correct. As new data becomes available, they readily change their opinions, and this isn’t seen as weakness, it is seen as good science. This is what “mental models” is all about.

Can you imagine a world in which politicians admit that they are unsure about much of what needs to happen, but are therefore making their best guess based on available information? A world in which politicians admit they made mistakes and inform the public what has been learnt as a result? A world in which you admit your own mistakes and learn from them? Such a world is a prerequisite for creating an economy that provides enough for everyone.

Team Learning

This discipline follows directly on from mental models. Team learning really describes a way for teams to consult together. Senge draws heavily on the work of physicist David Bohm, who developed a theory and method of “dialogue”. He contrasts this with “discussion”, a word which has the same root as concussion and percussion. This can convey an idea of a conversation as something like hitting a ball back and forth. Too often, the purpose of discussion is to “win” the argument.

Bohm therefore proposed the word “dialogue”, which literally means “through meaning”. He gives the idea of meaning flowing through a conversation like a river flowing between the banks. In this context, the “banks” of the river that guide its path are our mental models, our unconscious assumptions. If we become adept at surfacing these assumptions, we can make them explicit, identify them, and if necessary change them, changing the path of the conversation.

We sometimes talk about “suspending” assumptions, and Bohm utilises this term in two ways. First of all, there is the common meaning that we “suspend”, them as in don’t cling to them rigidly – we are open to considering new possibilities. But suspend can also mean to hold or hang something up. Bohm uses a play on words to suggest that suspending our assumptions also means to “hold them up” where they can be inspected by everyone and the errors in them can be pointed out (not necessarily a pleasant experience!).

A fundamental purpose of “dialogue”, therefore, is for all participants to make their assumptions explicit, to hold them up for everyone to critique. When we can free ourselves of erroneous assumptions, often inherited from our upbringing or from the society around us, we can start to have dispassionate conversations that search for truth, free of ideological bias. The use of the word “dialogue” does become a bit jarring, particularly when used as a verb (I’ve read management literature talking about “dialoguing” with each other). I’ve found the words consultation (noun) and consult (verb) fit more naturally into everyday English, and convey the same idea.

A New Political Economy

Now this might all seem a bit new-agey, not to mention divorced from economics. So first of all I want to emphasise again that these ideas come from a hugely influential and respected business management book. And secondly, I’m not presenting this as the “answer”. This is one example of how the literature on organisational learning could apply to the process of learning how to create a functioning economy – I just didn’t want my constant references to the need to “learn” to merely be empty words with nothing behind them.

The analysis above implies a completely new approach to politics and governance. It’s no good asking where this sits on a “left/right” spectrum – this requires such a different way of thinking about public life and governance that it doesn’t fit anywhere on that spectrum. In the opening of this post I refer to the terms “capitalism” and “socialism” having become such barriers to rational conversation that it would be better never to use them. This is not just about terminology – we need a whole new way to think about public life. We are conditioned to thinking about politics and governance through the lens of the traditional ideologies and philosophies. We need something new.

That’s easy to say, but you need a starting point. In the penultimate post on the blog (coming in about 4 weeks) I will suggest a foundation that I believe should be universally agreeable to all and is absolutely rooted in scientific fact. When it comes to thinking about the economy, we likewise need some foundational concepts that are clear, empirical facts about the world. The final post of the blog will present what I believe these facts to be, summarising everything in the blog.

But to come back to Senge’s work – I’ve only described four of his “disciplines” of a learning organisation. And the fifth fits right in to the need for a new way of thinking – it’s “systems thinking”.

Senge sees this discipline as the one that holds all of them together. He gives it almost as much space in this book as the other four put together, so I’m going to give it its own post. We always talk about “the economic system” and the “financial system”, so it makes sense that it would have a special relevance to understanding economic life, and indeed it will lead us into some explicit systems approaches to understanding the economy.

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