It's the System, Stupid

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Sloan Management Review, the magazine of the MIT Sloan School of Business, has a new editor and a new format. Sustainability is one of the primary topics they now cover. Some months ago, they began to publish extended interviews with MIT-related people who have been engaged in this topic. (Disclosure: I was one of these people, and expect to see my interview come out shortly.) The latest one is with Peter Senge, with whom I collaborate on several projects. The subject, based on Senge's recent book, The Necessary Revolution, is focused on how firms are adjusting to the demands that sustainability, not their customers, is forcing them to rethink their strategies.

Let me start at the end and work back from there.

(SMR) You’ve been working this field for a long time. How you think attitudes toward sustainability have changed within organizations?

(Senge) In the last year or two, everything has changed. People are starting to suspect that these are really strategic issues that they will shape the future of our businesses. The specifics are all different depending on industry and context, but we’re in the beginning of an historic wakeup.

Undoubtedly, climate change has been the straw breaking the camel’s back. A lot of people think of climate change as a technical problem, something that’s going to be fixed by technical solutions. But more and more people are starting to realize that it’s not going to be fixed except as a byproduct of a real shift in how the whole industrial system operates.

I’m guessing that in the next six months people will have an even better handle on that. We’re right in a moment when the issue is moving from something marginal, something that we think somebody else needs to worry about, to something more personal.

The leading companies he talks about in the interview and in his book, Coca-Cola, Nestle, Alcoa, and others depend on natural resources, in these cases, water. They have begun to rethink their future based on models of scarcity rather than assuming that there will always be enough for limitless growth. I completely agree with Senge that there is a wake-up call being heard for the first time. My concerns are that the firms listening to this trumpet continue to think about the new set of problems basically in terms of how their firm would be impacted, without understanding the effects on the whole global system. Senge writes:

We don’t see the system because we’re habituated not to see the system. We’re organized not to see the system and we’re intellectually organized not to see the system. So it starts there.

Senge's is not a fan of the word, sustainability, and would rather use something that more clearly reflects the aspirational character he finds behind successful projects. He tries on, “All about the future.” I don't agree with his negative assessment of sustainability. Sustainability means, as I wrote a few days ago, the ability of any system to produce whatever you envision over a long time. It's that vision that pulls us forward. I talk about it as flourishing, but many other words will do. It's not enough simply to talk about the future that will face our children, without adding the qualities that future would bring. The same reasons we don't think in systems context, make thinking about the future largely constrained to how the past has worked. Yes, it's critical to look at ways to operate without using up the world, but it is just as critical to come to understand and change the cultural roots that have been driving the system. I am yet to hear this kind of argument in virtually all the recent assessments of the direction business is moving. The best efforts of individual firms, even in association with their peers, is not enough. It's the system, as Senge writes, that's in trouble.

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