Governance: From Competition to ABC (Awareness-based Collective Action)


Today’s post is written by Otto Scharmer. His new book, “The Essentials of Theory U” (March, 2018), is an inspiring pocket guide that focuses on three essential components: the core principles, the key movements that make the process of Theory U, and the practical applications that transform our economy from ego to eco.

Dr. Scharmer offers an excerpt from his book:

Historically, the 1.0 mechanism was hierarchy and centralization; the 2.0 mechanism came with the rise of markets and competition; and the 3.0 mechanism took the form of negotiation among organized stakeholder groups.

The most important and least understood institutional innovation today concerns the creation of a 4.0 coordination mechanism that is based on making the system sense and see itself: awareness- based collective action (ABC)—that is, acting from seeing the whole. Today we see the first examples of this mechanism in governance being adopted at the local level. In many cities and local communities, stakeholders are collaborating to rebuild the environmental, social, political, and cultural commons. But what is missing is an understanding of how this collaboration across boundaries can be aggregated and extended to larger systems— regions, countries, and continents.

4.0 Lab

In the summer of 2017 I visited the family farm near Hamburg where I grew up. (It is, by the way, no longer just a family farm, as we turned the ownership over to a foundation committed to bridging the three divides.) The purpose of my visit was to attend a meeting of founders and CEOs of green brands in Europe and Asia. Many of the major green pioneers and innovators sat in the meeting circle. It was an eye-opening conversation that taught me many things about the evolution of the food sector.

Looking into that circle, it was also clear to me that what made those leaders (and their companies) so successful in the 3.0 world will not help them succeed in the emerging 4.0 environment. And all of them knew that.

Seeing that, I explored an idea with the group. I proposed setting up a global innovation lab that would bring together pioneers and leading innovators from all four of the systems I just described—food, finance, health, and learning—to focus on co- creating a cross-sector 4.0 innovation lab.

In broad outline, the “4.0 Lab” would begin with regional labs in one or multiple geographies. Each regional lab would start with an agenda-setting workshop in which the key innovators and institutional partners would connect, get to know each other, and co-initiate the agenda and set the regional focus of each lab. The Presencing Institute would support these labs with methods and tools, as well as with our online-to-offine u.lab platform, and share the results via the joint multimedia platform on the new economy that we jointly curate with HuffPost.

Even though this idea came up only toward the end of the meeting, three or four of the founders in the circle instantly said “I’m in”—even without knowing exactly what they are in for. Nor of course do I. But I do believe that these kinds of cross-sectoral initiatives are needed now more than ever—in many places, regions, and geographies—because no one can create 4.0 platforms and eco-systems alone.


More about Otto Scharmer
Otto Scharmer is a Senior Lecturer at MIT and co-founder of the Presencing Institute. He chairs the MIT IDEAS program for cross-sector innovation that helps leaders from business, government, and civil society to innovate at the level of the whole system. He is the author of Theory U (translated into 20 languages) and co-author of Leading from the Emerging Future, which outlines eight acupuncture points of transforming capitalism. His latest book, The Essentials of Theory U: Core Principles and Applicationsilluminates the blind spot in leadership today and offers hands-on methods to help change makers overcome it through the process, principles, and practices of Theory U.


In 2015, he co-founded the MITx u.lab, a massive open online course for leading profound change that has since activated a global eco-system of societal and personal renewal involving more than 100,000 users from 185 countries. With his colleagues, he has delivered award-winning leadership development programs for corporate clients and co-facilitated innovation labs on reinventing education, health, business, government, and well-being.

About Paul LaRue

My goal - To encourage you to lead & influence others with positive impact.

Posted on March.20.2018, in Book Review, Leadership. Bookmark the permalink. Leave a comment.

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