Editing Leading from the Emerging Future: From Ego-System to Eco-System Economies

A summary of Leading from the Emerging Future: From Ego-System to Eco-System Economies (based on Theory U) by Otto Scharmer and Katrin Kaufer.

[[File:Theoryu.jpg|thumbnail|right|The Theory U process]]

=On the Surface: Symptoms of Death and Rebirth (Downloading)=
We move from the toppling of tyrants to an exploration of the deeper fault lines that keep generating the disruptive changes of our time. We also look at these disruptive events from the viewpoint of changemakers: In the face of disruption, what determines whether we end up in moments of madness or mindfulness?

==The Three Divides==
# The Ecological Divide
## Water
## Soil
## Climate
## Eco-Systems
# The Socioeconomic Divide
## Hunger
## Poverty
## Inequality
# The Spiritual-Cultural Divide
## Happiness and Well-Being
## Burning, Depression, Suicide

===Journaling Questions===
Take a journal (or blank piece of paper) and write your responses to the questions below. Spend no more than one to two minutes answering each question. Number your responses.
# Where do you experience your ecosystem that is dying (in society, in your organization, in yourself)?
# Where do you experience your ecosystem that is waiting to be born (in society, in your organization, in yourself)?
# Where have you experienced moments of disruption? And what did you notice about your own process of presencing or absencing?
# How do the ecological, socioeconomic, and spiritual-cultural divides show up in your personal experiences?

===Circle Conversation===
Assemble a circle of five to seven individuals and hold a first meeting to share the context that each person brings to the circle. Respond to the following:
# Introduce your personal story with one or two formative experiences that shaped the person you are.
# Where do you experience your ecosystem that is ending/dying, and where do you experience your ecosystem that is beginning/wanting to be born?
# What do you consider to be the root causes and issues of our current crisis and the three divides?
# What do you personally feel is going to happen over the next year? The next one to five years?
# What would you like to do right now in order to make a difference going forward?
<br>

=Structure: Systemic Disconnects (Seeing)=
What are the structural issues that lead us to reenact patterns of the past and not connect to what is emerging? What is the underlying blind spot that, if illuminated, could help us to see the hidden structures below the waterline?

==Structural Disconnects and System Limits==
The table below lays out the eight issue areas or visible symptoms of problems in our current system. Column 1 describes the symptom broadly; column 2 explains the structural disconnect that gives rise to the issue in row 1; and column 3 spells out the limits that the whole system is hitting. Addressing the root causes of these structural disconnects is like touching eight acupuncture points of economic and social transformation. If addressed as a set, these acupuncture points hold the possibility for evolving our institutions in ways that bridge the three divides.

{| class="wikitable"
!colspan="9"|Structural Disconnects and System Limits
|-
|
|'''Ecological issue'''
|'''Income issue'''
|'''Financial issue'''
|'''Technology issue'''
|'''Leadership issue'''
|'''Consumerism issue'''
|'''Governance issue'''
|'''Ownership issue'''
|-
|Surface Symptoms
|1.5 planet footprint
|Top 1 percent own more than bottom 90 percent
|US$1.5 quadrilion speculation bubble
|Quick technological fix syndrome
|Collectively creating results that nobody wants
|Burnout, depression, consumerism without well-being
|Inability to face challenges at sale of whole system
|Overuse of scarce resources; tragedy of the commons
|-
|Structural Disconnect
|Decoupling of unlimited growth and finite resources
|Decoupling of Haves and Have Nots, of wealth and basic need
|Decoupling of financial economy and real economy
|Decoupling of technological solutions and societal needs
|Decoupling of old leadership tools and new challenges
|Decoupling of GDP and well-being
|Decoupling of parts and whole
|Decoupling of current ownership forms and best societal use
|-
|Systemic Limit
|Limits to growth &rarr; cultivating finite resources
|Limits to inequality &rarr; embodying human rights
|Limits to speculation &rarr; organizing around the real economy
|Limits to symptom fixes &rarr; focusing on sustainable solutions
|Limits to leadership &rarr; direct, distributed, dialogic self-governance
|Limits to consumerism &rarr; attending to inner and relational sources of happiness and well-being
|Limits to competition &rarr; redrawing boundaries of competition and cooperation
|Limits to state and private property &rarr; property rights for the commons
|}

Common characteristics of Structural Disconnects and System Limits:
# embody systemic structures that are designed not to learn;
# are unaware of externalities;
# facilitate money flowing the wrong way;
# allow special-interest groups to rig the system to the disadvantage of the whole

==The Challenge-Response Model of Economic Evolution==
Societal progress happens as an interplay of challenge and response: Structural change happens when a society’s elite can no longer respond creatively to major social challenges, and old social formations are therefore replaced by new ones.

{| class="wikitable"
!colspan="7"|The Challenge-Response Model of Economic Evolution
|-
|
|'''Primary societal challenge'''
|'''Response: coordination mechanism'''
|'''Primary sector/players'''
|'''Primary source of power'''
|'''Dominant ideology'''
|'''Primary state of consciousness'''
|-
|Society 1.0: State-Driven, Mercantilism, Socialism
|Stability
|Commanding; hierarchy
|State/government
|Coercive (sticks)
|Mercantilism; socialism (state-centric thought)
|Traditional awareness
|-
|Society 2.0: Free-Market-Driven, Laissez-Faire
|Growth
|Competing: markets
|Capital/business: state/government
|Remunerative (carrots)
|Neoliberal and neoclassic (market-centric thought)
|Ego-system awareness
|-
|Society 3.0: Stakeholder-Driven, Social-Market Economy 
|Negative domestic externalities
|Negotiation: stakeholder dialogue
|Civil society/NGOs; capital/business; state/government
|Normative (values)
|Social democratic or progressive thought
|Stakeholder awareness
|-
|<span style="color:#008000">'''Society 4.0: Eco-System Driven, Co-Creative Economy
|<span style="color:#008000">'''Global disruptive externalities, resilience
|<span style="color:#008000">'''Presencing: awareness-based collective action (ABC)
|<span style="color:#008000">'''Cross-sector co-creation; civil society/NGOs; capital/business; state/government
|<span style="color:#008000">'''Awareness: actions that arise from seeing the emerging whole
|<span style="color:#008000">'''Eco-system-centric thought
|<span style="color:#008000">'''Eco-system awareness
|}

===Journaling Questions===
Take a journal (or blank piece of paper) and reflect on how the systemic disconnects show up in your world by writing your responses to the questions below.
# Where does your food come from?
# What roles does material consumption play in your life?
# What makes you happy?
# What is your relationship to money?
# Given the four stages of economic development discussed in this chapter, how do you see the past, present, and future of your own community and country?

===Circle Conversation===
Form a circle of five to seven individuals and discuss the organizational or professional context that each person brings to the circle. Ask the following questions (or some variation):
# Introduce your own organization by relating one or two formative experiences that shaped its culture as it is today.
# Where does your organization experience a world that is ending/dying, and where does it experience a world that is beginning/wanting to be born?
<br>

=Transforming Thought: The Matrix of Economic Evolution (Sensing)=
Exploring the abyss between the world of new leadership challenges, and the world of old economic and management tools.

==The Matrix of Economic Evolution==
The Matrix of Economic Evolution maps both the journey of our economic development and the possible development space going forward. Note the boldface text in each column of the matrix, indicating the critical factor in each developmental stage. In the 0.0 stage, “Mother Nature” is is the critical factor for the production function. Then, at stage 1.0, dependent labor (serfdom and slavery) became the critical developmental factor. The production function changes from one factor (nature) to two (nature, labor). In stage 2.0, industrial capital becomes the critical developmental factor, allowing new players in the market economy to be productive (nature, labor, capital). In stage 3.0, technology emerges as a critical factor, and with that the factors of production evolve to four (nature, labor, capital, technology). And finally, in the currently emerging stage 4.0, all of the factors may turn out to be bottlenecks, or critical factors, in the economy.

{| class="wikitable"
!colspan="9"|The Matrix of Economic Evolution
|-
|'''Stage'''
|'''Nature'''
|'''Labor'''
|'''Capital'''
|'''Technology'''
|'''Leadership'''
|'''Consumption'''
|'''Coordination'''
|'''Ownership'''
|-
|0.0: Communal: Premodern Awareness
|'''Mother Nature
|Self-sufficiency
|Natural capital
|Indigenous wisdom
|Community
|Survival
|Community
|Communal
|-
|1.0: State-Centric: Mercantilism, State Capitalism; Traditional Awareness
|'''Resource
|'''Serfdom, slavery
|Human capital
|Tools: Agricultural Revolution
|Authoritarian (sticks)
|Traditional (needs-driven)
|Hierarchy and control
|State
|-
|2.0: Free Market; Laissez-Faire; Ego-Centric Awareness
|'''Commodity (land, raw materials)
|'''Labor (commodity)
|'''Industrial capital
|Machines: first Industrial Revolution (coal, steam, railway)
|Incentives (carrots)
|Consumerism: mass consumption
|Markets and competition
|Private: exchange of private ownership in markets
|-
|3.0: Social Market: Regulated; Stakeholder-Centric Awareness 
|'''Regulated commodity
|'''Labor (regulated commodity)
|'''Financial capital (externality-blind)
|'''System-centric automation: second Industrial Revolution (oil, combustion engine, chemicals)
|Participative (norms)
|Selectively conscious consumption
|Networks and negotiation
|Mixed (public-private)
|-
|<span style="color:#008000">'''4.0: Co-Creative: Distributed; Direct; Dialogic; Eco-Centric Awareness
|<span style="color:#008000">'''Eco-system and commons
|<span style="color:#008000">'''Social and business entrepreneurship
|<span style="color:#008000">'''Cultural creative capital (externality-aware)
|<span style="color:#008000">'''Human-centric technologies: third Industrial Revolution (renewable energy and information technologies)
|<span style="color:#008000">'''Co-creative (collective presence)
|<span style="color:#008000">'''CCC: collaborative conscious consumption
|<span style="color:#008000">'''ABC: awareness-based collective action
|<span style="color:#008000">'''Shared access to services and common resources
|}

==The Eight Key Factors: In Search of 4.0==
===Nature: Relinking Economy with Nature===
Propositions
* All economic activity arises from and returns to nature
* Exposing Commodity Fiction
* Biomimicry
* Closed-Loop Designs

Examples
* Slow Food movement
* Community-supported agriculture (CSA)
* Local food
* Local living economies
* Sustainable sourcing practices (biodynamic/organic farming)

===Labor: Relinking Work (Jobs) with Work (Purpose)===
Propositions
* Expose the discourse of denial
* Debunk the myth of growth
* Debunk the myth of money
* Relinking work and entrepreneurship

Examples
* BALLE

===Capital: Relinking Financial with Real Capital===
Propositions
* Understand that the financial system is too efficient
* Understand that money is not capital
* Understand that money is not a commodity
* Understand that money does not equal money

Examples
* GLS Bank and Triodos Bank
* BRAC Bank
* Complementary Currencies

===Technology: Relinking Technology with Collective Creativity===
Propositions
* Debunk the liberation myth
* Debunk the technology-fix myth
* Relink R&D investments with pressing societal needs
* Lead the third Industrial Revolution

Examples
* Wikipedia
* Linux

===Leadership: Relinking Leadership with the Emerging Future===
Propositions
* Shift leadership from ego-system awareness to eco-system awareness
* Debunk three leadership myths:
** The leader is the guy at the top (vs many to everyone)
** Leadership is about individuals (vs the whole system)
** Leadership is about creating and communicating a vision (vs listening)
* Co-initating, co-sensing, co-inspiring, co-creating, co-evolving

Examples
* Collective sensing and prototyping

===Consumption: Relinking the Economy with Well-Being===
Propositions
* Debunk Myth 1: Production and consumption are separate
* Debunk Myth 2: Consumers are separate from one another
* Debunk Myth 3: Material consumption creates well-being
* A model of communication that creates missing links between the different actors in an economy.

===Coordination: Relinking the Parts with the Whole===
{| class="wikitable"
!colspan="3"|How a Society Coordinates Itself
|-
|'''System Integration/Degree of Interiorizing the Whole
|'''Primacy of the Whole
|'''Primacy of the Parts
|-
|High
|4.0: ABC (Awareness-based Collective Action): head, heart and hand (intentional)
|3.0: Negotiation and dialogue: head, heart and hand (ad hoc)
|-
|Low
|1.0: Central planning: visible hand
|2.0: Markets and competition: invisible hand
|}

Propositions
* Debunk the myth of the antagonism of markets versus hierarchies
* The answer to 'either-or' is 'both-and'
* An economy is not a business
* ABC (Awareness-based Collective Action) closes the feedback loop between parts and whole

===Ownership: Relinking Ownership with the Best Societal Use===
{| class="wikitable"
!colspan="5"|Title
|-
|'''Economy
|'''Property Rights
|'''Types of Goods
|'''Bundle of Rights and Responsibilities
|'''Institutionalization
|-
|0.0
|Open access
|Common pool resources: ocean fisheries, atmosphere (nonexcludable, rival)
|No property rights
|Communal ownership
|-
|1.0
|State property rights
|Public goods: national defense (nonexcludable, rival)
|Property rights assigned by state
|State ownership: four-year election cycles
|-
|2.0
|Private property rights
|Private goods: food, clothing, housing (excludable, rival)
|Private property rights can be exchange by market (access, use, management, exclusion, and right to sell)
|Private ownership: quarterly results
|-
|3.0
|Mixed (public-private) property rights
|Mixed goods (public-private): eco-system services (excludable, nonexcludable, rival)
|Mixed property rights that are managed and in part exchanged by markets (access, use, management, exclusion, and right to sell)
|Mixed-stakeholder ownership (organized internet groups)
|-
|4.0
|Commons-based property rights
|Common goods: fisheries, eco-system services (non-excludable and rival)
|Property rights are jointly controlled by trust-based co-owners, stakeholders, and trustees (access, use, management, exclusion, and shared cultivation)
|Shared eco-system ownership (trustees representing the whole system, including future generations)
|}

Propositions
* All ownership forms are socially constructed
* Debunk Myth 1: Only private property rights are efficient; other forms are not.
* Debunk Myth 2: There is no third form of ownership.
* Commons-Based Property Rights
* Shared Ownership

Examples
* Landshare, UK
* Mondragon Corporation, Spain

==Journaling Questions==
Use the table as a mini-version of the Matrix of Economic Evolution in order to assess your organization through the following five steps.
{| class="wikitable"
!colspan="9"|The Matrix of Economic Evolution
|-
|
|'''Nature'''
|'''Labor'''
|'''Capital'''
|'''Technology'''
|'''Leadership'''
|'''Consumption'''
|'''Coordination'''
|'''Ownership'''
|-
|1.0
|Resource
|Serfdom
|Human
|Tools
|Authoritarian
|Traditional
|Central planning
|State
|-
|2.0
|Commodity
|Commodity
|Industrial
|Machines
|Incentives
|Consumerism
|Markets and competition
|Private
|-
|3.0
|Regulated commodity
|Regulated commodity
|Financial
|System-centric automation
|Participative
|Selectively conscious consumption
|Networks and negotiation
|Mixed (public-private)
|-
|<span style="color:#008000">'''4.0
|<span style="color:#008000">'''Eco-system, commons
|<span style="color:#008000">'''Entrepreneurship
|<span style="color:#008000">'''Cultural, creative
|<span style="color:#008000">'''Human-centric
|<span style="color:#008000">'''Co-creative
|<span style="color:#008000">'''Collaborative conscious consumption
|<span style="color:#008000">'''ABC: Awareness-based collective action
|<span style="color:#008000">'''Commons: shared access
|}
# In each column, check one box (1.0, 2.0, 3.0, or 4.0) that best represents the currently dominant operating model in your ecosystem and context.
# Then draw a current reality line that links all the boxes that you checked.
# What would be the most appropriate operating model for the future work that needs to happen to address the big challenges of the next decade or two? In each row, check one box, this time using a different color.
# Now draw the emerging future line by connecting the second set of checked boxes with the second color.
# Compare both lines, the current reality line and the emerging future line. Do they differ, and if yes, where, and what does it mean?

==Circle Conversation==
# After completing the tasks above individually, have each member share with the group what the answers might mean going forward.
# What interesting prototypes can you think of for exploring 4.0 types of operating models in the context of your own work and life right now?
<br>

=Source: Connecting to Intention and Awareness (Presencing)=
Exploring the source level of social reality creation, the deepest level of the “current reality iceberg”, the level of intention and awareness, and connecting to the source of the future that is wanting to emerge.

===The Matrix of Social Evolution===
One of the core ideas of Theory U is that form follows attention or consciousness. We can change reality by changing the inner place from which we operate. The Matrix of Social Evolution spells out what this looks like for an individual (attending), a group (conversing), an institution (organizing), and a global system (coordinating). The table below shows how these different social fields (micro, meso, macro, mundo) transform according to the inner place — or the quality of awareness — from which we operate.

{| class="wikitable"
!colspan="5"|The Matrix of Social Evolution
|-
|'''Field: Structure of Attention'''
|'''Micro: Attending (Individual)'''
|'''Meso: Conversing (Group)'''
|'''Macro: Organizing (Institution)'''
|'''Mundo: Coordinating (Global System)'''
|-
|1.0 habitual awareness
|Listening 1: downloading habits of thought
|Downloading: speaking from conforming
|Centralized control: organizing around hierarchy
|Hierarchy: commanding
|-
|''Suspending''<br>2.0: ego-system awareness
|Listening 2: factual, open-minded
|Debate: speaking from differentiating
|Divisionalized: organizing around differentiation
|Market: competing
|-
|''Redirecting''<br>3.0 stakeholder awareness
|Listening 3: empathic, open-hearted
|Dialogue: speaking from inquiring others, self
|Distributed/networked: organizing around interest groups
|Negotiated dialogue: cooperating
|-
|<span style="color:#008000">'''''Letting Go''<br>4.0 eco-system awareness
|<span style="color:#008000">'''Listening 4: generative, open-presence
|<span style="color:#008000">'''Collective creativity: speaking from what is moving through
|<span style="color:#008000">'''Eco-system: organizing around what emerges
|<span style="color:#008000">'''ABC: Awareness-based collective action: co-creating
|}

==Journaling Questions==
Use the Matrix of Social Evolution table to assess your current situation by answering the following questions.
{| class="wikitable"
!colspan="5"|The Matrix of Social Evolution
|-
|'''Awareness'''
|'''Micro: Listening'''
|'''Meso: Conversing'''
|'''Macro: Organizing'''
|'''Mundo: Coordinating'''
|-
|1.0 habitual
|Level 1: downloading
|Downloading
|Centralized control
|Central planning
|-
|2.0: ego-system awareness
|Level 2: factual
|Debate
|Divisionalized
|Markets and competition
|-
|3.0 stakeholder
|Level 3: empathic
|Dialogue
|Networked
|Negotiation and dialogue
|-
|<span style="color:#008000">'''4.0 eco-system
|<span style="color:#008000">'''Level 4: generative
|<span style="color:#008000">'''Collective creativity
|<span style="color:#008000">'''Eco-system
|<span style="color:#008000">'''ABC: seeing/acting from the whole
|}
# What percentage of your time do you spend on each level of listening? Write down the percentage.
# What percentage of your time do you spend on each level of conversing?
# What percentage of your time does your institution make you organize around centralized, divisionalized, networked, or eco-systemic structures?
# What percentage of your time do you spend on connecting to the whole through the mechanisms of hierarchy, competition, stakeholder negotiation, or ABC (shared awareness of the whole)?
# With a different-colored pen, indicate in the table what you would like the future to look like (using percentages).
# Compare the two sets of percentages, notice the gaps, and develop ideas for bridging them.

==Circle Conversation==
# After answering the six questions above individually, have each member of your circle share their insights, questions, and intentions in regard to their personal profile.
# What interesting small prototypes can you think of for exploring 4.0 types of operating that can move your profile from actual to desired?
<br>

=Leading the Personal Inversion: From Me to We (Crystalizing)=
Stepping into the field of the future starts with attending to the opening of an inner crack. Following that crack requires us to let go of the old and “let grow” something that we can sense, but that we cannot fully know before we see it emerge. This moment, which requires us to move although we cannot yet fully see the new, feels like jumping across an abyss. At the moment we leap, we have no idea whether we will make it across.

==The Three Conditions for self to Self, me to We==
# Bending the Beam of Observation - Enabling presencing between Levels 2, 3, 4 of listening.
# A Holding Space for Embracing the Shadow - The cultivation of a holding space allows a shift of the social field to happen, the mind and the heart to open.
# Going to the Edge of Letting Go - The willingness to go to the edge of the abyss, to let go, to lean into the unknown—and take the leap.

==Twelve Principles for self to Self, me to We==
# Practice, don't preach.
# Observe, observe, observe: Become a black belt observer.
# Connect to your intention as an instrument.
# When the crack opens up, stay with it - connect and act from the now.
# Follow your heart - Do what you love, love what you do.
# Always be in dialogue with the universe.
# Create a holding space of deep listening that supports your journey.
# Iterate, iterate, iterate.
# Notice the crack to the field of the future.
# Use different language with different stakeholders.
# If you want to change others (other stakeholders), you need to open to changing yourself first.
# Never give up. Never give up. You are not alone.

==Journaling Questions==
Take a journal and some quiet time to answer these sixteen questions. Spend about one to two minutes per question.
# What in your life and work is dying or ending, and what wants to be born?
# Who have been your “guardian angels,” the people who have helped you to realize your highest potential?
# Where, right now, do you feel the opening to a future possibility?
# What about your current work and/or personal life frustrates you the most?
# What are your most important sources of energy? What do you love?
# Watch yourself from above, as if from a helicopter. What are you trying to do at this stage of your professional and personal journey?
# Watch the journey of your community/organization/collective movement from above. What are you trying to do in the present stage of your collective journey?
# Given the above answers, what questions do you now need to ask yourself?
# Look at your current situation from the viewpoint of yourself as a young person at the beginning of your journey. What does that young person have to say to you?
# Imagine you could fast-forward to the very last moments of your life, when it is time for you to move on. Now look back on your life’s journey as a whole. What would you want to see at that moment? What footprint do you want to leave behind on this planet?
# From that future point of view, what advice would your future Self offer to your current self?
# Now return to the present and crystallize what it is that you want to create: your vision and intention for the next three to five years. What vision and intention do you have for yourself and your work? What are the core elements of the future that you want to create in your personal, professional, and social life? Describe the images and elements that occur to you. The more concrete, the better.
# What would you have to let go of in order to bring your vision into reality? What is the old stuff that must die? What “old skin” (behaviors, thought processes, etc.) do you need to shed?
# Over the next three months, if you were to prototype a microcosm of the intended future in which you could discover “the new” by doing something, what would that prototype look like?
# Who can help you make your highest future possibilities a reality? Who might be your core helpers and partners?
# If you were to take on the project of bringing your highest intention into reality, what practical first steps would you take over the next three days?

==Circle Conversation==
Invite each person in your group to share the most meaningful things that surfaced through this sixteen-step journaling experience. Listen deeply and go with the flow of the conversation.
<br>

=Leading the Relational Inverstion: From Ego to Eco (Prototyping)=

We need to learn how to see ourselves through the eyes of others and of the whole.

==Four Levels of Stakeholder Communication==
In the diagram below displaying the four levels of stakeholder communication in economic systems, the most common types of conversation are represented by the outermost ring. At the center are the rarest and most precious types of conversation, which offer a major acupuncture point for future change.

[[File:Four-levels-communication.jpg|600px]]

# Level 1: Unilateral, one-way downloading, and manipulating
# Level 2: Bilateral, two-way discussions, and exchange of viewpoints
# Level 3: Multilateral stakeholder dialogue: Seeing oneself through the eyes of another
# Level 4: Co-creative eco-system innovation: Blurring the boundary of ego and eco

==Five Types of Innovation Infrastructure==
# Infrastructures to co-initiate
# Infrastructures for co-sensing
# Infrastructures to co-inspire
# Infrastructures for prototyping, or exploring the future by doing
# Infrastructures to co-evolving

===Stakeholder Interview Questions===
Identify three to five really important stakeholders in your life and/or work. Invite each of them to a conversation in which you pose the following seven questions (modify the questions as needed for your particular situation):
# What are you seeking to accomplish in your work, and what is my contribution to that work?
# Can you give me an example of a time when my contribution has been helpful to you?
# Which criteria do you use to gauge whether or not my contribution to your work has been successful?
# Which two things, if changed in my arena of influence or responsibility within the next three to four months, would create the most value for you?
# Which issues have made it difficult for us to work together effectively in the past?
# What best possible future would you like to see in regard to our collaboration going forward?
# What might be a first practical next step that will move us onto that path of desired future possibility?

===Circle Conversation===
# Invite each person to share some key insights from the stakeholder interviews.
# Reflect on some emerging themes.
# Invite those who want to share a story of when they experienced of a shift in the social field, like the one in Berlin or the one that Beth Jandernoa shared in this chapter. Share a story of a time when you saw a social field shift from one state to another—what changes did you notice in the field in how people interact? What changes did you notice in yourself?
<br>

=Leading the Instituional Inversion: Toward Eco-System Economies (Performing)=
The next social revolution has to be an institutional one. A revolution that helps us to bend the beam of institutional attention all the way back to source — that is, to a place where the institutional system can see and renew itself.

==Stages of Economic Logic and Corporate Development==
{| class="wikitable"
!colspan="7"|Stages of Economic Logic and Corporate Development
|-
|'''Stage of Economic Development
|'''Coordination mechanism (power)
|'''Pivotal sector
|'''Dominant economic logic
|'''Purpose of business
|'''Company examples
|'''Stakeholder relationships
|-
|1.0: Centralized State Economy
|Hierarchy, regulation, control (sticks)
|First sector: public
|Economies of scope: vertical integration
|Control over entire value chain
|Old IBM
|Controlling
|-
|2.0: Free-Market Economy
|Market and competition (carrots)
|Second sector: private
|Economies of scale: horizontal integration
|Profit and shareholder value
|Intel, Microsoft
|Transactional
|-
|3.0: Social-Market Economy
|Networks and negotiations (norms)
|Third sector: social
|Economies of networks (and scope): circlar integration
|Eco-system domination
|Apple, Facebook, Google
|Empathic but dominating: no shared ownership
|-
|4.0: Co-Creative Eco-System Economy
|ABC: awareness-based collective action (presencing of the emerging whole)
|Fourth sector: cross-sector collaboration
|Economies of presencing: spiral integration
|Eco-system stewardship: co-creative relationships with self, other, nature, whole
|Emerging examples: Natura, BALLE, Alibaba
|Generative: co-sensing, presencing, and co-creating highest future potential
|}

==Shifting the center of gravity for economic and conversational action==
The path to the future, to Economy 4.0, requires a shift at the gravitational center of our economy from primarily 1.0 and 2.0 communications (the outer two spheres) to 3.0 and 4.0 conversations and relationships (the inner two spheres). This implies that we have to redesign the system of money so that speculation money (in the outer sphere) will naturally be redirected and turned into gift money (in the inner sphere) that helps to cultivate the creative commons at the core.<br>
[[File:Economic-field.jpg|600px]]

==Economy 4.0 Key Principles: A Cross-Sector Platform for Eco-System Economies==
# Openness: Leadership shifts from inside an organization to the surrounding sphere.
# Transparency: Information must be transparent, not secret.
# Sharing: Ownership of goods must be accessible and intelligently shared.
# Intention: Organizing revolves around common intention, not structures.
# Holding space: Co-creative communities require high-quality core groups and holding spaces.
# Conversation: Shift from levels 1 and 2 (toxic, transactional) to levels 3 and 4 (dialogic, co-creative).
# Awareness: Shift the primary mode of operating from ego-system to eco-system awareness.
# Commons: Identify, protect, and cultivate the commons as base of the whole eco-system.
# Playfulness: Create a culture that values playfulness, entrepreneur-ship, and co-creation.
# Diversity and symbiosis: These are the twin principles that allow eco-systems to thrive.

==Journaling Questions== 
# How can you shift your conversational relationships from levels 1 and 2 to levels 3 and 4—that is, from downloading and debate to dialogue and collective creativity? Be specific. Name one or two examples.
# Consider [[Theory_U:_Leading_from_the_Emerging_Future#Shifting_the_center_of_gravity_for_economic_and_conversational_action|this chart of the economic and conversational field]]. How could you and your organization shift your economic and financial relationships from the outer to the inner spheres—that is, from speculation and consumption to entrepreneurial initiative and to cultivating the creative commons in your current context and community? Name one or two examples. Where are you contributing to the commons? Where do you take or enable entrepreneurial initiative?
# How do the first two questions relate to each other? Be specific. Think about them in the context of your examples.
# How can you keep cultivating your own sources of capital—that is, your own sources of creativity?
# Consider [[Theory_U:_Leading_from_the_Emerging_Future#Stages_of_Economic_Logic_and_Corporate_Development|the Stages of Economic Logic and Corporate Development]]. What would your company or organization look like if it chose to operate as a 4.0 co-creative eco-system venture? Use the above list of ten key principles as input for developing concrete images and ideas.
# What small prototype could you create that would allow you to explore your most interesting idea for a possible 4.0 venture?

==Circle Conversation==
Download the [https://www.presencing.org/files/tools/PI_Tool_CaseClinic.pdf Theory U case clinic tool]. It’s a great process that takes a small group through a highly co-creative seven-step U-based process in seventy minutes. Each session focuses on one case-giver. Start with just one session and case-giver and do additional sessions in the upcoming meetings of your group.

<br>

=Leading from the Emerging Future: Now=

Applying these 4.0 principles to your own life, close to home, and to the emerging journey and movement we all participate in on earth.

The U process of learning from the emerging future follows three movements:
# Observe, observe
# Retreat and reflect: allow the inner knowing to emerge
# Act in an instant

==Closing the Feedback Loop of Matter and Mind: Economy 4.0==
The source is, from a systems view, where the feedback loop between mind and matter closes in the now, both individually and collectively. We have called these “closing-in” points or acupuncture points. This is how it happens for each of the eight acupuncture points:
# '''Nature''': Close the feedback loop of production, consumption, reuse, and recycling (through “earth-to-earth” or closed-loop design).
# '''Labor''': Close the feedback loop from work (jobs) to Work (passion) by building new entrepreneurship infrastructures that ignite the connection between self and Self.
# '''Capital''': Close the feedback loop in the flow of capital by redirecting speculative investment into ecological, social, and cultural-creative renewal (through gift money and intentional capital).
# '''Technology''': Close the feedback loop from technology creation to societal needs, particularly in underserved markets (through needs assessment and participatory planning).
# '''Leadership''': Close the feedback loop from leadership to the emerging future of the whole (through practices of co-sensing, co-inspiring, and co-creating).
# '''Consumption''': Close the feedback loop from economic output to the well-being of all (through conscious, collaborative consuming and new indicators such as GNH, or gross national happiness, discussed later in this chapter).
# '''Coordination''': Close the feedback loop in the economy from the parts to the whole (through ABC, awareness-based collective action).
# '''Ownership''': Close the feedback loop from ownership rights to the best societal use of assets (through shared ownership and commons-based property rights that safeguard the interests of future generations).

==U.School Elements - SEEDS U?==
# '''Global classroom.''' A blended technology approach that creates an intense, personal learning relationship among a global, multilocal community of learners and a world-class faculty by combining live-streamed classroom sessions and mini-lectures with highly interactive small-group practice sessions. Social media–supported conversation spaces would continue the classroom dialogue between sessions.
# '''Deep dives into inspiring local, regional, and global hot spots of innovation.''' Deep dives are total immersion journeys (actual, not virtual) that allow the learner to feel, empathize, and connect with multiple new perspectives (e.g., marginalized communities) and that connect the learner to a global web of inspiring living examples that address critical challenges in promising new ways.
# '''Awareness-based leadership technologies.''' The capacity to facilitate processes of profound societal innovation is grounded in mindful leadership and awareness-based leadership technologies that link the intelligences of head, heart, and hand. These methodologies combine state-of-the-art organizational learning tools with participatory innovation techniques and blend them with awareness-based leadership practices. Mastery of these blended new leadership technologies, such as presencing, to sense and actualize emerging future possibilities is the methodological backbone of the school.
# '''Presencing coaching circles.''' One of the most important mechanisms for holding the space for deep learning is peer circles that use deep listening–based coaching practices. A coaching circle usually consists of five to seven members and applies a version of the case clinic process that we described at the end of chapter 7. We have found that the power of these peer group circles is simply amazing. They hold the space for individual and shared renewal. As one member of Otto’s peer group put it in a recent coaching call with his colleagues: “You [the whole circle] are the cradle of my rebirth.” This may sound airy-fairy or sentimental to some, but it is in fact an accurate description of a subtle experience that all of us—and many others in their circles—have experienced.
# '''Action learning.''' Students participate on the frontlines of profound societal innovation through access to a global innovation ecology, and by being challenged to co-create hands-on prototype solutions that are helpful to a specific community or stakeholder constellation. These real-world prototypes are embedded in and guided by a global network of mentors and change-makers that operate in or collaborate with their living examples of institutional renewal.
# '''Innovation hubs.''' Innovation happens in places. Innovation hubs prototype the globally distributed campuses of the future. While a traditional campus is organized around discipline-based schools that deal separately with societal challenges and issues, an innovation hub is an inversion of that principle: It puts the emerging future opportunities at the center and organizes the disciplines and tools around them. Innovation hubs create spheres of hands-on innovation, a place for generative conversations that link and mediate between application-centric action learning projects and head-centric global classroom sessions. Innovation hubs are about integrating the intelligence of head, heart, and hand, not only for individuals but also for communities of innovators. Innovation Hubs will look different in different places. But they will share a blend of the following features:
## a space that evokes the mindful simplicity of a Buddhist temple;
## the hands-on creative atmosphere of a buzzing artistic community;
## the high-tech equipment that interconnects all these places to a functional, global web of co-sensing practices;
## the clarity of a well-organized think tank; and (e) the functionality of an avant-garde theater that can be turned in minutes into a stage for Social Presencing Theater. In short, an innovation hub would bear little resemblance to today’s campus, and it could in principle be replicated in cities, eco-systems, and urban or rural communities across the globe.
# '''Individualized lifelong learning journeys.''' If the classroom is global, if the sensing and actualizing of our emerging future are the real curriculum, and if the possible user base of this school is not tens or hundreds or thousands but millions, hundreds of millions, or billions—basically everyone who is interested in awakening, activating, and strengthening their capacity to be an entrepreneur from this deep place—then the question is: Who is navigating the amazing complexity of such a distributed eco-system? Who is designing your curriculum? The answer is, you are.

==U.School (Seeds U?): Three Core Activities==
[[File:U-school.jpg|600px]]

==Journaling Questions==
What do you see when you turn around? What is the seed of the future or the sprout that you see in your field? Here are twelve questions for you to ponder in your personal reflection. Take a journal and a quiet moment to write for a minute or so on each of them:
# What do you feel is wanting to transform within yourself?
# What do you want to bring into being?
# What do you need to let go of?
# While reading this book, what has been your most important insight?
# While reading this book, what has been your most important insight about yourself?
# While reading this book, what has touched you and why?
# While reading this book, what precious seed of the future (intention) did you become aware of?
# How can you pull people together from across different systems in order to do something inspiring, fun, and meaningful—your version of a GNH or Society 4.0 Lab?
# Who is your coaching circle—your circle of five or seven?
# What practices (moments of stillness) do you use to connect to Source?
# How do you balance beauty and truth in your life and work?
# What are your most important next steps? Your action items for the next three days?

==Circle Conversation==
With other people in your circle, reflect on these points:
# Each shares where you feel the crack
# Each shares an observation on your own opening over the past few weeks (open mind, heart, or will). # Share your observations on a conversational shift in your group that you may have noticed.
# Share how all these observations relate to the institutional inversion around you.
# What initiative, if taken on jointly, could help to shift the field of your system to 4.0?
# Who needs to be involved to make it work?
# Dialogue on and determine your next steps.
# Use the [http://presencing.com presencing.com] as a resource to get tools, share stories, and link up with a global community of other circles that are “joining the river.” Let’s meet at one of the upcoming forum events that will allow us to connect online or in person.
<br>

=Appendix=

[[File:Health-inequality.png|thumb|left|Health and social problems are closely related to inequality among rich countries.]]
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	A summary of Leading from the Emerging Future: From Ego-System to Eco-System Economies (~~Applying~~ Theory U ~~to Business, Society, and Self~~) by Otto Scharmer and Katrin Kaufer.		A summary of Leading from the Emerging Future: From Ego-System to Eco-System Economies (based on Theory U) by Otto Scharmer and Katrin Kaufer.

	[[File:Theoryu.jpg\|thumbnail\|right\|The Theory U process]]		[[File:Theoryu.jpg\|thumbnail\|right\|The Theory U process]]