Otto Scharmer

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= Innovative thinker; lecturer at MIT; author/creator of Theory U



"Otto Scharmer is cofounder of the Leadership Lab for Social Responsibility in Business at the MIT Sloan School of Management, where he also lectures. He is a visiting professor at the Center for Innovation and Knowledge Research, Helsinki School of Economics and a faculty member of the Fujitsu Global Knowledge Institute in Tokyo. He studies leadership, organizational learning, and the dynamics of multi-stakeholder dialogue, collaboration, and change.

Otto is co-author, with Peter Senge, Joseph Jaworski, and Betty Sue Flowers, of Presence: Human Purpose and the Field of the Future, published by the Society for Organizational Learning in 2004. In a forthcoming book, Presencing: The Blind Spot of Leadership (working title), he describes the theory and practice of sensing and actualizing emerging futures in the context of personal, institutional, and global change.

He is also the host of a global webcast series on science, wisdom awareness, and global change at the beginning of the twenty-first century, a program co-sponsored by the new Library of Alexandria, Egypt, and the Society for Organizational Learning, of which he is a founding research member. He holds a Ph.D. in economics and management from Witten/Herdecke University, Germany. His article “Strategic Leadership within the Triad Growth-Employment-Ecology" won the McKinsey Research Award in 1991.

With his colleagues, Otto has used presencing to facilitate profound innovation and change processes both within companies and across societal systems. He lives with his wife and two children in Boston, MA." (

Otto Scharmer is author of Theory U.


A critique by Nafeez Ahmed

Nafeez Ahmed:

"Scharmer rightly recognizes that there is a fundamental lack of joined up thinking in the approach to the multiple crises facing the planet. He calls for a more integrated response, and sets out his diagnosis of the problem in the destruction wrought by early phases of capitalism.

He commendably acknowledges the entrenched limits of conventional economic thinking, with its dependence on “a very small number of economic theorists and frameworks.”

He asks pointedly, “… despite the millions of words devoted to [the economic crisis] by ‘experts’ on talk shows and in publications, what do we really know about its root causes?”

This all sounds compelling, until his ‘solution’: a shift to what he calls ‘Capitalism 3.0’, which he defines magically as “a shift of awareness that extends the natural self-interest of the players to the entire ecosystem.”

Amazingly, Dr. Scharmer doesn’t really offer a definition of capitalism that has anything remotely to do with economics, finance, relations of production or anything.

Capitalism, he says, has already been ‘evolving’ — and improving — from being solely ego-centric and growth oriented, resulting in massive social and environmental costs, toward a more stakeholder-oriented system.

Scharmer conceives of this ‘evolution’ as being “based on a different state of awareness among its players” — consciousness evolution, he believes, is driving capitalism’s evolution.

Today’s capitalism, Capitalism 2.0, he writes — seemingly with a straight face — is “more regulated” than before. It has wondrous new social security systems, labour unions, environmental standards, much of which are supported by the activities of hundreds of thousands of NGOs. As such, he declares that “the main focus of capitalism 2.0 is on redistribution in order to sustain society as a whole.”

This, supposedly, is the defining nature of the current age of capitalism.


In one fell swoop, Scharmer manages to obscure what is really going on.

It’s widely recognized that the defining feature of today’s extreme form of neoliberal capitalism is all about imposing grand-scale financial market deregulation, designed to shift power over economic policy from the public to the private sector, from the government to an unaccountable financial elite. This is the same ideology which has exponentially accelerated the debt and financial volatility we now see in the global economy.

And it is precisely this rampaging expansion of unregulated neoliberal globalization, which has led to the steady dismantlement of state-led regulatory apparatuses established between the 1940s and 70s. That, in turn, has generated an army of largely impotent NGOs campaigning desperately, usually on deaf ears, to restrain this increasingly predatory financial system.

Those civil society movements, then, emerged not as a benevolent outpouring of the existing capitalist system — representing an expansion of its overall consciousness — but out of conflict with the prevailing system: struggle between those who monopolize access to resources, and those dispossessed from that access.

This was not some sort of teleological process of ‘consciousness’ evolution.

And yet, Scharmer himself concedes that the friendlier ‘capitalism 2.0’ “does not appear to be working to mitigate the current global externalities”. Within his logic, the actual reasons for this appear unfathomable.

That is why, under Scharmer’s ‘capitalism 2.0’, global inequalities have widened, and the number of people living under $5 a day — a more realistic poverty line than the World Bank’s $1.90 — has dramatically increased. Today, 4.3 billion people, nearly two-thirds of the world’s population, live on less than $5 a day.

That is why, what is actually happening is that state-failures, extremist nationalism, Islamist terrorism and other phenomena are being driven by a convergence of economic and ecological crises, which are intensifying within a broken economic model that is hell-bent on accelerating extraction at any human, social or environmental cost.

Work on your ego, and the corporate world will obediently follow

Perusing Scharmer’s work, it becomes painfully clear that he is ill-equipped to engage with the interconnected complexity of this systemic crisis.

Scharmer’s basic limitation is his starting point: organizational change theory. He remarks that it is standard practice for leadership teams in global companies to do ‘inner change work’ to help shift an individual’s awareness “from an ego-system to an extended stakeholder situation or, in some cases, to the larger ecosystem”.

Neoclassical economists, he says, do not acknowledge how changes in “human awareness and consciousness” can “influence human behaviour”. And so he concludes that “the biggest blind spot in economic theory today [is] consciousness — that is, the structure of human awareness and attention that a community of actors develops when they go on a journey of transformational change.”

So what’s the solution? Don’t worry about the economics: let’s have Scharmer and his crack team lead the employees of all the giant corporates currently extracting from the planet at break-neck pace, and have them go through mind-expanding “journeys of transformational change” — this will change their behaviour, and the behaviour of their companies, and transform capitalism into a juggernaut of collective, orgasmic altruism.

This, basically, is what’s going on at the MIT Presencing Institute.

Can we get real here, please? The stark truth is that Scharmer is casting a net of beauty on a far more mundane process of corporate cultural institutional conditioning: improving the productivity of workers.

It doesn’t really matter what company employees think they are experiencing. For the most part, their “transformational change” is designed to condition the individual to “embrace the larger forces of change” that constitute the narrow profit-maximizing imperatives of the company itself. The end result is not a transformation of how these companies operate in the world, but instead, the cultural conditioning of employees into the belief that submerging themselves in the corporate values and vision of their employers is, indeed, part of a ‘transformative’ process."

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