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Leadership in the New Economy: Sensing and Actualizing Emerging Futures
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DRAFT
Leadership in the New Economy:
Sensing and Actualizing Emerging Futures
The Leadership Laboratory
for Competing in the New Economy
Interview Project
May 2000
Joseph Jaworski, Claus Otto Scharmer
Generon Consulting
Society for Organizational Learning (SoL)

TABLE OF CONTENTS
1 The New Leadership Challenge............................................................................1

1.1 Leadership in the New Economy..........................................................................1
1.2 The Alliance Story ...............................................................................................3
1.3 Meeting W. Brian Arthur ....................................................................................6
2 Seven Core Practices.............................................................................................8
2.1 Practice 1: Listen to Your Call ............................................................................9
2.2 Practice 2: Observe, Observe, Observe .............................................................. 10
2.3 Practice 3: Uncover Intent: Surrendering into Commitment.............................. 11
2.4 Practice 4: Allow Inner Knowing to Emerge...................................................... 14
2.5 Practice 5: Crystallize and Broadcast Intent ...................................................... 18
2.6 Practice 6: Act in an Instant .............................................................................. 20
2.7 Practice 7: Work: Execute, Learn, Let Go......................................................... 21
3 The Essence of Sensing and Actualizing ...........................................................21
3.1 Process: Sensing – Presencing – Embodying ...................................................... 21
3.2 The Leader’s Journey: Through the Eye of the Needle ...................................... 22
3.3 Three Root Principles ........................................................................................ 24
3.3.1 The Power of Intent............................................................................................................24
3.3.2 The Power of Mindfulness and Hyper-Concentration..................................................24
3.3.3 The Power of Love .............................................................................................................29
4 Making It Work: The Leadership Laboratory ...................................................30

4.1 Operating Principles.......................................................................................... 30
4.1.1 Principle 1: Primacy of Praxis ..........................................................................................30
4.1.2 Principle 2: Practice Fields ...............................................................................................31
4.1.3 Principle 3: Field Visits (Learning Journeys) ................................................................31
4.1.4 Principle 4: Generative Conversations: Dialogue.........................................................32
4.1.5 Principle 5: Aesthetics and the Power of Place..............................................................32
4.1.6 Principle 6: Presencing......................................................................................................32
4.1.7 Principle 7: Self and Work................................................................................................32
4.1.8 Principle 8: Creating, Incubating, and Prototyping New Business Ventures............33
4.1.9 Principle 9: Communities of Leaders ..............................................................................33
4.1.10 Principle 10: LeadershipLab.com ....................................................................................33
4.2 Concept ............................................................................................................. 33
4.2.1 Enrollment: Executives, Champions, Invitees, Supervisors ........................................34
4.2.2 Call to Adventure: Preparation for the Journey.............................................................35
4.2.3 Field Visits...........................................................................................................................35
4.2.4 Reflection, Documentation, and Research .....................................................................36
iii
4.2.5 Retreat: Allowing the Inner Knowing to Emerge.......................................................... 36

4.2.6 Forum: Broadcasting Intent and Convening Collaborators ........................................ 37
4.2.7 Business Incubator and Rapid Prototyping ................................................................... 37
4.2.8 Venture Committee............................................................................................................ 38
4.2.9 Commencement, Celebration, and Launch .................................................................... 39
4.3 Summing Up ..................................................................................................... 39
5 Appendix: Biographies of Interviewees.............................................................40
6 References ...........................................................................................................48
Sensing and Actualizing Emerging Futures 1
1 The New Leadership Challenge
1.1 Leadership in the New Economy
“A new world is taking shape as this millennium ends,” says University of California
at Berkeley’s Manuel Castells, concluding his comprehensive analysis of society,
economy, and culture (1996, 1997, 1998). Castells sees the information technology
(IT) revolution as a major driver in the emergence of a new dominant social structure
(the network society), a new culture (the culture of “real virtuality”)(1998: 336), and a
new economy (the informational economy).
This new economy can be characterized by five trends that have profound
implications for leaders in every industry:
• Vast globalization
• The primacy of networking and connectivity
• Steady de-materialization of products into knowledge,
• Speed as the prime source of competitive advantage
• The widening dominance of winner takes most modes of competition (increasing
returns; Arthur 1996)
In essence, these five trends are redefining the foundational concepts of time (speed:
instantaneous), space (global connectivity), structure (networks), matter
(dematerialization), and competition (increasing returns economics) on which the
economy operates. As a consequence, leaders and managers have to adapt to a whole
host of new ground rules for business.
Many people have attempted to codify these rules (see Box 1 for example). In spite of
their efforts, we have yet to gain a true understanding of the new economy and its
impact on business, leadership, and society. In particular, we know very little about
how leaders actually experience and deal with these new forces in their everyday lives.
W. Brian Arthur, one of the foremost thinkers about the new economy, uses a
metaphor set in a gambling casino to illustrate how the foundations of business are
changing.
Imagine you are milling about in a large casino with the top figures in
high tech — the Gates, Gerstners, and Groves of their industries. Over
 2000 Generon Consulting

2 Leadership in the New Economy
at one table, a game is starting called Multimedia. Over at another is a

game called Web Services. In the corner is Electronic Banking. There
are many such tables. You sit at one.
“How much to play?” you ask.
“Three billion,” the croupier replies.
“Who’ll be playing?” you ask.
“We won’t know until they show up,” he replies.
“What are the rules?”
“Those will emerge as the game unfolds,” says the croupier.
“What are my odds of winning?” you wonder.
“We can’t say,” responds the house. “Do you still want to play?”1
What distinguishes great leaders from average leaders, says Arthur, is their ability to
perceive the nature of the game and the rules by which it’s played as they are playing.
In order to succeed in competitive environments that operate according to the
“winner takes most” rule of increasing returns, leaders have to develop another
cognitive capability: the capacity to sense and actualize emerging futures. This
capacity constitutes a new kind of knowledge creation, one that no one really
understands how to reproduce or apply, particularly in larger companies.
BOX 1: RULES OF THE NEW ECONOMY (KEVIN KELLY 1998: 161)
• Decentralization: As power flows away from the center, the competitive advantage belongs
to those who learn how to embrace decentralized points of control.
• Increasing Returns: The value of a network explodes as its membership increases, and then
the value explosion sucks in yet more members, compounding the result.
• Plentitude, not Scarcity: In the network economy, the more plentiful things become, the
more valuable they become.
• Follow the Free: As resource scarcity gives way to abundance, generosity begets wealth.
• Feed the Web First: Unless the net survives, the firm perishes.
• Let Go at the Top: Innovation requires unlearning.
• From Places to Spaces: As physical proximity (place) is replaced by multiple interactions
with anything, anytime, anywhere, the opportunities for intermediaries expand greatly.
• No Harmony, All Flux: Innovation and flux occur at the edge of chaos and order.
• Relationship Tech: In the post-industrial era, communication is economy.
• Opportunities before Efficiencies: Opportunity is the ultimate raw material for value
creation in the knowledge economy.
1
Arthur 1996

1.2 The Alliance Story
The seeds for this research project and leadership laboratory were planted back in
1998, at a meeting of the senior officers of an organization we refer to as the
Alliance.
The Alliance was formed in early 1997, when Shell Oil Company, Texaco Inc., and
Saudi Aramco announced their intention to form an alliance of all of their
downstream operations in the United States. This company would be the largest
downstream operation (refining, distribution and marketing) in the world, with
revenues approaching $40 billion annually. About 250 senior officers of the three
companies were assigned to work together to ensure a smooth start when regulatory
approval was gained. This “transition team” worked together at a feverish pace for 14
months before the Federal Trade Commission granted final approval.
When operations were set to begin in early 1998, a final gathering of the transition
team took place in Houston. At the kick-off of this meeting, a senior officer from
each of the three companies spoke to the group. The Chief Operating Officer of
Texaco Inc., Glenn Tilton, gave the opening remarks. They were startling in their
honesty.
“We’ve been down a long road all pulling together to put this alliance in place. This
will be the largest downstream operation in the world and the eyes of the oil world
are trained on us. We have worthy competitors in the major oil companies, but our
greatest challenges will come from the newer, more nimble, entrepreneurial
downstream operators, the Racetracks and Quick Trips of the world. We’re going to
be challenged as never before. We in this room have been operating in major oil
companies most of our lives as elephants. But starting next week, we’re going to have
to act like gazelles if we expect to be in the phone book in five years.”
You could have heard a pin drop. He continued, “To be honest with you, I’m not sure
we can do it. I’m personally afraid — afraid that we can’t rise to the occasion. We’ve
got our work cut out for us in more ways than we can ever imagine.”
The purpose of the leadership laboratory project is to create a learning environment

that helps leaders to “act like gazelles,” that is, to learn how to innovate in the new
economy. Under the leadership of Gary Jusela, the Chief Learning Officer of the
Alliance, a design team was created in early 1999, made up of managers from key
business units across the Alliance.2 The team worked together for eight months,
2
Design Team Members: Nancy Badore, Sue Byrne, Jim B. Castles, Dave D. Chapman,
Tom M. Gallagher, Carolyn J. Grovey-Brown, Lori T. Herlin, John H. Hollowell, Joseph Jaworski,
Pat Kennedy, D. Beth Macy, Alicia Randolph, Otto Scharmer, Reola Phelps, and Adam Kahane.

making significant contributions to the design that is indicated in the final section of
this paper.
In order to inform and inspire the thinking of the Design Team, we, the authors,
sought out and interviewed twenty of the most interesting thinkers and practitioners
in the areas of creativity, high performance, and the new economy (see Box 2). We
knew we needed help in understanding the principles of the dynamic we were
exploring. Specifically, we wanted to:
• identify the principles and practices used by leaders in the new economy
• use these principles to design a leadership laboratory that would help leaders learn
how to sense and actualize emerging futures faster and better.

BOX 2: LIST OF INTERVIEWEES (1999, PHASE I): 3
1. W. Brian Arthur, Ph.D., Professor, Santa Fe Institute
2. Gordon Campbell, President, Techfarm
3. Jim Carreker, Chairman and Chief Executive Officer, Aspect Telecommunications
4. Bruce Cryer and John White, HeartMath Institute
5. Mihaly Csikszentmihalyi, Ph.D., Professor, University of Chicago
6. Ann DeBusk, President, American Leadership Forum, Silicon Valley
7. Larry Dossey, M.D., author of five books on the role of the human mind in health
8. Dr. John F. Elter, Vice President and Chief Engineer, Xerox Corporation
9. John W. Gardner, Consulting Professor, Stanford University
10. Charles Geschke, Chairman and President, Adobe Systems, Inc.
11. Edward Hoffman, Ph.D., clinical psychologist, author of a biography of A. Maslow
12. Jon Kabat-Zinn, Ph.D., Executive Director, Center of Mindfulness in Meditation, Healthcare,
and Society at the University of Massachusetts Medical Center
13. Michael Lipson, Ph.D., Chief Psychologist, Columbia University
14. Manuel Manga, Member, Society for Organizational Learning
15. Charles Miller, Chairman, Meridian Advisors, Ltd.
16. Gib Myers, Founding Partner, Mayfield Fund
17. Srikumar S. Rao, Ph.D., Columbia University
18. Michael Ray, Ph.D., Professor of Creativity and Innovation, Stanford University
19. Peter Senge, Ph.D., MIT Sloan School of Management, Society for Organizational Learning
20. Alan Webber, Founding Editor, Fast Company
The purpose of this paper is to share some of that research. To date, we believe that
our work has yielded three significant insights.
3
Gary Jusela, then Chief Learning Officer of The Alliance, joined us on a number of interviews. He has since been
succeeded by William T. Fitzpatrick.

1. Doing well in the new economy requires the enhancement of a particular

capacity: the ability to sense and actualize emerging realities.
2. This ability can be developed using the following practices:
Ø Listen to your call
Ø Observe, observe, observe: become one with the world
Ø Uncover intent and surrender into commitment
Ø Allow inner knowing to emerge
Ø Crystallize and broadcast intent
Ø Act in an instant
Ø Work: execute, learn, let go
3. To foster these seven practices, leaders have to build three different types of
knowledge-creation environments: (1) Total immersion: Field visits and “learning
journeys”; (2) Deep knowing: retreats designed for reflecting on field experiences
and accessing inner sources of knowing; and (3) Venture incubators that foster
the rapid prototyping and development of new business ventures.
The remainder of this paper is organized into three sections: (1) sharing a moment of
epiphany from our conversation with W. Brian Arthur, (2) discussing the seven core
practices that constitute the ability to sense emerging futures, and (3) specifying the
three environments that foster that ability.
1.3 Meeting W. Brian Arthur
When we went to Palo Alto to meet W. Brian Arthur at Xerox PARC, we were
interested in one thing: Given Arthur’s assertion that success in the new economy will
stem from an ability to recognize emerging competitive games first, how does one do
that? What specific activities can help leaders intuit, recognize, and comprehend
emergent realities in the context of the new economy?
Arthur began by distinguishing among different levels and qualities of cognition.

Cognition might mean, for instance, simply “rummaging around in your mental attic”
for an existing framework to apply, or it might mean something more fundamental,
“a deep inner knowing.” How do you access this deep inner knowing? Says Arthur:

Suppose I was parachuted into some situation in Silicon Valley — not a

real problem, just a complicated, dynamic situation that I’m trying to
figure out. I would observe and observe and observe and then simply
retreat. If I were lucky, I would be able to get in touch with some deep
inner place, and allow knowing to emerge.
You wait and wait and let your experience well up into something
appropriate. In a sense, there is no decision-making. What to do just
becomes obvious. You can’t rush it. Much of it depends on where you’re
coming from and who you are as a person. This has a lot of implications
for management. I am basically saying that what counts is where you’re
coming from inside yourself.
Imagine what that would mean for a CEO from a traditional company
like Pepsi Cola who suddenly finds himself at Apple Computer. What’s
he going to do? He’ll bring one sort of cognition with him — cost down,
quality up, whatever the mantra is — and it won’t work. Now think
about someone like Steve Jobs. He knows how to distance himself from
the “problem” and think differently. When he came back to Apple, the
Internet was just beginning. No one knew what that might mean. Now
look at him: he turned Apple around.
First-rate scientists have the same ability. Good, but not quite first-rate,
scientists are able to take existing frameworks and overlay them on to some
situation. The first-rate ones just sit back and allow the appropriate structure to
form. My observation is that they have no more intelligence than the
good scientists do, but they do have this other ability that makes all the
difference.
There are many types of understanding. Most tend to be the standard
cognitive kind that you can work with in your conscious mind. But there
is a deeper level. Instead of an understanding, I would call this deeper
level a “knowing.”
Arthur believes that as technology continues to drive the new economy, people will
develop new ways of knowing, of sense-making — and of doing business.
The conversation with W. Brian Arthur was seminal to our thinking, and helped us
articulate a new core process of knowledge creation. This is summarized in the
following three-stage sequence (see Figure 1):
• Observe, observe, observe. Become one with the world.

• Reflect and retreat. Listen from the inner place where knowing comes to the
surface.
• Act in an instant. Incubate and bring forth the new into reality.

1.
Observe, 3.
observe, Act in
observe an instant
2.
Allow the
inner knowing
to emerge
Figure 1: Cognizing Emerging Futures
2 Seven Core Practices
The conversations we had with our other interviewees essentially supported and
expanded on the three-step process proposed by Arthur. Ultimately this led us to
envision one single process with seven distinct aspects or practices (Figure 2).
1. 7.
Listening Work:
to your execute,
call learn, let go
2.
6.
Observe,
Act in
observe,
an instant
observe 3.
Uncover
intent 5.
4. Crystallize and
Allow the broadcast intent
inner knowing
to emerge
Sensing Presencing Embodying
Figure 2: Seven Core Practices of Leadership in the New Economy

These practices are:
1) Listen to your call
2) Observe, observe, observe: become one with the world
3) Uncover intent and surrender into commitment
4) Allow the inner knowing to emerge (Illumination)
5) Crystallize and broadcast intent
6) Act in an instant
7) Work: execute, learn, let go
The following sections discuss each of the seven core practices in more detail. Though
each can be described distinctly, they are so closely linked that they are often
experienced simultaneously, or with some degree of overlap.
2.1 Practice 1: Listen to Your Call
“Every journey,” says philosopher Martin Buber, “has a secret destination of which
the traveler is not aware.”4 Becoming aware of that destination is the essence of
“listening to your call.” By cultivating a certain quality of attention, every person can
learn to recognize the resonant tone of thoughts and feelings that serve as their inner
guide. Those who have followed those clues and developed a strong sense of direction
often speak of finding their “calling” in life.
More often than not, the call first presents itself as a feeling of frustration with
current conditions, and the sense that something more is possible. Alan Webber,
co-founder of Fast Company, recalls what contributed to his own sense of readiness:
We were really frustrated with our work situation. At the same time, we
sensed the approach of some major shifts. Globalization and the new
technology of digital communication were changing how and why people
work. That frustration, coupled with a changing world and my own
approaching middle age, made me take the leap. I knew if I didn’t do it
then I’d soon be too old, too cautious, or too established to try.
We asked Webber to tell us why he wanted to create Fast Company. Says Webber:
4
We thank Ed Hoffman, who called our attention to this quote.

People who have genuinely been taken over by an idea or a belief usually
can’t answer the question “Why are you doing this?” in rational terms.
Years ago my father bought me a collection of interviews of great fiction
writers. The interviewer was George Plimpton. He’d say, “Why did you
become a writer? Why do you get up in the morning and write?” The
answer invariably was, “Well, I can’t not.”
People would ask me, “Why are you doing Fast Company?” At first, the
answer was very rational: “Well, you know, it’s a magazine about this and
that, and the world doesn’t have one.” But I soon realized that those
reasons weren’t the real ones. The reason you do it is because you can’t
not do it. But it’s hard to explain that to people without sounding like a
lunatic.
Although some people experience their call so strongly they feel compelled to follow
it immediately, many others don’t respond for some time. Responding inevitably leads
to change, and until one is ready for change, the call falls on deaf ears.
2.2 Practice 2: Observe, Observe, Observe
The essence of the second practice, “observe, observe, observe,” is opening up to and
immersing oneself in the emerging new. The process of immersion allows people
time to see and sense the situation they are in without, as Arthur points out, rushing
to make sense of it using a preconceived pattern of cognition. Instead, observations
and sensations combine to form new ideas and understandings. As the Leadership
Laboratory’s field visits confirmed, the core practice of “total immersion” is absolutely
critical to many companies’ immense success. The immersion experience gives them a
full understanding of their customers, and their customers’ changing needs in a
changing environment — a significant competitive advantage.
In the case of many entrepreneurs, this immersion requires a departure from an

institution which has provided a secure, yet closed, environment. That very security
begins to feel constraining, and inspires the need to cross the boundary from the
known to the unknown. Some people take the step with trepidation, some with glee,
but the move always opens up a new world of activity, connection, and “magic.”
Webber recalls:
I remember vividly my sense of liberation when I left the Harvard

Business Review. All of a sudden I started meeting a whole new group of
people. The basis for personal interaction was completely different:
“What are you working on that is interesting and who are you and how
does it feel?” I was seeing the world with fresh eyes. I was learning at a
rapid clip, going places I had never been before, and meeting people I

would never have met before. It was as though I had escaped the
boundaries of a walled city.
Charles Geschke, the Chairman and President of Adobe Systems was brought to the
threshold of his entrepreneurial journey when he was still teaching math at a
graduate school. Says Geschke:
I had to fail a graduate student in math because he just wasn’t capable of

getting a master’s degree. He left the school. A year later he called and
asked if he could come see me. I said yes, but I didn’t know what to
expect. Was he going to tell me I’d ruined his life? When he came in he
was smiling and happy and well-dressed and he said, “The best thing you
ever did was kick me out of here. I got a job selling computers for
General Electric and I’ve made so much money in the last year that I just
don’t know how to thank you. I’ve been thinking of what I could do for
you and I wondered if you would like to learn how to program. I’d be
happy to come in the evenings to teach you and your friends if you’d
like.” I said, “Great!”
Learning Fortran set Geschke on a path of change and discovery that led to Carnegie
Mellon, Xerox PARC, and, eventually, Adobe.
2.3 Practice 3: Uncover Intent: Surrendering into Commitment
Crossing the boundary into the unknown leads to challenges and tests that require
cultivating a third practice: uncovering intent and surrendering into commitment. As
the many entrepreneur’s stories show, sensing and uncovering one's true intent is
always interwoven with the first two practices, “listening to the call” and “observing.”
The journey of discovery is not linear; it is an iterative, self-reinforcing progression.
The following account comes from Gordon A. Campbell, a well-known entrepreneur

and a veteran of many Silicon Valley start-ups. Over the course of his remarkable
career, Campbell held positions in sales, marketing, and engineering at Honeywell,
Motorola, and Intel. When Intel decided to move all its operations to Mexico,
Campbell’s division was one of the first to move. Because his children were going to
stay in the U.S., Campbell felt no desire to move, but hadn’t done anything to change
his situation.
One day four or five people from my group walked into my office and
said, “We have a problem. We’re going to leave Intel. We want to start a
company and none of us will work for each other, but we’ll all work for
you. Would you consider coming with us?”

I’d never even thought about running a company or doing a startup. It

was one of the toughest decisions I ever made, because I really liked Intel
and I think they liked me. I finally decided that I might never get
another chance to be a CEO.
The start-up he founded, Seeq, eventually grew to about $50 million in annual
revenues. Campbell decided to move on when it began to feel like a “normal
company,” but left without knowing what he was going to do next. Soon enough, his
commitment was unexpectedly reinforced — by someone else’s commitment:
One day there was a knock on my door. It was my old secretary. She
said, “They threw me out. I don’t know what I’m going to do!” and I
said, “Well, join the club.” She said, “Would you mind if I just come to
your house every day? You don’t have to pay me. I’ll just answer your
phone.” I said yes, and she became employee number two in my next
company.
After months of observation and immersion into new environments, his next business
idea took shape around the idea of creating a fabless semiconductor company called
Chipset.
In mid-1985, we went down to IBM in Boca Raton. We had a meeting

with the executive staff. We said, “Here’s our idea: we’re going to create
this product called a Chipset. This Chipset is going to allow you to build
your product much more efficiently, have lower power, more features,
higher performance and we think you ought to buy some of these.”
IBM kind of sat back and thought and looked at us and shook their
heads and said, “You just don’t understand do you?”
We said, “Okay, what don’t we understand?”
And they said, “Well, if we bought your Chipset and we built our PCs
with your Chipset, we would have to change the documentation
worldwide and any cost savings we got out of your Chipset would be just
overwhelmed by the cost of just changing our documentation.”
And we said, “Oh, okay.”
Did this mean the idea was bad, or starting a new company a mistake? Learning to
assess new information and opportunities in light of your original commitment was a
theme in many of the interviews we conducted with entrepreneurs. As Campbell tells
it:
IBM was interested in what we were doing and was willing to set us up
as a design center for future products. So, there we were. We had no

money. There was no market for our product. Should we take their offer,
or should we charge ahead? We decided to charge ahead. We didn’t want
to be designers doing a design center for IBM.
Campbell’s continuing story is a testament to the power of intention and

commitment. With no capital, Campbell was only able to proceed by borrowing
against his own personal credit cards. At several points, the “road of trials” started to
look like a dead-end. At the same time, his commitment and perseverance seemed to
attract the help he needed just as he needed it.
Raising money was incredibly difficult. Sixty venture capitalists turned me down.
A couple of them pulled me aside and told me that the word on the
street from Hunter Perkins was that I was a bad person to do business
with, and that anyone who did business with me would no longer get
business from them.
By mid-1985 we’d gone through the first million and a half. We were
proceeding very nicely on the designs, but I had no money, and I had no
fab. No one in the U.S. would run designs for me, so I packed my bags
and went to Japan. Toshiba and Fujitsu committed to support us. I flew
to Korea to talk to some more people. My personal credit card was about
maxed out. I had no idea what I was going to do when I got back. While
I was there, my secretary called to tell me that someone who had heard
my presentation in Korea had gone back to Japan and told a guy named
Kaynishi about me. Kaynishi happened to be Microsoft Japan. He
wanted to talk.
I flew back to Japan and had dinner with him. At the end of the evening he
asked me if it would be possible for four Japanese companies to invest in us. I said
I’d have to think it over, but it might just be possible. Little did he know that we
were almost bankrupt.
They put in another $1.5 million. It wasn’t a lot of money at the time.
They made their investment in September and we started shipping
product in November. We turned profitable in December and we took
the company public in its 16th month. In the third year of our company
history we did $100 million. In the fourth year we did $200 million and
in the fifth year we did $300 million. It was a rocket ride.
Gib Myers, a long-time managing partner of the Mayfield Fund, is currently setting
up a community foundation whose purpose is to transform the culture of Silicon
Valley. His story illustrates the process of gradually uncovering one’s own intent,
which he summarized by saying:
I have not been much of a community person. But as the pieces began to
come together, I felt this was something that was meant for me to do.

Sometimes I wondered about that, but I thought, “I just have to do this.”

Once I’d tested it and made sure there weren’t any huge flaws, I said,
“This is the time. I’ve got to do it. I don’t know why.” I wouldn’t say I
had to do it — like I had no control — but it was the right thing to do.
Positive feedback often gives those who are venturing into the unknown the
strengthened commitment they need to continue, as Alan Webber describes it:
After we had done our prototype issue, we were looking for someone
with a lot of money to help make it go. We kept saying “If it doesn’t
happen by such and such a date, we’re going to have to kill it.” And we
kept setting new dates. We were still getting good feedback, good
signals. It was obvious to us that it should happen and that it needed to
happen. Our attitude all along was that this was too good an idea not to
happen. The project is over when you lose your spirit. It’s over when you
say it’s over.
Sometimes that feedback does not seem positive — but it does help strengthen
commitment. Charles Geschke relates:
My professor took me aside and said, “I don’t think you’re going to make
it in this program.” I went home and told my wife Nan. She just looked
at me and said, “Now listen here. You quit your job, you moved the four
of us down here, and we’re living on $300 a month. You get your butt
back there and go back to work.” I said, “Well, I guess I know what to
do.” And I turned around and went back to study.
Brian Arthur used the term “surrender” to describe the inner quality of action that is
required for this kind of commitment. Says Arthur:
I think that in some strange sense the absolute key to living a very active
life is surrender. As Martin Buber says, “You are not surrendering to your
own will but to a higher, deeper will.” In some sense I think that one has
to say, “Look, I’m here. I’m willing to do whatever is necessary. Give me
the chance to do it, and the means, and I’m willing.”
2.4 Practice 4: Allow Inner Knowing to Emerge
The first three practices along the left side of the U (Figure 2) are all aspects of, as W.
Brian Arthur articulated it, the experience of observing and becoming one with the
world. The second or lower part of the U-shape is anchored by Practice 4, going to
the inner place where knowing comes to the surface. Says Arthur:

The inner knowing comes from here [pointing to his heart]. Every one of
us has experienced this in different ways, even if we’re not conscious of it.
While business managers in the West tend to scoff at the idea, the ability to get in
touch with this deep inner knowing is viewed as eminently practical by those in the
East. Although everyone has this ability, not everyone has found the means to access
or develop it. Arthur thinks meditation is one way to do so:
I was sitting around in the Coyote Café in Santa Fe with my friend Phil
Anderson5 when somebody said, “Hey Phil, do you play chess?”
“No,” replied Phil.
“Do you play checkers?”
“No,” repeated Phil.
“So you’re not any good at that sort of thing?”
Phil said, “I play Go.”
“Oh,” I said, “Phil, are you any good at Go?”
“I’m not bad at it.”
“How good are you?” I asked.
“Well,” he said, “there are four people in Japan who can beat me.”
“Why can they beat you, Phil?” I asked.
“They meditate,” he said.
To me, this means they’re coming from that inner place of knowing. We
have no vocabulary for it. There is another place where you retreat deep
into essence and then let things emerge.
Other less formal kinds of meditation can also provide access to this deep source of
knowledge. Immersing oneself in any activity can evoke the “flow” experience where
inner knowing surfaces. Arthur distinguishes between two levels of knowing and
illustrated it with a story of his own experience.
You absorb and absorb and absorb and then forget and it becomes an
inner part of your being that the knowingness can arise from. That’s one
level. I suspect there is an even deeper level, one which the West might
call “grace.”
5
Philip W. Anderson, the Vice Chairman of Physics at Princeton University, is also a member of the Steering
Committee and Science Advisory Board at the Santa Fe Institute. The winner of the 1977 Nobel Prize, Dr.
Anderson has received numerous distinctions and honors, including the O.E. Buckley Prize, the John Bardeen
Prize, the Dannie Heineman Prize, and the National Medal of Science.

When my wife finished her Ph.D., I took a two-month leave. We spent

it in Hawaii, during which time I read a great deal. If there was one
moment of epiphany, it was in June 1979 when I read an essay that
Prigogyne had written about positive feedback. It covered everything
from the way termites build nests to the phenomenon of languages
taking over. Almost instantaneously I realized I had the answer. All I needed
to do was figure out what the question was. It took another ten years to
do that. But again, suddenly within about two or three weeks, everything
in economics fell into place for me.
Following our meeting with Arthur, we met with Michael Ray, Professor of
Creativity and Innovation, and creator of the famous course on “Creativity in
Business” at Stanford University. We were curious about the connection between
creativity and inner knowing. Ray told us that he creates learning environments in
his classes that allow students to answer the two root questions of creativity for
themselves. Says Ray:
The first question is: Who is my Self? By that we mean your higher self,
your divinity, and your highest potential. The second question is: What is
my Work? In other words, what is the purpose of your existence; what are
you meant to be?
Over the twenty years Ray has taught his classes, he has made it a practice to invite
successful creative figures and entrepreneurs in to talk to his students. These guest
speakers tell their own stories of dealing with the challenges of the creative process.
Ray recounted one story that clearly spoke to being in touch with your inner
knowing:
One of the speakers in our class was a fellow named Will Ackerman. He
was a student here who had one class to finish — a class on Chaucer —
when he went to the professor and said, “I can’t take this anymore. I’m
dropping out.” The professor said, “Sounds like a good idea, Will. I think
I will too.” The professor was Will’s father, who did indeed quit his job
after his son quit school.
Will had a construction company here in California, but he was also a
musician. He borrowed $5 each from twenty of his friends and cut a
record. The resultant record company, Windham Hill, was one of the
first new age music companies, and it became hugely successful.
Will built a little place for his father in New Hampshire. One night they
were sitting out on the porch in their rocking chairs and Will said, “I
don’t know Dad. I’ve got this construction thing; I’ve got this music
thing. What should I do?” His father said, “You know Will, I’ve never
made a decision in my life.” And Will thought, “Oh God what a letdown.”

But as he thought about it he realized it was really a Zen statement. If

you know what’s right, you don’t have to make decisions. When you know
what’s right, it’s just there for you, and you do it.
Michael Ray’s two root questions of creativity are very similar to those that Peter
Senge, author of The Fifth Discipline and luminary of the organizational learning
movement, uses as his personal guiding questions. Says Senge:
I have always felt that I should do what I was here to do. To know what
that is, I have to keep asking, “What’s going on in the world?” and
“What’s important to me?” The two questions are intertwined and can’t
be answered in isolation. I think we’re all born with these questions.
Every child is always asking: “What’s going on here?” and “Why am I
here?” They are the most important questions we can ask.
Senge shared a story with us that shows how the practice of observation and
immersion can pass directly into tapping “inner knowing.” Says Senge:
I once met astronaut Rusty Schweickart. He believed that everybody who

goes into space has their consciousness transformed, but that very few
people have the capacity to reflect and make some sense of their
experience.
He said, “You go around the planet every 90 minutes. If you just keep
looking, you realize your consciousness is changing dramatically. The
first four or five days you’re waiting to see places you know, that are part
of your personal history. After a while you realize you’re looking at all
the places you can name on the planet and identifying with them
equally.”
On the very last day they were passing over the Middle East — the
Sinai, the Mediterranean, Jordan and Israel, Palestine, Syria, Iran. And
suddenly it hit him: there were no physical boundaries between these
countries. In that instant he knew that millions of people were dying
over imaginary boundaries. As a result of that experience, Rusty left the
space program early, and now works for the California Energy
Commission.
Brian Arthur, Michael Ray, and Peter Senge talk about accessing an inner source of
knowing that leads to a fundamental shift of mind. Abraham Maslow gives a
beautiful description of the power that results from this shift:
The first great task is to search for one’s identity. Each person must find
his or her true, active self . . . Clearly, this task is related to finding one’s
calling . . . What is the mission that one chooses to love and sacrifice to?

First you must be a good person and have a strong sense of selfhood and
identity. Then immediately all the forces in the world become tools for
one’s own purposes. At once, they cease to be forces that cause,
determine and shape but become instruments for the self to use as it
wishes. . . .
Essentially, if you know who you are, where you are going, and what you
want, then it is not hard to deal with inane bureaucratic details,
trivialities, and constraints. You can simply disarm them and make them
disappear by a simple shrug of your shoulders. . . . Persons who have
achieved their identity are “causers” rather than “caused.6
2.5 Practice 5: Crystallize and Broadcast Intent
Another practice that was highlighted by our interviewees was the power of intention
and will. This is very similar to Practice 3; in effect 3 and 5 are simply a continuum of
one practice. Some think of surrendering into commitment as the “inhalation,” and
broadcasting intent as the “exhalation.” Professor Srikumar Rao, who teaches a course
on business creativity at Columbia and Long Island University, told us that the
essence of his work was to teach students to develop, hold, and broadcast their intent.
If you form and hold your intent strongly enough, says Rao, it becomes true. But how
do you develop your intent? Says Rao:
You become extremely clear about what it is you want to do. Why is it
you want to do what you do? How is it a reflection of your values? How
does it relate to your unique purpose in life? What is it that you want to
accomplish in society? Think about all of the inherent contradictions
that are there and then, if possible, reconcile them. This could take
anywhere from a week to years. This process of refinement — thinking
about your intention many, many times — is, in a sense, a broadcast of
intention. When you broadcast such an intention, there is very little else you have
to do. The broadcast of intention goes out and makes it happen.
Crystallizing intent often occurs with the help and feedback of other people. When
Geschke and his colleagues first decided to start their own company, they went to a
venture capitalist in the Valley.
He said he’d hire someone at his own expense to help us draft a business
plan he could take to his investors. When we eventually took that plan to
the venture capitalist, he liked it and said, “I’ll give you the money.” We
asked if we could have something a little more formal than that because
6
Quoted from Hoffman 1996.

we both had families. My oldest was about to go off to college. The

venture capitalist told us that he’d meant what he’d said but he couldn’t
put it in a contract until after we left Xerox.
We quit and incorporated a day after we left Xerox. Sure enough, within
a month we had $2.5 million worth of venture capital investment.
They started the company and soon got a phone call from DEC. Gordon Bell visited
their site and was impressed with what they were doing. He suggested they license
their software to him. Looking back on it now, Chuck laughs:
I thanked him very politely and told him that wasn’t our business plan,
but we’d keep in touch.
Soon they had another call from an ex-Xerox colleague now at Apple. As their
intention was tested, it was also refined.
He told us he thought Steve Jobs would really be interested in this, and

set up a meeting. Steve liked what he saw. He said, “I’d like to buy you
guys.” We said we weren’t for sale. “Oh come on,” he says. And we said,
“No, we have this business plan.” He said, “Well, that’s a dumb business
plan.” He said, “I don’t need computers. I don’t need laser printers. I
really want to have that software.” We said, “Well, we’re not for sale.”
We hassled all through the summer and finally he proposed that we just
change our business plan. He thought we should go into the business of
licensing the software. We told him we had heard from DEC. He knew
we were already talking to a typesetting company. He said, “Why don’t
you just figure out a business plan where we pay you a percentage of every
piece of equipment your software is on?” So that’s how our business plan
got rewritten. Steve volunteered the new business strategy for us.
The ability to crystallize intent was described by John White of the HeartMath
Institute as the capacity to develop a “laser intent.”
Often people know what to do, but they haven’t acted on it yet. It’s
floating around in their consciousness and they understand theoretically
that they need do something, but they haven’t. Once they see very clearly
“This is what I need to do and now I know that,” their intent becomes more like a
laser and less like incandescent, incoherent light. Their intent and their will are
more focused and concentrated. It doesn’t take as much will to do
something if you know it’s the right thing to do.
When the kind of “laser intent” that develops from clear intentions and commitment
is broadcast, it evokes response. As Gib Myers put it:

Every time there were obstacles or I had no idea what would happen,
something would unfold or open up.
2.6 Practice 6: Act in an Instant
The sixth practice involves the ability to draw on deep knowing and strong intent to
act instantaneously — not just once, but continually. This, and Practice 7, form the
final upward sweep of movement in the knowledge-creation “U” of Figure 2.
In the case of organizations, that means being able to concretize ideas, build and test
prototypes, and get products to market with lightning speed. One of the most critical
elements in that capability is attracting and retaining the right kind of talent. This
task is increasingly difficult in the new, technology-driven economy. Says Gordon
Campbell:
If you are going to compete in this marketplace in this economy you

need to have an enormous sensitivity to the time element. That
translates into execution, and execution translates into people. If your
team can’t execute and you’re not going to come out with a product at
the right time, you’re just not going to be successful.
At the same time, the right people are critical to the speed and success of a team.
Learning to distinguish between those who can further the work, and those who
cannot, is critical. Says Webber:
Every step of the way we found people who were drawn to what we were
trying to do and eager to be as helpful as they could. That can get tricky.
All of them were good people, but they weren’t all equally good for the
project. When you’re feeling so joyful about all the new openings and
possibilities you’re experiencing, it’s hard to know what’s a diversion and
what’s the next opportunity. You are constantly evaluating and gauging
whether this new person, idea, or partner is a potential landmine or the next
chapter in the story. It’s a constant dialogue between you and the universe,
between you and your environment.

Making decisions quickly requires not only being constantly and consistently in tune
with one’s deep knowing and intent, but, also, as Webber points out, an awareness of
the context in which those actions take place.
2.7 Practice 7: Work: Execute, Learn, Let Go
Many entrepreneurs are deluged with ideas — their own and others’ — and
knowing which to develop and work on, which to ignore, and when to cut your
losses, is one of the most difficult practices. Practice 7 involves learning how to put the
organizational routines and structures in place that will support the ability to act
quickly, evaluate the results, incorporate new learning, and continue to act.
That ability allows you to recognize the way the evolving daily work is connected to
one’s Work, or calling, and to keep the two in balance. Says Webber:
The work of doing the magazine is not about getting interviews, and it’s
not about getting awards. Its about meeting remarkable people who are
doing amazing work and getting them to tell their stories in the pages of
our magazine so that other people can share that.
When I find myself worrying about little stuff, or whether I’m a hero or
a failure, I know I’m listening to the wrong voices. The real voices are all
about this conversation that started many years ago about what really
matters. What really matters is the capital “W” Work, and the Work
comes out of this magic concoction of the reasons we started down this
road in the first place.
3 The Essence of Sensing and Actualizing
The seven practices described above are all aspects of the same single movement.
That movement takes place on many levels and can be viewed from three
perspectives: process (from felt sense to embodiment); person (the leader’s journey);
and principles (the power of intent, mindfulness, and love).
3.1 Process: Sensing — Presencing — Embodying
The process that underlies the seven practices consists of three main stages : sensing,
presencing, and embodying. This correlates with the three stages of all creative
processes: conception, gestation, and delivery.

In the first stage, sensing, the focus is on opening up to the world. It starts with seeing
reality as it is, and may extend to uncovering some of the hidden or emergent realities
both within and outside of one’s organization. The main focus, however, is on
transcending external boundaries and interacting with the larger world.
During the second stage, the focus reverses and is redirected inward. While the first
stage focused on transcending external boundaries, the purpose of the second stage is
to transcend internal boundaries — to tap into the sources of your highest potential,
and to bring your highest Self into presence.
During the third stage, the focus shifts again, from presencing to embodying,
incubating, and executing.
Throughout all of these stages, three different types of learning infrastructures or

holding environments are needed. During Stage One, infrastructures are put into
place that allow people to transcend the boundaries of their own organization, both
physically and mentally, and to experience the world through the perspectives of
others. Field visits are one example of this kind of infrastructure.
During Stage Two, the environment required switches from one that provides
connectivity to one that provides a generative cocoon from which a new kind of
knowing can emerge. A well-designed off-site retreat in a quiet, special place is an
example of this kind of infrastructure.
Stage Three depends on a third kind of environment, one that supports the
development of new venture ideas into venture proposals. Incubators that are
conducive to creativity while providing opportunities for deep customer interaction,
rapid prototyping, and effective technical help are critical at this stage.
3.2 The Leader’s Journey: Through the Eye of the Needle
From an individual point of view, the U-shape process looks like a “journey.” At the
heart of the leader’s journey lies a new way of seeing the intertwined relationship
between one’s self and the world. The question “Who is my Self?” cannot be
answered by pure introspection but only by engaging with the world. Likewise, the
question “What is going on in the world?” cannot be answered by observation alone:
it requires accessing inner wisdom.
This brings us back to Webber’s notion of a “semi-permeable membrane” that allows

leaders to engage in a dialogue with the universe. Martin Buber gave one of the finest
descriptions of this delicate balance between sensing and actualizing when he talked
about the distinction between “unfree will” and “grand will.” Says Buber:

Free is the man that wills without caprice. He believes in the actual,
which is to say: he believes in the real association of the real duality, I
and You. He believes in destiny and also that it needs him. It does not
lead him, it waits for him. He must proceed toward it without knowing
where it waits for him. He must go forth with his whole being: that he
knows. It will not turn out the way his resolve intended it; but what he
wants to come will come only if he resolves to do that which he can will.
He must sacrifice his little will, which is unfree and ruled by things and
drives, for his great will that moves away from being determined to find
destiny. Now he no longer interferes, nor does he merely allow things to
happen. He listens to what grows, to the way of Being in the world, not
in order to be carried along by it but rather in order to actualize it in the
manner in which it, needing him, wants to be actualized by him — with
human spirit and human deed, with human life and human death. He
believes, I said; but this implies: he encounters.7
This balance between sensing (Practices 1–3) and actualizing (Practices 5–7) is at the
heart of the leader’s journey. The key challenge is not just about achieving that
balance but about passing through “the eye of the needle”: the transformational
moment of giving birth to something new and being changed oneself in the process.
(Figures 1, 2, 4.) This involves a subtle experience of transcending the boundaries
between self and world, or being in contact with the unitary ground from which both
spring. Goethe wrote:
Man knows himself only to the extent that he knows the world; he
becomes aware of himself only within the world, and aware of the world
only within himself. Every object, well contemplated, opens up a new
organ within us.8
The Self is the vehicle for bringing forth the new into the world, as the world is the
vehicle for the Self. Each of the entrepreneurial journeys recounted by our
interviewees included this passage of change, and embodied the seven practices in a
unique way. In each story, the seven practices constitute a tightly interwoven, living
whole.
7
Buber 1974
8
Goethe 1985

3.3 Three Root Principles
There are three root principles that characterize the leader’s journey through the U-
shape process: (1) the power of intent, (2) the power of mindfulness, and (3) the
power of love.
3.3.1 The Power of Intent
The most powerful tool available to a person who wants to make a significant
difference in the world is intent. The power of intention and commitment cannot be
overestimated. The intention we speak of here is not what many learned early on in
their careers — the commitment to “make it happen” — in effect seizing fate by the
throat and doing whatever it takes to succeed.
This commitment is another, deeper aspect of intention — it begins with the way we
think about the world, about life itself, and the role we play in life’s unfolding. In this
way of being, first we see the world as fundamentally open, dynamic, interconnected
and full of possibilities — possibilities that stand in need of us. When Martin Buber
wrote, “every journey has a secret destination of which the traveler is unaware,” he
was writing about the second aspect of this kind of intention — the most fundamental
need of the human species, to discover the intersection between our destiny and the
possibilities in the world waiting to be actualized by us.
There is a third, more subtle aspect to this way of intention that seems paradoxical.
The commitment to this journey, once taken, is absolute. It’s been consistently
described by the entrepreneurs we’ve spoken to as “total commitment,” a “crusade,” an
“epic journey,” a “life or death” matter. It is, in short, an effort of total, risk-it-all
conviction. The entrepreneur literally becomes one with the cause. Yet, in this state of
intention we must have the integrity, as Francisco Varela puts it, to stand in a “state of
surrender,” knowing that whatever we need at the moment to meet our destiny, will
be available to us. It is at this point that we alter our relationship to the future. When
we operate with this kind of intention and in this state of open commitment, we see
ourselves as an essential part of the unfolding of the universe, of life itself and we seek
to bring an unborn possibility into reality as “it desires,” to serve humankind, not to
serve our own narrow, selfish desires. It is at this very moment, Maslow has written,
that “all the forces in the world become tools” for this greater purpose. Persons who
have achieved this kind of identity are “causers rather than caused.”
3.3.2 The Power of Mindfulness and Hyper-Concentration
Relationship is the organizing principle of the universe. The physicist Henry Stapp
described elementary particles as “in essence, a set of relationships that reach out
outward to other things.” And David Bohm, a principal architect of quantum theory,

has spoken and written eloquently about the essential interrelatedness and
interdependence of life — that in reality there is separation without separateness. In
modern society, rather than acknowledge our essential wholeness, we tend to view
ourselves as separate from others — as individuals, institutions, states, or nations. By
seeing the world as fragmented, we create artificial barriers between each other and
fail to tap the potential inherent in our underlying unity.
A key discipline described by many of those we interviewed is that of mindfulness or

hyper-concentration. In this state, one experiences a collapse or transcendence of
boundaries between oneself and others and, indeed, the rest of the universe.
Sometimes this is called unitary consciousness. This state can be induced by personal
practices such as meditation or long-distance running or other forms of movement.
It is also induced by concentrated focus, particularly in the midst of critical moments,
such as those that occur in athletic contests or motor races. Athletes refer to this state
as being in the “zone.” Mihaly Csikszentmihalyi refers to this as the “flow state.” In
all of these instances, the underlying unity Bohm spoke of becomes reality resulting in
synchronistic experiences, precognition, and extraordinary experiences of highly
aligned action and shared meaning. It is in these same moments of high intentionality
and focus in the entrepreneurial experience that just the right people show up to assist
in the cause.
“Over and over again,” says Mihaly Csikszentmihalyi reporting on his research
project on optimal experience, “as people describe how it feels when they thoroughly
enjoy themselves, they mention eight distinct dimensions of experience.” Hindu
yogis, American basketball players, Australian sailors and chess players all report the
same the characteristics of the flow experience.
First, the experience usually occurs when we confront tasks that we have
a chance of completing. Second, we must be able to concentrate on what
we are doing. Third and fourth, the concentration is usually possible
because the task undertaken has clear goals and provides immediate
feedback. Fifth, one acts with a deep but effortless involvement that
removes from awareness the worries and frustrations of everyday life.
Sixth, enjoyable experiences allow people to exercise a sense of control
over their own actions. Seventh, concern for the self disappears, yet
paradoxically the sense of self emerges stronger after the flow experience
is over. Finally, the sense of the duration of time is altered. The
combination of all these elements causes a sense of deep enjoyment that
is so rewarding people feel that expending a great deal of energy is
worthwhile simply to be able to feel it.
When people operate on this level, the experience becomes autotelic, i.e., it becomes
worth doing for its own sake.

Michael Lipson, Chief Psychologist at Columbia University, describes the

phenomenon of flow or hyper-concentration from the viewpoint of what he calls
“living thought.” For Lipson, the key lies in developing the capacity for attentive
thinking.
Certainly organizations benefit from teamwork, from standards of

excellence, from dialogue, from quality control. But all these rely
fundamentally on a skill we rarely develop directly: the skill of thinking
fluidly and with concentration. When this basic capacity is developed
with unusual rigor, we discover the life-giving paradox that concentration
and improvisation are one and the same. When I am truly concentrated
on any task, it becomes new — and it gives rise to unexpected life. The
practice of attentive thinking leads us to participate wakingly, knowingly,
in the unfolding generative order. We can co-create at the level
of living thought, before thought descends into language and image.
Lipson’s notion of living thought describes a state in which we participate fully and
consciously in the unfolding generative order before it materializes or becomes
apparent. The key to achieving this state lies in heightening the capacity for
concentration and paying attention. What does it take to heighten this capacity?
Dr. Jon Kabat-Zinn, Executive Director of the Center of Mindfulness in Meditation,

Healthcare, and Society at the University of Massachusetts Medical Center says
meditation is about paying attention.
The heart of meditation has to do with something very simple: finding

one’s capacity for paying attention. Ultimately, it’s paying attention to
anything and everything that might be relevant to your capacity to
navigate in the world. Meditation training starts with simplifying the
fields of awareness and narrowing in on something like the breath.
There are two elements or levels of experiencing the practice of meditation. The
first level, as Kabat-Zinn explains, is the aspect of concentration.
When you begin to focus in that way, two elements come quickly to the
fore. One is that the mind has a life of its own and tends to go all over
the place. It’s not interested in staying focused on the breath. If you get
disciplined about it — by which I mean letting go of whatever your mind
carries you off to and bringing your attention back to the breath — you
will notice after a while that you can develop a certain amount of calmness
and stability of mind. By cultivating that kind of attention you can become
less reactive and agitated. That’s called the concentration aspect of
meditation.

Concentration leads to the second level, mindfulness, which allows the

practitioner to see beyond the visible to the underlying connections between
things.
If you bring a certain kind of open, moment-to-moment, non-

judgmental awareness to what you are attending to, you will begin to
develop a more penetrative awareness that sees beyond the surface of what is
going on in your field of awareness. This makes it possible to see connections that
may not have been visible before. That moment-to-moment, non-reactive, non-
judgmental awareness is mindfulness. The cultivation of mindfulness allows
you to see a greater relationship or unity among things. But it’s not
something you try to do. It comes out of the stillness.
Meditation practice is about dropping underneath the conventional way of
thinking. You don’t try to solve anything but just observe it.
This still space beyond our chattering, busy minds gives us access to a far greater
range of information, and it is a truly generative place. Says Kabat-Zinn:
Bringing more awareness into your life is going to influence everything because it
influences the next moment. Awareness is generative. It creates new
possibilities for interaction. We’re always thrown off by the chaos that’s
inside the order and the order that’s inside the chaos. The meditative
practice is a way of learning how to navigate at the edge of chaos. The most
creative and generative and imaginative elements of life are right on that
edge.
Larry Dossey, a physician who served for years as Chief of Staff of the Medical City
Hospital in Dallas, emphasizes that the rise of mindfulness and spirituality are linked
to an enormous shift taking place in society today.
The issue of spirituality and personal transformation cannot be teased out

from the huge social movement toward alternative therapies. When I say
social movement, I mean that this is one of the most significant social
movements in American culture at the end of this century. Each year 42
percent of Americans go to some sort of alternative therapist. That’s
nearly half. We are talking almost a majority here. They spend about
$37 billion annually, mostly out of pocket, because it’s usually not
reimbursed by insurance. We’re talking about a titanic shift in our
society.

Forty-two percent seems like an astonishingly large number. But Dossey, who just
completed a book called Reinventing Medicine, thinks the real number is probably
even larger. This shift has profound implications for traditional medicine.
Doctors are desperate to understand this. They have this feeling that the
train has left the station and they’re not on board. They’re trying to
figure out what to do and how to respond.
Tens of thousands of nurses are involved in a movement called
Therapeutic Touch. The practice calls for centering themselves before
they try to heal somebody at the bedside. Centering is getting quiet and
meditating and finding that place in yourself where you can allow empathy and
compassion to surface and well up.
There also appears to be a physiological basis for mindfulness. It is becoming widely

known that complex neuronal structures exist not only in the brain, but throughout
the human body. Some researchers even talk about “a little brain in the heart”
(Childre and Cryer 1999). The work of the HeartMath Institute involves measuring
the impact of consciously accessing what they call “heart intelligence.” Says Bruce
Cryer of the HeartMath Institute:
Intelligence in the human system is far more distributed than we used to

think. The old model that the brain was the master computer and
everything else followed its commands is wrong. We’re saying the heart
is a highly intelligent system, although nowhere near as neurologically
complex as the brain. It produces hormones and neurotransmitters that
we used to think were only were produced in the brain. The heart affects
brain function in many ways — electrically, biochemically, etc.
Biologically, there’s compelling evidence to suggest the heart is an
intelligent system.
Intelligence, or at least memory, has also been demonstrated at a cellular level. The
implications of this are far-reaching. Cryer explains:
What started out sounding like National Inquirer stories of heart

transplant recipients taking on personality characteristics of the donor
have now been documented. In most cases it’s short term, but heart
transplant patients frequently report that they have taken on some
personality characteristics of their donors. Truck drivers suddenly crave
fine wine and want to go to Europe and can’t figure out why. They
discover their donor was a writer for Gourmet magazine who traveled to
Europe all the time and loved wine. I asked one of the major heart
transplant surgeons in the U.S. at Cornell University of New York about
stories like this, and he said, “Absolutely, we see it all the time.”

In a sense, the physical heart is the transmitter station for spirit. Many
cultures throughout history have considered the heart to be the core of
the soul, even the core of intelligence. It’s really only been during the
last hundred years that the heart has not been viewed to be a source of
intelligence. In most other cultures of the world, the heart is still seen as
terribly central to what the experience of being human really means.
When we are internally coherent — meaning our mind and our heart are
in synch, which can be measured biologically — when the heart’s
rhythms and electrical patterns are most coherent, you feel the best. You
feel most alive. Your heart is in what you are doing.
Many of the people we interviewed used personal practices like meditation and other
forms of mindfullness to stay attuned and open to their own forms of knowing.
3.3.3 The Power of Love
The final root principle can be seen as an aspect of the first two, but it is of supreme
concern to anyone seeking to develop the capacity to better sense and actualize
emerging futures. It is the highest of the three principles: one must unambiguously
stand in a place of love, deep caring, and sacrifice for others, as opposed to devoting
energy to narrow selfish desires. In this instance, the other two principles become
operational and boundaries between self and others collapse. At this point there is a
palpable shift in capacity to bring the new into reality.
Perhaps the single best way to understand this phenomenon is to consider what
happens when individuals in crisis situations are willing to give their lives for others.
Larry Dossey gave some examples from his own experience. While in Vietnam, he
often risked his own life to help others. Where does that willingness to help others
come from?
Why one human being would actually put his life on the line for another
one has always puzzled me. When I got back from Vietnam, I read
Joseph Campbell. Campbell talked about an essay Schopenhauer wrote in
which he asked the same question: “What is it that makes one individual
in a situation of crisis or danger actually willing to give their life for
another individual?” His answer was that at that moment, they’re not two
people; there is only one. So this person is not saving another person. This
person has identified so completely that he no longer is separate from the
other individual.
There is a complete collapse of boundary, and the two are no longer separate. This is
what occurs in the midst of the creation of something new in the world by an
entrepreneur or a group of entrepreneurs who hold the intention, who are totally
focused, and who stand in the place of serving humankind. The entrepreneurs are

then acting out of the unfolding generative order — the unbroken wholeness from
which seemingly discreet events take place.
Many practitioners confirmed that the role of intention and love was absolutely
critical to their entrepreneurial processes. And yet we know very little about how to
consciously access and leverage that domain of our mind. What does it take to operate
from this different place? One professional who helps practitioners cope with this
challenge is Barbara Dossey. Dossey, who has a Masters in Social Work and is a
registered nurse, works with nurses across the country to help them access the deeper
dimension of their work. How does this work? Says Dossey:
It takes an intention in the nurse’s consciousness — which is

instantaneous and timeless — and being totally present in the moment,
not thinking about all the other responsibilities. It is being focused, the
“being with” and “being there” as much as possible in that moment.
Intention involves consciously creating an image of the person’s spiritual
essence and wholeness that is experienced as a sacred space of inner calm.
It is also a volitional act of love.
Love is probably one of the least talked about and most important conditions for all
forms of everyday work in social change and related fields. Without love, there is no
way to develop generative relationships with other people, let alone to grow an
attractive social field or community.
4 Making It Work: The Leadership Laboratory
What are the implications of all of this for everyday leadership work? How can we
create environments that encourage the process of creation?
The following sections outline the generic design of a leadership laboratory that will
help leaders learn to sense, presence, and actualize emerging futures.
4.1 Operating Principles
4.1.1 Principle 1: Primacy of Praxis
The primacy of the leader’s real work (“praxis”) is the first foundational principle.
This principle has three tangible implications. One, the leadership lab needs to focus
on the challenges that matter most to leaders or leadership communities; in other
words, line leaders — not HR managers — define the learning agenda. Two,
learning and knowledge creation must be grounded in everyday experience and

everyday practices. And three, participants in the lab must produce tangible
accomplishments in terms of business results, capacity building, and knowledge
creation.
4.1.2 Principle 2: Practice Fields
Leaders who take on the most critical and difficult challenges need help. Help can be
in the form of new tools, safe environments to begin using these tools, or the creation
of reflective spaces for peer coaching with colleagues across organizational
boundaries. Practice fields provide all these forms of help.
4.1.3 Principle 3: Field Visits (Learning Journeys)
One of the biggest constraints in developing rule-changing strategies is the lack of

diversity in the experience brought to bear by executive teams. Most leadership teams
are made up of similar kinds of people with similar backgrounds, professional
training, and business experience. The purpose of learning journeys is to broaden and
deepen that experience base by taking team members in small groups to visit other
organizations, industries, countries, and cultures. Learning journeys are chosen for
their differences (relative to the familiar knowledge) and relevance (for example, high
tech industries). Each learning journey consists of three components: full immersion
in another world or organization; new conceptual input from encounters with
eminent practitioners and thinkers; and shared reflection on the various experiences
of the group’s members.
Self-reflective
(enacting emerging futures)
IV. III.
Generative Reflective
dialogue dialogue
flow inquiry
Whole Parts
I. II.
Talking nice Talking tough
politeness debate
Non-reflective
(re-enacting current reality)
Figure 3: Four Modes of Dialogue (from Scharmer 2000)

4.1.4 Principle 4: Generative Conversations: Dialogue
The capacity for dialogue is perhaps the most important precondition for creating
results in the knowledge economy (Nonaka and Takeuchi 1995, Scharmer 2000). In
the Leadership Lab, the shared group reflection that concludes each learning journey
is critical for helping leaders make sense of the knowledge developed during the
experience. The quality of this reflection depends largely on the participants’ ability to
engage in a generative mode of conversation (see Figure 3) called dialogue.
Ultimately, the quality of this kind of conversation builds on itself and enhances the
participants’ capacity to access and act on their collective intelligence.
4.1.5 Principle 5: Aesthetics and the Power of Place
The quality of place determines the quality of knowledge creation. Much of the
recent research in knowledge management has revolved around “place” and “shared
context” as a leverage for knowledge leaders (Nonaka and Konno 1998). The
principle of Aesthetics and Place has the following three implications for the
leadership lab design. One, work and learning environments should be chosen that
stimulate and engage all the senses and capacities of the human being. This includes,
for example, using wilderness or sacred places to experience the elevating beauty of
nature. Two, processes should be structured in such a way that each part (fractal)
reflects the guiding principles of the whole. Lastly, all process architectures should be
designed to evoke and stimulate the “Self” of the participants. For instance, this might
mean using a “check-in” at the beginning of each meeting.
4.1.6 Principle 6: Presencing
In the new economy, as Brian Arthur puts it, “the business of business is cognition.”
Enhancing and heightening the capacity for presencing is the core of the leadership
laboratory. Presencing is both a collective/organizational and an individual/personal
phenomenon composed of three elements: to pre-sense what is going to emerge in
the environment, to intuit one’s highest future potential, and to actualize the first two
through another (Scharmer 1999). This implies 1) creating the environments that
allow people to let inner knowing come to the surface and 2) offering tools and
techniques such as meditation that help people develop their capacities for presencing.
4.1.7 Principle 7: Self and Work
An important part of the leadership laboratory focuses on the leader’s own journey,
i.e., on creating environments and opportunities for each leader to address the root
questions of creativity: Who is my Self? What is my Work? The process of asking and
answering those questions are the only way leaders can harness the power of their
true will and intent in service of bringing forth new ideas and ventures.

4.1.8 Principle 8: Creating, Incubating, and Prototyping New Business Ventures
The leadership lab reinforces the development of enhanced capacities by producing

tangible results. During the third stage, the lab turns into an incubator that fosters
new business ideas and grows them though rapid prototyping and/or venture
development assistance. The goal is to get fast feedback about the viability and
potential of new ventures.
4.1.9 Principle 9: Communities of Leaders
In a globally connected and interdependent economy, the capacity to develop strong

networks and living communities is a critical resource. What factors help create the
sense of community, and the bond of relationship? Common action, common
reflection, and formation of common will. As people cycle through the activities of
the lab together, they move through a “self-transcending knowledge spiral” which
fosters a new sense of bonding and community (Scharmer 2000). These communities
of leaders are critical for providing a distributed network of shared vision,
communication, and action that will move a company coherently into its future.
4.1.10 Principle 10: LeadershipLab.com
All employees of participating companies will be kept aware of and involved in the
three core activities of the lab — sensing (learning journeys), presencing (retreat),
incubating and prototyping (embodying) — via a continually updated, interactive
Web site and open face-to-face forums. The leadership laboratory can be seen as a
stage, the whole of the company as the audience, every individual leader as a potential
actor, and the script as evolving interactively as the laboratory’s “new economy
drama” is enacted in real time.
4.2 Concept
The leadership lab is organized around three core activities:
1. Learning journeys (“observe, observe, observe — become one with the world”)
2. Retreat and reflect (“allow the inner knowing to emerge”)
3. Incubating and prototyping venture proposals (“act in an instant”)
These activities are based on W. Brian Arthur’s description of the cognizing process
necessary for competing successfully in the new economy.

Enrolling: Executives, Champions, Invitees, Supervisors Commencement, Celebration, Launch
1.
Call to
adventure 7.
Venture
committee
2.
Field 6.
visits Rapid
prototyping
3.
Reflection and 5.
research
Forum: Convening
4.
collaborators
Retreat:
Allow the inner knowing to emerge
Figure 4: Seven Steps of the Leadership Laboratory
During the lab, each leader will be supported in his individual journey of growth and
discovery. In the first stage — learning journeys — ethnographical tools of precise
observation and dialogue interviews are practiced and used. During the second stage
the focus is on enhancing the capacity for deep reflection, dialogue, personal mastery,
and presencing. During the third stage the focus is on how to quickly incubate and
prototype new business ideas and venture proposals. The lab is structured around the
following sequence (Figure 4).
4.2.1 Enrollment: Executives, Champions, Invitees, Supervisors
The first step is establishing a clear understanding and relationship with the executive
leaders of the respective company. Companies will benefit most from the leadership
lab when it is fully aligned with and a vital part of the strategic focus and direction of
the company. That alignment with the strategic intent of the company is usually
embodied by the visible participation of executive leaders, and most specifically the
CEO. It’s particularly important that:
• the challenge of recognizing emerging futures is at the center stage of the CEO’s
agenda
• the CEO participates as an executive champion at key points during the 100-day
leadership lab experience, particularly in the setting of the Lab’s strategic agenda
in the beginning, and in the Venture Committee’s decisions on project funding at
the Lab’s conclusion.

After a joint strategic agenda has been established, business leaders who can define
the strategic focus of the lab become involved. Each lab needs to have its own focus
and agenda for generating new ventures and business ideas. Accordingly, the next
prepatory step is selecting the right business leader champions (typically business unit
leaders who are critical for determining the focus of the Lab) as well as the twenty-
five invitees to the Laboratory. Finally, the supervisors of the invitees need to
understand and support the strategic focus of the laboratory so that they willingly free
up one of their best people for the better part of the 100-day duration of the
laboratory.
4.2.2 Call to Adventure: Preparation for the Journey
The first workshop focuses on preparing for the journey. Participants start by
spending a half-day with highly successful Silicon Valley entrepreneurs and venture
capitalists, listening to their stories to get a hands-on feel for the new economy. Then
the group meets with its own CEO to learn how the Lab’s activities and goals fit with
the strategic evolution of the company and its industry. During the afternoon, the
participants spend time in small groups, talking about their current questions and
struggles, and how that relates to the larger picture of their respective businesses. Day
1 closes with a dialogue in which W. Brian Arthur or Michael Ray share their
insights into the nature of creativity and the new economy.
Day 2 focuses on the basic frame that underlies the leadership lab: the seven practices
(Figure 2) as well as the basic structure of the lab (Figure 4). Participants again meet
in small groups to talk about how these principles and practices relate to their own life
experiences. The afternoon session includes guest presentations on the new economy
and how it is manifesting in the industry of the respective company.
Day 3 is dedicated to preparation for the learning journeys — the field visits to
companies offering the richest experience and exchange.
4.2.3 Field Visits
The field visits take the participants in small groups to the companies whose work and
practices are most relevant and interesting to the strategic agenda of the Lab. Each
small group (usually 5 participants) is accompanied by a guide who helps to set up the
visit according to the individual needs of each participant. Usually, the participants fly
in to the respective site on the afternoon prior to the site visit. During the evening,
they may meet with one of the executives of the host company. The site visit
generally follows a set structure: (1) History, overview, and introductory presentations
by the host company, (2) tour and teaming up with a counterpart in the host
organization. Counterparts are chosen according to each visitor’s interest. Visitors

follow that counterpart around for about two hours (“shadowing”). The group then
reconvenes for a concluding conversation with the leaders of the host organization.
The after-action review of this session takes place in the van on its way to the airport
and often is concluded in an airport lounge.
4.2.4 Reflection, Documentation, and Research
The next step of the laboratory work is to review experiences in-depth, and crystallize
and capture the key learnings. Participants may use the following questions to guide
their reflection:
• What stood out about the organization; what observations struck you most?
• What do you consider the essence of the host organization’s success?
• What images, stories, or metaphors capture that essence?
• What did you notice about yourself/your organization?
• What are the most important learnings you took away from the visit?
• What potential venture opportunities occurred to you as a result of the visit?
• What questions or puzzles are you holding?
All participants debrief using these questions. Each team then synthesize sand
articulates their learnings and posts the results on the Leadership Lab Web site.
4.2.5 Retreat: Allowing the Inner Knowing to Emerge9
With the retreat, participants enter the second stage of the laboratory. Retreats are
held in beautiful natural settings near wilderness areas in New Mexico in the winter,
and the Colorado Rockies in the summer. They are designed to give each person, and
the group as a whole, the experience of the “hero’s journey.” The structure of this six-
day program may follow the following sequence:
• Storytelling and sharing the experiences of the field visits across teams (Day 1)
• Capturing the essence of these experiences in models that synthesize the key
learnings on how to operate successfully in the new economy (Day 1)
9
The design of the Leadership Lab Retreat has benefitted greatly from the ideas and experiences of our colleague
Reola Phelps.

• Relating the field visit experiences to the emerging new business context as
presented by Brian Arthur in a “graduate course” on the new economy (Day 2)
• Sensing and crystallizing these emerging patterns in a set of possible scenarios

(Day 2)
• Using the scenarios (Kahane 1999) to brainstorm a number of future ventures and
business ideas. (Day 3)
• Late in the morning of Day 3 participants depart on solo overnight retreats. The
retreats are planned so that each person can safely experience the solitude and
Self-communion found so readily in natural settings. Participants have prepared
extensively for this time, both physically and mentally, over many months. Their
time alone is spent reflecting, observing, and writing in personal journals as they
explore the questions that help form true intent: who is my Self, and what is my
Work?
• On the evening following the retreat, participants meet around a campfire for a
generative conversation about how their solo experience relates to their essence
and to what they want to create. (Day 4)
• During the final two days, the group focuses on the venture development process.
Informed by their solo experience, reinforced by mini-seminars on practicing
mindfulness and hyper-awareness, and drawing on their knowledge about
emerging business trends captured during Day 1 and Day 2, the group creates a
short list of potential new ventures. Teams form around each venture, and the
remainder of the retreat is spent on first-tier business planning.
• During the entire week, participants are invited to attend Sunrise Seminars that
offer capacity-building in core disciplines and practices like meditation, journal
writing, yoga, personal mastery, and presencing. In addition, afternoon or
evening fireside chats and storytelling sessions with remarkable persons like
Larry Littlebird, a Native American artist, storyteller, and teacher, or W. Brian
Arthur are open to all participants.
4.2.6 Forum: Broadcasting Intent and Convening Collaborators
Following the retreat, the participants enter the third and final stage of the Lab. This
stage focuses on developing initial venture ideas in preparation for presentations to
the Venture Committee. The first step is to hold one or more forums in which the
participants of the lab share the key learnings from their field visits and the key
initiatives generated at the retreat with their respective organizations and companies.
By doing so, lab members are able not only to disseminate key learnings and

broadcast their initiatives, but to attract the people, partners, and collaborators best
suited to help develop their business ideas.
4.2.7 Business Incubator and Rapid Prototyping
Several 2- to 3-day planning sessions lead participants through the “immersion

process” described by venture capitalists. These sessions culminate in substantive
proposals that have been developed, refined, and tested in close collaboration with
key customers, suppliers, complementors, and a mock venture committee. Teams will
have had a chance to ask and answer the “hard questions” involving value proposition,
business model, partners, people, funding, risk factors, competition, and hand-off
strategies. During this stage the laboratory turns into an incubator for business ideas.
While individual incubators will develop according to the specific needs and
opportunities of each idea, all incubators share the following characteristics:
• Space: The whole team will be co-located to a large, single space that serves
as a semi-permeable generative cocoon for fostering and co-developing
various business ideas. This place should be located beyond the physical
boundaries of the company headquarters.
• Lead customers: Teams will involve lead customers by spending “a day in the
life of a customer”; getting rapid feedback from customers; and involving
customers in the co-creation of the product or business idea.
• Rapid Prototypes: Teams will use fast prototyping methods for their initial
models and will use feedback to evolve the design.
• Professional Services: Appropriate services will be sought to ensure that teams

have the help they need from designers, venture developers, venture
capitalists, marketing experts, and process consultants throughout the
incubator phase.
• Audiences: Teams will make frequent informal and improvised presentations

to multiple visitors and audiences. The multiple presentations and audiences
are in themselves a major source of idea generation and refinement.
4.2.8 Venture Committee
On Day 100 the results of the laboratory are presented to the Venture Committee.
Each team will present a tangible prototype that embodies the main features of its
business idea. The Venture Committee decides on the spot which projects will get
further seed funding and which will not. The criteria that underlie the Venture
Committee’s decisions will be clear to all participants. For example, they may include:
• Market space: the size of the opportunity

• Value proposition for the targeted customers
• Business model: how to capture the value
• Defensible competitive advantage (e.g., property rights)
• People: quality of the people needed and how to attract, develop, and
retain them
• Quality of proposed partners
• Game plan: next steps
4.2.9 Commencement, Celebration, and Launch
The lab concludes by publicly acknowledging and celebrating the participants’

successes. These successes always occur on three levels: the development of business
innovations, leadership skills, and skills of personal mastery. The commencement
party formally concludes the lab, launching alumni into new professional and personal
ventures.
4.3 Summing Up
We live in a time of profound change. Leaders across the globe are wrestling with
similar challenges in a world that is becoming increasingly unfamiliar. In order to
succeed in such an environment, leaders have to develop a new cognitive capability —
the capacity to sense and actualize emerging futures. This capacity constitutes a new
form of knowledge creation. For organizations, it also poses a fundamental question:
How can this capacity be reliably reproduced or applied, particularly in larger
organizations and institutions competing in the new economy? The answer to this
question will constitute the core process around which organizations, industries, and
institutions will organize their activities in the future.
We hardly know how to begin to describe this process, to give voice to its essence. In
what domain does it reside? Is it simply about knowledge creation? Is it about the
formation of awareness and will? Is it about mobilizing collective energy, will, and
action? Is it all of these? What are the fundamental activities and stages of the
process? And what are the qualities that enable this process to take place? The more
we probe into the deeper questions of leadership in the context of the emerging new
world, the more we realize how little we really know, in terms of actionable
knowledge.

This paper represents a first effort to answer this enormously important and complex
question. We recognize we are exploring vast new frontiers of human knowledge and
that whatever is said here is only a beginning. However, we believe we have
identified at least some of the critical components and building blocks that, in one
way or another, will represent an answer to this question. We believe the essence of
the new leadership will involve building the three types of organizational spaces
outlined in the design of the Laboratory. These spaces enable entrepreneurial leaders
to move through all three stages of sensing (connecting to the world outside),
presencing (connecting to the world within), and enacting (bringing forth new ventures
and worlds) as aspects of a single core process of large-scale innovation and change.
The key carriers of this process must move through all three spaces, rather than
remaining in just one of them. That is the essence of the process. In moving through
these three spaces and stages, leaders and communities of leaders become the vehicle
and conduit through which this emerging new dynamic becomes reality. This is the
way true innovators have always worked. Placing these principles and processes at the
heart of organizing in the future would revolutionize business, social architectures,
and society as a whole.10
5 Appendix: Biographies of Interviewees
W. Brian Arthur, Ph.D. Dr. Arthur is the Citibank Professor, Santa Fe Institute,
Santa Fe, New Mexico and the author of Increasing Returns and the New World of
Business, HBR 1996. Dr. Arthur is best known for his discovery of the role of
increasing returns in the information economy. His exploration of the way increasing
returns magnify small random economic events is revolutionizing economic thought
and business strategy. One of his current interests is cognition: the study of how
managers strategize and make decisions. Recent research on cognition shows that our
minds rarely make strictly logical and rational deductions. Instead, we rely on patterns
and feelings associated with those patterns. In order to make the best “big decisions,”
Arthur asserts, we must first absorb clues and evidence from our environment and
then allow our minds to work at this deeper level. This approach to decision making
requires time, patience, and the courage to listen to our inner wisdom.
Gordon Campbell. In his twenty-five year career, Mr. Campbell has been a driving
force in the evolution of both the semiconductor industry and the personal computer
10
See Kahane 2000.

industry. Inc. Magazine recognized Mr. Campbell as Entrepreneur of the Year for his
achievements. Currently Mr. Campbell is the President of Techfarm, a privately held
firm he founded in 1993 to create a new model for technology start-ups. Techfarm
advises, manages, consults, assists in raising capital, and invests in seed and early stage
development technology start-ups. Techfarm is the latest in a long list of Silicon
Valley companies pioneered by Mr. Campbell. In 1981 he founded SEEQ
Technology, a company that pioneered the advanced development of non-volatile
memory and communication chips. As President and CEO, Campbell took the
company public in 1983 and propelled it to a $200,000,000 market capitalization. In
1985, Mr. Campbell founded CHIPS and Technologies (“CHIPS”). As Chairman,
CEO and President, he brought CHIPS to profitability in twelve months, and led the
Company to an initial public offering in just 22 months. CHIPS defined and
pioneered the concept of chip sets for PC systems’ logic, graphics, and
communications. This concept was so successful that CHIPS achieved sales of
$300,000,000 less than four years after its founding. Chip sets are still the
fundamental architecture for every personal computer manufactured today.
Following studies at the University of Minnesota, Mr. Campbell held positions in

management, sales, marketing, and engineering at Intel Corporation, Motorola,
Intersil, and Honeywell. He currently serves as Chairman of the Board of Directors
of Exponential Technology and 3Dfx Interactive.
James R. Carreker. Mr. Carreker is Founder, Chairman, and Chief Executive Officer
of Aspect Communications Corporation, a publicly traded San Jose, California-based
company established in 1985. Aspect designs, develops, and markets customer
relationship management (CRM) solutions for companies and organizations seeking
sophisticated management of their customer contact zone. Today, Aspect’s business
volumes are above $100 million per quarter, and Aspect’s 2,400 employees serve its
customers on five continents.
Before starting Aspect, Mr. Carreker was Senior Vice President at Dataquest, where
he directed market research in the worldwide telecommunications, computer, and
software industries. Previously, he worked at AT&T Bell Labs, EDS, and Datapoint.
Mr. Carreker is a frequent speaker and industry advisor on issues related to call
center, customer relationship management, and corporate re-engineering based on
customer-centric models.
Mr. Carreker holds a Bachelors of Electrical Engineering degree from Georgia Tech
and an MSEE from Stanford University. For the past six years, he has been a
member of the Professional/Industry Advisory Board to the School of Electrical and
Computer Engineering at Georgia Tech, where he was instrumental in creating a
certificate program in “Engineering Entrepreneurship.” Mr. Carreker is a Senior

Fellow and board member of the American Leadership Forum in Silicon Valley. He
is also a board member of Entrepreneurs’ Foundation, a newly-formed Silicon Valley
philanthropic entity encouraging community support on the part of start-up
companies.
Bruce Cryer. Mr. Cryer helped launch the HeartMath Institute. He is one of the key
architects of the Institute’s Inner Quality Management (IQM) training programs.
IQM’s practical tools and strategies for enhancing organizational effectiveness,
creativity, and innovation and increasing productivity are based on the HeartMath
Institute’s innovative biomedical research. Mr. Cryer successfully brought HeartMath
programs into the global corporate arena with significant projects at clients such as
Motorola, HP, Royal Dutch Shell, and Cathay Pacific Airways.
Mihaly Csikszentmihalyi, Ph.D. Dr. Csikszentmihalyi is Professor and former

Chairman of the Department of Psychology at the University of Chicago. He is the
author of the best-selling books Flow and The Evolving Self. His most recent book is
Creativity, Flow, and the Psychology of Discovery and Invention. For this latest book, Dr.
Csikszentmihalyi interviewed more than ninety of the world’s most distinguished
people — including Jonas Salk, Linus Pauling, John W. Gardner, and Robert Galvin
— to discover the role of creativity in their lives.
In Flow, Dr. Csikszentmihalyi explored states of “optimal experience” — those times

when people report feelings of concentration and deep enjoyment — and showed
that what makes experience genuinely satisfying is a state of consciousness called
“flow.” (This is the same state of consciousness that athletes call being “in the zone.”)
Dr. Csikszentmihalyi discovered that these peak performances occur regularly and
predictably under certain circumstances. In Creativity, Csikszentmihalyi profiles
individuals who have found ways to make flow a permanent feature of their lives and
at the same time have contributed in outstanding ways to society and culture. Dr.
Csikszentmihalyi argues that creativity needs to be cultivated not only in traditional
creative fields, but also in business, government, and education.
Ann Narver DeBusk. Ann DeBusk, President of American Leadership Forum-

Silicon Valley, founded ALF-Silicon Valley on July 1, 1988. Her primary
responsibilities initially were to establish the new chapter, recruit a chairman and
Founders’ Board, develop funding, and oversee selection of Fellows and the Fellows'
one-year class program. ALF’s mission is to create a regional, diverse network of
senior-level leaders to build philanthropy, public service, and community in Silicon
Valley.
Ms. DeBusk earned a Bachelor of Arts degree in history from the University of
Washington and a Master of Arts degree in Education from Stanford University.

Larry Dossey, M.D. Dr. Dossey is a physician of internal medicine who served for
years as Chief of Staff of the Medical City Hospital in Dallas. He is the author of five
books, a number of which have been translated into several languages and two of
which have been New York Times bestsellers. They all examine the role of the human
mind in health and illness. Dossey says that we are in the process of rethinking some
of the most fundamental assumptions in modern medicine and that we are on the
threshold of a new era in medicine. His work intersects with that of Brian Arthur and
draws on empirical evidence reflecting the demonstrated ability of individuals to
influence, consciously and non-locally, the state of the physical world.
Dr. John F. Elter. John Elter is Vice President, New Business Development and
Chief Engineer at Xerox Corporation.
Professor John W. Gardner. John W. Gardner, writer and educator, is currently a

consulting professor in the School of Education at Stanford University. A former
President of the Carnegie Corporation and the Carnegie Foundation for the
Advancement of Teaching, he was Secretary of Health, Education, and Welfare;
Chairman of the National Urban Coalition; founding Chairman of Common Cause;
and a co-founder of Independent Sector. He served on President Kennedy’s Task
Force on Education and was Chairman of President Kennedy’s Commission on
International Educational and Cultural Affairs. He was Chairman of President
Johnson’s Task Force on Education, served on President Carter’s Commission on an
Agenda for the 80s, and chaired the President’s Commission on White House
Fellowships. He served on President Reagan’s Task Force on Private Sector
Initiatives.
A graduate of Stanford and the University of California, he taught psychology at the

University of California, Connecticut College, and Mount Holyoke College.
In 1964 Mr. Gardner was awarded the Presidential Medal of Freedom, the highest
civil honor in the United States.
Charles Geschke. Dr. Geschke is Chairman and President of Adobe Systems Inc.,
the company he co-founded with John Warnock in 1982. A respected and inspiring
leader in the software industry for more than 25 years, Dr. Geschke has been
honored by many industry and business leaders for his outstanding technical and
managerial achievements. Prior to co-founding Adobe Systems, he formed the
Imaging Sciences Laboratory at Xerox Palo Alto Research Center (PARC) in 1980,
where he directed research activities in the fields of computer science, graphics, image
processing, and optics. Previously, he was a principal scientist and researcher at Xerox
PARC’s Computer Sciences Laboratory.

Dr. Geschke actively participates on several boards of high technology companies,

educational institutions, and arts organizations. He is a member of the National
Academy of Engineering, the Government-University-Industry Research
Roundtable of the National Academy of Sciences and the Board of Governors for the
San Francisco Symphony. He also serves on the computer science advisory boards of
Carnegie-Mellon-University and Princeton University, the Board of Trustees for the
University of San Francisco and the Board of Directors of Rambus, Inc. Dr. Geschke
holds a Ph.D. in computer science from Carnegie-Mellon University and a M.S. in
mathematics and an A.B. in classics, both from Xavier University.
Edward Hoffman, Ph.D. Dr. Hoffman is a highly regarded clinical psychologist in

New York City. He is the author of the definitive biography of Abraham Maslow,
The Right to be Human. He is also the author of a related book, Future Visions: The
Unpublished Papers of Abraham Maslow, which has been translated into several other
languages including Chinese. Hoffman’s clinical experience and research has led him
to the conclusion that the deep source of human creativity is the capacity to see one’s
life as part of a larger story.
Jon Kabat-Zinn, Ph.D. Dr. Kabat-Zinn is Executive Director of the Center of

Mindfulness in Meditation, Healthcare, and Society at the University of
Massachusetts Medical Center. He is also Professor of Medicine in the division of
Preventive and Behavioral Medicine at the University of Massachusetts Medical
Center. Dr. Kabat-Zinn’s books, Full Catastrophe Living and Wherever You Go, There
You Are, were both best sellers. His major research interests are in mind/body
interactions for healing and health enhancement. His current research includes
studies on the effects of mind on healing and the effects of mindfulness training in
corporate settings. He is the founder and former director of the University of
Massachusetts Medical Center Stress Reduction Clinic. His work there was featured
in Bill Moyer’s PBS special “Healing and the Mind” and in the book of the same title
as well as other prominent television shows and on NPR. During his career he has
trained many groups in mindfulness, including the 1984 U.S. men’s Olympic rowing
team. The UMMC Stress Reduction Clinic has served as the model for programs at
more than 240 hospitals and clinics, nationwide and abroad.
Most recently, Kabat-Zinn has designed and delivered a program for CEOs and
emerging corporate leaders called “The Power of Mindfulness.” The program,
structured as a retreat, is designed to explore the power of moment-to-moment, non-
judgmental attention as a way to expand our capacity to learn and be creative. The
retreat includes periods of guided instruction in a number of meditation practices,
periods of silent exploration, and periods of collective inquiry and dialogue all aimed
at cultivating deep, penetrating awareness and the insight and the creativity that flow
from it. Kabat-Zinn’s work stresses the importance of paying attention to and

examining our unexamined assumptions and mental processes — just those areas that
are the most opaque to us. Ultimately, these areas are matters of mind and heart, soul
and spirit — a vision of life itself, says Kabat-Zinn. Such attention can rapidly lead to
new ways of seeing and learning — with vast implications for our organizations and
ourselves.
Michael Lipson, Ph.D. Dr Lipson is Chief Psychologist at the College of Physicians

and Surgeons of Columbia University. He is also on the faculty of George Soros’
Open Society Institute where he trains health professionals at all levels in the
compassionate care of terminally ill patients. Dr. Lipson’s research focuses on
strengthening the capacity for thinking attentiveness. When this basic capacity is
developed with unusual rigor, people discover the life-giving paradox that
concentration and improvisation are one and the same. And when one is truly
concentrated on any task, it becomes new — and gives rise to unexpected life.
Ultimately, the practice of attentive thinking leads us to participate wakingly,
knowingly in the unfolding “implicate order” itself. This capacity makes synchronicity,
generative dialogue, and innovation far more likely than when these are based on an
un-evolved thinking style. This orientation and this kind of training, Lipson deeply
believes, can promote the fundamental transformation of an organization or business
unit’s capacity to create and innovate.
Manuel Manga. Mr. Manga is an organizational design consultant and management

coach with international experience consulting to large and small organizations. Mr.
Manga brings an extensive professional background to consulting, management
development, project management, and designing programs and courses. He has
consulted throughout the United States, Canada, Mexico, Latin America and Europe
to both private and non-profit organizations.
Charles Miller. Mr. Miller, Chairman of Meridian Advisors, Ltd., a private

investment partnership based in Houston, Texas, has been in the investment business
for more than 36 years. Before joining Meridian in 1992, Miller was President and
CEO of Transamerica Asset Management Group. He was instrumental in
developing the company’s worldwide investment management activities and in
formulating the firm’s development under the earlier name, Criterion Group, which
he founded.
Gib Myers. Mr. Myers joined the Mayfield Fund in 1970 — the first full year of the
partnership’s existence. During his twenty-nine years with the firm, he has
participated in virtually all of the company’s investments, including 3Com
Corporation and MIPS Computer Systems. In his role at Mayfield, Mr. Myers has
nurtured companies in diverse areas of technology through each phase of growth,
from start-up to maturity. Prior to joining Mayfield, he served as a marketing

manager at Hewlett-Packard. He holds a MBS from Stanford University and a BS in

Engineering from Dartmouth College.
Srikumar S. Rao, Ph.D. Dr. Rao was educated at Columbia University where he
received his Ph.D. in Marketing from the Graduate School of Business and his
Masters in Philosophy. His undergraduate training was in physics at Delhi University
in India. He is a contributing editor for Forbes and for many years served as a
consultant to Continental Group and Warner Communications, Inc., setting long-
term strategy.
Dr. Rao has designed a course, “Creativity and Personal Mastery,” which he delivers
at Columbia University’s Business School. It is a course about the human mind, its
immense potential, and how individuals can harness this potential to achieve
breakthrough results. His research leads him to conclude that the key to creating new
circumstances is learning to passionately hold the intention towards a dream or a goal.
At the beginning of the course, Dr. Rao makes the following statement: “Suppose it
were possible to set up a system whereby you did not have to build a network. Any
time you needed help, a person would appear who had precisely the knowledge
and/or resources you required.” He asserts to his students that, with the right mixture
of passion, detachment, and acceptance of whatever actually happens, they can learn
to function in this way.
Michael Ray, Ph.D. Dr. Ray is the first John G. McCoy–BancOne Corporation
Professor of Creativity and Innovation at Stanford University, where he developed
the legendary course “New Paradigm Business.” His books Creativity in Business and
The Path of the Everyday Hero bring the lessons of this course to a wider audience.
In the coming century, says Ray, strategic thinking will undergo a sea change.
Connectedness — to our own inner wisdom, to the consciousness of others, and to
our environment — will become increasingly important when it comes to setting
strategy. As physicists, system theorists, biologists, chemists, and virtually all scientists
operating from the new paradigm tell us, everyone and everything is connected in
some way to everything else. The watchwords for this new era in business are
“connection, creativity, compassion, and intuition.”
Peter Senge, Ph.D. Dr. Senge is the Director of the Society for Organizational
Learning (formerly the Center for Organizational Learning at MIT’s Sloan School
of Management) and a founding partner of Innovation Associates, a consulting firm
in Boston. He is the author of The Fifth Discipline and co-author of The Fifth
Discipline Fieldbook. In these influential books, Dr. Senge advanced the idea that the
groups of people we call organizations have the potential to learn. More recently, he
has written about the gift of leadership. Leadership, says Senge, is not about
positional power, or accomplishments, or even, ultimately, about what we do.

Leadership is about creating a domain in which human beings become more capable
of participating in the unfolding of the world. It is about creating new realities.
Alan Webber. In 1993 Mr. Webber co-founded Fast Company, a business magazine
published in partnership with Mort Zuckerman and Fred Drasner of US News &
World Report. The idea for Fast Company came to him one night when he tripped on a
discarded shoebox and hit his head on an open desk drawer. On the desk were copies
of Rolling Stone, the Harvard Business Review, and US News & World Report. The
rest, as they say, is history.
The premiere issue of Fast Company hit newsstands in November 1995, and the
magazine began publishing bi-monthly in April 1996. Having celebrated
unprecedented early publishing success, Fast Company was named “Launch of the
Year” by Advertising Age and “Startup of the Year” by Adweek. Mr. Webber is
responsible not only for driving, managing, and contributing to the content of every
issue of the magazine, but also for evolving the publication’s unique character and
style.
Before creating Fast Company, Mr. Webber spent six years as the Managing
Editor/Editorial Director of the Harvard Business Review (HBR). Three times during
his tenure at HBR, the highly acclaimed business magazine was named a finalist for
the National Magazine Awards. Mr. Webber is widely in demand as a speaker and
presenter at events and business meetings. He has been a consultant to some of the
most innovative and successful companies in the world. His articles and columns have
appeared in The New York Times, The Washington Post, the Wall Street Journal, and
USA Today. Webber has also appeared on ABC’s “Good Morning America,” CNN,
and NPR’s “The Connection,” discussing how companies are adjusting to the new
world of business. In 1996, Viking Penguin published his book, Going Global, co-
authored by Fast Company co-founder Bill Taylor. The book explores what it takes to
be a global company in a new economy. Webber, 49, is an alumnus of Amherst
College. He lives in Brookline, Massachusetts, with his wife and two children.

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Leadership in the New Economy: Sensing and Actualizing Emerging Futures

Article · January 2000

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Leadership in the New Economy:

Sensing and Actualizing Emerging Futures

The Leadership Laboratory

for Competing in the New Economy

Joseph Jaworski, Claus Otto Scharmer

Society for Organizational Learning (SoL)

1 The New Leadership Challenge............................................................................1

4 Making It Work: The Leadership Laboratory ...................................................30

4.2.5 Retreat: Allowing the Inner Knowing to Emerge.......................................................... 36

1 The New Leadership Challenge

1.1 Leadership in the New Economy

 2000 Generon Consulting

at one table, a game is starting called Multimedia. Over at another is a

 2000 Generon Consulting

1.2 The Alliance Story

The purpose of the leadership laboratory project is to create a learning environment

 2000 Generon Consulting

 2000 Generon Consulting

BOX 2: LIST OF INTERVIEWEES (1999, PHASE I): 3

1. W. Brian Arthur, Ph.D., Professor, Santa Fe Institute

2. Gordon Campbell, President, Techfarm

3. Jim Carreker, Chairman and Chief Executive Officer, Aspect Telecommunications

4. Bruce Cryer and John White, HeartMath Institute

5. Mihaly Csikszentmihalyi, Ph.D., Professor, University of Chicago

6. Ann DeBusk, President, American Leadership Forum, Silicon Valley

9. John W. Gardner, Consulting Professor, Stanford University

10. Charles Geschke, Chairman and President, Adobe Systems, Inc.

11. Edward Hoffman, Ph.D., clinical psychologist, author of a biography of A. Maslow

13. Michael Lipson, Ph.D., Chief Psychologist, Columbia University

14. Manuel Manga, Member, Society for Organizational Learning

15. Charles Miller, Chairman, Meridian Advisors, Ltd.

16. Gib Myers, Founding Partner, Mayfield Fund

17. Srikumar S. Rao, Ph.D., Columbia University

20. Alan Webber, Founding Editor, Fast Company

 2000 Generon Consulting

1. Doing well in the new economy requires the enhancement of a particular

2. This ability can be developed using the following practices:

Ø Listen to your call

Ø Observe, observe, observe: become one with the world

Ø Uncover intent and surrender into commitment

Ø Allow inner knowing to emerge

Ø Crystallize and broadcast intent

Ø Work: execute, learn, let go

1.3 Meeting W. Brian Arthur

Arthur began by distinguishing among different levels and qualities of cognition.

 2000 Generon Consulting

Suppose I was parachuted into some situation in Silicon Valley — not a

• Observe, observe, observe. Become one with the world.

 2000 Generon Consulting

Figure 1: Cognizing Emerging Futures

2 Seven Core Practices

Figure 2: Seven Core Practices of Leadership in the New Economy

 2000 Generon Consulting

These practices are:

1) Listen to your call

2) Observe, observe, observe: become one with the world