Peter Senge's Necessary Revolution

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Peter Senge, author of the new book, The Necessary Revolution Barry Hetherington

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But we all know that beyond a certain level of material need, further material acquisition doesn't make people happier. So you have a society predicated on the idea that you have to keep growing materially, and yet nobody actually believes it.

How dominant is the price-value model in business today? Has the success of products like the Toyota Prius convinced companies that consumers care about more than narrowly defined self-interest?

It's still dominant. Now, I don't think there's anything inherently wrong with price-value. [The problem is] the unquestioned assumptions about how we define it. At some point it becomes tautological. How do you know what people value? Well you watch what they buy. How do we know what products to create? Well, it's based on what they value.

We've done a lot of work with companies in Detroit, and when the Prius came out, I asked them what they thought of it. Everyone said the same thing: "It's a niche product." They said: "In focus groups, we ask people how much they would pay for a 10% improvement in fuel efficiency, and it's always a small number." But you're never going to learn latent demands from focus groups. Toyota (TM) didn't introduce the Prius because of a focus group. They were convinced that cars needed to change.

In The Necessary Revolution, you profile people, working independently or within companies or organizations, who are trying to bring about a more sustainable world. As you learned their stories, what patterns emerged?

The first is obvious: People have to be passionate. These are innovators in a fundamental sense, and innovators innovate because there is something that they are passionate about. Second, they all in different ways were able to step back and see a bigger picture. This is a huge challenge for people in companies, because so many companies are dominated by short-term perspective and because lots of people in key positions simply aren't very good or don't care very much about the bigger picture. Watch how the decisions are made. Are they thinking of the value of the company 10 years after they retire, or are they thinking about the value of their stock options this year?

The other two things we focused on are the ability to connect with lots of people and collaborate across boundaries—you could call it high levels of relational intelligence. The final element that we saw again and again is a shift [in strategy] away from "we've got to stop doing x, y, or z" and all the negativism that tends to pervade these issues.

Can you give some specific examples?

Nike is a great example of these last two qualities. The company's [eco-friendly Considered system] came into being because of two women who were consummate networkers and who realized that "we're never going to change this culture by convincing people that toxins are bad and that we should be less bad. What's going to make people really passionate is the idea that we can do something that no one has done before and that it will be a great thing for athletes." So they started talking to designers and getting them excited about different kinds of shoes. They created the Organic Exchange for cotton because there wasn't enough on the market. They wanted to design running singlets that were compostable. Within five years they had a network of their best designers really passionate about these design challenges. These are all tough, tough problems; the only way to solve them is to get people excited.

How can companies shift their focus away from quarterly earnings to take a longer view?

That's an issue that has come up periodically during the development of the Society for Organizational Learning network. Usually it comes from an elder, a retired CEO who says: "If I really look back, a big blind spot for all of us is that we take as given the primacy of the shareholder." When the limited liability corporation was created 140 years ago, this made sense.