BP was on a good path lately. Under the strong leadership of Vivienne Cox, BP was turning the alternative energy business from a more “philanthropic” activity into a serious, expanded business unit for the BP group, with corporate investments of $8 billion. BP was indeed moving “beyond petroleum.” And the firm was gaining a good reputation as a large corporate player starting to listen more to a variety of stakeholders and starting to change the way of doing business. Some of the company’s business practices and cooperation activities with NGOs and local communities even found their way into the latest book from organizational learning guru Peter Senge, The Necessary Revolution, and were referenced as one of not too many examples of “How individuals and organizations are working together to create a sustainable world” – as the optimistic subtitle of the book runs.
This was before the massive oil spill in the Gulf of Mexico, which started when an offshore oil rig exploded, caught fire and sank. With the oil spill getting out of control and with BP seeming not to be able to find a way of fixing the hole at the bottom of the ocean, and with massive criticism from every side and party, including strong pressure from the U.S. government (“a breakdown in responsibility”), BP, in the public eyes, is now falling back into old habits and old behaviors, which are heavily criticized as dysfunctional behaviors and no longer acceptable for a 21st century organization. The truth is, of course, way more complex, and what really went out of control is still to be found out.
But control, as Peter Senge wrote in the same book, “is a simple word with very different meanings. Machines are controlled by their operators, but living systems are different. No one is in charge of a forest. Living systems control themselves based on a web of relationships. . . . Building enterprises based on cultures of relationship – organizations that not only work like nature but are more harmonious with nature – may prove a defining feature of regenerative society.”
What Senge has been relentlessly describing and exploring since his best-selling book, The Fifth Discipline, is the authentic organization of the future. An organization, described by the Arthur W. Page Society as the “The Authentic Enterprise” — an organization that has the ability to adapt to and thrive in a radically new economic and societal environment. And this new type of organization is one that is able to learn, and therefore able to change its behaviors and mindsets as a result of experience. An organization that is able to do what organization theorists Argyris and Schön call double-loop learning – learning that occurs when error is detected and corrected in ways that involve the modification of an organization’s underlying norms, policies and objectives. The current BP experience is not the only one for industrial or commercial organizations to test their capability for double-loop learning.
What are the basic requirements that have to be in place, to allow learning and substantial change? Definitely an increased level of responsibility and willingness for being accountable across the whole organization; a solid grounding in a society based on a strong network of relationships and peer support; the capability to take advantage of the distributed intelligence in the organization; and, finally, the ability to comprehend and address the whole, understanding system dynamics and being oriented toward the long-term view.
Companies that have created such an environment for learning always have an opportunity to change the game. “A positive self-reinforcing effect of just one firm in an industry can change the game for every one by demonstrating what is possible” (Senge).
News + Views