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The Conference Board Review® Article
As the Bubble Pops
Companies — all of us, in fact — must change the way we do business. Right now. Take it from Peter Senge.
By Matthew Budman
Peter Senge remains best known for co-authoring 1990's The Fifth Discipline, but he has long since broadened his scope beyond what happens inside organizations. Today he hopes to help companies create "a future truly in harmony with a flourishing world." It's not as hippie-ish as it sounds, though: He believes that society is in dire straits, and that companies need to change what they're doing — indeed, their reason for being — for the sake of the planet and its inhabitants. Senge's new book, The Necessary Revolution: How Individuals and Organizations Are Working Together to Create a Sustainable World (Random House) — written with Joe Laur, Nina Kruschwitz, Sara Schley, and Bryan Smith, all affiliated with the Society for Organizational Learning — urges companies to invest in as-yet-unproven initiatives and technologies, and to see their own existence in a societal context. He writes that "it's more important than ever to learn how to expand the boundaries of normal management attention and concern in order to see the larger systems in which businesses operate."
Garrulous and intense, thoughts and ideas pouring forth, brandishing a white Oxfam wristband, the MIT senior lecturer accepts the evangelist mantle. "I have been pretty obnoxious for a long time," he says. Senge, 60, spoke with TCB Review acting editor Matthew Budman on a recent visit to The Conference Board's New York offices.
First of all: Are we really still, as you say, in the Industrial Age? I thought we'd moved on to at least the Information Age.
It all depends how you define it. If you look at how much cement we make in the world, how many cars we manufacture, how many buildings we build, how many factories there are, how many people are employed in those factories — guess what? All those numbers are higher today than ever before. And people don't think about the fact that when they plug in their PDAs to charge up at night, puffs of coal-fired smoke go up in the air. This country is more dependent on coal than ever before. So we're right in the middle of the Industrial Age in terms of what we do and how we actually live.
And you characterize society today as the Industrial Age bubble. Why is that the most appropriate metaphor?
We're obsessed about labor efficiency and the efficiency of capital, but we're enormously wasteful in the use of natural resources. And it struck me that what we're living in is a long-term bubble, one that's been growing for 150 years or so. Look: Nature generates no waste — zero. Everything in nature runs off basically the same energy source: the sun. Food doesn't travel ten thousand miles for any other species on this planet. So we're violating laws of nature, and laws of nature are not things you vote on — like you don't vote on gravity. This can't go on indefinitely.
Everybody in the United States complains about the price of gasoline. But a pint of bottled water costs at least a buck, and that's $8 a gallon. Gasoline is half as expensive as water, and we're complaining! That's because there's an Industrial Age assumption that energy is free. We build all these buildings with no windows that open — no use of natural breezes, no thought of how to keep cool naturally in the summer and warmer in the winter. We heat and air-condition everything 24/7, 365 days a year. It's crazy.
So that's the bubble. What's surprising is that people don't notice it. There's a lot of concern about things like climate change, but I am very skeptical that the changes that will ultimately be needed will be achieved without looking more comprehensively at fixing society. The Industrial Age is not an age that has a long future. No society that's lasted for a while has ever operated this way.
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Return to the July/August 2008 The Conference Board Review® issue.
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