My EMBA Journey

Dialog on Leadership: Arie de Geus Interview

This is a great interview from Arie De Geus a line manager with Royal Dutch Shell, his experiences related to successful living company. Arie goes through several aspects of organization behavior. More importantly he talks about The Living Company. Following is the content of the interview.

I. What Is Planning For?
II. Decision-Making As Learning
III. Meeting with Jay Forrester and Peter Senge at MIT
IV. What [Entity] Is Making Organizational Decisions?
V. The Living Company: Metaphor Or Reality?
VI. Cellular Structures
VII. Every Institution is a Living System
VIII. Every Startup Is The Birth Of A New Being
IX. The Absorption Level Of Immune Systems
X. Questions For Future Research


Following is an excerpt from the http://www.DialogOnLeadership.org Website.

XI. Reflection

During the 1980s, Arie de Geus proposed to conceive of planning and decision-making as a learning process. During the 1990s, he enhanced this key proposition with the notion of seeing companies as a living system. Every institution, claims de Geus, is a living system. The implications of this perspective include a different role of profit and purpose in which we’re beginning to realize that "profit for commercial institutions is the same as oxygen is for humans"; as well as a "limited absorption capacity" of organizational immune systems that explains the extraordinary high failure rate of mega-mergers among global companies, which because of their enormous size exceed the natural absorption capacity of the system.

I left the conversation with de Geus with two questions: One, when we are living and working in our institutions, how can we relate to the "living being" de Geus talks about and that is embodied through the way we collectively enact the organizations in which we participate?

Two, what is the nature of the relationship between individual human beings and the larger organizational whole? I was struck by hearing de Geus characterize the relationship between individual and whole (organization) in a strictly hierarchical manner: "Stern used to say that the hierarchy is you have the human being, and then you have the family, and then you have the village community, and then you have das Volk, and you have a clear hierarchy." In this view, "the whole is something separate from the parts." This view differed from what science philosopher Henri Bortoft and the Japanese philosopher Ryosoke Ohashi had told me in their interviews (see conversations with Bortoft and Ohashi). In their view, you cannot separate the whole from the parts, for the whole presences itself in the parts. Accordingly, the parts are not determined by the whole in which they exist. They are the locus in which the whole is enhanced, contradicted, or even transformed by them, or all of the above. So, I guess the deeper question I am trying to articulate here concerns the the differences between biological and social systems.

I recently asked biologist Humberto Maturana, the author of the theory of autopoietic systems, about his view on the numerous recent approaches to applying his biological theory to the realm of social systems. His response: "If social systems are autopoietic, I do not want to live in them." "Why not?" I asked. "Because in autopoietic systems the part is totally determined by the whole in order to reproduce certain functions of the larger system. Its like Orwell’s 1984. It’s the end of freedom and choice in social systems." Thus, there seem to be two different notions of the whole-part relationship in social systems. The first one is what Maturana calls the 1984 version of society: the part (individuum) is determined by the whole. The second notion is closer to what Ohashi and Bortoft suggested in their interviews: that the individuum is not determined by the whole but rather conceived of as a place in which an emerging new whole can come into being. The first whole, I would call the traditional [and often oppressive whole] of social systems. The second whole belongs to an emerging social art, which yet needs to be developed and created in the years to come. I did not have the time to ask de Geus where he would position himself on that spectrum. I heard him describing elements of both notions outlined above.



XII. Bio

Arie de Geus joined Royal Dutch/Shell in 1951 and remained with the company for 38 years. He worked in Turkey, Belgium, and Brazil before returning to the United Kingdom in 1979. Arie assumed regional responsibility for Shell's businesses in Africa and South Asia and then, in 1981, became coordinator for Group Planning. During his last 10 years at Shell, Arie became increasingly interested in the nature of large corporations, their decision-making processes, and the management of change and he is widely credited with originating the concept of the learning organization.

Since his retirement from Shell in 1989, Arie has headed an advisory group to the World Bank and consults with government and private institutions. He is a visiting fellow at London Business School, and a board member of the Nijenrode Learning Centre in the Netherlands. Arie is also the author of the award-winning bestseller, The Living Company(1997).