Otto Scharmer: Prototyping the New in the Post-COVID Era

Helio Borges
11 min readJun 21, 2021

How to Reinvent Innovation with Vertical Prototyping

Crystallizing and Prototyping session of ulab2x. Image: Olaf Baldini, Presencing Institute

Vertical prototyping moves into prototype action from a place of connection to the deeper intention we are holding. It is about seeding and inviting a different quality of relationships in a particular eco-system of collaborators to bring into being a living microcosm of the future that wants to be born.

Surfing the Complexity Wave

In December 2014, Otto Scharmer was teaching a graduate course to 90 students at the Sloan School of Management of MIT — u.lab: Leading From the Emerging Future. During that trimester he reluctantly turned it into a MOOC on the EDX online platform, which the Presidents of Harvard and MIT launched in January 2015 to make the educational content of both institutions available to everyone without cost. In one month, Otto’s audience skyrocketed from 90 students in Boston to 50K change-makers from all walks of life located all over the world. Theory U had taken the world by storm, and I had been swept away by it. Since then, Otto’s work has grown in complexity and scope, and I am doing my best to keep surfing that wave.

In 2015, at 65, I was a student in Otto’s global classroom, looking not only to make a living but also to change the world around me in a purposeful, meaningful way. Today, at 71, thanks to having integrated Theory U into my life, I am catalyzing change in different parts of the world. Surprisingly, my big breakthrough happened in the middle of the worst crisis that the world has seen in the last 80 years. During those years I’ve seen some people thriving and others falling down into depression. I’ve seen companies making impressive breakthroughs and others failing. I’ve seen societies growing in maturity and well-being for their citizens, and others failing miserably, like the Venezuelan society, where I happen to live.

What key factors influence such radical systemic shifts? Complexity? Business as usual? Leadership? Disruption? Adaptability? Innovation? Opportunity? Meaning? All of the above, and even more. What do those keywords mean to you as a person and as a leader? How can you bring innovation to your life, your profession, and your organization/institution in a time of ever-increasing complexity? The intention of this article is to help you answer those questions.

Bringing Innovation to Complex Adaptive Systems

What is Innovation? Innovation is fundamentally the capacity to have insights and to act upon them to develop anything that the human mind can conceive, from inventing a new way of obtaining water in a desert, to developing the Relativity Theory. Nevertheless, we tend to believe that it is a process reserved for a few illuminated people who come around once in a blue moon. On the contrary, while the Shakespeares, Einsteins, and Lennons of this world are not common, everyone has had Aha! moments at a given moment in time, but the problem resides in that we attribute them to chance, or to a given set of uncommon circumstances that won´t happen again. The truth is, everyone is capable of changing the world, all you need to have is creative confidence.

“Creative confidence is the belief that everyone is creative, and that creativity isn’t the ability to draw or compose or sculpt, but a way of understanding the world. Creative confidence is the belief that you can create change in the world around you and the conviction that you can achieve what you set out to do.” IDEO founder David Kelley,

We, as individual human beings, can learn the skills and develop the will to innovate our way out of the disruption. It is not easy, but it is definitely doable. Nevertheless, organizations and societies are Complex Adaptive Systems (CAS). Simply put, a Complex Adaptive System is a system that adapts its behavior according to changes in the environment. That adaptive response feeds back into the system and modifies it. Consequently, the organization needs to adapt again, producing another feedback. Add to it that the other players in the field are not sitting still, in fact, they contribute to accelerating the rate of change in a complex system.

Compared to today's reality, the rate of systemic change in the Pre-COVID era was relatively slow, and the more advanced organizations used innovation processes as levers to implant change successfully. Not anymore. In this era, innovation may be helpful, but it is not sufficient to bring lasting change to society or to create a competitive edge for businesses.

The Big Reset and the Blind Spot of Leadership

COVID-19 pushed the RESET button to the society that we used to know, starting a de-facto new era, a transitional one where everything is under scrutiny. All over the world, business models, political regimes, societal structures, and value systems that seemed to be stable in the recent past, won’t do the job anymore.

The spinning wheel of change broke down because of the myriad of feedback loops, uncertainties, and new unknowns originated by COVID-19. We are entering an era of magnified complexity, where systemic change manifests in the form of massive disruptions brought about by wicked problems, which have been originated by what Otto Sharmer calls The three divides:

Three Divides. Image: Presencing Institute

“the Ecological Divide, the Social Divide, and the Spiritual-Cultural Divide. While the ecological divide is based on a disconnect between self and nature, and the social divide on a disconnect between self and other, the spiritual divide reflects a disconnect between self and Self — that is, between my current “self” and the emerging future “Self” that represents my greatest potential.”

Every time that an organizational or societal leader reacts to a disruption based on experiences that might have been successful in the past, is risking the creation of new problems, more complicated than the ones they were trying to solve.

“Managers are not confronted with problems that are independent of each other, but with dynamic situations that consist of complex systems of changing problems that interact with each other. I call such situations messes. . . . Managers do not solve problems, they manage messes.” Russell Ackoff.

Iceberg Model of Systems Thinking. Image: Presencing Institute

The Iceberg model above shows the different levels of awareness from where a system is operated. Visible Behaviors” is what we can call a normal level of awareness where our daily lives take place, and where leaders of businesses and governments function most of the time. That is the “Business as usual” level. In the Pre-COVID era, you could get away with doing business as usual. Not anymore.

To act creatively and consciously in the Post-COVID era, any leader needs to move up and down the awareness spectrum of the model, depending on the situation they are facing at a given moment, not getting stuck in crisis management. Furthermore, independently of the demands of day crisis management, they should be able to deep dive to the “Source” level to “re-connect” with their greatest future potential to create de new.

Failing to make decisions at that level is what Otto Scharmer calls “the blind spot of leadership”. The forward-looking leaders are able to access deeper levels of awareness, gaining a competitive edge for their businesses, and establishing policies for the well-being of their countries’ citizens.

In the Post-COVID era, if any leader wants to transform the paradigms of thought and the structures that maintain the status quo and keep producing results that nobody wants, they must first illuminate their own blind spot, letting loose their inner leadership capacity to create, innovate, and inspire.

That is the What, but the question is How?

Awareness-Based Systems Change is the How.

Awareness Based Systems Change

Theory U, One Process, Five Movements. Image: Presenting Institute

Theory U is an Awareness-Based Systems Change methodology of five movements that allow us to move down one side of the U (connecting us to the world that is outside of our institutional bubble) to the bottom of the U (connecting us to the world that emerges from within) and up the other side of the U (bringing forth the new into the world).”

Awareness Based Systems Change allows us to “sense” and “actualize” our highest future potential. In the article, Facing Disruption with Presencing, we focused on the 3rd movement — Presencing. The bottom of the U is where we “sensed” our highest future potential. Co-creating builds on Presensing to “actualize” that potential, transforming it into innovative practical applications.

Co-creating: Crystallizing and Prototyping the New

Co-creating is the 4th movement of the U process. The aim of co-creating is to build landing strips for the future through prototypes that allow us to explore the future by doing.”

“The prototypes evolve based on the feedback they generate. The “observe, observe, observe” of the co-sensing phase becomes “iterate, iterate, iterate.” This movement is inspired by Design Thinking and blended with Presencing principles to make it relevant to profound shifts in social fields.”

Crystallizing: Nothing Happens

When you come out of Presencing, there is a subtle shift that happens to Crystallizing.

“The funny thing about Crystallizing is that when you start doing it, you feel something that is not fully articulable. What happens? Nothing happens. When that happens, you need to keep being at it, to keep holding the space, to keep getting your attention to what is emerging, to what´s beginning to manifest from that deeper space of resonance. You need to follow your own process, follow your own Knowing- Feeling and bring that into the conversation.”

Prototyping: Explore the Future by Doing and Experimenting

“Prototyping is the first step in exploring the future through action — by doing and experimenting. A prototype is something you do that generates feedback about a core question or assumption you want to explore that helps you evolve your idea. So long as it is an action that generates feedback, no prototype is too small.”

The Prototyping Pentagon. Image: Presencing institute

Unleashing Innovation with Vertical Prototyping

“What we do here in the u.lab2X is an evolved version of traditional prototyping, which we call Vertical Prototyping.”

“Vertical prototyping moves into prototype action from a place of connection to the deeper intention we are holding. It is about seeding and inviting a different quality of relationships in a particular eco-system of collaborators to bring into being a living microcosm of the future that wants to be born.”

Screenshot of Otto Scharmer showing the Vertical Prototype Canvas during the live u.lab2x 2021 Prototyping session

“Vertical Prototyping evolved from our own processes, of what we observed in our own ecosystem. It involves three things that are really different from the traditional way of prototyping.”

  • The first one is to give a lot more attention to the interior dimension. Specifically, the inner shift that we experienced from 4-D Mapping, and the other sensing activities that we had. Also connecting with the real deeper intention that we are holding.”
  • The second one is the collective interior — the inner shift in the quality of the relationships that we have with one another in a particular stakeholders system. We need to notice it and cultivate it.”
  • The third one is that it is different from traditional prototyping, where you create a lot and then you toss away what is not working. A more proper image would be to hold a place where something new is being born. In that sense, we are really dealing with a living microcosm of the whole.”

“The canvas that we use has some of the traditional prototyping, and aditionally the vertical dimension.

  1. Shifts.Paying attention to the shifts that we notice outside and inside and between ourselves.”
  2. Sensing.We move deeper into sensing, including the possibilities that want to emerge.”
  3. Source.We really need to connect to the deeper intention, to the source of what it is that is really wanting to emerge through us. The intention is not only what we want to project out into the world but also and more importantly it is how the world is calling on us.”
  4. Sun.Sun is really articulating the aspiration, the highest future potential. If you call it in it makes a subtle but profound difference.”
  5. Seeds.Where are the seeds of that future already present in our current environment right now?”
  6. Living microcosm.If these seeds could develop, what is their potential? What might they look like? How we would live out the future that we want to create?”
  7. Stewards and Stakeholders.What are the key partners that we need to involve to generate, to make the shift happen?”
  8. Soil.Soil is a holding space, a container for the entire situation generated during prototyping.”
  9. Strategic Action.Regarding the direction that we are moving to, what are the one or two things that we need to do now to move from reflecting and contemplating the situation, toward realizing it?”

“This prototyping is more like seeding and then inviting a different quality of the relationship with collaborators, a different manifestation of the Social Field, that has its own DNA, its own spirit with which you try to be in partnership. It is something like a living microcosm, something we can evolve with.”

“But it is not only about evolving the idea but how you present it to others. You do it by giving a felt sense of possibility, which is much bigger than what people can see. It is not about “I do this, therefore, it happens that way”. It is about tapping on the potential that is already there — it is playing a small piece in activating that potential.”

Outcomes of Co-creating

  1. “A set of refined prototypes — living microcosms of the future — that have generated meaningful feedback regarding the guiding questions and objectives of the lab”
  2. “A set of connections with stakeholders and partners that are relevant for taking the prototype to pilot and scale”
  3. “Enhanced leadership and innovation capacities for dealing with disruptive innovation”
  4. “A team spirit that could help change the leadership culture in the company”
  5. “Creative confidence among the team members to take on big and complex projects”

“Once in a while go back in your journey and ask yourselves, what is it that sparkled in the core team the commitment to move something, to launch something. Go deeper in there and think about how you can activate that collective energy to replicate it on learning journeys when you are having conversations with key collaborators.”

“When a small group of key persons commits itself to the purpose and outcomes of a project, the power of their intention creates an energy field that attracts people, opportunities, and resources that make things happen. This core group functions as a vehicle for the whole to manifest.”

If you want to know more about how to create the new in the Post-COVID era using Vertival Prototyping, contact me with a comment on this post, message me in LinkedIn, write me at I will contact you to have a generative conversation.

This article is a collection of personal experiences as a Theory U change maker, and insights from my work and research. Additionally, I have extracted content from Otto Scharmer’s writings and quotes from different sources ordered by themes: the book The Essentials of Theory U, educational materials from the courses u.lab1x and u.lab2x, and quotes from the u.lab2x live Crystallizing and Prototyping session. Otto Scharmer’s remarks are quoted.



Helio Borges

Executive & Team Coach & Mentor. Cultural Transformation Change Agent & Consultant. Twitter: @hborgesg. Instagram: @heboga. FB: helio.borges.35. Uriji: @hborges