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SIMPLE COMPLEXITY? Systems thinking and collaborative approaches in times of change October 2014 T HE ONLY CONSTANT IS C HANGE Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof. John Kenneth Galbraith 2 E XAMPLE : A USTRALIA Example Question: If your organisation improved outcomes delivered by 30% this year . . . ? 3 A USTRALIA : S OCIAL I MPACT S YSTEM The turnover of the “Social Impact System” is around $300 bn pa. Governments • 1 federal, 6 state, 2 (largish) territories, 564 local governments • Many departments across Health, Welfare, Education, Justice . . . • Multiple roles - sets policy, funds programs, runs programs . . . Not-for-Profit • 700,000 NFPs • 60,000 economically significant Corporate • Philanthropy, corporate social responsibility, creating shared value Evolving forms • Social enterprises, B-corps . . . 12012-13 ABS Satellite Accounts NFP $107bn1 All Govt: $500bn+ $41bn1 Govt (Social) $200bn+ ? For-Profit (Social): $? For-Profit Total? Top 500: $1,543 bn 4 S YSTEM C OST G ROWTH $bn 2006-07 2012-13 Change % pa NFP Turnover 76.0 107.5 41.4% 5.9% Government Funding for NFP 25.5 40.9 60.5% 8.2% CPI: 2.7% pa 5 H OW ARE WE D OING ? System Effectiveness Outcomes/$ Invested 1. Exponential growth 2. Slow and steady 5. Consensus? 3. Status quo 4. In reverse 1980 1990 2000 2010 6 M EETING THE C HALLENGE CSI Mission question: “What are the keys to improving social impact in Australia?” We have learned to create the small exceptions that can change the lives of hundreds. But we have not learned how to make the exceptions the rule to change the lives of millions. Lisbeth Schorr, Social Analyst 7 S OCIAL I MPACT F RAMEWORK 8 W HY AREN ’ T WE D OING T HIS A LREADY ? Core: System misalignment. Example: outcome measurement • The business case for measurement at a system level is strong. • The case for measurement at a program/ organisation level is weak. • (Short-term) incentives for key players are poorly aligned. 9 L ESSONS ABOUT C OMPLEX S YSTEMS • A complex adaptive system is comprised of agents (individuals, groups, organisations, communities) – Each agents’ behaviour is dictated by their local perception of the environment – They optimize their own fitness, not that of the system • Agents are connected by feedback loops; behaviour is interdependent. Systems resist change. • Agents adapt to improve their own payoffs; in so doing they co-evolve, shifting the landscape • The system is constantly evolving as agents come and go; system complexity is added because there are systems within systems Individual incentives matter (they are often misaligned with the desired system outcome) In complex systems, siloed responses generally fail Change is constant, complex and not predictable Footnote: not every social problem is complex! 10 S OME K EYS TO A S YSTEMS A PPROACH 1. Develop an understanding of the system 2. In this context – what is your “theory of change”? • Create a shared agenda with a system view 3. Develop positive feedback loops: focus on the system (community, country) outcome first, program attribution second 4. Seek to align individual incentives with desired system outcomes . . . “You can achieve incredible progress if you set a clear goal and find a measure that will drive progress toward that goal . . . this may seem basic, but it is amazing how often it is not done and how hard it is to get right.” - Bill Gates 11 S OME K EYS TO C OLLABORATION 1. Trust. 2. Common agenda. 3. Shared measures. 4. Resource. 5. Communication . . . and trust. 12 YOUR O RGANISATION ROLE ? 1. System envisioner/catalyst/advocate? 2. Specialist? 3. System Integrator/backbone? 4. Other? . . . and building your capabilities, people and organisation relationships accordingly 13 C ONCLUSION The secret is to gang up on the problem, rather than each other. - Thomas Stallkamp 14