Systems shift: seeing the big picture

Sensemaking / Systems shift: seeing the big picture

19 May 2011

Anna Simpson unveils Forum for the Future’s groundbreaking new strategy for system innovation.

"The word for world is forest", wrote the sci-fi novelist Ursula K Le Guin in the 70s. Unwittingly perhaps, she put her finger on one of the best illustrations of the complex web of causes and effects at play on the planet. Take any of the systems on which we depend – such as the supply, distribution and sale of food, or the financial transactions and investments that define our economy. Each is as intricate and interlinked as a forest, and – just as forests play a wider role in shaping our climate – so these key systems shape our society, and the chances of our enjoying a sustainable future.

Think your way into a forest. Thousands of trees stretch up to the sunlight – some ancient, others saplings. Creepers and vines weave around their trunks, and in the shade thrives a crop of coffee, nourished by soil enriched with rotting leaves. Up above, monkeys swing between the branches, and macaws make their nests in the hollows of trees. At dusk, the flowers of the Annona tree give off a sweet perfume, attracting beetles and flies. The sun rises, the petals fall, and the pollen-covered insects fly off into a new day…

Give one corner of this ecosystem a tug, and in another corner a tree comes crashing down. If we have to ask why, it's because we're not seeing the wood for the trees.

But the rainforest isn't just an illustration of the need to see systems as a whole – powerful as it is. It's a case study, too. For much of the 1980s, environmentalists shouted themselves hoarse demanding an end to rainforest destruction, and were largely ignored by the timber trade and its retail customers. By 1990, some were ready for a different approach. That was when a group of campaigners, together with traders, buyers and forestry experts, sat down in a room in California. They met to discuss whether it was possible to identify supplies of tropical hardwoods which could be harvested sustainably, and to distinguish them in the market place. The eventual outcome was the formation of the Forest Stewardship Council (FSC), which certifies timber and wood products sourced from sustainably managed forests across the world. Today, the FSC logo applies to over 140 million hectares across five continents.

It's a great example of change on a significant scale – change that no single company or organisation, however ambitious or well-resourced, could have achieved alone. It needed leaders from right across the system, without any direct links in the supply chain, to get together and look at the bigger picture. They began by reaching a consensus on what good forest management actually means, and then had the guts to ask, 'How do we get there?' The result, as is so often the case when a whole system is held up to the light, was an original idea: a practical innovation for doing things differently.

It may sound relatively simple – but it's all too rare a story, says Stephanie Draper, Director of Change Strategies at Forum for the Future. "Sustainable development is awash with projects that improve something locally, campaigns which tackle one issue, and technologies with lots of potential which aren't rolled out." Many of these disparate initiatives are taking us in the right direction, Draper says, but are unlikely in themselves to create the wholesale shift we need to deal with the risks posed to our ecosystem, and thereby to our economies which depend on it. This is the thinking behind Forum for the Future's ambitious new strategy to bring leaders and innovators together to look at whole systems – such as food, finance and energy – and work out what sort of actions and interventions are needed to set them firmly on the path to sustainability [see panel, 'Systems shift' below].

Take tourism as an example. A low-impact travel agency might encourage tourists to journey overland, but what happens once they reach their dream destination? How much of the local water supply is hoarded by the elegant hotel? How do the top-rated restaurants source their food? Does money spent on attractions and souvenirs stay in the community, or does the lion's share end up in the pockets of traders far away?

Getting the most out of tourism, with the least impact on the environment, takes more than isolated actions by individual travellers, tour companies or regulators. It means bringing together all these actors, from travel agencies to destination governments and community representatives. This was the conclusion of a recent project to help the UK outbound tourism industry plan for 2023, led by Forum for the Future in partnership with ABTA and The Travel Foundation. It may sound over-ambitious, but any alternative approach is almost by definition inadequate. And as Draper points out, compared to 1990, "we live in an age where, largely thanks to ICT and social media, it's easier than ever to join things up".

 Food for thought: a whole system in transformation

It's not just that we can get more done by working together. A broader perspective shows up risks we might not have seen coming, and makes us less likely to reinvent wobbly wheels when we try to address them. "Systems thinking can shine a light on inconsistencies", says Dan Crossley, who heads up Forum for the Future's work on food. "Take misdirected protein in the food chain. Nearly 50% of cereals are used in animal feed: that's huge swathes of land which could be used to fight famine."

You can't seriously expect a multinational food retailer to care about land use. Or can you? When PepsiCo executives started using some possible future scenarios to look at their role in the food system, they soon realised that whether or not they cared about the environment, their business was entirely dependent on it. They saw that, if we don't use fundamental resources like land sustainably, then the future of essential crops like corn and sugar is by no means certain. Similarly, when they thought about the various pressures weighing on their suppliers (climate change, water scarcity and rising demand, to name just a few), they realised it wasn't just about ethics. They were looking at a real threat to their profits.

Out of these musings came a programme which has helped to guarantee a future supply of corn through direct relationships with 300 small-scale farmers in Mexico, and has instigated a massive switch from palm oil (implicated in rainforest destruction) to sunflower oil. And that's not all. The same programme brings together PepsiCo and the Inter-American Development Bank to ensure farming remains an attractive option for the next generation in Latin America, by addressing regional issues from water and sanitation, to youth development, to disaster relief.

Forum for the Future is convinced that we need much more of this sort of imaginative collaboration, and so it's setting out to make it happen by bringing the right people together. "There's a real appetite for it among leading companies", says Crossley. "People are getting the message about the benefits – especially as initiatives like the Sustainable Food Laboratory (SFL) show signs of success."

Of course, opportunity is a big part of the pull. SFL offers companies the chance to cut costs by linking up distribution streams, so that, for example, a van taking products from a rural farm to a city superstore doesn't make the return journey empty. Others take a more aggressive approach. A smarter system could mean more mergers and acquisitions. Or it could mean a whole new set of faces. Take Forum for the Future's recent project, 'Gatecrashing the Energy Sector'. This encouraged innovative start-ups, especially in the ICT field, to shake up traditional ways of working in one of the world's most crucial – and unsustainable – sectors. Any major shift is likely to involve new products or services that make old ones redundant. In recent years, we've sent the fixed-line phone, the fax machine and the CD player to the dinosaur graveyard. What's next? Start-ups like Streetbank and WhipCar remind us that ownership itself can be more a hassle than a help. Why pay parking and maintenance costs when you can use your neighbour's car for the weekly trip to the game?

Such systemic questions are surfacing in finance, too, says Alice Chapple, Director of Sustainable Financial Markets at the Forum. "Players want to get a sense of where the economy will be in a few years time. Recently we've been approached by big banks like Barclays, RBS and HSBC – all of them saying, 'We need to understand the context'."

In some ways, the context stretches as far as you like. Forget about the old piece of string – today's 'unanswerable' is 'How broad is a system?' Wherever you draw your chalk circle, there'll be overlap. There's the impact of speculation [that sits in the finance system, right?] on the price of wheat [food, surely?], fuelled by rising oil costs [energy, then?]. Understanding the context is just the first step. The next is daring to ask how it else it could work: what the best possible system would look like.

And then you have to try it. This is what pioneers do – they open up the way to a new system by doing things differently. Forum for the Future's approach is based on the premise that if you have enough innovators, or pioneers, working with a shared vision, their combined tapping and knocking will tip the whole into a more sustainable place.

Systems shift
Peter Madden unveils Forum for the Future's bold new strategy.

Forum for the Future has a new goal. We want to transform the complex systems which serve our fundamental needs, such as food, energy and finance, so that they are fit for the challenges of the 21st Century.

The need for new ways to increase wellbeing within environmental limits is more acute than ever. If we're going to design and implement effective solutions, then we have to begin by recognising the complex causes of these challenges and how they interconnect. This means thinking and working within the whole context. We need to know what influences our decisions, actions and behaviours, and we need to understand how things join up.

To do this, we are putting 'systems innovation' at the heart of our new strategy.

Why this change in approach? We have 15 years' experience doing great work with business, government and the public sector. But in spite of our achievements, it is clear that if we want to tackle problems such as climate change or vulnerable ecosystems, we can't take a piecemeal approach. Doing a bit here and a bit there won't change things at the speed or on the scale we need.

Our new strategy looks at whole systems. It draws on 'complex systems theory', as set out by the likes of Donella Meadows. Meadows observed that there are levers, or particular places within a system – such as a company, a city, an economy – where a "small shift in one thing can produce big changes in everything".

We will focus, initially, on three critical global systems that underpin our lives and the prospects for sustainability: energy, food and finance. These are areas in which Forum for the Future can already bring to bear a depth of expertise and a breadth of relationships.

For each, we need to identify the barriers that are stopping them from being sustainable. Then we can work out what innovations and what fresh thinking are needed to overcome those barriers – and where the strategic 'tipping points' are, where interventions have the most chance of transforming the whole system. Key questions we'll be asking include how we can change the finance system so that it rewards long-term thinking, and how we can take sustainable energy systems to scale.

As a 'Forum', one thing we do very well is bring together different players to tackle complex problems in new ways. We'll play the role of 'informed enablers', convening new alliances between business, public service providers, NGOs and entrepreneurs.

We'll also draw on our experience of working with others creating practical solutions. As well as a clearer understanding of how a whole system works, we need innovative products, services and business models that can help shift it to a more sustainable equilibrium.

So take energy: we will work with the people who generate it, sell it, and use it, and who set the policies which affect how all those things are done. And we will use disruptive innovation, to challenge the settled, unsustainable way of doing things, and to discover new opportunities for getting it right.

We are impatient to put the brightest and the best of these solutions into practice: new technologies and infrastructure to build the green economy; intelligent production to bring us goods and services at a fraction of today's economic and environmental costs; smart new ways to live and travel, work and play.

We intend to capture and share the learning, too, drawing out the best practice in both collaborative and disruptive innovation to flesh out the stories. We want our work to be a global resource for practical knowledge about sustainable development.

Our ultimate aim is to enable change on a scale that works in a practical, interconnected way across whole sectors and systems that are essential for sustainable living. If we succeed, we won't simply help deliver a more sustainable future. We will also make our lives more secure, more enjoyable and more prosperous here and now.

Peter Madden is Chief Executive, Forum for the Future.

Anna Simpson is Deputy Editor, Green Futures.

Image credits: Stephane Couturier/Prix Pictet; Thomas Struth/Prix Pictet

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