Don’t build a start-up, become a systems entrepreneur

560px-Morne_Seychellois_NP_footpath“Make sure you start the year on the right foot…”

…my grandmother always used to remind me. Given that I work at what is externally referred to as one of Canada’s main entrepreneurship centres (though I much prefer describing MaRS as an innovation hub), starting the year by writing a piece on why you should NOT build a startup probably wouldn’t meet her standard. But you have to put your job on the line at least once a year to make the ride worthwhile, right?

Whenever I am trying to solve a problem, whether it’s in my personal life, at work (first in management consulting and now in innovation) or in my relationships (where I get a lot of slack for treating problems like projects), I generally go through a three-stage process:

The why

How is success defined? How should it be defined? What is the North Star or goal post we’re going after?

The how

What are the options? What pathways can we imagine to get us there? Which one(s) should be chosen?

The what

Where do we start? What’s the first step? How do we track progress and learn?

There is also a big “who” question that runs through all three stages, but we will leave that for another time. For now, let’s consider the challenge proposed in the title of this article through these questions.

(Re)defining success: Why people build startups

When I consider the wide range of underlying motivations for why people decide to build startups, they generally fall into one of the following (non-comprehensive) categories:

  • Necessity: “This is my best chance at providing the basics of life for me and/or my family.”

If this is the case for you, you should absolutely take what you believe to be the best path forward. Nobody else understands your specific context better than you do. Just make sure that you understand the realities of the startup life and the risks associated with it, and also be sure to get access to the fast-growing range of public resources that can help support you along the way.

  • Achievement: “I am going to do this so that I can have more money/power/freedom/excitement/etc.”

While I have my own opinions about why these are the wrong settings on a personal compass, fortunately I can just defer to Phil Libin, CEO of Evernote, who explains why you shouldn’t build a startup if these are your goals.

  • Impact: “I want to change or create a positive impact in the world!”

I’m lucky enough to meet a lot of people for whom impact is a primary motivation. Listening to them express their motivations makes my heart both melt and ache every time. It makes my heart melt because these are absolutely the kind of people we need much more of—those who seek meaning, are driven by purpose, and have a vision for the future. On the other hand, it makes my heart ache because I see so much of their amazing potential go to waste (or, at best, not go very far). This is due in part to their choosing the wrong “how,” even though they have the right “why” as their starting point.

Mission Big Change: Why building a startup isn’t the best path

Of those in that final category, almost everyone I speak to genuinely wants to create real, meaningful, positive, long-lasting, sustainable change—what we will call ‘big change.’

The next question is whether building a startup is the best way to get there (most people default to this option and only ask how to build the best startup.)

To answer that question, we can compare the most significant conditions necessary for big change with the most common pieces of advice given to the founders of new startups. As we can see in the chart below, for every one of the five key conditions, the common advice for startups is the exact opposite:

Screen Shot 2015-01-21 at 4.43.19 PM

A whole article could be written analyzing each condition and piece of advice, their respective underlying logic and their stark contrast, but we will leave that to another time. For now, I will just share a quote from Nicholas Negroponte of MIT Media Lab and One Laptop Per Child fame (who has, with freakish accuracy, predicted the future over the last several decades), from his interview with Stewart Brand of The Long Now Foundation:

“Startup businesses are sucking people out of big thinking. So many minds that used to think big are now thinking small because their VCs tell them to ‘focus’…they’re doing these startups and their venture funding tells them focus, focus and become cash-flow positive—which is a really stupid idea in a startup…keep the risk high, don’t become cash-flow positive.”

To be abundantly clear, no part of this is a criticism of entrepreneurial thinking or entrepreneurial spirit—both of which I love, with the former featuring prominently in our curriculum (led by our amazing faculty member Assaf Weisz) and the latter being a big part of our culture at Studio Y. Both are necessary ingredients to becoming a truly successful systems entrepreneur. The issue is that these really powerful, bold ideas and concepts have been corrupted in the way in which we’ve built our dominant startup ecosystems.

“But what about Elon Musk?” is an unavoidable counter to the arguments outlined above. Elon Musk, in this case, is exactly the exception that proves the rule. He thinks big, he gives away his intellectual property and he takes on big societal challenges that matter to our future. In fact, the fact that Elon Musk is celebrated for being such an outlier in how he goes about working on his ventures is what should concern us most.

Another great (and Toronto-based) example is Aled Edwards, director and CEO of the Structural Genomics Consortium, who has championed the view that drug discovery advances would be made more rapidly within an open access research environment in which no patents are filed, and materials and ideas are exchanged without restriction on use.

C/O NASA

C/O NASA

So if not ‘launch a start-up!’ then what?

The road less traveled: The rise of systems entrepreneurs

To make the case for an alternative path, it is important to also consider how big change happens. Two distinguishing factors include adoption and success definition:

Let there be light.  

The fundamental transformations in our world come from large-scale adoption, not from the act of invention. For a number of reasons, including very innate human tendencies, we reward invention significantly more than we do adoption, despite adoption being an absolutely necessary condition for big change. In my research for this piece, I came across Dr. Marc Ventresca, an economic sociologist in strategy and innovation at Saïd Business School, who makes this point in a TEDx talk using a great example. He argues that it is large-scale power-grid systems (each unique to its particular context) that have changed the world, not simply the invention of electricity.

We need to grow.

This is the shared mantra of almost every organization across industries. Even in those organizations focused on growing impact (rather than profits), the problem is that the “we” is the organization; our dominant, if not exclusive, approach to success definition is at the organizational level. Just think about the mind-blowing amount of resources that go into setting up, growing and promoting individual organizations, or about how highly we regard leaders (again, across all sectors) who grow an organization’s budget, size, reach or, in the best case scenario, actual impact.

Yet, what we know to be unequivocally true is that our biggest issues are so complex and interdependent that no single organization or solution can alone achieve the level of fundamental systems change required. One of the biggest issues with the startup model is that it fundamentally defines success as organizational success (and how fast, big and far you can grow it) with zero accountability for system success.

So who, then, are systems entrepreneurs? The concept of systems entrepreneurs is not widely recognized, as can be seen by performing a Google search for  “systems entrepreneur” or “system entrepreneur,” which return 25,000 and 5,000 results respectively, almost all of which are related to information, communication and power systems.

Both Engineers Without Borders and our team at Studio Y have used the term “systems change leaders” as a frame over the past couple of years, in developing the people we work with.

In her paper, “How Actors Change Institutions: Towards a Theory of Institutional Entrepreneurship” (2009),  Julie Battilana, an associate professor at Harvard Business School, suggests that while all systems entrepreneurs are change agents, to be considered a systems entrepreneur, two criteria must be met:

  • First, you must initiate divergent change (something that breaks with the status quo rather than simply improving or enhancing it).
  • Second, you must actively participate in the implementation of these changes, demonstrating an ability to marshal the resources required to implement change (speaking to the adoption point made earlier).

She and her colleagues then describe three sets of activities that systems entrepreneurs undertake:

  • Developing a vision — encompasses activities undertaken to make the case for change, including sharing the vision of the need for change with followers.
  • Mobilizing people — includes activities undertaken to gain others’ support for and acceptance of new routines.
  • Motivating others to achieve and sustain the vision — consists of activities undertaken to institutionalize change.

Note how none of these criteria and activities require building a startup. In fact, the dominant startup model limits one’s ability to truly focus on some of the most important elements of systems entrepreneurship.

More recently, Peter Senge, the author of The Fifth Discipline and a guru in systems thinking and organizational learning, co-authored a piece in the Stanford Social Innovation Review titled: The Dawn of Systems Leadership. In it, the authors offer the following advice for those interested in getting started on a journey of becoming a systems leader/entrepreneur.

  • Learn on the job.
  • Engage people across boundaries.
  • Let go of control.
  • Build your own toolkit.
  • Work with others on a similar journey.

A plea and a pledge

I may not have listened to that piece of advice from my grandmother about how to start a new year, but one thing I learned through her actions (rather than her words) was never to shy away from a healthy debate about the future.

So whatever your vision or passion for the future, consider this a plea to make the pledge to take the road less travelled by way of systems entrepreneurship because, as Robert Frost said, we will look back years from now and know “that has made all the difference.”

For more on systems change roles, thinking, mindsets and initiatives, explore Ecosystems for Systems Change.

Systems as people, not structures

SiG Note: This blog is the first response blog to the newly launched Building Ecosystems for Systems Change: How do we collaborate to create ecosystems that support innovation for systems change? A report and reflection, based on Session 22 of the Unusual Suspects Festival.

Further response blogs are welcome. Please email: kelsey@sigeneration.ca if you have written, or wish to write, a response or think-piece.

The best way to understand a system is to look at it from the point of view of people who want to subvert it” — Joseph Schumpeter

Provocative? Perhaps. But I think this is as good a place to start as any when we talk about building ecosystems for social change.  And of course we should ask: why do people try to subvert systems in the first place?

Building Ecosystems for Systems Change

Summary Graphic || How do we collaborate to create ecosystems that support innovation for systems change?

Systems represent complex structures developed to carry out specific activities, perform particular duties, and at their best solve problems.  The bigger and more intricate they are, the more complex they tend to be.  Swirls of interrelated and interdependent elements, components, entities, factors, members, and parts immediately spring to mind.  The report’s assessment of the purpose in building ecosystems for systems change is very clear: encouraging collaboration to create a space that supports innovation.  You would be hard pressed to find many who disagreed this was a positive purpose to serve.

My personal apprehension derives from the very obvious challenges of how you go about actually building such an ecosystem.  As we all know (whether we live by it or not is another matter), diversity in people, perspectives, expertise, ideas, skills, and experience makes fertile ground for innovation.  So when the report asserts that ‘without diversity, the ecosystem collapses,’ I would go further and argue that without diversity, the ecosystem never really gets going.  And the dangers of acting on the urgency to do something, anything runs the risk of the ‘deliberate intentionality’ creating systems that happen to and for people rather than with them, as the report rightly warns against.

This is precisely why the conversation around how we identify, engage, and work alongside unusual suspects, has to drastically change gear.  We almost have to get back to basics and ask ourselves questions such as: “How can I identify everyone who may be affected by a particular problem and get them involved in solving it?”

Granted, this is easier said than done, but now more than ever is the time to craft new, creative, and engaging ways to connect different actors at varying scales, who can influence a range of external conditions (the report cites cultural, fiscal, political, temporal, and physical).  Our combined and connected influences then create enabling environments for innovation to take root as a first step towards systems change.

RAGE IS CRITICAL. IT SURE IS.

The other point I wanted to very briefly touch upon was this fantastic notion of rage as a driver for social change.  History suggests this couldn’t be truer.  In 1964, when Fanny Lou Hamer said: “I am sick and tired of being sick and tired,” unknowing of the context, one could quite easily be forgiven for thinking that this was merely one woman’s trite expression of frustration at the mundane struggles of life as we all know it.  My point is that rage often comes from an uncomfortable place that shapes our motives and objectives for affecting change.  Jon Hugget’s estimation that “rage is what gets us to do good things (it can also get us to do bad things), but if the rage isn’t there, we aren’t getting anywhere” may be true, but it does beg the question: how do you direct rage for good rather than retribution, particularly when feelings of rage may stem from being unequal players within a system?

This is probably too big and complex a question to combat here – and definitely warrants its own blog piece! But the success of collaborating to innovate systems change will be strongly dependent on making meaningful attempts to understand the complex and challenging make-up of our coalition of actors and unusual suspects, in order to co-create the right spaces and platforms for new thinking, cultures, and practice.  And that is not a bad place to start at all.

Building Ecosystems For Systems Change [CoverPage]

Download the report

BUILDING ECOSYSTEMS FOR SYSTEMS CHANGE

How do we collaborate to create ecosystems that support innovation for systems change?

This report is a reflection on the Unusual Suspects Festival 2014: Session 22, a session co-hosted by Social Innovation Generation (SiG) National and Oxfam.

It was prepared by Social Innovation Generation (SiG) National on behalf of the collaboration.