Sustainability Illustrated: Animating Knowledge

It is no secret that YouTube has transformed the way we use the Internet. YouTube is the second largest search engine after Google; it is where people go to learn (about pottery, gardening, physics, etc.), find demonstrations, and share their work with the world. I believe this is a trend that will continue to grow in the future.

I have been working as a sustainability advisor for almost 10 years (with the international non-profit The Natural Step) and have seen first-hand the power of innovative sustainability practices to transform lives, businesses, and communities for the better.

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As an artist and an illustrator, I have also witnessed the power of illustrations and multimedia to help people understand and learn more effectively. So I decided to combine my skills and share, through animated illustration, what I have learned about sustainability over years of helping businesses and communities become more successful, sustainable, and resilient.

I started a YouTube channel called Sustainability Illustrated. The purpose of the channel is to change the world by giving people free access to the best sustainability knowledge and processes available.

Animating Knowledge

The first video I created was based on a presentation that participants always enjoyed during my workshops: sustainability explained with science.

This video introduces the common scientific definition of sustainability based on natural cycles and thermodynamics — using illustrations to make it easy to understand. Given the popularity of works like RSA animates and the Story of Stuff, I used a similar “living whiteboard” style – an approach that is both engaging and particularly effective for explaining complex concepts.

Design Insight: How It’s Done…

I drew the illustrations on my computer while recording my screen, recorded the narration, imported everything into iMovie, accelerated the drawings, edited and synchronized the voice, and voilà! There was my first Sustainability Illustrated film.

A Growing Learning Gallery…

Since then, I’ve covered key sustainability topics including:

Ecological footprint | Triple bottom line | Benefits of backcasting | Four sustainability principles

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All Sustainability Illustrated videos are available in both French and English and are hand-drawn in a short 4- to 7-minute format, so people can learn about sustainability for free in bite-size pieces.

To date, the channel has gathered over 500 subscribers through word-of-mouth and received more than 28,000 views! Understanding that YouTube is a social platform,  I hope the channel will soon develop into a community where people learn and share sustainability knowledge and practices: a sustainability-knowledge mobilization movement.

Upcoming video topics will include: human needs, the business case for sustainability, systems thinking, stories from the field, objection handling, and more. I have a list of over 60 videos to publish and many more to come…

Feel free to share the videos! And please do not hesitate to let me know what you think and share your ideas to improve the channel and make it even more visible, helpful, and successful.

Subscribe to the Sustainability Illustrated channel or support the project.

 

The Scaling Imperative

Today, it is quite common to come across promising social innovations that tackle important sustainability concerns. The excitement around them floods our newsfeeds, seeps into household conversations, and inspires new generations of social entrepreneurs. What is less common, however, is the wider adaptation and scaling of successful sustainability innovations.

C/O Nicolas Raymond

C/O Nicolas Raymond

As Christian Seelos says, “scaling is what creates value for innovation.” Cultivating for a single tree is very different from cultivating a forest. When we talk about systems change, we are talking about growing a forest and, therefore, require concerted scaling efforts.

Truly, we cannot miss the forest for the trees.

For instance, the Equiterre Community Support Agriculture (CSA) network has 20 years of experience fostering ecological agriculture, yet to date only supports 100 organic family farms. Despite their proven potential and local success, Equiterre’s limited scale by no means challenges the prevalent food system.

Similar niche socio-ecological innovations in local food, affordable housing, alternative transport, energy consumption and production, social care, and more can be found in different communities across Canada, addressing important challenges facing our societies, but focused at the local level, where they are taken up by a comparatively small group of individuals (early adopters).

Just as the household blue recycling box has become widely adopted by municipal and provincial governments, and a normal part of our day-to-day life, how do we “blue box” other proven innovations for sustainability?

Scaling Innovations for Sustainability

Today, the challenge of climate change demands a great transition, which calls for social innovations that are intelligently networked and will diffuse quickly, at remarkable scales. Scaling innovations – ‘tipping the scales’ – will require new ways of seeing:

  1. It is not about innovating for the sake of innovation. It is about bringing value to promising innovations and the strategic cultivation of the accompanying conditions, structures and practices needed for an innovation to take root and transform day-to-day life.
  2. It is not merely about replication or bringing a niche model to scale. Instead, it is about catalyzing waves of change that can transform current unsustainable socio-economic systems and practices and drive the shift to new sustainable and resilient forms of provision.
  3. Effective scaling involves taking a pilot project’s success and adapting it elsewhere. It involves translating the essence of socio-ecological innovations to new geographic contexts, levels of society, and political arenas through a process of adaptation or reinvention. We must adjust the innovation to the local and, at the same time, ready the specific local conditions to receive the innovation. Adaptation is a twofold process.
  4. Scaling is about impact, not the organization. We need to change our focus from scaling the size of the innovating organization to instead scaling the impact of the innovation itself. Increasing organizational size is not the primary goal and is not necessarily critical for bringing sustainability innovations to scale.
  5. Spreading innovations demands rethinking ‘scale’ itself. Typically, we see scale as a nested hierarchy of geographic locations: local, regional, national, international. Spreading an innovation in today’s networked and globalized world, demands seeing ‘scale’ in new ways: ie different scales of systems or networks.

Geographer Doreen Massey’s “global sense of place” recasts what we mean by ‘the local,’ or community, beyond physical location to include our connections to international networks and flows of resources, information, collaborators, risks, and solidarities. Her thinking imagines exchanges of, for example, goods, knowledge, or finances, that are based on local-to-local connections of trust and common value, as examples of ‘local scale.’ Ethically motivated Fair Trade between local consumers and distant producers comes to mind as a type of ‘rescaling.’

6. There are different ways of scaling:

A. Scaling Out: Increases the impact of an innovation through diffusion by adaptation into new sectoral and geographical contexts. While the innovation may spread across geographic/sector boundaries, it typically remains at the “niche” level and is adopted by a small percentage of early adopters in each locale or sector.

Example: Community Land Trusts tackle affordable housing issues by separating the market price of the land from the price of the house. The CLT model takes land out of the real estate market and puts it in a community-partner-controlled trust. CLTs encourage partnerships with government and ensure that taxpayers do not have to increase housing subsidies simply to keep up with the real estate market. CLTs’ success in preserving housing affordability in the U.S. travelled from North America to the UK and beyond, a process captured by Lewis & Conaty, the authors of the Resilience Imperative.

The idea has circled back to Canada and is being explored in Prince George, Victoria, and Vancouver, where the Mayor’s Task Force on Affordable Housing brought together municipal staff, social partners, and VanCity Credit Union to pilot using a CLT for a large affordable housing project in Canada’s most expensive city.

B. Scaling Up: Escalates the impact of a particular innovation on the wider system in which it resides, in order to change that system and reach more people. The innovation scales beyond the niche level, overcoming overarching institutional regimes and pressures that limit the innovation’s spread and may have caused the sustainability problem in the first place. The innovation looks different at each new level of the system, in order to have impact on a different scale.

Example:  A local wind mill co-op that provides renewable electricity through community ownership is scaled up via a feed-in tariff that guarantees a price for energy produced that makes the investment sustainable. The FIT came about because of the lobbying work of organizations and intermediaries who built political coalitions in support of the feed-in tariff policy mechanism, which is designed to accelerate uptake of multiple-point energy production by municipalities, private firms, and individuals at provincial or national scales.

C.  Scaling Deep: Dedicates time and resources to improve the socialization of an innovation to achieve greater impact within a sector and, ultimately, transform systems. It is not a question of rolling out the innovation in different contexts, it is a question of evolving the innovation for uptake by different groups and system-levels.

This strategy recognizes that innovations and their new practices must be well-supported to achieve scale – there is an important, if mundane, everyday aspect to successful scaling [see Elizabeth Shove for more on Social Practice Theory].

Example: Climate Smart’s carbon accounting initiative for small and medium-sized businesses evolved into a user-friendly online software. This put control over feedback and analysis of improvements into the hands of the individual firms and allowed them to compare carbon and cost-saving performance against similar firms. Improvements in benchmarking, measuring accomplishment, and providing feedback on performance compared to others in their own sector, increased buy-in from managers and workers to alter workplace practices.

If we want to get serious about social innovation for systemic change, we must think about scale from the outset. Will an innovation build, or gain, momentum across and beyond its current scale to potentially topple unsustainable systems?

Catalytic social innovations demand a much more dynamic way of understanding and thinking about scale. By intelligently pursuing the scaling strategies that are most relevant to a particular innovation, we can begin to carve a pathway for transition and bring real value to our sustainability innovations.

SiG Note: One organization that learned through experience to focus on scaling innovation early was the Toronto Atmospheric Fund. SiG profiled the organization in our series on social innovation here.

Sustainability-driven Collaboration, Part III: Simplicity without reduction, authentic leadership, and process design

In the previous entry in this three-part series on Sustainability-driven Collaboration, I discussed value creation and vision as key drivers of collaboration: how shared and individual value keep collaborators at the table working towards collective goals and how an ambitious, principle-based vision of success (sustainability) can provide creative tension and serve as a powerful driving force for such  multi-stakeholder initiatives.

Based on experience and research at the organizational level, I believe that the following three lessons are just as important for improving the capacity of collaborative efforts to achieve transformational systems change towards sustainability.

1. Simplify without reduction – Whether at the scale of individual organizations or in the context of multi-stakeholder collaborative efforts, achieving transformational outcomes in an increasingly complex world requires us to acknowledge and deal with complexity as best we can. Given the multiple competing priorities and dynamics at play even in small organizations, it is true that: “whether building companies, steering governments, or achieving personal goals, avoiding complexity isn’t the answer anymore.”

Simplifying, while not reducing or dismissing complexity, becomes that much more important in multi-stakeholder collaborative contexts. Approaches such as Change Labs have emphasized the need to embrace complexity and use detailed systems mapping and similar practices to identify leverage points for change.

Yet most of us cannot hold complicated systems maps in our heads as we make decisions day to day. Creating systems maps to reveal connections, complexities, and leverage points can be powerful, but  individuals and groups can quickly get lost in complexity. Using a systems perspective on an ongoing basis therefore requires simplification without reduction, a process that involves being able to recognize patterns.

For example, the system conditions for sustainability are a useful lens through which individuals and groups can identify patterns that make sense of complicated systems maps about current reality,  highlight strategic leverage points, and guide the adaptive processes of trial and error and rapid prototyping that are necessary for innovation.

2. Demonstrate authentic leadership – The importance of effective leadership is no secret to anyone who has tried to make change happen.  For sustainability-driven change in organizations, leaders play an integral role in helping develop shared assumptions and beliefs about the importance of sustainability to long-term success, shared understanding about what sustainability means, and shared language with which to describe sustainability issues.

In multi-stakeholder collaboration, authentic and effective leadership is just as crucial. Leaders issue the call to collaborate, frame the narrative of the desired and emerging transformational change, and encourage participants to be comfortable with accepting the emergent and uncertain outcomes that characterize collaboration. Leaders can also visibly model the behaviors so important to collaboration. Baan, Long, and Pearlman, authors of The Lotus, have described 9 personal capacities for transformational leadership. These capacities include having compassion, generating whole system and whole-self awareness, holding paradoxes and ambiguities, and maintaining a sense of humour.

Otto Scharmer’s Theory U: Leading from the Emerging Future provides the definitive word on leadership aimed at transformational change. According to Scharmer, the primary job of leadership is “to enhance the individual and systematic capacity to see, to deeply attend to the reality that people face and enact. Thus the leader’s real work is to help people discover the power of seeing and seeing together.”

3. Design good processes – Sustainability-driven change within organizations doesn’t just happen through compelling words, good indicators, best practices, or even strong leadership. It takes special attention to the social processes that foster creativity, hope, and ambition in this work. Getting people to interact with different people and in different ways than they usually do via carefully designed processes that respect the way adults learn is vitally important for the work to be enduring and the change to be transformational. As explained in Frances Westley, Sean Goebey, and Kirsten Robinson’s Change Lab/Design Lab for Social Innovation, clear processes “are there to provide the direction and put momentum behind a change-making project, not stifle its creativity.” 

In a multi-stakeholder context, the importance of clear process is amplified by the absence of any particular unifying organizational structure, the necessity for widely differing viewpoints, and the stronger likelihood of mistrust among individuals. Trust is the most important ingredient for success in a multi-stakeholder collaboration and building trust is the most important process design challenge. Helping people be present and honest, while articulating and respectfully opening up to points of disagreement, requires careful process design and facilitation.

A lack of clarity in role definition is also an extremely common problem in collaborations. Well-defined processes can help by  “providing all participants with a sense of where their workshops are going and how the work they are currently doing, researching, sense-making, or prototyping will fit into broader system change.”

TNSblog2Given the challenges, it is no surprise that social innovation labs that offer models on how to actually run collaborative efforts have become so popular. The emphasis of the Lab approach on careful process design, the engagement of diverse stakeholders from across a whole system, and the messy, emergent nature of such endeavors means that Labs tend to require a significant investment of resources and a hefty time commitment from stakeholders.

Advancing the important and emerging practice of Sustainability-driven Collaboration

With all of these lessons and questions in mind, The Natural Step Canada has developed and launched a program called the Sustainability Transition Lab. We aim to blend the lessons that we’ve learned about facilitating transformational change at the organizational level with the best practices that enable change in a multi-stakeholder context.

We think that it is possible to accelerate change in sustainability-driven collaborations by consciously designing the process to build a principle-based vision, shared language, and widespread sustainability literacy among participants. Our bet is that this helps build buy-in and alignment more rapidly and provides helpful design constraints to guide and spur innovation efforts.

In collaboration with a number of partners, we plan to test this hypothesis through a series of projects over the next three years. This effort will itself be an experiment and we will share our learnings – successes, failures, outcomes, and results – as we go.

For more information about the Sustainability Transition Lab, please visit: naturalstep.ca/sustainability-transition-lab.

Want to engage further in the conversation about sustainability-driven collaboration? The Natural Step Canada is excited to host the 2nd annual Accelerate: Collaborating for Sustainability Conference on June 5-6, 2014, in Toronto. Join us to deepen learning about collaboration from experts and practitioners, experience collaboration by creating connections with other change agents, and seed new collaborative initiatives. As an Endorsing Partner of Accelerate, members and friends of the SiG community are encouraged to use the Exclusive Partner Discount Code SIG10 to automatically save 10% when registering. Learn more and register today!

Sustainability-driven Collaboration, Part II: Value Creation and Vision as a Driving Force

In the first post of this three-part series, Sustainability-driven Collaboration, I discussed the imperative for profound systems change to address sustainability challenges, which provoked the question: how we can provide a platform for sustainability-driven collaboration in which participants are able to embrace complexity and reframe ‘wicked problems’ as ‘wicked opportunities’?

TNSblog3At the level of individual organizations, there is a long history of studying the distinction between efforts leading to incremental change versus transformational change, in particular sustainability-driven change. Research and experience in this area have led to methodologies like the Framework for Strategic Sustainable Development, by which organizations can credibly aim for sustainability-driven transformational change.

Although multi-stakeholder collaboration differs from such methodologies in many ways and presents a host of unique challenges, it seems likely that at least some lessons from sustainability-driven organization-level change can apply, or be adapted to apply to the context of multi-stakeholder collaborative change efforts. Approaches that have been successful at the organization level may similarly improve the capacity of collaborative efforts to achieve transformational systems change towards sustainability.

1. Focus on value creation – For organization-level change initiatives to achieve transformational results, it is crucial that sustainability be seen as a driver of business value as opposed to a cost centre. Nowhere is the case for sustainability as a driver of business value better made than in the work of Bob Willard, whose “Seven Business Case Benefits of a Triple Bottom Line” continue to be used to build boardroom buy-in on sustainability initiatives around the world. At an organizational level, the seven benefits are as follows: Easier hiring of top talent, higher retention of top talent, higher productivity from employees, reduced expenses in manufacturing, reduced expenses at commercial sites, increased revenue, and reduced risk and easier financing.

While a focus on value creation is no less important in a collaborative context, the added complexity that stems from the need to align the various interests and value-drivers of diverse stakeholders can make finding mutual benefit a much more complicated task than at the organization level. A multi-stakeholder collaborative effort must be capable of achieving compelling value creation at both the collective and organization/individual levels. This is the key insight and opportunity in Michael Porter and Mark Kramer’s popular Shared Value concept. Collective value acts as a centripetal force, lending cohesion to collaborative efforts, while value to the organization/individual dictates whether each party is willing to stay involved in a messy process with the sort of “emergent outcomes” typical of collaborative efforts.

Change Lab and Transformative Scenario Planning pioneer Adam Kahane, speaking at the 2013 Accelerate: Collaborating for Sustainability conference, summed up the importance of value creation, saying that: “The key to people choosing to stay at the table is understanding that they cannot get where they want to go otherwise.”

2. Use vision as the driving force – In order to move beyond incremental changes that still feel like costs to the kinds of breakthroughs where real value lies, organizations must be clear about what sustainability requires and therefore get ambitious about goal-setting. If one thing has been learned through work at the organization level, it is that vision-driven change efforts consistently lead to more profoundly transformational results, which tend to accrue the most value.

MIT Sloan Management Review

MIT Sloan Management Review

Peter Senge uses the metaphor of an elastic band being stretched between two hands – one representing current reality and the other representing the desired future. This metaphor describes the innovation and motivation that can be generated through creative tension. This tension is most powerful and most useful to drive innovation and change when:

a)     The vision remains ambitious;
b)     The accounting of current reality is rigorous and honest; and
c)     The gap between the two can be clearly and simply expressed as key transitions (i.e. we need to move from a system with X characteristics to a system with Y characteristics).

The power of vision as a driver of change in organizations seeking breakthrough outcomes has been demonstrated again and again by businesses such as Interface, Nike, and The Co-operators.

The need for a shared sense of success will be no less important for participants engaged in collaborative efforts. That said, it may not be advisable to rush towards a detailed shared vision in a multi-stakeholder context. In collaborations involving diverse stakeholder groups with widely different interests, the pressure to get agreement on a unifying vision risks generating something very high-level and abstract.  As the director of the Sustainable Food Lab, Hal Hamilton, said at a Breakthrough Capitalism event in Toronto in November 2013: “We don’t believe in a common vision. Oxfam and Walmart will never share the same vision.” Getting to a shared vision that is detailed enough to actually provide direction risks consuming a great deal of precious time and threatens participation levels, particularly among groups where there is a strong orientation to immediate action.

Although a single, detailed vision may not be possible or helpful when dealing with systems as complex as those targeted by collaborative systems change initiatives, it is difficult to be strategic in the determination of key priorities, or to maintain energy and momentum, without the tension provided by some shared understanding of success. However, success need not only be defined as a vision statement; it can also be articulated using principles.

The Natural Step

The Natural Step

Fortunately, scientists and thought leaders have done some helpful heavy lifting for us in this regard. Natural and social science can tell us the system conditions for sustainability, beyond which ecological systems will be eroded and social well-being will deteriorate below minimum levels, leading to divisiveness, instability, or breakdown. These system conditions address the root causes of our unsustainable path and use them to describe a principle-based articulation of a future sustainable state.

With reference to the elastic band metaphor, these science-based system conditions can serve as tacks on either end of the band, helping maintain the creative tension. They help ensure that the visions we create remain descriptive of a sustainable future state; in our analysis of the current system, they help us make sure we are rigorous so we don’t “lie to ourselves” about the current situation.

While they do not describe a specific sustainable future, the system conditions provide the boundary conditions within which society and systems can operate indefinitely and within which any sustainable future must exist. As such, system conditions serve as design constraints and can act as a compass for ongoing, adaptive change efforts. This is an approach referred to by The Natural Step as backcasting from principles.  It has been used by hundreds of leading organizations in the sustainable business and sustainable community fields.

In the context of multi-stakeholder collaborations, backcasting from system conditions for sustainability can help address the dilemma presented by the need for compelling, ambitious goals versus the difficulty of developing meaningful shared visions amongst diverse stakeholders. For example, we can collectively agree that we need to design a transportation system that doesn’t contribute to climate change and then each actor at the table can find ways to describe their organization’s role within that broader context – the organization’s vision will be specific, while success for the broader collaborative effort will be expressed on a principle level, but with no less ambition.

In the third and final entry of this three-part series, I will discuss three more lessons learned from organization-level change efforts that can be adapted for multi-stakeholder collaboration: simplicity without reduction, authentic leadership, and the importance of process design.

Want to engage further in the conversation about sustainability-driven collaboration? The Natural Step Canada is excited to host the 2nd annual Accelerate: Collaborating for Sustainability Conference on June 5-6, 2014, in Toronto. Join us to deepen learning about collaboration from experts and practitioners, experience collaboration by creating connections with other change agents, and seed new collaborative initiatives. As an Endorsing Partner of Accelerate, members and friends of the SiG community are encouraged to use the Exclusive Partner Discount Code SIG10 to automatically save 10% when registering. Learn more and register today!

 

Sustainability-driven Collaboration: A platform for turning wicked problems into wicked opportunities

This series of posts, entitled Sustainability-driven Collaboration builds on lessons learned over years of sustainability-driven transformational change efforts at the organization level and explores the value they can bring to multi-stakeholder collaboration.

STL Circle1In their March 2013 post to the Harvard Business Review Blog, Paul Ellingstad and Charmian Love pointedly asked the question, Is Collaboration the new Greenwashing? This attention-grabbing title resonates strongly because of the ubiquitous use of the term collaboration in the past few years, particularly with the rise of concepts such as “Shared Value” in the business community and “Collective Impact” in the not-for-profit world. Those of us who have worked in the sustainability and social change space for some time are well aware of how easily means can be confused for ends, how often talk has been confused for action, and the difficulty of achieving transformational rather than incremental improvements.

But as Ellingstad and Love’s article points out, “to solve the big challenges in the world today we need to aim for nothing less than breakthrough levels of innovation.” At Brainstorm Green 2013, Nike’s Hanna Jones echoed this sentiment in an oft-retweeted statement: “If we don’t achieve system change, we might as well go home.” It is clear that none of us alone, working isolated in our own organizations on our own problems, can affect this change.

The need for collaboration to enable systems change is so evident and compelling that collaboration itself has become a buzzword and risks being confused for an end unto itself. How do we avoid this?

This is the real question, which Ellingstad and Love began to address in their article. How can collaboration not be the new greenwashing? How can collaborative efforts achieve breakthrough results?

Systems Change & Collaboration

The answer requires us to understand how complex systems work and how they change. Here we turn to Donella Meadows’ classic article Leverage Points: Places to Intervene in a System and her book Thinking in Systems, which describe 12 leverage points as the most effective places to intervene in systems. Volans’ Breakthrough Business Leaders, Market Revolutions Report, released in March 2013, takes the original list of twelve and groups them into six, but generally follows Meadows’ model.

The list of system leverage points, or places to intervene in a system are as follows, in order of ascending influence:

  1. Changing the numbers: subsidies, taxes and standards
  2. Changing buffers, stocks, flows, delays and feedback loops
  3. Changing information flows
  4. Changing the rules
  5. Changing the system’s genetic code (or changing the purpose/goal of the system)
  6. Changing paradigms

Changes to higher order items on the list – rules that govern a system, the purpose that drives the system, and the paradigms making up its foundation – offer the most far-reaching and fundamental transformational change. Still, the most common methods of attempting to influence complex systems – changing numbers via subsidies, taxes and standards – while noble pursuits, unfortunately target the least effective points of leverage to affect change.

This isn’t surprising. How does one organization change the rules of a system or the system’s goals? Imagine, for example, trying to shift the rules of the transportation system of a large metropolitan area. It’s simply not something within reach of a single organization. Getting at such higher yield leverage points requires collaboration among organizations.

In their book The Necessary Revolution: How Organizations are Collaborating to Change the World, authors Peter Senge, Bryan Smith, Nina Kruschwitz, Joe Laur, and Sara Schley recount a number of examples of successful collaboration resulting in real change. One of the most powerful examples is the story of the U.S. Green Building Council (USGBC) and the Leadership in Energy and Environmental Design (LEED) certification system, where a collaborative effort among a range of stakeholders resulted in a de facto industry standard that has managed to influence building construction by causing change to the rules of that system.

The Necessary Revolution describes organizations that were able to find common ground, putting the issue in the centre of their efforts, and creating real and lasting change in a wide range of ways. However, as Senge and his co-authors point out, “successful collaboration is easier to espouse than achieve, and many of these efforts have struggled to realize their founders’ goals.” As anyone who has been involved in such a venture knows, collaboration is often unsuccessful, and won’t necessarily lead to systems change. Some of the most common obstacles to effective collaboration involve challenges related to trust, competing interests, power dynamics, ego, time, resources, leadership and collaborative capacity.

circlesitting

In recent years we’ve witnessed the rise of numerous approaches to multi-stakeholder collaboration, including some that target these key obstacles directly. Social innovation labs, including Change Labs, Design Labs, Solutions Labs and other such processes, are an important example. How can more collaborative initiatives be designed to change systems in profound, “breakthrough” ways that alter the paradigms, goals, and rules in a system and that endure over time, instead of just becoming new venues for incrementalism or distractions from deep innovation? How do we provide a platform for sustainability-driven collaboration in which participants are able to embrace complexity, and reframe ‘wicked problems’ as ‘wicked opportunities’?

In the second entry of this three-part series I will explore how lessons learned (by The Natural Step and others) from sustainability-driven change at the level of organizations may apply to the context of multi-stakeholder collaborative efforts. These lessons have underpinned the development of The Natural Step’s Sustainability Transition Lab approach.

Want to engage further in the conversation about sustainability-driven collaboration? The Natural Step Canada is excited to host the 2nd annual Accelerate: Collaborating for Sustainability Conference on June 5-6, 2014, in Toronto. Join us to deepen learning about collaboration from experts and practitioners, experience collaboration by creating connections with other change agents, and seed new collaborative initiatives. As an Endorsing Partner of Accelerate, members and friends of the SiG community are encouraged to use the Exclusive Partner Discount Code SIG10 to automatically save 10% when registering. Learn more and register today!

 

Making Systems Thinking More Than a Slogan

From climate change and deforestation to collapsing fisheries, species extinction and poisons in our food and water, our society is unsustainable and it is getting worse fast. Many advocate that overcoming these problems requires the development of systems thinking. We’ve long known that we live on a finite “spaceship Earth” in which “there is no away” and “everything is connected to everything else.” The challenge lies in moving from slogans about systems to meaningful methods to understand complexity, facilitate individual and organizational learning, and catalyze the changes we need to create a sustainable society in which all can thrive.

Here, I’ll describe how the world operates as a system — and how businesses can respond effectively to the challenges we face.

systems thinking map

Systems thinking is used in the World Economic Forum report (2011)

The World as a System

Systems thinking helps us understand the structure and dynamics of the complex systems in which we live, from organizational change to climate change, from physiology to financial markets.  The structure of systems must be understood broadly, including physical elements (such as the concentration of carbon dioxide in the atmosphere and the time delays in a supply chain), institutions (such as markets and governments), human behavior (such as the way we make decisions) and the mental models that shape how we perceive and interpret the world. These elements interact and coevolve to generate the world we experience.

All too often, however, we treat problems in isolation, ignoring the networks of feedback that bind us to one another and to nature. We often blame policy failure on “unanticipated events” and “side effects.” Political leaders blame recession on corporate fraud or terrorism. Managers blame bankruptcy on events outside their organizations and beyond their control.

But there are no side effects — just effects. Those we expected or that prove beneficial we call the main effects and claim credit. Those that undercut our policies and cause harm we claim to be side effects, hoping to excuse our failure.  But “side effects” are not a feature of reality; they are a sign that the boundaries of our mental models are too narrow, our time horizons too short.

For example, governments in many nations “solve” water shortages for irrigation by subsidizing electricity so farmers can install more powerful pumps. But the short-run success of that policy merely causes the water table to fall faster, requiring still larger pumps and still greater subsidies.

 

Avoiding such self-defeating interventions, in business and in sustainability, requires us to consider our actions in the context of the broader systems in which we are embedded.

 

Researchers have identified important characteristics of systems to help us manage them more effectively and sustainably. Complex systems, from an ant colony to a business to a society, are:

  • Governed by feedback: Our decisions alter the state of the world, causing changes in nature and in the behavior of others, which then feed back to change our own behavior. Cut prices to gain market share and your competitors may respond the same way, leading to a price war. Suppress forest fires and fuel accumulates in the forest, leading to more damaging fires.
  • Subject to delays: Feedback processes often involve long time delays and accumulations (stocks and flows). Carbon dioxide (CO2) emissions from fossil fuel combustion accumulate in the atmosphere, causing the world to warm and the climate to change. Emissions are far higher than the rate at which CO2 is removed from the atmosphere. Just as a bathtub continues to fill as long as the flow into the tub from the faucet exceeds the flow out through the drain, stabilizing emissions will not stabilize the climate. Limiting dangerous climate change before the end of this century requires emissions to fall dramatically, starting now.
  • Nonlinear: Effect is rarely proportional to cause. Complex systems can cross “tipping points” that cause dramatic and often irreversible changes in their behavior.  Take a few fish and fish stocks recover; take too many and the fish stock collapses. Warm the planet enough and greenhouse gas emissions will rise as bacteria convert carbon in melting permafrost into CO2 and methane, further warming the planet in a vicious cycle.
  • Characterized by trade-offs: Time delays in feedback processes mean that the long-run response of a system to an intervention often differs from its short-run response. Ineffective policies often generate transitory improvement before the problem grows worse, while policies that can create enduring value often cause worse-before-better behavior.
  • Counterintuitive and policy resistant: In complex systems, cause and effect are distant in time and space, while we tend to look for causes near the events we seek to explain. Our attention is drawn to the symptoms of difficulty rather than the underlying cause. As a result, many seemingly obvious solutions to problems fail or worsen the situation.

These and other principles have implications for the way businesses can become more successful — and sustainable.

 

How Business Can Respond

Systems thinking offers several key lessons for business.

1) Expand the boundaries of our mental models. Most of our current sustainability efforts target symptoms of unsustainability rather than the causes. Our vehicles burn too much oil and generate too much CO2, so we target that symptom with standards to raise the efficiency of new cars. But the resulting reduction in oil demand will lower oil prices, undermining the incentive for people to buy efficient vehicles or cut oil use in other industries.

By expanding the boundaries of our mental models, we can identify the potential for such “policy resistance” and design more effective policies. Raising the price of CO2 will encourage auto companies to design more efficient vehicles and encourage consumers to choose them without the need for complex regulations, while simultaneously offsetting the drop in world oil prices.

2) Recognize constraints. Many of us are overstressed and operate in overstressed organizations. Trying to do too much means we are often unable to marshal the resources we need to kick-start improvements in productivity, quality and sustainability. The result is a self-reinforcing trap of low performance, overstressed resources and failed improvement programs. Firms that succeed in quality and sustainability free up the resources needed to improve by slowing down and focusing on the long-term.

Similarly, we live on a finite world. Therefore, “sustainable growth” is an oxymoron. Striving for perpetual growth while we degrade the carrying capacity of our world is self-defeating.   Forward-thinking firms understand that destroying the environment also destroys the possibility of profitable enterprise.  They are working to provide products that last longer and offer greater value; to take responsibility for their operations and products over their full lifecycle, including takeback and recycling; and to provide services to support the wellbeing and fulfillment of their customers instead of simply selling more stuff at lower and lower margins.

3) Move beyond technical solutions. Technology offers hope that we can build a more sustainable world. But market failures limit the efficient allocation of capital and resources, including creativity and innovation. And there are long lags from problem recognition to innovation, commercial viability and scale up. Technology often generates unintended consequences: for example, taller smokestacks reduce local smog but increase distant acid rain.

Innovation in markets, institutions and governance is essential to realize the full potential of technology. Externalities must be priced. Market failures must be corrected. We can make technology more effective by improving market signals, through regulations that create level playing fields and prevent a race to the environmental bottom, and through monitoring to prevent free riding and unintended consequences.

4) Confront our values. Our guiding values offer the most important leverage point for enduring, sustainable change. Recently, I asked MBA students how much money they needed to be happy. The average response was $2 million per year, and about half said more is always better. Most would accept lower income — as long as they could make more than everyone else. But obviously endless material growth on a finite world is impossible, and everyone cannot be richer than everyone else, no matter how clever our technology.

Those who are currently affluent must confront the culture of consumption, the conflation of having with being, that is destroying both the environment and human well being, while supporting the legitimate aspirations of billions around the world to rise out of poverty.

5) Recognize that we can make a difference. People often feel powerless in the face of huge, complex systems. But understanding how systems work helps us to find the high leverage points that make a difference. People often recoil from climate science because they fear that what they do can’t possibly matter. But we’ve created more astonishing change before, from the fall of the Berlin Wall to the peaceful end of Apartheid.

The abolition of the slave trade and slavery in England can serve as a model for action on climate change and sustainability: a few committed individuals found the high leverage points and ended an institution that had existed from the dawn of history, one that nearly all assumed would always exist.

History shows we can do it. But will we? That depends on you.

 

Businesses Embracing Systems

More and more businesses are developing the systems thinking capabilities of their people, and realizing large benefits.  For example, using systems thinking,

  • A major oil company has generated documented savings of several billion dollars to date, while improving safety and environmental quality.
  • A shipyard went from cost overruns and project delays to an award-winning yard in great demand.
  • Businesses bootstrap steady improvement in quality, productivity and sustainability by reinvesting initial savings in further improvement.
  • A high-tech electronics firm redesigned its supply chain, improving customer service and delivery reliability while cutting inventory.
  • A global automaker built an entirely new service business and is now the market leader in that rapidly growing segment.
  • A major university implemented maintenance projects that boosted energy efficiency and sustainability while more than paying for themselves, creating resources for still more projects.

Systems thinking can be powerful, but too often remains an abstraction.

The challenge for us all is to develop our systems thinking skills, to help others develop their capabilities, and to bring systems thinking into our everyday lives: to move beyond slogans and on to action.

 

Editor’s Note: This blog originally appeared on the Network for Business Sustainability (NBS) website in their Thought Leader blog series. It has been reposted here with permission from the author. NBS Thought Leaders offer guidance on sustainable business models for the 21st century. Thought Leaders are leading academics and practitioners: world experts on sustainability issues.  Dr. John Sterman is a professor at the MIT Sloan School of Management, and has been widely honored for his research and innovative use of interactive simulations in management education and policymaking.

Breakthrough Capitalism: “We are more than consumers, more than tax payers”

A UN Global Compact survey reported that 81% of CEOS believe sustainability issues have become part of their company’s strategy and operations.

Most people would see the survey as a positive sign for sustainable business. Volans’ Executive Chairman, John Elkington does not.

A few short weeks ago, John shared these survey findings to a crowd of Canadian business leaders and posed the question: if CEOs are ‘accounting’ for sustainability issues in their core business, why are we experiencing escalating pressures on our environmental, economic, political and social systems?

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John Elkington speaks to business leaders in Toronto, Canada.

The Volans team believes that part of the answer rests on the shoulders of executive level corporate leadership. Around one thousand companies control half the value of all the world’s publicly listed organizations. The power of some of the largest corporations and their leaders has become colossal in magnitude.

In response to the expanding dominance of business, Volans catalyzed a movement called Breakthrough Capitalism. Breakthrough Capitalism is a global call to action for corporate leaders to “reboot” capitalism through radically re-envisioning their business models. Volans has hosted Breakthrough forums in Berlin, London, Singapore and most recently Toronto.

In early November, Canada’s Breakthrough Capitalism forum challenged Canadian business leaders to rethink the way they do business in context to increasing global complexity. In his opening address, John Elkington acknowledged the increasing linkages between systems such as the food-energy-water-finance nexus, where one system cannot be fully understood without considering the others.

Toronto’s event brought together leaders from a cross-section of industries including financial services, energy, consumer goods, food, health, media and retail. The day was heavy on interaction and light on speeches. It opened the space for candid dialogue, questioning and brainstorming. Participants were asked to understand their business in relation to projecting three future world scenarios: Breakdown, Change-as-usual, and Breakthrough as depicted in the video below.

Following a fairly morbid discussion, participants recognized that the Breakdown and Change-as-usual scenarios are one and the same. Both will result in over-consumption, resource depletion, widespread poverty, and failed governance. The only distinction is that Breakdown will reach systems collapse sooner. Consequently, managers were quick to agree that the only viable way forward is the Breakthrough scenario.

 

What does Breakthrough mean to Canadian Business Leaders?

 

1) Executive Leadership

All participants agreed that buy-in from the top is critical. One only has to look at the likes of Paul Polman at Unilever or Jochen Zeitz at Puma to understand that executive level leadership holds immense power over corporate strategy.

2) Aligning Language

From shared value to corporate social responsibility, conscious capitalism to constructive capitalism, corporate social innovation to sustainability, the field is a cacophony of competing language. It’s painfully ironic that each movement is attempting to achieve the same goal of making the world a better place. Participants accept that language needs to converge in order to shift the movement from the periphery to the mainstream.

3) Creating Opportunities to Act

During the afternoon, the forum broke out into four groups prepared to hack the assumptions and models driving their respective industries. These breakout groups gave attendees permission to dig deep into the heart of their business and posit potential solutions.

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Hal Hamilton, founder of Sustainable Food Lab, facilitating a breakout session.

I.     Accountants

Generating a storm of new ideas and next steps, the accountants led the way for actionable solutions. Real time performance indicators, responsible resource stewardship, long-term thinking, and embedded sustainability education represented a handful of the accountant’s proposed objectives.

II.     Consumer Behaviour

Marketers wrestled with their dependence on ever-increasing consumption in order to meet their sales growth objectives. Group participants agreed that enabling consumers to align their social and environmental values with their purchases is the future of responsible consumer behavior.

III. & IV. Food

Solutions that bubbled up from the food systems group included creating a “sin food” tax, mitigating food waste, educating consumers, investing in local food, and collaborating along supply chains.

 

4) Personal Transformation

Although much needs to be done at the office, change must also start at home. Too often we ask the world to act differently and forget our own role in embracing the change we seek. It was widely recognized that we should be mindful of our own values and beliefs, and channel that energy beyond our workplace to permeate all aspects in our lives. Sandra Odendahl of RBC captured this spirit in her closing remarks: “We are more than consumers, more than tax payers. We are citizens.” As citizens, it is our duty and privilege to care for one another and support a healthy environment.

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Sandra Odendahl

What Now?

It’s up to us – business leaders, civil society and government – to push one another forward. As the CEO of MaRS Discovery District, Ilse Treurnicht, declared, “It feels like the world expects more of us than we expect for ourselves.” Let’s cut loose from the status quo and rise to meet the demands of wicked problems. We are ready. It’s time for a breakthrough.