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How to think about systems innovation

November 5, 2011

Or, what if everyone thought like Charles Leadbeater?

Tootin' the horn amidst a sea of suits at #mesh11

The thing about Charles Leadbeater is that he speaks so carefully and so seriously that it is difficult to grasp how radical the changes he is proposing are. There he stands, a balding middle-aged man with plain black glasses and what can only be described as an intelligent frown, and he speaks slowly and articulates the need for radical change so clearly that it’s almost frightening. A journalist full of righteous anger and a mass unstructured movement like the Occupy protests currently percolating around the world aren’t met with alarm because we expect those things. But we don’t expect a newscaster to quietly tell us that we’re being invaded by aliens, and we certainly don’t expect a soft-spoken management thinker to advocate for uprooting systems that we cling to for stability like it is the only reasonable way forward. It is, indeed, the only way forward for systems to innovate continuously as problems refuse to silently go away, but the implications don’t really strike us all that often. Most of us don’t really understand innovation – Leadbeater not only understands it, but he helps others understand too.

Charles starts off by recognizing that we are living in a new culture where people take communication for granted; they expect to have a voice, to be linked, to be constantly connected, to be able to organize in new ways. These cultural changes lead to modified expectations, which lead to new institutional expectations. So large institutions that don’t easily change seem detached, self-referential, and incomprehensible – like the government taxation system.

The second insight is that while we all rely on systems for day to day functioning and to provide us with choices, we are increasingly finding it difficult to live with systems. While a lack of systems agitates us, overbearing systems force us to live through their lens; eventually people become institutionalized and robbed of their autonomy. At their worst, these systems become self-interested; for example, the financial system, which was more interested in bonuses than in public welfare. Most of the time, however, these systems are just suffering from autism – they are cold, functional, and efficient, but highly alienating (think of call centers, for example). Naturally, such systems are often rejected by those who have the opportunity to do so, and people adopt the other extreme – highly relational, small-scale systems like farmer’s markets that are very difficult to scale up.

So we live ping ponging between extreme systematization and extreme empathy. However, we can’t afford to live in either extreme – systems create a huge backwash of nostalgia but we can’t really live in those old worlds where, for example, we walk to a mom-and-pop store and get everything we need.The question that prompts the search for innovation, then, is – are there good structures that combine empathy and systems?

Yes. There are plenty of examples of great systems that maintain relationships, that serve lots of people but still manage to retain a sense of empathy. For instance, great cities build public spaces that encourage relationships that in turn enrich the cities in a number of ways. Many cities are not like that – but there is no reason to believe that we cannot get there through innovative approaches.

Charles uses a matrix to chart four broad ways in which innovation can be pursued. This, arguably, is one of his great contributions to our thinking about how to enact change.

Innovation needs to be understood and pursued with conscious effort.

  1. Generally,we  have a lot of improvement: trying to fix a broken system using the same processes and simply ramping them up, investing even more time, energy and money than before. This is often ineffective and runs out of steam (in the form of commitment, political goodwill, or funding), even if there is potential.
  2. Then there is combination: building onto the current system with something that exists beyond it. A great local example of that is Pathways to Education, which leverages the community to reduce high-school dropout rates.
  3. Reinvention consists of disrupting the system from the inside – think of Escuela Nueva, a child-centered, community based education system where teachers don’t ‘lecture’, they facilitate.
  4. Transformative innovation is also disruptive, but from outside the system. Think of open course-ware and learning through the web, or to move away from education, look at the initiatives based on the use of open data, such as Recollect (formerly VanTrash).

A lack of understanding was one of the most significant points raised during Charles’ talk, actually brought up by an audience member who wondered why innovation is still usually associated with manufacturing and widgets. Charles, of course, was able to immediately turn that into an example of how governments stubbornly stick to highly visible examples of ‘progress’, remarking that the public sector almost feels obliged to produce a shiny new building whenever an ‘innovative’ initiative is being undertaken. The truth, of course, is that the innovation is not in the building but in the actual work being done – an innovative idea doesn’t necessarily need a new building.

We don’t need to go out of our way find innovation, because it is already around us.  We just need to learn to look in the right places. Often, however, innovation is where we least expect it. Leadbeater has found innovation mostly in areas where there is lots of demand but little supply – where people are almost forced to come up with new solutions. These areas don’t need to be geographically defined – they can be sectors such as social services in rural areas or funding preventative interventions [social impact bonds].

Where it is present, innovation needs to be recognized and actively fostered, otherwise it might wither away – everyone knows of great ideas that could make a great positive social impact if only they were more widely adopted. It isn’t necessarily entirely new either – often innovation is just about re-purposing what already exists, rearranging relationships and structures in ways that turn the system inside out (or right side up, if you prefer to look at it that way).

This is certainly true of many of the examples Charles presented during his talk, of which he had a seemingly inexhaustible supply, from all over the world. Take, for example, mothers2mothers – an initiative to reduce the incidence of mother-to-child HIV transmission after Dr. Mitch Besser recognized and decided to support it in 2001. Despite decades of fighting against AIDS, mother-to-child transmission of HIV remained very common in South Africa, while it was almost unheard of in America. There were ways to bring it down, but it was difficult to convince pregnant women to change their behavior. What did the trick was something that seems quite obvious in retrospect (doesn’t it always?) – get older, local women, who were also HIV-positive, to act as mentors. The younger women, who were both HIV-positive and pregnant, were afraid of admitting their condition and facing public stigma, and perhaps even more haunted with the thought of passing on their disease to their newborn children. Dr. Besser understood the need for social support and opened a site in Cape Town, combining two approaches to create an innovative model of care that has since expanded to 700 sites in nine countries in sub-Saharan Africa.

This points to the inescapable conclusion that innovation needs to be given resources so that it can thrive. As a longtime FC Barcelona fan, I enjoyed seeing the blaugrana used as a model of reinvention that has changed global football, but what Charles did not mention was that FC Barcelona has invested a great deal of time and money, without which the team would not be half as successful. It is one of the richest clubs in the world, due in extent to a large fan base and biased TV ad revenue arrangement, and regularly makes expensive transfers. For example, one of the players integral to the Barcelona system is their right back, Daniel Alves. He was signed for a record €32.5m in 2008 and is acclaimed as one of the finest fullbacks in the world. Indeed, much of Barcelona’s current success is due to a generation of extraordinarily skilled players that have been trained for years in La Masia – the system, that Charles is in such admiration of, could not work otherwise.

FC Barcelona also leads us to another frequently overlooked point – innovation demands patience. For all its beautiful triangles and tiki-taka, the Barcelona system has never been praised as much as it is now. Barcelona have been playing this way for many years, but it is only after winning multiple European Cups (and the small matter of winning 6 trophies in a single year) that their system is now being studied so intently. Fortunately, the club management has always supported the philosophy of a certain playing style.

That isn’t always the case. There are plenty of great ideas that have never scaled because they weren’t given the space or because the funder ran out of patience. In the government, a lack of political will inhibits a lot of innovation because there is a focus on short-term gain and avoiding risk. Preventative funding, which has a long-term results horizon, often never takes place precisely because no one can afford to wait around for results to validate their decision making.

Perhaps the most important takeaway from the talk, however, is that everyone can be an innovator. You don’t need to be working at Apple or be living in the favelos in Rio de Janeiro. You can come up with new ways of doing things at your desk – the challenge is really to take that leap of faith and dive into the process. Too often, those who have innovative ideas (or can push them forward) are held back by a system of fear. In the current scenario, however, there is more incentive than ever to take a shot, to try something different. As a public servant I was talking to recently remarked, “The worst that will happen is that it could fail, and that certainly couldn’t be worse than the status quo.”

Charles Leadbeater visited MaRS in mid-September as part of his tour with Social Innovation Generation’s Inspiring Action for Social Impact Series, and delivered a public presentation on innovation in the public service in the MaRS Global Leadership Series. This post is based on that public presentation. A version of this post was also published on the SiG blog.

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