What is systems change?
Systems change can be identified as either an outcome (the system changing impact we create) and a process (the way in which we intervene).
Our work falls under either of these two categories; we invest in either products or services that contribute to systems change or tools that enable systems to change. Positive systems change should be for the benefit, not the detriment, of either people and/or the planet. Our work is powerful not just because of what we invest in, but also how we invest. When we focus our financial, human, social and creative capital in a project, we provide an example to others that they can do the same.
Across all lines of our work – whether it is a project we are taking on or a company we are choosing to allocate our resources to – there must be a demonstrated goal of positive systems change.
Levels of Systems Change
Systems change is not a simple case of ‘out with the old, in with the new’. According to The Berkana Institute, in any given system, both the old system and the seeds of the new system exist at the same time and that transition is a tense, dynamic process of resistance of the old and breakthroughs of the new.
The transition to a new system requires three shifts;
Environment.
The values and ideologies that support the system, the purpose of a system, and the social and cultural trends that allow it to perpetuate. This can be the slowest shift.
Does it question the mindset and values that underpin the status quo? Does it question the core assumptions of the system?
Does it change the goal of the system? Does is help to re-purpose the system?
Does it change the parameters of the system?
Regime.
The power relations between the institutions that exist in the system, and the demographics of its users.
Does it seek to change the rules of the game in its industry? Does it help change the power to shift the system in the future?
Does it seek to change the distribution of power? Does it help change the stakeholders or beneficiaries of the system?
Does it help to change the information flows in the system?
Infrastructure.
The tools that the system relies on to operate. This can be the quickest shift.
Does it seek to change the information flows in the system?
Does it seek to change the stocks (the elements of the system)?
*Sourced from: Financial Innovation Lab
At Regenerative, we take this multi-level perspective of systems change to inform our decision-making around our business activities. Across all lines of our work – whether it is a project we are taking on or a company we are choosing to allocate our resources to – there must be a demonstrated goal of positive systems change. This is assessed through whether there is current or likely future achievement of a shift at one or more levels of the system. In most cases, the project/company is the disruptive innovation that triggers the shift. This shift must do more to positively change the system and be assessed in relation to any negative externalities that might occur.
Our Approach
There are three key elements to Regenerative’s understanding of systems change.
Positive.
We believe that systems change has to be positive. The new system should not just be an improvement on the previous system in terms of its environmental and social impact (in other words, a reduction in damage), but should also aim for net positive impact. “Net Positive” is a way of doing business which puts more into society, the environment and the global economy than it takes out. Regenerative takes note from the past, when production was conducted in a way that was considerate of the future strain on the environment.
Opportunistic.
Although systems change is an ongoing process that can operate silently and slowly, it can also take advantage of certain situations and junctures in time. We are opportunistic in the way we approach systems change. Moments of crisis are also moments of opportunity. Instead of returning to business as usual, we can work to transform systems to create a ‘new normal’. Regenerative has historically been an opportunistic fund and applies this to our thinking around systems change.
Impact.
Finally, systems change is not just an end in itself, but rather the means to assess other areas of impact. Systems change recognizes that we need to not just shift the product, but the process of getting there. Systems currently do damage through their effect on the environment and society. This understanding of systems change feeds directly into our impact assessment framework: the Four P’s – product, process, planet and people. Systems change should be for the benefit of either people or the planet, and can either be achieved through a product or a process.