System. Innovation. Transformation. Learning a New Approach to Complex Challenges

Leonhard Teichert interviews Banny Banerjee on systems, innovation, and transformation.

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Thought piece
Leonhard Teichert
February 18, 2019

This article was posted by Leonhard Teichert on Medium.

My training is in Philosophy and Economics, and I keep an eye out for pivotal thinking. I attended Stanford ChangeLabs Masterclasses on Transformative Leadership and the Scale Advantage, and observed something quite remarkable.

In these Masterclasses, leaders from all over the world came together, and were able to transform their way of thinking and fundamentally change their way of perceiving and approaching the challenges that they are dealing with every day. What I learned is that this transformation is indispensable.

Led by Banny Banerjee, Stanford ChangeLabs has developed systems innovation and leadership approaches for thinking and acting to address large-scale complex challenges.

In class Banny pointed out that humanity has progressed to a point where the level of complexity and scale of the challenges we experience has hit the steep part of an exponential curve, and so perpetuating our current ways of thinking and acting will not only exacerbate the complexity, it may create bigger challenges. The highly complex issues of a globalized and inter-connected world therefore require an entirely new approach to decision making and leadership. This approach must work towards an alternate, more desirable future, while empowering people to realize and leverage their potential to transform the system itself.

ChangeLabs’s approach to systems innovation and leadership calls for a deep transformation in the way we perceive our challenges and the ways we shape our actions. In order to cope with systemic challenges, leaders need to see the systemic nature of our complex reality and recognize the importance of innovation. This shift is of immense philosophical importance as well. It is not only a shift in thinking, it also changes how we understand the fundamental elements of the world of which we are a part of. Being able to see this, to think and to act accordingly is a paradigm shift — or in common language, a game changer.

After the Masterclass I took the opportunity to catch up with Banny to discuss this with him in greater detail:

Leo Teichert: Banny, why are the challenges of today so different? It is hard to accept that the issues we are currently dealing with have changed in such a fundamental way that we are not able to tackle them anymore.

Banny Banerjee: I get this question a lot. Our world has always been complex and inter-related, but we had been able to make advancements without paying heed to those complexities. The world is now in a different regime where we experience vastly different levels of complexity, increasing pace of change, ambiguity, and grave uncertainty about fundamental aspects about our collective futures. On one hand, the sheer complexity and critical nature of our challenges are increasing exponentially, and on the other, our own advances in technology, rapid globalization, and upheavals in our social and political systems create extremely non-linear and disruptive changes in our world.

At one point I started to jot down a list of prevalent, high impact-potential technological advancements emerging, and within minutes and with very little effort, I filled a whole page of more than 40 items — frame-changing technologies such as CRISPR, blockchain, sensors, artificial intelligence, robotics, etc. Each item with the ability to completely change the shape of our lives to the extent that the steam engine or the internet has done previously. The pace and magnitude of the complexity arising from the simultaneous occurrence of these advancements will be immense, particularly when considered together with the increasing challenges of our environmental, social, and political systems.

The tools in our current repertoire, such as existing business models, decision frames, governance models, market interventions, philanthropy, were designed for a less complex age and are not able to properly address the disruptive patterns of our current global reality. We have entered an era of great turbulence and our current thinking is not only inappropriate for what lies ahead, but could be actually constitute a threat.

LT: But why aren’t our tools working properly anymore?

BB: Our current style of solving problems and approaching challenges takes place in a highly deterministic frame. Within this frame, we assume linear causal chains of “A causes B”, without inquiring into deeper underlying and inter-related causes. We presuppose that the world can be described in mechanistic terms. We assume that the small contributions will add up to something good, without examining if they really will. This creates a mindset of incrementalism and “short-termism”, where we place more importance on having control of the tiny inconsequential short term goals at the cost of the bigger picture or long term stability. In doing so, we fail to identify how to bring about systemic outcomes, and worse still, our piecemeal approach results in unleashing problems that are systemic in nature. We have not organized our thinking and our institutional structures to deal with systems challenges, and our current challenges are in large part due to this oversight.

Up to now, our society, its institutions, and our identity build on a more deterministic structure. We have become really good at linear and deterministic solutions, but in consequence, it obstructs a larger view and ability to solve large-scale challenges sufficiently. The systems we live and operate in do not follow deterministic and linear rules, yet that is the nature of mainstream approaches to solving complex challenges, despite all the evidence that linear and static approaches will not work.

LT: According to what you say, there is a gap between what we hold to be true and what actually is true. A gap between our linear thinking and the systemic character of the challenges of our time. I can not imagine that it is just our idleness or unwillingness that hinders us form seeing that. What is it that keeps us from recognizing the inappropriateness of our reasoning and behavior? Why can’t we see it?

BB: It is a type of blindness. We don’t see certain things because we have blindfolds on. For a people who have never been exposed to arithmetic, the very notion that you can look at some strange symbols on a piece of paper and figure how much fuel you might need to make a long journey across the country might be difficult to fathom. They would be blinded to the mental models that arithmetic or mathematics generate. Similarly, if our culture has entrenched us in deterministic thinking, then we might be blinded to a more dynamic, inter-related world of systems. It is not unwillingness, but rather the absence of the semantic apparatus to see phenomena in the systems realm.

LT: You are saying that we are unable to perceive that something actually exists and that we therefore don’t even know that it is there. So it is our conceptual perspective of the world that has a blind spot. And it is not only one. In class you mentioned that there are even multiple of such blind spots in our perception of the world.

BB: Yes, there is blindness on multiple fronts. We are aware that challenges can be systemic, deeply entrenched, or intractable, but we are blind to what makes them systemic or what to do about them. Of all the many blindnesses there are, I would highlight three critically important ones: System Blindness, Innovation Blindness, and Transformation Blindness.

LT: Let’s get through each of them at a time.

BB: System blindness means that we simply cannot see the world in terms of their complexity and their inter-related causal relationships. System blindness masks the dynamic relationships between multiple system actors and system forces, and the underlying reasons for why the system is behaving as it is. It believes in linear causal relationships and deterministic frames whereas our big challenges involves complex chains of causality, feedback loops, and nuanced influence of one part of the system on the other. System blindness has a static view and does not look at the challenge in terms of the larger ecosystem in which it is couched. If we are blind to systems, then we act blindly in systems.

If we are to work with challenges that are complex, then we need to be system minded. This involves understanding that the system is a dance being performed by many system actors, with complex inter-relationships and emergent behavior. It seeks to understand underlying root causes and to frame issues as complex challenges, rather than mechanistic problems with “silver bullet” solutions. Systems mindedness creates a quest to see the system as a system, and to understand the system dynamics and shape our intentions, decisions, and actions in terms of this new perspective.

LT: Systems Mindedness helps us to see systems as systems in an era of complex challenges. Why is this not sufficient?

BB: Understanding the system does not translate to knowing how to transform it into one that will lead to a desirable future. Transforming systems is not easy — it takes a great deal of creativity and innovation to identify wherein the system to intervene, and what the intervention is. We face challenges that demand a level of innovation that surpasses all previous forms of innovation. Overlooking the critical need for innovation and not seeing its immense power is what I call innovation blindness. The primary reasons for innovation blindness are risk aversion, the desire to maintain status quo, a lack of imagination, apathy, and settling for inconsequential outcomes. Innovation is an entirely different way of thinking from standard problem solving, hence it is seen as being risky, especially in the face of uncertainly. Innovation blindness leads to the question “Can we afford to try something different if it could be a failure? Why should we take the risk?” This is a trap of limiting ourselves to the familiar, even if it is sub-optimal. By settling for the incremental advances, we assume the risk of under-leveraging the power of innovation to generate far more transformative options. Even if we look at the world through the systems lens, if we don’t seek to disproportionately outperform current norms, then we are either not being aspirational enough, or expecting new results with existing solutions.

Being innovation minded is to drive the creation of interventions that drive unprecedented outcomes and system level transformation. I define innovation as “outperforming current approaches by a disproportionate margin in order to bring about new outcomes, system behaviors, and system trajectories”. Innovation is about using existing solutions in intelligent ways, as well as creating solutions ones that don’t yet exist. This second one is particularly important because the solutions and interventions that are needed may not exist yet. We need to seek means for breakthrough system level solutions, drive new outcomes, behaviors, paradigms and come up with entirely new options in order to bring about system transformation and resilient system trajectories.

LT: I can see how System blindness and Innovation blindness would preclude chances for solutions in a complex world. What about Transformation blindness?

BB: We can remove the systems blindfold and attain a systems perspective, and we can also acknowledge the need for innovative interventions that have the theoretical potency to transform at a systemic level, but these two ingredients do not ensure system level transformation.

Transformation blindness keeps us trapped in a frame that draws us towards incremental and piece-meal actions that aim to fix symptoms of the system behavior, rather than transforming the system behavior to produce new outcomes. By acting without the intention and drive towards system transformation, we find ourselves constantly chasing one problem after the next, not realizing that the way we addressed the previous problem may have created the new one. It is also not taking stock of what might be needed to really change the system and the necessary commitment to make it happen.

Transformation mindedness is realizing the critical importance of simultaneously a) shaping our intentions in terms of deeply transformed system behavior, and framing success in terms of system level transformation, b) recognizing the importance of one’s own role and great potential to transform the system, and c) shaping the new types of agency and action that will actually result in the system veering towards altered states. Transformation mindedness is a triad between an altered framing of success in terms of transformed systems, a transformed identity in terms of one’s own role in catalyzing change, and driving a transformed nature of action so that what is brought about is nothing short of system level transformation. Hence, to be transformation minded is to seek deep system transformations rather than addressing problems piecemeal, generating the necessary agency to transform the system, and then catalyzing the action, network effects, and altered resource flows, on the part of multiple stakeholders to transform the system.

These three mindsets are of course, deeply intertwined. Without system mindedness, we don’t even see a system as a system, without innovation mindedness, we might settle for the business as usual, and without transformation mindedness, we might not even frame success in terms of system level change, or generate the necessary action that is needed.

LT: Thank you very much Banny, for sharing your insights!

We are confronted by an entirely new class of challenge that standard approaches are not able to address effectively. But that does not mean we are doomed!

In the context of an increasingly complex world, what we do can lead to bigger challenges and even make them intractable. But we also have the option to address the challenges or transform the system to produce the outcomes that will lead to a better future. Collectively we are not yet proficient at the latter, and that implies undergoing some transformation ourselves. Acknowledging that we are blind gives us a path out of the blindness. In removing the blindfolds we can start discerning the silhouettes of the holistic system, leverage the power of innovation, and commit to paths of altered futures.

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