System Innovation
on Purpose

December, 2021

In Building Better Systems¹, we introduced four keys to unlock system innovation: purpose and power, relationships and resource flows.

These four keys make up a set. Systems are often hard to change because power, relationships, and resource flows are locked together in a reinforcing pattern to serve the system’s current purpose. Systems start to change fundamentally when this pattern is disrupted and opened up. Then a new configuration can emerge, serving a new purpose.

In this essay series we delve deeper into these four keys and provide practical advice on how they can be put to use.

This essay is about the role that purpose plays in orchestrating complex systems and how system innovators can create a new system around a new sense of purpose.

The most powerful lever to shift a system is to change what it is for, the purpose it serves. Creating a new system invariably involves establishing a new sense of purpose. It is easier said than done.

The potency of purpose was one of Donella Meadows’ key ideas in her groundbreaking book Thinking in Systems.² Yet Meadows’ insight still leaves us with many pertinent questions: how can an established sense of purpose be dislodged? How can a new sense of purpose be developed? How does the new purpose become operational, translated into the system’s daily work?

Amidst the disruptions wrought by climate change, the spread of digital technologies and widening social inequalities, fundamental questions are increasingly being asked about the purpose of social and economic systems, not just by citizens and social movements, but by professionals working inside those systems who are keen to be part of that change.

Proposals for fundamental system change are emerging from many sources, from technological utopians advocating exponential innovations³ to radical traditionalists who want to take us back to pre-industrial methods and mindsets⁴; from social activists pursuing racial justice and gender equality⁵ to those advocating more protectionist and nationalistic approaches.⁶

In Doughnut Economics⁷ the economist Kate Raworth proposes a shift to an economy which is circular, regenerative and distributive by design. Advocates of a Green New Deal to propel a new phase of green growth vie with those who argue that economic growth should no longer be our goal in order to save the planet.⁸

Paul Polman, the former chief executive of Unilever, is proposing that companies should not be rewarded for putting shareholders first but instead for making a net positive contribution to society and the environment⁹. He is just one among many people arguing that capitalism needs to be remade from within by companies adopting a new sense of social purpose.¹⁰

There are a myriad of proposals emerging for radical rethinking of the welfare state in the face of an ageing and more fluid, flexible patterns of work. The OECD is among those advocating a fundamental shift in education systems away from a dominant focus on academic achievement towards equipping young people to become collaborative problem solvers.¹¹ The social entrepreneur Alex Fox, of Shared Lives Plus is reimagining our systems of care around the need to support people with lasting relationships rather than services and money.¹² The activist Ai-Jen Poo of the US National Domestic Workers Alliance is trying to remake care from the point of view of those employed to provide it as well as those receiving it.¹³

Beyond that there are proposals for fundamental change to systems for food production; fashion; urban mobility; city living; land ownership and housing.

The success of these initiatives rest on being able to shift the purpose of systems. How does that happen?

In this essay we outline a three stage process to develop a new sense of purpose for a system.

The first step is to work out whether and why a system is open to change.

The second step is to find the right mix of a directive and an emergent approach. Some systems respond to a new purpose set from above. In others a new sense of purpose has to grow bottom-up. We argue that often the best approach is to combine the two.

The third step is to find the path to the preferable future.

That means engaging in a cycle of collective learning, imagination and experimentation to bring people together from inside and outside the system and across all its levels from the macro to the micro. This allows them to see a wider range of possible purposes for the system and to create a shared sense of direction.

Before going into those three steps, we examine why purpose is so influential in both shaping how systems change and in making them hard to budge.

The Power of Purpose

Purpose has become a fashionable word, especially in business. Many companies claim to put purpose alongside making a profit. Business consultant Simon Sinek¹⁴ has become famous for urging companies to base their strategy on what they stand for. Yet as the pursuit of purpose has become more ubiquitous, the idea has become more difficult to pin down.

Psychologists argue that purpose gives life meaning and direction in answer to questions such as: what do I stand for? What do I care about? What greater good do I want to make a contribution to?¹⁵ Without a sense of purpose there is a danger that life will be aimless and shallow, reactive and drifting. The same is true for systems.

Purpose combines identity with intent. What and who you care about is a matter of identity; it’s fundamental to who you are. Yet purpose also expresses what we want to achieve and who we are becoming. That intent needs to be made real by being acted upon; our purpose should propel us forward into the world.

A real sense of purpose is anchored in identity (who we are, what matters to us), intent (what change we want to bring about) and action (how we can make this change demonstrable). You do not shift the purpose of a system by coming up with a good slogan. A shift in purpose involves putting in question our sense of identity and our commitment to act on our intent.

Purpose is often confused with the missions and goals, targets and outcomes that make it real. A purpose is deeper and more enduring than a mission. When President John F. Kennedy launched the Apollo programme, the mission was to land a man on the moon. The purpose was to project US technological and military power in the context of the Cold War. One danger in systems is that the mission can come to be seen as if it were the wider purpose.

Purpose creates a framework for thinking about how a system should work to achieve the outcomes it seeks.

Take Karyn McCluskey’s work to reduce knife crime in Glasgow.¹⁶

When McCluskey started the Strathclyde police’s Violence Reduction Unit, the police’s mission was to arrest criminals and bring them to trial so they could be punished.

McCluskey was not alone in being frustrated with that approach. It was having little impact on knife crime and the toll of grief and distress it created.

So McCluskey encouraged the system to reimagine itself. Violence was like a disease, she argued, a virus that needed to be prevented from spreading. McCluskey shifted how people inside and outside the system thought of their purpose (eliminating knife crime rather than arresting perpetrators); how they needed to work (more akin to a public health campaign to prevent transmission); and what success amounted to (a city free from violence rather than criminals in jail).

By reframing the purpose she propelled a collaborative effort, bringing together the police and social services, education and employment, voluntary and community groups. In the process, unforeseen solutions emerged, new relationships formed and resources flowed in new ways through the city. Economic development and training initiatives targeted young men at risk to give them a better chance of finding work. Dentists were enlisted to fix the broken teeth of men going for their first job interview. There was much more emphasis on early intervention in families where there were warning signs of domestic violence. For example, with vets reporting cases where men had been violent to household pets.

By shifting the purpose from “arresting perpetrators” to “stop the spread of violence”, McCluskey brought an entirely new, community-based system into being, one that achieved its purpose by addressing the problem at its source.

Without a shared purpose, collective innovation efforts lack meaning and coherence. Shared purpose breeds commitment and coordination and resilience and innovation across a coalition of actors.

Yet the power of purpose is a double-edged sword. Once a system becomes established around a purpose it can be enormously difficult to dislodge it. Homelessness is a good example.

From helping the homeless
to ending homelessness

Over many years communities have responded to homelessness by providing shelters and emergency services to give people respite from living on the streets. For shelters, the key metric of success was the proportion of beds occupied each night. Catering for more homeless people meant shelters were more successful. That was their purpose.

Yet it has also been clear for a long time that shelters might keep a lid on the problem without encouraging long-term solutions.

Ending homelessness by preventing it at source, by providing people with permanent places to live, requires a completely different approach, according to David Peter Stroh in Systems Thinking for Social Change:¹⁷

“Ending homelessness requires a complex, long-term response involving affordable permanent housing, support services for the chronically homeless and economic development. This means establishing new relationships among the various providers who prevent homelessness, those who help people cope with being homeless and those who develop permanent housing, with support services and jobs, that enable people to end homelessness. Aligning providers along the continuum of care towards the goal of affordable permanent housing with support services enhances everyone’s ability to solve the problem.”

Making the shift from “helping the homeless” to “ending homelessness” threatens long-established identities and vested interests. It’s a matter of self-image and raw economics. Take the case of Boston’s Pine Street Inn, one of the most respected shelters in the US.

Lyndia Downie, the Inn’s then president and executive director committed to an approach called Housing First¹⁸, which provides homeless people with permanent housing with a range of support services wrapped around them. That new purpose meant giving up a self-image based on caring for the homeless, and developing a new sense of identity and purpose as real estate developers, home builders and landlords. It was painful for staff and supporters committed to the traditional mission who felt they were turning their back on people in need as shelters were closed and resources shifted into home building.

Purpose expresses our sense of identity and our intent in the world. Changing the purpose of a system threatens the identity of those who work in the system and makes them question how they act. That’s an uncomfortable experience. That’s one reason why system change is so hard.

Spotting when a system is ready to fundamentally question its purpose is vital.

Systems become open to fundamental change when two conditions come together: society faces a systemic challenge which requires a systemic response and a systemic opportunity emerges to create a new kind of system. This raises questions which are not just about how a system works, but about what a system is for.

Systemic challenges push innovation forward; systemic opportunities pull it. The first is about tackling a problem, the second about realising a possibility. Either of these factors on their own can create the conditions for system innovation.

Systemic challenges are problems which are deeply ‘stuck’: there has been no significant change in outcomes despite sustained investment in conventional solutions. An example is the persistent minority of Danish young people who do not complete further education or participate in work.¹⁹ There are also new and growing problems which current systems were not designed to deal with, even if they were expanded. The population is ageing, putting new pressures on families, care providers, health and pensions systems. Society needs new systems to enable people to age well, not just more day care centres.

Systemic challenges are deep rooted: the problem keeps coming back despite attempts to fix it within the system. That produces a persistent pattern of failure which does not stem from a single component, nor even a single sub-system, but from the interconnections between different systems. These challenges are difficult to deal with because the response requires coordination across many government departments and agencies, as well as the private sector and civil society. Solutions designed in organisational silos do not work for challenges which spread across those boundaries. Systemic challenges reveal a growing mismatch between a system and how it serves society; what society needs and what the system is set up to provide.

The stresses and strains this mismatch creates inside the system lead to a variety of responses. One will be to double down to make the existing system more focussed and efficient. Another is to start looking outside for alternative models, partnerships and solutions. A growing mismatch between the system and society creates challenges which are deep-rooted, persistent and interconnected, thus provoking further questions about the system’s purpose.

The search for alternatives will be hastened by signs that new opportunities to reconfigure the system and so new possible purposes are opening up. Sometimes new systems develop even in the absence of a clear and compelling failure in an existing system.

When jet airliners were introduced in the 1970s they opened up entirely new ways and reasons to travel²⁰. The technology was ready to be used before people knew what it might be for. Jet travel opened a wider world of opportunities for trade and leisure, initially for an elite and then, with the advent of low cost airlines, for almost everyone. The Boeing 707 opened up a systemic opportunity. Air travel organised around propeller planes was not a system in trouble nor was it facing insurmountable challenges; it was more that the system based on the jet engine opened up new, unforeseen possibilities: a new purpose to enable rapid, mass, long-distance mobility. A systemic opportunity is never just a different way to achieve an existing goal: it opens up a new way of life.

A systemic opportunity is fundamental because it involves finding a new way to organise a system around a new sense of purpose. Costa Rica’s community-based health system, Ebais, which delivers world class outcomes at a fraction of the cost of hospital-based systems in Europe and the US is a case in point. Costa Rica has surpassed America’s life expectancy, reduced deaths from communicable disease by 94%, made decisive progress against non-communicable diseases and reduced premature mortality among the poorest families, while spending less than half the world average on health care. Those achievements stem from the system’s purpose: Costa Rica’s health system’s purpose is to “build a healthy community” rather than “treat individuals who are ill”.²¹

A new purpose for a system does not arrive like a pizza delivered to your home. It takes time to unfold, as people explore what a new technology is capable of. The scale of that possibility is rarely apparent to the initial innovators who may open it up. When Douglas Watson launched the Vegan Society in 1944 to promote plant based diets he was in a tiny minority; he could not have foreseen that 60 years later vegan food would come to be seen as both fashionable and ethical.

Often the first signs that a new systemic purpose is feasible is the appearance of “hybrids” which combine elements of the old and the new: the hybrid electric car which uses a battery as well as a petrol engine; the first containers that were carried on the decks of traditional cargo ships; the decision made by companies to measure their environmental and social impact alongside their financial returns. All of these are slightly ungainly hybrids. They are a sign that bigger change is on the way.

This is the first step. Systems are open to being reorganised around a new sense of purpose when a dynamic is created between systemic challenge and possibility; when criticism of the current system feeds the search for new workable alternatives; when insiders and outsiders start to work together to find solutions, across all levels of the system, from the macro to the micro.

All of this starts the search for a new sense of purpose. How do people involved with a system establish a new sense of purpose for it?

A new purpose to guide a system can develop in two quite different ways, one more directive and the other more emergent, exploratory and bottom-up. It’s important to know what kind of approach will work for the challenge and the opportunity you face.

Take the directive model first.

The Directive Model

In September 1962 in a speech at Rice University, President John F. Kennedy launched what was to become the most famous example of large-scale, purpose-driven innovation: the mission to land a man on the moon and bring him back safely, within the decade.

Only seven years later, on July 20th 1969, with a spellbound world watching on television, the US achieved its goal and landed two men on the moon. The Apollo programme cost about $283bn in 2020 prices. It involved more than 400,000 staff at the National Aeronautics and Space Administration (NASA), at universities and in private contractors. Hundreds of teams worked to solve a myriad of specific problems with space flight, propulsion, re-entry, navigation and sustaining life in space. That multitude had to contribute their different knowledge into a common programme, organised around a shared mission.

What integrated all their efforts and gave them direction was the inspirational mission they were set. That catalysed and gave coherence to the efforts of multiple actors, public and private, across many different sectors of the economy. The mission expressed Kennedy’s underlying purpose which was to project US technological power.

The story of the Apollo programme is the foundational account of mission-driven innovation, set out by the economist Mariana Mazzucato in her book Mission Economy: A Moonshot Guide to Changing Capitalism.²² Mazzucato says a “mission oriented approach [...] means choosing directions for the economy and then putting the problems that need solving to get there at the centre of how we design our economic system. It means designing policies that catalyse investment, innovation and collaboration across a wide variety of actors.”

For Mazzucato that means public policies aimed at creating tangible benefits
for citizens and setting goals that matter to people, driven by public interest considerations rather than profits. Crafting the right mission involves setting targets that are inspirational yet concrete.

This directive model makes sense in settings that the systems theorist Béla Bánáthy²³ describes as deterministic and purposive.

According to Bánáthy, deterministic systems are relatively closed; they have a clear, unitary goal set from the top. People within the system have very limited freedom even to change the methods to achieve the goal. An Amazon warehouse is a deterministic system.

Purposive systems allow greater scope for innovative problem solving around the shared mission. People within these systems have greater freedom to adapt new methods so long as they are demonstrably better at achieving the goal. The Apollo programme was purposive. The quality improvement systems created by Japanese car manufacturers are purposive.²⁴

Deterministic and purposive systems can be changed by a directive approach in which a new purpose is set from the top.

However, this directive approach will not work especially well for many social challenges. Most public challenges are not like a Sudoku puzzle for which there is a single, definitive answer. Many of the deepest public challenges are often ill-defined and complex; which goals and which solutions matter is not obvious to begin with. For those challenges we need a different model for the way that purpose orchestrates system innovation. We call this the emergent model and it explains why the Dutch got clean water.

The Emergent Model

Most Dutch people did not drink clean water until the 20th century. Mainly they drank water from wells, rivers and canals, or they collected rainwater in barrels, because it was free. They also put most of their waste in the canals and rivers that they drank from. Polluted water created water-borne diseases, especially cholera, dysentery and typhoid which killed tens of thousands of people.

As medical knowledge advanced and it became clear that dirty water caused disease, it paved the way for systems to provide clean, piped water which helped to bring the death rate down. By 1900, about 40% of the population had piped water. By 1951, it was more than 80%. Looking back, it seems clear that piped water systems were developed to improve public health.

Yet according to Frank Geels’ detailed history²⁵ of this transition, that is not what happened at all.

Piped water systems developed for a variety of reasons in different settings before any coherent rationale for a system emerged. One of the earliest clean piped water systems in the Netherlands was developed in Den Helder, a naval port, where water was piped to ships that were departing on long voyages.

Neither the state nor citizens were much interested in clean water. Through much of the 19th century, government was relatively small, confined to defence and policing. Health was not part of the state’s remit. The first water systems were not created by public authorities but entrepreneurs keen to make a profit from places that lacked reliable supplies, like Amsterdam. Health was a purely private concern and people thought having a body covered in grime provided protection against disease. Doctors advised against bathing as it would eliminate that protection.

Clean water started to become important in the final three decades of the century as the middle classes set themselves apart by being clean and washing with soap. That was a cultural shift rather than a scientific one; a social change rather than a policy change. It took many years for the new science of infectious disease to become widely accepted, even among doctors. When those theories finally became more accepted in the medical profession, this scientific understanding made common cause with the middle-class ethic of cleanliness. Clean water became a social priority.

By the late 19th century the growing recognition that governments needed to take responsibility for tackling poverty and poor living conditions in cities paved the way for what Geels calls a public “ideology of cleanliness”. This then led to public investment in and mass adoption of clean water systems which improved and saved millions of lives.

Piped water eventually emerged as a system with a stable, widely accepted moral and public purpose. But the process of arriving at that purpose was anything but directive, rational and linear. The system cohered around a purpose that emerged long after piped water had been developed as a technical solution. The purpose did not spur the innovation; the innovation eventually found the purpose it needed to propel it. The means and the ends, the understanding of the opportunity and the solution, evolved together.

In the directive model the system’s purpose is decided by figures of authority. In the emergent model the purpose comes into focus through an often ill-coordinated process of experimentation and exploration, creating visible attractors for others to change their behaviour. Political authority eventually endorses the purpose but only once

that purpose has been established within society. In the directive model there is a clear statement of purpose: Kennedy’s speech marked the launch on the mission. In the emergent model the purpose is embodied in changing behaviour and norms rather than statements.

The directive model assumes a system needs a clear purpose, singular. Yet most systems are trying to reconcile the competing claims of different purposes, plural. The Canadian system of National Parks, for example, was created through finding a common interest between the demands of conservation science, real estate development
and the leisure and tourism industry²⁶. To this day the Parks are a meeting point for the different interests involved. There is no common purpose, more a stable way to reconcile different interests. Systems of any complexity have to respond to a plurality of purposes which are not always in accord with one another. Then it is not a question of finding a purpose so much as finding the right combination of several different purposes.

The emergent model is a better fit for shifting systems that Béla Bánáthy²⁷ calls heuristic and purpose-seeking.

Heuristic systems are open to initiative and change, from within and without. They have to be adaptive, not just in the means they employ but the purposes they serve. A health system is a heuristic system. Not only are health systems trying to treat patients well, they are also trying to prevent disease and promote mental and physical wellbeing. Health systems have multiple goals and competing priorities based on different definitions of good health in a constantly shifting environment.

Purpose-seeking systems are like mountaineers constantly looking for higher peaks to scale, as well as new techniques to do so. Purpose-seeking systems co-evolve with shifting environments, aspirations and new knowledge to seek out new, better purposes. An example is the way that trams were introduced into French cities

to reduce dependence on and provide an alternative to cars. After 10 years of experimentation, trams enabled a wider vision of the walkable 15-minute city urban life. Public systems can be platforms for citizens to pursue their own purposes: public libraries are a case in point.

The directive model is the right approach when the challenge is well-defined, the authority to set the purpose is clearly established and the potential solutions fairly knowable.

The emergent model will be more appropriate when there are many different possible solutions and purpose will only come into focus through discovery and experimentation, from within society rather than set by those in authority.

Directive, mission-driven innovation approaches will not work in all situations, as the business economist John Kay points out:

“Where objectives are clear and simple and policy and implementation can readily be distinguished; when interactions with others are limited and predictable; when we are confident in our ability to specify completely the available options and the risks to our objectives and when we understand the systems with which we deal then our approach can be more direct and linear.

However most of the time life is not like that. Most of the time high level objectives and goals are loosely defined and multi-dimensional. There is no clear distinction between objectives and implementation because the actions we take to achieve the goals reveal what goals we should have. In the process of attempting to realise our goals we learn not just how to work better but what better goals we could have.”²⁸

Missions and Meanders

This simple grid helps to distinguish the two approaches.

The what and the why of innovation - the mission - go along the vertical axis, from unclear at the bottom to clear at the top. The how of innovation - the means to achieve the goal - goes along the horizontal axis from unclear on the left to clear on the right.

Success lies in the top right hand corner where there are reliable and effective means to achieve a clear purpose.

In the directive model of innovation shown below, the purpose (1) is very clear (send a man to the Moon) but the how is unknown. As the Apollo programme makes the means clear, so the innovation travels from the top left to the top right as the goal becomes achievable (2).

The emergent model is a lot messier.

In the case of how the Dutch got clean water, the system is initially in the bottom left hand corner (1), without either a clear purpose or a clear means. First, the technical system is developed in the bottom right hand corner (2). It becomes possible to pipe clean water but no one really knows what the system is for. The purpose starts to emerge at point (3) when the middle classes start to adopt cleanliness as a mark of social distinction. The purpose solidifies at point (4) when that middle class ethic combines with the new medical science of disease which makes clean water a priority. At point (5) the emerging power of the state to create public systems propels a new shared public purpose that was not possible before because the state was so limited. The ideology of public cleanliness (6) on public health grounds. The system eventually develops a clear, coherent purpose and the means to achieve it through a meandering interaction between means and ends.

The System Innovator’s Dilemma

The differences between the directive and emergent approaches to innovation create the system innovator’s dilemma.

Directive approaches will not work for emergent, complex, wicked social problems. Yet emergent solutions cannot be planned and directed; they take time to gain momentum. What if we do not have that long because the crises we face are urgent?

Urgency and focus are the great attractions of a directive approach. The Apollo programme landed a man on the moon in just seven years. How can we bring the urgency and focus of directive innovation to challenges and opportunities which demand an emergent and co-evolving approach to innovation?

The answer is to find ways to make the two approaches work together.

A period of emergent, purpose-seeking innovation can lead to more directive, goal- oriented development once the shared purpose has become clear. That is what happened with containerisation and electricity systems as they developed in the US. An initial period of emergent innovation eventually led to a stable technical system which could then be scaled. That opened up unforeseen new opportunities created by the system: a new process of emergent, purpose-seeking innovation started. For example, electricity was applied in households and factories in ways never originally envisaged.

Emergent approaches can work on the fringes of a more directive system. In hospitals providing elective surgery, the best approach to innovation might be directive, to drive the system to higher levels of performance. But at the fringes of the health system, where it is dealing with public health issues, lifestyle change and mental health, a much more emergent, community-based approach will be needed to develop new solutions.

Directive innovation can make sense in a sub-system of a wider emergent system. Providing people with pensions is a quantified, transactional process which responds to directive innovation. But it is also part of an emergent set of responses to ageing which are co-evolving in society, including health, housing, work and exercise.

The most interesting approach combines directive and emergent innovation at the same time. We call that intentional emergence.

Intentional Emergence

Emergent systems are beyond direct, detailed control. Yet that does not mean they are completely unpredictable and chaotic. They are not beyond guidance from designers, policy-makers, investors, activists and consumers. Systems that are complex, adaptive and emergent can be shaped by the pull of a purpose which makes them easier to coordinate; creates commitment among the people involved; generates innovation; and builds resilience. That happens only when those shaping the system from the inside and the outside are skilled at framing a purpose which orchestrates the collective endeavour needed to meet a challenge and open up new possibilities.

Directive, mission-driven innovation moves reasonably quickly in a fairly straight line from the goal to the means. Emergent innovation can have a profound effect throughout society but it often takes a meandering course over several decades. Intentional emergence is a way to accelerate and synchronise emergent processes through more rapid, iterative cycles of development, which gain momentum as they draw in more contributors.

The diagram below compares the three approaches: the directive, the emergent and the intentionally emergent. The organisation for mission-driven, directive innovation is a pyramid, with a hierarchy of missions, goals, challenges and innovation teams. The model for emergent innovation is a meandering interaction between means

and purpose: the innovation finds its route to scale in society like a river finding its course through a landscape. The model for intentional emergence is a vortex of rapid, synchronised collective learning, across technological development, business models, public policy, social activism and consumer culture.

Systems are organised around their purposes. But new purposes are rarely rationally chosen nor decided by figures of authority. More often they are found, discovered, uncovered and generated. Our model of intentional emergence shows how that process can be accelerated, synchronised and steered by all those involved.

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