Investing in System Innovation
This blog post was part of the event Step Into System Innovation - A Festival of Ideas and Insights on Nov 9th to 13th, 2020 and sums up the fourth webinar of the week. Watch the recorded webinar and read about the event here.
——
Chrisann Jarrett, Alex Sutton and Guilio Quaggiotto provided us with a thought-provoking snapshot of the funding side of the equation to Systems Innovation. As far-sighted funders themselves, both Guilio and Alex showed us why it’s essential we invest in continuous learning, experimentation and collaboration, rather than single-point solutions.
In order to do this, we need to change the entire funding framework, what the role of funders is and how they perceive themselves as part of the puzzle. For Alex and Guilio, this means that we need funders who embrace the very complexity of challenges, rather than those in continuous pursuit for a clear-cut, one-stop solution. Funders must be committed to the process. As Guilio said, “many of the problems don’t fit into nice boxes”, and therefore, organisations and entities need to fund a portfolio of initiatives that open up multiple options for systems to adapt and develop. Many participants seemed to agree with our speakers, and as one nicely put it, we need to invest in “time, commitment and creative intelligence, because changing minds and actions is investment”.
This is where we need to bring about a mindset shift. We need to encourage funders to see the benefits of increasing systems’ options to accelerate the learning of a problem over time. It is this commitment to learning, investigation and research, which happens across a longer time period, that is crucial for both Alex and Guilio.
What is more, we need to design funding that allows for options to increase over time, instead of funnelling an initiative that then in fact reduces over time. Learning must also occur across different initiatives within a portfolio; according to Guilio, the key is building “superior adaptive capacity rather than superior planning capacity”. Indeed, as Alex said, systems change can often feel intangible, abstract and vague, which is why he prefers to talk about “systems approach”. When approaching investment in systems innovation, we ought to focus on the means, process and learning, rather than a single idea. Unless we understand how our systems are changing in real time, we will not be able to improve them.
One key question put forward by Charlie, and also by some of our participants, asked how we can convince funders to invest in the process and not the solution, and how to build a framework of accountability. In response, Guilio referenced what he calls “deep demonstrations”. If we design portfolios that learn from each other over time, we can start building “mental models” that demonstrate this learning to funders. With that, you can demonstrate your logic: “the logic of my intervention is this, which means the learning we intend to get is that, and this learning grows over time”. Funding could in fact then go towards many different organisations all working around that same logic.
Our guest discussant, Emily Bolton, wholeheartedly agreed with the emphasis on funding the process, not the solution. She asked the important question of what it means to fund social change, rather than social activity. Emily’s work at Impact Incubator is an example of how this is possible. What is unique about their funding model is that funders have invested in the process of change; they have been a key part of the journey, working together on how to get to the end goal, while simultaneously accepting the fact that the path is not linear.
When Chrisann described the magic that occurs when there is direct, intentional funding that allows for engagement and empowerment, Emily also wondered how funders could ensure the creation of this magic instead of constraining the pursuit of change. For Chrisann, this type of funding means engaging directly with people in a community which in turn adds value to both the funders and the community. At the next stage, when the community comes into contact with a different system, they will have the tools to know how to change it. One participant reflected on how Chrisann’s idea of investing in proximate leadership with a legacy mindset was incredibly empowering.
All our speakers demand more from funders. As Lars Jannick, our other guest discussant explained, systems change can certainly be a tricky thing to bring about. For that very reason, we need funders who have a long-term outlook and a true venture mindset for their investment to be successful.
In a future designed by Alex, Chrisann and Guilio, the role of the funder will be entirely different. Rather than being an external, distant money bank, the funder has a newfound responsibility in their proactive, relational role. It is key that social innovators develop relationships with the funders and open up opportunities for collaborative engagement. Chrisann believes this means funders need to tap into the entrepreneurial spirit of the people they’re working with, and that there needs to be desire on the part of the funder to encourage those people to work alongside them. In Alex’s work at the Paul Hamlyn Foundation, he actively demonstrates the need for funding to be an entire collaborative field of endeavour. Alex himself studies the foundation’s portfolio of interventions and looks for the gaps in their investment. He then asks the question, “where should we be channeling resources and what are we learning from the organisations we’re engaging with?”
Collaboration leads to better outcomes. Alex admitted to us a realisation he had before joining the Paul Hamlyn Foundation, “no single organisation or initiative by itself is ever going to achieve the kind of whole-sale change I was interested in”. This is where Alex’s ‘convenings’ come in. Each year, Alex hosts a convention with a hundred or so people, including investors, organisations and people with lived experience of the challenges they are trying to tackle. In these convenings, there is opportunity for cross-sector players to talk, ideate, meet people and explore new approaches. Each year, around 60% of the participants will have been there the year prior. In other words, Alex takes those participants on a journey, a learning process, which can last four or five years. With this, he creates a cohort of people who are building trust and relationships and importantly, who are learning together. These convenings “focus on connection, on relationships between organisations and the people they partner with, but also between the partners themselves.” These convenings require sustained engagement from their participants, while each year he also ensures to bring in new voices, and those new voices are essential in portraying the health of the sector and asking new, pressing questions. For Alex, it is crucial “to stitch together different approaches and discreet conversations so they became much more than the sum of their parts”. He is allowing for intelligence from the wider funnel to be brought into meaningful, direct conversations. Chrisann, someone who has attended many of these convenings, concurred: “it allows for sector-wide conversations to prevent duplication of work and avoid silos occurring”.
Creating these open conversations is also something Chrisann does very successfully in her work at We Belong, the only British charity led by and for young migrants. Chrisann ensures that her team engages with policy-makers, “not on their terms, but on our terms”. She sets up the time and space to have one-to-one conversations, which are focussed on building a relationship. At We Belong, they develop their own platforms and host their own parliamentary debates, so policy-makers know what their terms of engagement are, while presenting a diverse core of people the politicians have to interact with.
Through his convenings, Alex also looks out for clusters of energy that he sees potential in. As he described, funders have the benefit of a bird’s eye view and therefore can spot people who are working on the same issue but don’t know each other, and Alex then makes the connection between them. Through this bird's eye view and the drawing together of an ecosystem, Alex is also able to see who is left on the periphery. He then ensures that those people, who are often the ones with direct lived experience, are brought back into the centre of the conversation, providing them with the space to articulate what needs to happen and what they think the approach should be. As Chrisann put it, this requires engaging and investing in people who have had the power taken away from them.
This is Alex’s top-down and bottom-up approach, convening players from across the system to bring about change from politicians, researchers and policy makers, to service providers and migrants themselves.
Shifting the field requires building a coalition of funders from across the system who are prepared to play an active role in developing a new approach, learn from and about the challenge, and work together to take steps towards systems change.
