Fixing systems, not symptoms
Social entrepreneurs are driving innovation, but there is a need to go beyond service delivery to influence the structures of a dysfunctional status quo
The rise of presidential hopeful Marine Le Pen, whose fate will be decided by French voters on Sunday, is the latest in a series of global shocks shaking systems of governance and democracy.
In the face of a growing backlash from voters against the political establishment and against a backdrop of rising global inequality, the progressive agenda is stalling, prompting some to ask the question: was it progressive enough?
Social change is slow at the best of times, but increasingly economists such as Thomas Piketty are warning that things may be going in the wrong direction.
According to data from the Maddison Project, people living in the world’s richest country in 1960 were 33 times richer than people living in the poorest. By 2000, after neoliberal globalisation had run its course, that figure had jumped to 134 times richer. This is compelling people working in social change — including social entrepreneurs — to question the limitations of their models.
For a time, the rise of social entrepreneurship — the hybridisation of nonprofit and for-profit organisations — seemed to herald a new era in tackling poverty and inequality by harnessing the powers of business and business thinking in the service of social good.
These organisations have made a significant contribution to the world.
Take VisionSpring, an organisation founded by Jordan Kassalow that has increased the productivity and incomes of more than 3.5-million poor people through sales of spectacles in Asia, Africa and Latin America, creating an economic effect estimated at $280m.
Many such social businesses are reaching countless beneficiaries, but most stop short of challenging the architecture of the systems themselves — the laws, policies, economic and cultural structures — that have caused the problems. Rather, they exist primarily to try to correct the consequences of failures of these systems.
Without taking away from the extraordinary work these entrepreneurs do, some are losing patience with this band-aid approach and are looking at ways to go beyond service delivery to influence underlying beliefs and structures.
VisionSpring, for example, has moved on to found EYElliance, a coalition of multi-sector public, private and non-governmental organisation partners that are working within systems to engage governments and harness market forces to collectively find solutions to the world’s unmet need for eyeglasses. Such reach was not something VisionSpring was able to achieve on its own.
So while faith in current systems to solve the big problems may be waning, interest in creating new, more inclusive systems is gaining momentum.
According to the late Donella Meadows, in her book Thinking in Systems, a system is "an interconnected set of elements that is coherently organised in a way that achieves something".
This new brand of social entrepreneur wants to influence these interconnected elements — such as policy, governments and global institutions — while working to find the leverage points to bring about a new way of doing things.
These entrepreneurs often use a language more commonly associated with activists and revolutionaries than business people and they are the subject of a new report from the World Economic Forum (WEF) and the Bertha Centre for Social Innovation and Entrepreneurship at the University of Cape Town Graduate School of Business launched this week.
The report delves into the modus operandi of six for-profit and nonprofit social entre-preneurs working across the globe in education, health, consumer rights, land rights, rural development and the informal economy, who share a common approach of setting their sights higher than their own organisation’s to focus on shifting social systems.
The report calls these organisations "systems entrepreneurs" and looks to highlight the key lessons for effectively positioning an organisation to effect systems change.
While the concept of systems entrepreneurship has been around for a few years, this report is one of the first to put concrete examples behind it.
Fleshing out the theory in a way that has an immediate effect for others, the research has been developed into a set of six case studies that will be taught in business schools.
The potential application of systems change is significant. According to Martin Fischer, cofounder and CEO of KickStart International, systems change means "fundamentally, and on a large scale, changing the way a majority of relevant players solve a big social challenge such that a critical mass of people affected by that problem substantially benefits".
SA is ripe for systems change. Issues around widening inequality, free tertiary education and land reform are just some of the systems reaching breaking point. If these failing systems are not tackled, they will undermine the democratic transition of the country.
The WEF report demonstrates that to bring about systems change, entrepreneurs and other actors need to improve their ability to collaborate across sectors. They also need to identify and alter the rules and norms that create barriers to change by exerting positive peer pressure and by taking political action.
Political action may include borrowing from the playbook of activists — an unlikely ally of the business sector — such as the ability to dismantle existing power structures and mobilise communities. Systems entrepreneurs must understand that they need to embrace market dynamics and be prepared to work with and influence governments. And they must make sure the beneficiaries of their efforts are given the power to steer their own destinies so that they become true partners in driving change. This is more sustainable than the top-down approaches that have been historical practice.
Of course, all this might not be enough to save us from ourselves. As systems theorists teach us, in order to change, sometimes you have to break things apart.
There is an element of creative destruction involved in the rise of new ideas and history is replete with examples of societies that have floundered — or even failed — because they have not had the courage to move forward. Instead, they opt to try to maintain the status quo or, as we see in France, they retreat into perceived safer territory.
But this is not a long-term or sustainable solution as keeping the majority out in the cold only serves as a threat to social stability. The challenge, therefore, is whether we can positively transform failing systems into new systems that work for the majority of citizens rather than against them.
• Rayner is senior researcher and Bonnici is founding director at the Bertha Centre for Social Innovation & Entrepreneurship at the UCT Graduate School of Business.