Backbones, scaffolds, spaceFORMS: what collaboration and governance for systems change say about its financing

The pursuit of better development and sustainability outcomes through the lens of complex adaptive systems is breaking into mainstream policy thinking and development finance, thanks to a cohort of trailblazing actors, slowly converging from a variety of fields including applied scientific research, design, philanthropy, social enterprises, policy, economics, and international development.

At the cutting edge of this pursuit lie two questions under active exploration. One of them is the financing of systems transformation – something being researched and experimented with across philanthropy, social enterprises think tanks, forward-thinking development organisations such as the European Commission-backed EIT Climate-KIC and the various networks they are weaving between themselves. (note: this is a question that I have been trying to make sense of through eight trade-offs).

Another area is collaboration and governance of systems transformation endeavours. Explicit references to complexity in matters of collaboration and governance are throwing up new challenges which a growing number of consultants and organisations are focusing on, from civil society organisations working on systemic issues affecting local communities such as ReBoot to organisational design specialists such as Cognitive Edge (the research network founded by renowned applied complexity consultant Dave Snowden). In essence, how do people create a ‘space’ that enables cross-cutting, context-specific, adaptive collaboration that can deal with decentralised decision-making, the uncertainty of effecting change within complex systems and allow for coherence in such endeavours?

Look, guys – this stuff is really messy. And the issue is: how do we cluster people of good will?

Dave Snowden, chief scientific officer of Cognitive Edge, speaking on the “Boundaryless Conversations” podcast (1 December 2020)

A growing sub-segment of these organisations is applying the lens of complexity to international development such as Wasafiri and India-based Nudge Foundation (two networks of system-minded, purpose-driven professionals) or Netherlands-based CHÔRA Foundation (currently working with UN Development Program (UNDP) Accelerator Labs in the pursuit of systems transformation for international development).

Backbones, scaffolds and SpaceFORMS

Specialist organisational development practitioners with a focus on multistakeholder initiatives such as CollaborateUp or the Collective Impact Forum are promoting the need for what they describe as backbone organisations to undertake the vital function of holding such initiatives together – a function which includes “mobilising” finance (i.e. raising, arranging and coordinating).

However, the study and practice of backbone organisations so far does not explicitly engage with the organisational and financing challenges borne from the nature of complex systems – the agile, adaptive, context-specific nature of the underlying systems change work that is ill-suited for the permanent, context-free structures of most organisations and the fixed conditionalities and fragmented nature of present-day finance.

In work more deliberately designed for complex situations, Cognitive Edge describes as ‘scaffolding’ (or ‘endoskeletons’) key clusters of agents behind organisational set-ups that help loosely hold people and purpose together, allowing for a large variety of organisational outcomes to emerge and change while maintaining overall coherence. Meanwhile, CHÔRA Foundation is exploring the concept of SpaceFORMs, inspired by ‘multi-agent systems’, one of artificial intelligence (A.I.) core areas of research and which, according to the UK-based Alan Turing Institute, “consists of multiple decision-making agents which interact in a shared environment to achieve common or conflicting goals.”

Financing considerations: from a constraint to a demeaning problem

Interestingly – and perhaps inevitably, the exploration of collaboration and governance is increasingly being drawn into considering the question of financing. Indeed, beyond a certain scale, financing cannot be designed in isolation from the complexity of the underlying systems change work. And as with those who have been focusing on financing, the collaboration and governance that underlies systems transformation is bumping against the general “unfitness for purpose” of present-day large-scale financing approaches.

In her Wayscraft framework, international organisational design expert and member of the Cognitive Edge network Sonja Blignault appears to frame financing as a constraint – a factor beyond our control – which can be treated either as a “hard” constraint (i.e. something that inhibits momentum and must be worked around) or as something that stimulates innovation (i.e. something that can be affected to become a “leverage point” for systems change). In some sense, this is the most pragmatic way of framing the issues that financing poses when they arise.

However, as large-scale systems transformation becomes an increasingly pressing global issue, there are signs that people are shifting towards being less agnostic about the financing constraint and leaning towards looking at it as something in need of change to enable the kind of collaboration and governance that can enable systems transformation.

In a recently-published Green Paper framing its work with UNDP Accelerator Labs, CHÔRA Foundation bluntly describes the trade-offs imposed by today’s “stale paradigms of ROI (i.e. Return on Investment)” as “demeaning” for the pursuit of Development – a conclusion that aligns with the eight trade-offs that I have been using to frame present-day financing dilemmas and how they affect the ‘Scale of Intention’ in the pursuit of sustainability. Meanwhile, Dave Snowden has been exploring the emergence of localised gift-based economies complementing money-mediated national economies.

Where to next? Natural constraints, affordances and warehousing

There is little wonder as to why grant-making foundations (in particular the emergent class of ‘systems-aware’ donors) have taken the lead in exploring the question of how to finance systems change: by providing all-encompassing grants that are highly flexible, patient, open to risk-taking and to learning through experimentation, they effectively take out of the equation many of the trade-offheadaches of composing with today’s financial landscape. By doing so, they simplify the overall need for tricky governance of financing resources and any resulting “demeaning” trade-offs.

In my own organisation – an international NGO with an increasingly systems-minded approach to its work, some of us are actively exploring the need for sources of financing that are better suited for the complex, adaptive nature of our challenges. Meanwhile, CHÔRA Foundation and the UNDP Accelerator Labs are currently attempting to design “financial instruments” that account for the complexity of systems transformation in selected ‘deep demonstration’ pilot programmes. I would be very interested to see what instruments their experiments produce and perhaps view them through the lens of my own eight trade-offs for financing.

I am especially keen to see if three features will form part of the design of financial instruments:

  • Natural constraints

We can’t have everything mediated by money. We need to find ways by which we generate ‘natural constraints’ on [businesses] because they will respond to consumer pressure.

Dave Snowden, chief scientific officer of Cognitive Edge, speaking on the “Boundaryless Conversations” podcast (1 Dec 2020)

As the recognition of complexity makes the entangled nature of societies, needs and problems more apparent – beyond the connections that can be made through finance and monetary value (e.g. air pollution, inequalities, biodiversity), one area of interest is the identification of ‘natural constraints’ within a system which, like any important rule, could shift a variety of actors – including financing agents – towards adopting more problem-solving behaviours.

  • Affordances

Constraints create affordances or opportunities for action. Therefore, perceiving affordances in dynamic environments is key to innovation.

Sonja Blignault, “Enabling coherent explore space” blogpost (February 2020)

Can affordances be designed within a financial instrument to enable it to acquire greater fungibility, seamlessly changing properties within a range of “adjacent possible” scenarios?

  • Warehousing and standstill arrangements

When working on complex systems, problem-solving and sensemaking need time. Similarly, when (large) borrowers face the risk of defaulting on their debts, a “standstill agreement” and associated standstill facility are typically agreed so that the struggling borrower can meet any essential expenses while financial restructuring negotiations take place. Could a group of funders act as standby standstill funding providers, maintaining existing funding arrangements in place for reasonable period of time until a new value-sharing arrangement and associated funding arrangement can be designed?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s