Introduction to Systems Thinking Part 4

How does this work in real life? 

A few years back, I was having a conversation about gender equality with the Head of Gender and Diversity of a multinational corporation. 

She had an unmatched passion for her cause. 

She was also extremely supportive. 

She still inspires me to this day.

However, every time I mentioned the word “social business” in a conversation, I could sense this facial expression that was thinking “I won’t break your spirit, but social business to help fix the gender wage gap? Not sure about that.”

Maybe that was just me and the chip on my shoulder. 

She had told me that there are regulations in place for large companies to report on their gender wage gap, but there are a lot of loopholes. 

“It’s easy to circumvent the regulations,” she says.

I ask her if she sees room for innovation here for a social business.

Her expression is back. 

Social innovation, social business…Lots of buzzwords.

In an effort to humor me and explain the problem she tells me:

“The issue is that it’s not the primary agenda in companies. They still have their daily business to worry about. They’re not NGOs. They have to comply, it’s a compliance issue for large companies.”

I’m in investigative mode. I ask her: “What if we expose them?”

“What do you mean?”

“What if we build a platform that includes everything that each large company in Austria is doing? We dig through their CSR reports, we call, we check up, we report, we read through all the fancy words and bulls***, and make them transparent. If it is not reported, it doesn’t exist. If it is not followed up on, it doesn’t exist. If the plans and projects stay plans and projects the next year, they don’t exist. We report on this regularly.”

She still seems unimpressed, but seems a little more interested, with an eyebrow raised, which gives me hope. 

I continue:

“Then we take this platform, and we market the living crap out of it in every nook and cranny that they recruit from. In each university, in each specialization, in every corner, they market in. We call them out and make everything transparent. We take the data, we make it transparent, and we don’t stop shouting it from the rooftops until it changes. So now, it’s a branding and recruitment issue. We make sure that we make it a problem. Would that get it up on the agenda?”

Her other eyebrow raises, she stops to think for a second. 

There is silence in the room. 

I am sitting confidently, in my relaxed but investigative manner, my rebellious spirit is on high alert, ready to keep digging and asking questions until I get to the bottom of this. 

She breaks the silence.

“Well. Yeah, that would probably get their attention.”

I must have started to get a smug look of victory on my face. She smiles and goes:

“Get yourself a good lawyer. But, yes.”

We look at each other and flash a courteous smile, almost as to remember why we are both here in this room. 

How is this related to systems change? 

Well, sometime after, I read the inspiring story of Ma Jun. 

Bear with me. This will all make sense. 

Ma Jun started his career in the early 90s working for a newspaper in China called South China Morning Post. He would research China’s environmental problems and ended up writing a book in 1999 called: “China’s Water Crisis”. After being selected as a Yale World Fellow in 2004, he founded his organization called the Institute of Public and Environmental Affairs (IPE) in Beijing in 2006. 

Over the last four decades, China has experienced tremendous growth, resulting in the highest rate of poverty alleviation in the world. Largely credited to this economic growth, China has managed to pull hundreds of millions of people above the poverty line. 

However, this came at a cost. 

Pollution. 

Air, soil, and water pollution, exposing millions of people to health hazards.

How do we address this now?

Initially, the challenge China was having was a lack of regulation. So, they introduced environmental laws and regulations, that are quite similar to the ones we have in Europe.

However, as always, it was the actual implementation of the laws and regulations that became the problem. This is a story that we can relate to here. However, a lot of the time, the civil society and NGOs can push towards this type of implementation through the legal system by lobbying and suing the actors that do not abide by the laws and regulations. This did not work in China in this instance. 

To make things worse, the structure of the local governments was not conducive to the successful implementation of these regulations. In China, you had the environmental agencies who would be sitting under the local governments. However, the local government’s goals are tied to the Gross Domestic Product (GDP) growth rate, focused on more production.

GDP growth is a ludicrous metric to measure environmental well-being. It often has the opposite effect. You can guess how this incentive did not work. 

So, what do we do? 

Can one organization do what many before them and the existing ecosystems in civil society were unable to do?

If pollution is what we are addressing here, how can we keep companies accountable for the pollution that they create if:

  • the regulations are too little too late?
  • They are not being implemented by the government for several reasons?

Of course don’t forget that this is in a country with millions of factories, with over 1 billion people.

You are in an organization with 3 people.

Most of us would be right to be discouraged and have every reason to believe that there is nothing or very little we can do. 

Then Ma Jun found two things: the leverage point, and the way to make it happen. 

A quick note before we delve into leverage points: Leverage points are a controversial topic in systems thinking, largely because they’re misunderstood. A lot of systems thinkers don’t believe in them either. Then again, a lot of systems thinkers don’t believe systems exist either. I won’t rant about the pessimism in systems science. I encourage you to do your own research as this concept is contested.

OK, back to the article.

As the systems theorist, Donella Meadows said, a leverage point is where “a small shift in one thing can produce big changes in everything.” They are thought to be those acupuncture points where a strategic intervention could produce lasting and positive change.

It’s essentially the area where minimum input can result in the maximum outcome.

In this case, it was transparency.

In specific words: data. 

How could we keep any company accountable without showing or proving the negative impact they have on the environment first? 

That would be tough to do.

So, that’s what he chose to focus on. 

In 2006, IPE, consisting of Ma Jun and two colleagues, started to create a national database of pollution.

3 people.

Alright.

Now, the second challenge. 

How? 

Up until 2008, even data about air quality was nowhere to be found, let alone all other data on the pollution of private companies. 

It was sensitive, secret data. 

Remember, the court system is ineffective, the government support is inadequate. 

How can you make companies report to some website about all the negative impact they are having in the world? 

Here is how he did it. 

First try: IPE started to look high and low for any data points they could find that could give them meaningful indicators and found 2000 records of violations.

Alongside their hard work and other variables, the smog problem in China had become a bigger and unmistakable visible problem. So, it was the right timing for an intervention like this. As a response, in May 2008, China adopted “a pair of sweeping pollution disclosure measures that for the first time required government bodies at all levels to make certain pollution information publicly available.”

While that sounds like a lot of progress, remember that China is home to millions of factories. The job was not done.

So, to ensure implementation, they decided to create an index to help assess these measures: Pollution Information Transparency Index alongside their partner Natural Resources Defense Council (NRDC).

They used this index to assess 120 major cities in China, not only to make the data transparent between and within the cities but also to encourage the sharing of best practices.

That’s where it started to get interesting. 

In the first year, they had 2000 records.

2016, they had 60,000. 

2017, they had 160,000.

2018, they had 320,000.

Ma Jun supports the idea that transparency is subordinate to regulation, but it is of greater importance. But, enforcement still is the most important step.

To push for enforcement, he believes that you need to have toolkits. 

So, he turned to the people. To quote Ma, he believed that this shift would only come from “extensive public participation”.

These records that they have collected led them to initiate another project called the Blue Map alongside a group of 25 NGOs. With the push of public pressure to address the air pollution in China, they requested to get real-time data off government websites measuring water pollution. Amidst all the public pressure and the momentum that the awareness around the smog problem gained, the government agreed. 

Today with this free app, you can not only monitor and find out the worst polluters, but users can also share data with each other as well as report “black and smelly rivers” directly to the ministries. Namely, these represent the 2,059 most polluted rivers in China. Users can take photos, issue complaints, where the government is required to respond within seven days. Afterwards, the users can use the app to follow up to see what the government is doing about it.

This transparency of data does not only help the government but also the companies who outsource their activities in China. Since brands like Apple are under pressure from civil society, they refrain from having contracts with factories that are participating in this level of pollution practices.

The pressure this put on the factories was immense. They realized this when they observed a large steel factory that had very high levels of pollution according to their records. When they dug deeper, they found out that this was a government-owned factory and thought that all hope was lost. In the end, the feedback from the people online was so substantial, that they had no chance to shut down the most polluting arm of this factory.

What Ma Jun, his team, and collaborators understood two things very well: the inhibitors, and the enablers. They understood what factors are standing in your way, and what factors can enable you to unlock change.

InhibitorsEnablers
Little to no government supportThe trend of sustainability and increase of awareness due to the smog problem
Lack of effective judicial systemThe vast development of IT technology 
The sensitivity of data sharingOther NGOs and supporters
Lack of political incentivesAnd more…
And more…

Is our job done here? 

No.

Remember what was mentioned in the beginning about how systems are not finite games. 

It is more like working on a plane as it’s flying. 

So, this project will still need learning and constant adaptation. 

However, it does display the power of taking action in a complex environment.

“They pollute. It’s not because morally they have a problem, but more because the mechanism now is rewarding those who cut corners to save cost.” – Ma Jun

Tomorrow, we will address how systems thinking can play a role in social innovation. Stay tuned.

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