The only time we really get to do large-scale system change is when a system is in transition. When a system is in its normal state one’s capacity to alter the whole organization will be close to zero; as long as an organization is in or near its normal state of operation it will strongly resist systemic change. If there is no sign of crisis in the system you will not be able to alter it on a systemic level.
The great management systems thinker Russell Ackoff once pointed out quite clearly how you get a large-scale system to change1 “The easiest conditions under which to convince any organization to change is when it’s in the state of crisis when it’s stability or survival is threatened. If it’s desperate enough it’s willing to change in ways that it would never otherwise consider and therefore one of the important techniques that are available is to show any organization, no matter how successful it is, that in its current future there is a crisis impending. The way that’s done is you assume that the organization will continue to do what it’s doing now indefinitely into the future and you assume the organization’s environment will change but only in ways that it expects. Now if you project the future the organization under those two conditions, you have a non-adaptive organization and a changing environment and therefore ultimately through non-adaptation destroy itself… the projection reveals the Achilles heel of the organization.”
Your only chance for effecting systems change in a large-scale complex system is when the current paradigm is no longer working; not only this but the system will have already had to have faced a number of critical issues that the old model has manifestly being proven incapable of solving before the mainstream of the organization will be ready for any form of major transformation. Think for example about the environmental movement just forty or fifty years ago, a lot of effort was put in by environmentalist but very little happened. It is only now that an environmental crisis is apparent and the limitations of current solutions in the face of that are apparent that there is the possibility for systems change. Of course, the time to solve the environmental crisis was thirty or forty years ago, now it is too late to solve those issues within the existing model; a transition implies that you are not going back to the old model, it is too late at that stage.
With complex systems you never really get to redesign some new system, system change is really about enabling transitions within an organization. A transition is a process or a period of change from one condition to another. Transitions are pervasive in nature, many different types of systems undergo rapid change before emerging in a new form or state of semi stability on the other side. Children become adults, seeds become plants, a town becomes a metropolis, but the classic example of a transition is the metamorphosis of a caterpillar into a butterfly. The reason that the term systems innovation and systems change have risen to prominence today is due to fundamental transformations taking place in the global economy. These transformations are the drivers of change and it is really only by harnessing them that we can really hope to change anything on a fundamental level.
Transitions are different from normal periods of change, during normal periods of change the whole structure of the organization stays the same while the parts change, things typically grow or decay in an incremental fashion as one thing builds on top of another. Stable existing structures provide the context within which the parts change with this change happening in a proportional fashion where only big events cause big changes, with small events only able to cause small changes. Transitions are different from normal linear processes of change where there is only a change in the individual parts, with phase transitions, new macro-level structures emerge. For example, as ice goes through a phase transition to become water the overall structure of the substance changes without any of the individual atoms or molecules being changed. During a transition, the parts may stay largely unchanged but the context around them changes fundamentally.
We can call this overarching context a paradigm. Typically two overall patterns are mutually exclusive, when we flip a coin we either get a head or a tail not somewhere in between. Two people can exchange a song if they both use analog or both use digital but the two overall patterns are mutually exclusive, they both have to use the same pattern to enable the exchange. This is why paradigm shifts happen very rarely and happen fast because there are huge dislocations and inefficiencies created by having two fundamentally different patterns in the system and because there are huge advantages gained by everyone using the same basic pattern. The system will thus strongly resist staying in that transition process and once it finds the new pattern move rapidly into it fueled by network effects.
Major systems change comes about as a function of a qualitative change in the system, not a quantitative change. Qualitative change is a systems-level change because it is not about the system doing what it does better, fast or more efficiently, it is about the system doing something different. It is a change in the context within which the system exists, a change in the understanding of the end objective of the system and the function it performs and as a consequence the enabling structures and organizations required to enable that function.
Take for example an auto company, their model of the world was that people move around using their car and thus want cars, and if we build a better car we will make customers happy and generate more revenue. So the system is set up to make an incremental improvement in the properties of their cars and try to sell more. A paradigm shift here would involve a reassessment of what the organization is trying to achieve, we might say this is not about cars it is about mobility, mobility is delivered by transport systems, how can we build a better transport system? That is a very different question a very different kind of organization with different objectives would follow from it.
An another example might be an energy company. Previously their objective was to extract more fuel to satisfy customer demand and generate revenue. But given the current realization to the negative environmental consequence of this and the shift towards energy conservation the organization might move to see itself as a provider of energy as a service via a smart grid network. The smart grid is here a paradigm shift, they are no longer trying to extract more energy but instead coordinating the exchange of energy, the system they build to do that would be qualitatively different from the one that was designed to extract fuels from the ground.
If a system is not in crisis then it is not going through a systemic transformation. A crisis is one dimension to a systemic transformation. A systemic transformation implies that the system cannot go on doing what it did in the past, this is exhibited as a form of unsustainability. In a transition the system cannot go on operating as it did in the past and likewise it can not stay where it is because it is consuming too many resources, it has to and will change, the only question is will it degrade to a lower level or integrate to a higher level. That is the only thing that is really relevant, thinking about going back, staying where you are or envisioning a future that looks similar to the present is no longer relevant. By definition, a transition implies that the system will change and the future state will not be similar to the past.