Developing at the systems level requires a strategic mindset that sees opportunities for change in intervention points. Donella Meadows understood this inherently when a realization occurred during a strategy meeting. She started listing leverage points that could be found in almost every system in order to create the most expedient change for the least amount of effort. Since then, she and others have refined this into a list of 12 points.
Leverage Points: Places to Intervene in a System, Donella Meadows, The Sustainability Institute, 1999 (in increasing effectiveness):
12. Constants, parameters, numbers (such as subsidies, taxes, standards)
11. The sizes of buffers and other stabilizing stocks
10.The structure of material stocks and flows (such as transportation networks, population age structures)
9. The lengths of delays, relative to the rate of system change
8. The strength of negative feedback loops, relative to the impacts they are trying to correct against
7. The gain around driving positive feedback loops
6. The structure of information flows (who does and does not have access to what kinds of information)
5. The rules of the system (such as incentives, punishments, and constraints)
4. The power to add, change, evolve, or self-organize system structure
3. The goals of the system
2. The mindset or paradigm out of which the system—its goals, power structure, rules, culture—arises [62]
All of these are places in which designers may find success creating larger system change.
But translating these into products and service offerings isn’t straight-forward and must be explored systematically and with multiple perspectives from knowledgeable partners in order to craft effective and lasting solutions.
Often, new business models await this type of systems thinking. When we look at traditional models in a new way or from a new perspective (often, corresponding to a different kind of stakeholder), we see new opportunities. New configurations or technologies allow us to shift resources from one system to another or from one product to a different service. New kinds of investments in human, natural, and financial capital can change product, service, and organizational efficiency, labor, component, or offering cost, life cycle impact, relationships with partners, retailers, and other stakeholders, and ultimately revenues and profits. New models can come unexpectedly from seemingly ridiculous frames of current challenges.
TerraCycle
In 2001, two Princeton students started TerraCycle with an unusual premise: they would collect garbage, sell it as garbage, use garbage for packaging—and make a profit doing so. Specifically, they collected food scraps, transformed the scraps into compost via worms, and sold it in reused plastic containers and cardboard boxes they collected from the trash. In addition, they decided to pay people for their garbage and still make a profit off the compost they sold. How’s that for an innovative business model?
Tom Szaky and Jon Beyer began by collecting food waste from Princeton’s dining halls, but since then, they have expanded considerably. They now sell their compost through Whole Foods, Home Depot, and Walmart stores. They also buy used bottles, bags, corks, juice boxes, and other trash from schools and online users to use as containers for their many products. They’ve expanded from fertilizer to bird food and feeders, liquid cleaners, deer repellant, rain
TerraCycle (continued)
barrels, bags and backpacks, and unique pots made from electronic waste (see Figure 15.2).
2
FIGURE 15.2
Making garbage profitable.
http://www. flickr. com/photos/
rosenfeldmedia/3264811633
2: http://www. flickr. com/photos/
rosenfeldmedia/3264830061
3: http://www. flickr. com/photos/
rosenfeldmedia/3264832621
4: http://www. flickr. com/photos/
rosenfeldmedia/3265658618
By understanding economic, environmental, and waste systems and rethinking business models, they’ve found a valuable opportunity where others didn’t—not to mention a solution.
www. terracycle. net
What doesn’t work well in systems thinking, however, is trying to force people to adopt new models, understandings, or behaviors. We can educate, cajole, convince—even bribe—but forcing people into changes they aren’t yet ready for is seldom successful. This includes trying to scare them into changing their behavior. Despite the wealth of assumptions to the contrary, people aren’t often rational, and this makes markets equally irrational.
Instead, we need to make information available, help people (in all stakeholder groups) understand new possibilities, and give them the tools to make their own decisions. But we can’t change their behaviors for them. This one fact creates an obvious drag on progress, and hampering it even further is the fact that usually only under severe circumstances (like emergencies or catastrophes) do people make such abrupt moves. This makes it all the more important to understand customer motivations and desires because these are the pivot points on which societies change decisions about themselves, their actions, and the world around them.
We can educate, cajole, convince— even bribe—but forcing people into changes they aren’t yet ready for is seldom successful.
