Archive for the ‘Frameworks’ Category

Why does the prepaid model work so well and what are the lessons for business model innovation?

Increasingly, employment is becoming ad hoc and flexible. The gig economy and the informal sector share a common characteristic of incomes which are irregular and unpredictable, unlike the timely wages characteristic of formal employment. Both budgeting and planning thus become a challenge when there’s no predictable paycheck to rely on. Expenses are managed against cash flows to minimize volatility, and payments with calender deadlines become a challenge in planning.

It is in this scenario that the prepaid or pay as you go model works so well for the customer, one of the reasons why its ubiquity across the developing world drives the growth of mobile phones. It puts control over timing and amount of money spent in the hands of the user, allowing them juggle voice and data purchases against available cash in hand.

Here are the lessons for business model innovation applicable for a plethora of products and services, drawn from our decade of research into the financial frameworks underlying the operating environment characterized by unpredictability and volatility, and the success of the prepaid model.

Flexibility

The prepaid model is flexible. There is no rigid requirement on the amount that can be spent, beyond the voucher values of each telcom operator, nor are there periodic calender based deadlines such as those in a monthly bill. In Nigeria, traders have been found to top up their phones multiple times a week or even the same day, yet purchasing the smallest denomination of vouchers. High frequency of small amounts is a purchasing pattern that resembles their own cash flow while trading in the informal market. They don’t want to tie up their liquidity in airtime in case cash on hand is required for business, yet their trade is clearly dependent on mobile communication hence the frequent recharges.

This flexibility built into the business model clearly puts control over timing and amounts spent in the hands of the end-user who must manage a volatile cash flow situation.

Seasonality

In addition to the daily or weekly fluctuations in cash flow experienced by gig economy workers or those active in the developing country informal sectors, there are larger variations in income level over the course of the natural year. Unlike the regularity of a monthly salary, irregular incomes rise during peak seasons, such as festivals and holidays, and plunge during low seasons. Developing country economies are more closely linked to the seasonality of agriculture, given the greater proportion of the population’s dependence on farming. Incomes can vary as much as 300% for instance, for tea farmers in western Kenya’s Kisii region. Climatic effects also have greater impact on cash flows, and the current drought in East Africa is expected to depress livestock prices in the coming half year. On the upside, seasonal peaks in consumer durable sales are predictable as the regional harvest timings are a known factor. North India’s post harvest season in late October/November kickstarts an orgy of consumer spending during the festivals and the weddings which take place during this period.

Business models designed to take expected seasonal changes into account can minimize the dropout rate of customers when their income changes.

Liquidity

One of the biggest challenges we have wrapping our heads around when considering more rural or cash intensive economies is that liquidity is not equivalent to wealth, or even purchasing power. While this factor can apply to anyone relying on multiple income streams from a variety of sources, I’ll use the example of a small farmer to explain its importance to the design of business models.

The homestead is managed like an investment portfolio, with different sources of income maturing over different durations of time over the course of the natural year. This is also why control over Timing – frequency, periodicity – of payments, such as possible in the prepaid model, is so critical for the success of payment plans. A smartphone might be purchased after the major harvest of the annual cash crop, but its the daily cash from the sale of milk that would be used for recharges (and other basic necessities). Similarly, a calf may be purchased to fatten against the following year’s school fees.

Negotiability

This leads directly to a factor more relevant to heavily informal economies where variance in systems and structures means transactions are more human centered, depending on face to face communication, trusted references, and mutual compacts rather than legal contracts to enforce agreements. Negotiability of your business model, and its close relation, reciprocity – “the give and take” – is an element missing from faceless institutions that seek to serve this demographic.

This is one reason many prefer to seek solutions outside of formal banking institutions, for example, as their opening hours might not suit the trader’s business hours. In Busia, Uganda, most women traders had established trusted relationships with a mobile money agent, many of whom would show up at the end of the work day to assist the trader in transferring the cash earning safely onto the digital wallet. And, unlike the bank, the telco’s prepaid model allows customers to “negotiate” when and how much they’ll pay within the constraints of far more flexible terms and conditions than most other models.

A farmer has “purchased” this solar panel after coming to an agreement with the shopkeeper. He will pay off the total, over time, as and when he has spare cash, and collect the panel when payment is complete. There is no interest charge. The shopkeeper has put the farmer’s name on the panel but will keep hold of the item.

The greater the span of control over timing and amounts, the greater the success of the payment plan

The prepaid model bridges the critical gap between the predictable formal structures of the large institution and the dynamic challenges of the informal. The bottomline is that the flexibility, negotiability, and reciprocity of the model are more important factors for its success than the conventional understanding of permitting micropayments in advance. Numerous consumer product marketers entering emerging markets experienced this challenge when their micropayment hire purchase models failed customers who might have to miss one or two week’s payments due to illness or other emergencies – their products were repossessed without any recourse to adjustment. Its the rigid calender schedule embedded in a payment plan that is often the barrier to a high ticket purchase than the actual price itself.

None of these factors are insurmountable with today’s technology, and the field for business model innovation for irregular income streams such as those in the gig economy or the informal sector is still wide open for disruption.

Zambia’s inclusive approach to various sectors in the informal economy is worth noting

The Zambian government most recently announced that they would provide certificates to illegal (artisanal) miners in order to recognize and formalize their activities. In addition, they were being encouraged to form cooperatives – a legally recognized organizational structure – that would permit further benefits to this informal sector.

Compared to the challenges Ghana is facing with galamsey – the local word for illegal or rather, artisanal mining – one must sit up and take note of Zambia’s decision to lower the barriers to inclusion rather than build the walls higher to protect large scale formal extractive industries.

And mining isn’t the only sector to be so considered by the Zambian government. There was an announcement last year of their intent to legalize street vending – the bane of all developing country cities – and bring vendors – mostly women with families to support – within the formal employment and revenue net.

I looked for updates on this legislation and have yet to find something, though there’s lots of news on managing the street vending and hawking rather than the usual method of chasing them off the streets or confiscating their goods. That in itself gives me hope that we’ll see some pioneering advances from Lusaka.

In fact, there’s an article in the Zambia Daily Mail from a week ago that says “Its the perfect time for vendor training“:

Most of the traders on the streets are women who carry their children along due to lack of caregivers at home. For many women, this vending is considered an extension of their reproductive and domestic role. And so they are willing to risk it all and toil all day so that they could earn enough to cater for the following day’s orders and meals for the family.

However, many of these have dreams, big dreams to grow, provide and educate their children to a level where their offspring will never have to earn from the streets. And with the right training, many, with aspirations to grow their businesses and create a brand for their products, could benefit from financial and business knowledge that they could otherwise not be able to afford.

Some vendors have decided to change from trading in goods that are high-risk (these include foodstuffs such as vegetables and fruits) to those that have less risk such as clothing and other products. However, without any improvement in the level of knowledge of the new trade they are about to engage in, many are likely to fail, and they may return to what they know best, no matter how risky it is. It would therefore be prudent for organisations with the perfect know-how to take this opportunity to offer knowledge that will enable them to make the swap with better planning and more confidence.

Street vending is viewed by many as an economic activity for those with a low level of education. But what the cholera outbreak has taught us is that, if it is left without interventions, the negative effects will spread out and affect the whole nation.

The training I am suggesting could include assistance with regard to business registration, opening companies, tax remittances and branding of businesses, among other things.

I can’t help but underline all that is being said, and express my hope that other cities – Lagos, Nairobi, I’m looking at you – will take a leaf from Lusaka’s book.

Trading economics: a new theoretical system

From the Financial Times, a snippet from a guest post by Wang Zhenying, director-general of the research and statistics department at the PBoC’s Shanghai head office and vice chairman of the Shanghai Financial Studies Association, summarising the arguments in his new Chinese-language textbook on economics.

“Trading economics” is one new theory emerging against this backdrop. Mainstream economics deduces the macro whole by extrapolating from the behavior of individual “representative agents”. Trading economics replaces this with a systematic and comprehensive analysis approach. It stresses that in an interconnected world, the interaction between trading subjects is the fundamental driving force behind the operation, development, and evolution of economic systems.

Trading economics first analyses the actions of trading subjects, then builds a dynamic trading network among trading subjects through trading relations, and finally reveals the operational rules of the economic system. The rules could be examined from two perspectives: short-term and long-term. The business cycle and price changes are examined in the short-term perspective. The long-term perspective would focus on the rules of economic evolution as well as changes in technology, knowledge, system, and network.

Throughout the history of economics, trading economics is the first and foremost theory to incorporate all economic phenomena into an all-encompassing logical system. It changes the long-standing scenario in the economics field, that is, the macro was separated from the micro, and the short-term from the long-term. Trading economics is a revolution of mainstream economic theories and is bound to exert a great and profound impact on all areas, including economic theoretical research and practical application.

 

NB: I thoroughly enjoyed reading this summary and expect to contextualize future research with some of the theoretical frameworks as presented here.

 

 

TEDTalk video: Recognizing the value creation and economic contribution of the informal economy

My talk given at the TEDGlobal conference in Arusha, this August, went live on Ted.com at some point during the night a couple of days ago. At that very moment, I was on a Finnair flight from SIN to HEL, so with a wee bit of delay, here’s the link to the video of the talk. Also available is a recommended reading list I curated, along with footnotes.

I just want to add that its high time we considered the informal sector as a commercial operating environment in its own right. This change of perspective will transform the way we think about poverty, it’s alleviation, and, importantly, open the doors to innovating products and services that can help boost productivity and revenues for micro, small, and medium sized businesses across the developing world, but particularly in Africa and India.

By doing so, we can recognize the economic contribution and value creation by women who make up the majority of such entrepreneurs, and put dollar values to their investment capacity and growth opportunities. As long as they’re lumped together under the umbrella term “informal sector”, with its unquestioned assumptions of low skill and low productivity, they’ll remain invisible, and solutions meant to support their development will never reach them.

Fundamental Elements of Informal Sector Commercial Activity

There are two key elements which underpin the dynamics of any business or commercial enterprise in the informal sector. These are Time and Money.

A generalized framework can be diagrammed, as shown above, where the dotted line denotes the degree of uncertainty and volatility of an individual’s cash flow patterns – whether from a variety of informal economic activities – such as for the farmer or trader; or from the salary received for a white collar job. The X axis – Time – denotes the increasing accuracy of estimating the Arrival date of a cash payment (from some revenue source), and the Y axis – Amount – denotes the increasing accuracy of estimating the Amount that will arrive. Their relative ability to estimate Arrival and Amount with any degree of accuracy is indicative of their ability to forecast and plan for expenditure.

Thus, at one end of the continuum, one can position an odd jobs labourer who may or may not get paid work on any given day, and is unable to predict with any degree of certainty what type of job he’ll get selected for, nor for how many days it will last. It could be as basic as loading a truck for half a day’s pay, which in turn might even be in kind, and not cash. And, at the other end of this continuum, one can position a the typical white collar salaried professional or civil servant who knows with certainty exactly on which day they will receive the salary and exactly how much will arrive.

 

Positioning and Location

Now, we can frame these two elements of the commercial operating environment in the form of a position map, as shown above, that maps the ability to plan expenditures against the stability of the cash flow. The red arrow is the continuum of certainty and stability of Timing and Amount of an income stream, anchored by the most vulnerable odd jobs labourer at one end and the relatively most secure salaried professional at the other.

Where it gets interesting is the relatively liminal space in the middle where the various economic actors in the informal economy constantly shift position as they seek to mitigate the volatility of their income streams, through a variety of mechanisms. Much of their decision making is related to their own perception of uncertainty and ability to forecast.

For the purpose of this explanatory diagram, I have selected 4 typical examples drawn from different sectors of the informal economy common in the developing country context. Each are at the more vulnerable end of their own segments i.e. a subsistence farmer, rather than one with an established cash crop; or a small roadside kiosk rather than an established general merchandise store in a market town; since they have not yet achieved the goal of their business development strategies to move their own entrepreneural ventures towards relative stability, and thus provide more insight on the relationship between cash flow patterns and investment and expenditure planning.

The hawker of goods at a traffic light or junction is in a comparatively more fragile situation than the kiosk owner with a fixed location who works to develop relationships with passing customers in order to convert them to regulars at her store. Unlike the kiosk, which might be located near a busy bus stop, or outside a densely populated gated community; the hawker cannot predict which cars will pause at the red light as he darts through traffic shouting his wares. However, compared to the odd jobs labourer, the hawker has comparatively more control over his income generation since his is not a passive function of waiting to be picked from the labour pool in a truckyard or construction site.

The smallholder farmer might actually be better off economically in many ways than his urban brethren involved in informal retail, being able to live off the land more cheaply than in the city. Experienced farmers, for the most part, are able to predict with reasonable accuracy, more or less the quantity of their crop, and the estimated timing of the harvest. However, his sense of uncertainty is often perceptually greater due to the unmitigatable impact of adverse weather conditions, or the sudden infestation of a pest or blight, any of which could at any time completely destroy his harvest, and thus, his expectations. This sense of insecurity in turn influences his decisions on expense commitments to far ahead in time, or too large a lumpsum at some point outside of his regional harvest season. The farmer’s income streams are relatively more out of his control than the disposable income in the pockets of the kiosk’s customer base.

The market woman with her display of fresh produce, at the entry level of inventory investment capacity, might only have one or two different varieties of vegetables or fruit to sell, and may not yet have established a permanent structure – a table, a kiosk – in the market. She might start off with only a tarpaulin on the ground with some tomatoes and onions for sale. Unlike the traffic intersection hawker, however, she is more likely to begin by assuming a regular placement and location as this establishes the foundation for her future business development, through the factors of discoverability and predictability among the customers in that locale.

That is, in addition to Timing and Amount of Income – the cash flow patterns and sources – we begin to see the role played by location – Place1, as a supporting element of the commercial activity in the informal economy. While farmers are least likely to have much control over the location of the land they may inherit, their risk mitigation strategies to minimize volatility of their income streams and maximize their ability to plan for the future and manage emergencies will be discussed in depth in the section2 on rural household financial management. These practices are the foundation of business development strategies commonly observed in the informal economy in developing countries which tend to be less urbanized, and as is often the case, more dependent on agriculture as a component of national GDP.

 

Appendix
1 People, Pesa, Place: A Multidisciplinary Lens on Innovating in Emerging Markets
2 Rural Household Financial Behaviour on Irregular Income Streams at the Base of the Pyramid

Work in Progress: An Introduction to the Informal Economy’s Commercial Environment


This topic is being shared in the form of a collection of essays on the following themes, each becoming hyperlinked on completion. Do bookmark this page for regular updates.


Introduction to Background and Context, some caveats apply
Fundamental Elements of Informal Sector Commercial Activity
Rural household financial management as a foundation
Linkages and Networks span Urban and Rural Markets
Underlying Principles for Financial and Social Contracts in the Informal Economy
Informal Sector Business Development Strategies and Objectives
Why A Blanket Approach to Formalization is not a Panacea
Disaggregating and Segmenting the Informal Sectors
The Journey to Formalization Cannot be Leapfrogged

 


Appendix:
Creating Economic Value by Design (John Heskett, IJD 2009)
Financial Behaviour Patterns Observed Among Households in Rural Informal Economy (IDRC, 2009)
More or Less: The Fundamental Principle of Flexibility” Slides (Informal Economy Symposium, 2012)
A Comprehensive Analysis of the Literature on Informal Cross Border Trade in East Africa (TMEA, 2016)

Financial Behaviour Patterns Observed Among Households in Rural Informal Economy in Asia

This is the original working paper of the research conducted on rural household financial management, in developing country conditions, pioneering the use of methods from human centered design for discovery, during Nov 2008 to March 2009, aka the Prepaid Economy Project. It was peer reviewed by Brett Hudson Matthews, and I have incorporated his comments into the PDF.

This research study was carried out with the aid of a grant from the iBoP Asia Project (http://www.ibop-asia.net), a partnership between the Ateneo School of Government and Canada’s International Development Research Centre (www.idrc.ca)

The abstract:


The challenge faced by Bottom of the Pyramid (BoP) ventures has been the lack of knowledge about their intended target audience from the point of view of business development whereas decades of consumer research and insights are available for conventional markets. What little is known about the BoP’s consumer behaviour, purchasing patterns and decision making tends to assume that there are no primary differences between mainstream consumers and the BoP except for the amount of their income – pegged most often between $2 to $5 a day.

In practice, the great majority at the BoP manage on incomes earned from a variety of sources rather than a predictable salary from a regular job and have little or no access to conventional financial tools such as credit cards, bank accounts, loans, mortgages. This is one of the biggest differentiators in the challenge of value creation faced by BoP ventures, particularly among rural populations (over 60% of the global BoP population lives in rural areas).

Exploratory research was conducted in the field among rural Indian and rural Filipino populations in order to understand how those on irregular incomes managed their household expenses. Empirical data collected by observations, interviews and extended immersion led us to identify patterns of behaviour among the rural BoP in their management of income and expenditure, ‘cash flow’ and ‘working capital’ and the significance of social capital and community networks as financial tools. Practices documented include ‘conversion to goods’, ‘stored wealth’, ‘cashless transactions’, and reliance on multiple sources of income that mature over different times.

This paper will share our observations from the field; identify some challenges these behaviours create for business and also explore some opportunities for value creation by seeking to articulate the elements that BoP ventures must address if they are to do business profitably with the rural ‘poor’ based on their own existing patterns of financial habits and norms.


The Conclusion:

In sum, it can be concluded that the challenges for value creation can be quite different for BoP ventures interested in addressing the rural markets. From the observations made in the field, we can highlight three key implications for business development. These are:

  • Seasonality – with the exception of the salaried, everyone else in the sample pool was able to identify times of abundance and scarcity over the course of natural year in their earnings. Identification of a particular region or market’s local pattern of seasonality would benefit the design of payment schedules, timing of entry or new product and service launch, for example.
  • Relative lack of liquidity – The majority of the rural households observed tended to ‘store wealth’ in the form of goods, livestock or natural resources, relying on a variety of cashless transactions within the community for a number of needs. Conventional business development strategies need to be reformulated to take this into account as these patterns of behaviour may reflect the household’s purchasing power or income level inaccurately.
  • Increasing the customer’s span of control over the timing, frequency and amount of cash required – Since the availability and amount of cash cannot be predicted on calendar time, this implication is best reflected by the success of the prepaid mobile phone subscriptions in these same markets. When some cash is available, it can be used to purchase airtime minutes for text or voice calls, when there is no money, the phone can still receive incoming calls. Models which impose an external schedule of periodicity, frequency and amount of cash required may not always be successful in matching the volatile cash flow particular to each household’s sources of income.

On the relationship between economics and design

This is an extract from the Introduction to John Heskett’s seminal paper, “Creating Economic Value by Design


The work of Herbert Simon, Nobel Laureate in Economics in 1978, is a rare exception of design being considered as a factor in economic theory. His starting point was acknowledging that the world we inhabit is increasingly artificial, created by human beings. For Simon (1981), design was not restricted to making material artefacts, but was a fundamental professional competence extending to policy-making and practices of many kinds and on many levels:

Everyone designs who devises courses of action aimed at changing existing situations into preferred ones. The intellectual activity that produces material artifacts is no different fundamentally from the one that prescribes remedies for a sick patient or the one that devises a new sales plan for a company or a social welfare policy for a state. Design, so construed, is the core of all professional training; it is the principal mark that distinguishes the professions from the sciences. (p.129)

Implicit in Simon’s reasoning is an emphasis on design as a thought-process underpinning all kinds of professional activities; yet the varied skills through which design is manifested are not discussed. He did indicate, however, why design is so rarely considered in economic theory. Economics, he stated, works on three levels, those of the individual; the market; and the entire economy (p. 31). The centre of interest in traditional economics, however, is markets and not individuals or businesses (p. 37). A serious problem is thereby raised at the outset: two important considerations relating to design—how goods and services are developed for the market place and how they are used—receive scant attention.


I was lucky enough to both work with him as a colleague as well as attend his classes in Design Policy and Design Planning & Market Forces as his student. I’ve been diving into my notes and his lectures of late as I wrestle with my theorizing on what I’ve been calling Biashara Economics, whose earliest avatar was the prepaid economy project of 2008/9.

A theoretical approach to Value for Money in aid & development: Optimizing research and design for ‘best fit’ iterative programming

Last year, I briefly touched upon this concept as an approach to cost effective programme design that was still flexible enough to provide room for iteration for best fit.

Today, I want to explore the concept further to evaluate its potential as a framework for incorporating the concurrent shift in development thinking towards Value for Money (DFID) principles, in addition to designing for best fit.

Value for Money as a Process Driver

Value for Money (VfM) is not the same as traditional monitoring and evaluation which seeks to measure impact of a project, and occurs usually after the fact. In many large scale projects, this may not happen until years after inception.

Instead, VfM is defined by the UK’s National Audit Office as ‘the optimal use of resources to achieve intended outcomes’, which in turn, the DFID document contextualizes for their aid programming investments as “We maximise the impact of each pound spent to improve poor people’s lives.”

If this applies to all investments in aid related programme development, then it follows that it must also apply to earliest stage of discovery and exploration that leads to problem framing i.e. the necessary groundwork to write a comprehensive and inclusive design brief for future programming.

Thus, the conceptual approach that I introduced at the beginning of this post, which is taken from the discipline of Operations Research, and seeks to solve the challenge framed so – what is the optimal solution that minimizes resources (inputs) for maximum outputs (value creation) – fits as a potential framework that can theoretically apply from the earliest stages of implementing development strategy, even before inception of any related projects, including early stage research and feasibility studies. After all, the function of Linear Programming is optimization.

Note: Here I will only consider the theoretical aspects from the point of view of programme design research and development, and not the mathematics. That will have to wait until I have gathered enough data for validation.

Design Research for Programme Design Purposes

In this context, the primary function of such an exploratory project is to identify the opportunity spaces for interventions that would together form an integrated programme designed to effect some sort of positive change in the ecosystem within which it would be implemented, and offer a wider (more inclusive) range of cross-cutting benefits.

In the language of product development, we are attempting to build a working prototype. We cannot build and test first prototypes to see if they work, directly, because our room for failure is much less spacious for experimenting with aid related programming, ethically speaking. This is not a laboratory environment but the real world with enough challenges and adversity already existent.

Programmes are not the same as consumer products, nor are they meant to be designed and tested in isolation before being launched for pilot testing in the market. Their very nature is such that innocent people are involved from the start, often with a history of skepticism regarding any number of well meant donor funded projects aimed at improving their lives. This changes the stringency of the early stage requirements for design planning.

At the same time, the nature of the task is such that no first prototype can be expected to be the final design. So, from the very beginning, what we must do is set the objective of the outcome as a Minimal Working Prototype (MWP) that meets all the criteria for an optimal solution, and NOT a Minimal Viable Product (which may or may not work wholly as intended until tested in the field for iteration.)

That is, the first implementation of the iterative programme design must fall within the bounds of the solution space – that which is represented by the shaded area in the diagram above.

The Optimal Solution is the Iterative Programme Design

Thus, what we must be able to do at the end of the discovery phase of research necessary to write the design brief, is tightly constrain the boundary conditions for the solution space within which the MWP can then be iterated. This minimizes the risk of utter failure, and maximizes the chances of discovering the best fit, and all of this within the definitions of Value for Money and it’s guidelines.

There are numerous ways to set the goals for optimization – one can minimize resources and maximize constraints, or minimize risk and maximize return on resources invested. These will guide our testing of this framework in field conditions to validate the robustness of this theoretical approach.

In this way, we can constrain our efforts to discover best fit within predefined limits of tolerance, while retaining the flexibility to adapt to changing real world circumstances and progressive transformation of operating conditions.

Best fit, then, becomes less a matter of experimentation without boundary conditions and more a discovery of which of the many right answers – if we take the entire shaded area as containing “right answers” to the problem at hand – help us meet the goals of intervention in the complex adaptive system in an optimal manner.

The point to note from this conceptual framework is that there is never any ONE right answer, so much as the answer will be that which we discover to the question “What is needed right now for us to meet our goals, given these changes since we last looked at the system?”

It is this aspect that loads the burden of a successful outcome on the front end of the entire research and development process, given that framing the problem correctly at the outset is what drives the research planning and steers the discovery process in the direction of relevant criteria, conditions, constraints, and user needs that will not only form the bounds of our solution space, but also act as waymarkers for monitoring change and evaluating its progression.

Systemic design thinking and complex adaptive systems

Going back to first principles has been a refreshing exercise. Even as our work has taken us into some wholly new places, there’s comfort in knowing that others have thought deeply about the concepts, though not in our context. I’m a firm believer in not re-inventing the wheel. Consider it a working prototype to be tested in a new environment, rather like I’ve been doing with Vijay Kumar’s innovation methods.

Here’s the context of the thinking I’d been doing on iterative programming for complex, adaptive systems – that is, taking on the wicked problem space of international development where the operating environment is rather greatly different from the predictable regularity of the developed world:

People-centered systems design thinking for complexity
Pivoting from “best practice” to “best fit”: An interdisciplinary perspective (Intro)
An Interdisciplinary Approach to “Best Fit” for International Development: Process and Tools (Part 1)
Enabling development’s paradigm shift from ‘best practice’ to ‘best fit’(Part 2)

Thus, it was with pleasure that I dived into exploring Peter Jones’ publications on social transformation. Two, especially, caught my attention.
The first lays the groundwork in the work of bringing together the two disciplines – systems thinking and design.  From the abstract of his Systemic Design Principles for Complex Social Systems:

Systems theory and design thinking both share a common orientation to the desired outcomes of complex problems, which is to effect highly-leveraged, well-reasoned, and preferred changes in situations of concern.Systems thinking (resulting from its theoretical bias) promotes the understanding of complex problem situations independently of solutions, and demonstrates an analytical bias. Design disciplines demonstrate an action-oriented or generative bias toward creative solutions, but design often ignores deep understanding as irrelevant to future-oriented change.While many practitioners believe there to be compatibility between design and systems theory,the literature shows very few examples of their resolution in theoretical explanation or first principles. This work presents a reasoned attempt to reconcile the shared essential principles common to both fundamental systems theories and design theories, based on meta-analyses and a synthesis of shared principles. An argument developed on current and historical scholarly perspectives is illuminated by relevant complex system cases demonstrating the shared principles. While primarily oriented to complex social systems, the shared systemic design principles apply to all complex design outcomes, product and service systems, information systems, and social organizational systems.

And once I noted there was a bit of an overlap between the references I’d drawn on for my initial exploration of design planning as the discipline from which to source methods to address the challenge of complex, adaptive systems as currently explored in the development space, I was relieved to see that I was on the right path for our own theoretical evolution.

This paper is a great starting point for our methods development for the context of the informal sector in the East Africa, particularly outside the urban centers. And, a second paper by Jones – Design Research Methods in Systemic Design validates many of our assumptions while working with only the methods and systems thinking from one school of thought – the Institute of Design’s philosophy and approach.

In future blogposts, I will attempt to triangulate the thinking from all of these disciplines – design planning, human centered design, systems thinking, and international development. There’s a paper I’m hoping to write by the Autumn, if all goes well and the abstract accepted for a conference at the end of the year.