Posts Tagged ‘design for complex adaptive systems’

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.

How the African movable assets bill can unleash innovation opportunities for the rural economy

Somewhere in Kenya, 4th June 2012 (Photo: Niti Bhan)

As Kenya joins Zambia and Zimbabwe in ratifying a Movable Property Security Rights Act, there’s a sense that the floodgates to innovation in access to finance might be taking place in rural Africa, south of the Sahara and north of South Africa.

Kenya’s law also goes beyond the cows and goats and allows a borrower to collateralise future receivables arising from contractual relationships.

How it ends up being implemented will set the stage for the next big disruption in financial inclusion. In the meantime, let’s take a closer look at the opportunity space for innovation in the informal and rural economy that dominates these operating environments.

 

1. A whole new bank, designed to meet the needs of rural Africa

Last night, a tweet by Charles Onyango-Obbo struck me forcibly, and reminded me of our Banking the Unbanked proposal crafted for ICICI back in January of 2007.

The very fact that contemporary thoughtleaders in the Kenyan banking industry are unable to take the concept of livestock as collateral for loans seriously, taken together with the deeply embedded assumptions of the formal economy’s financial structure leaves the door wide open to disruption.

It would not be too difficult to conceptualize a rural, co-operative bank custom designed for the local operating environment. In Kenya, where the mobile platform provides clear evidence of the viability, feasibility, and desirability of innovative financial tools and services that work for irregular income streams and provide the flexibility, reciprocity, and negotiability inherent in the cooperative local economies, such a bank could change the social and economic development landscape overnight.

In fact, one could conceivably foresee this “bank for rural Africa” scaling far beyond Kenya’s borders.

 

2. Insurance sector must respond to banking disruption

The domino effect of disruption in the banking sector should kickstart the stagnant insurance industry that has been ineffectually attempting to scale outside of the formal economy’s neatly defined boundaries. Bankers willing to take livestock as collateral for loans will therefore require insurance on their movable asset as a surety against the risk of disease, or drought.

Current products tend to emerge from the international aid industry, seeking to insure smallholder farmers against the shock of losing their livestock to climate related disasters such as prolonged drought, or an epidemic of illness. There is a dearth of relevant and appropriately designed insurance products from the private sector targeting the needs of the rural economy. For all the talk of African urbanization, even the most optimistic projections show that East Africa’s rural population will continue to dominate.

Thus, this an opportunity ripe for the plucking, given the right mix of product, pricing, and promotional messaging.

 

3. Disrupting assumptions of Poverty and Purchasing Power

Whether it is Kenya’s significant non profit sector or the nascent consumer oriented markets, the redrawn lines defining assets, collateral, and the floodgates of access to finance will require a complete overhaul in the way the population is segmented and measured.

Once these hundreds of movable assets have been valued, insured, and registered officially, even the most reluctant banker must now count the pastoralist among his wealthiest local clientele, able to draw a line of credit against his true wealth to the tune of thousands of dollars without feeling the pinch.

 

4. Triggering a rural investment and consumption boom

From mabati for a new roof and simti for the backyard wall, to the latest model smartphone or pickup truck, the concurrent boom in investments and consumption provides an ample playing ground for new products and services tailored for the contextual needs upcountry. Finally, Farmer Joe can install that solar powered irrigation pump for his orange groves in time to reap the next big harvest. And Mama Mercy can think of building up a nest egg of investments faster from the income provided by her farmyard animals.

Kagio Produce Market, Kenya, April 2013 (photo: Niti Bhan)

This might turn out to mean upgrading to a breed of high yield milch cows or being able to provide them with better quality feeds and medicines, but the financial bridge that a well designed strategy leveraging this movable assets bill and it’s timely implementation could mean the difference between the brass ring or treading water.

 

5. Trade and Commerce will open new markets

Given that the Kenyan Movable Property Security Rights Act 2017 goes beyond livestock to include other stores of wealth and value creation, there will be an undeniable impact on regional and cross border trade. No trader will give up the opportunity to leverage their existing inventory if it qualifies for additional credit that can be plowed back into the business.

On the road to Bungoma, Western Kenya, February 2016 (Photo: Niti Bhan)

Trader’s mindset and the documented biashara growth strategies already in evidence point clearly to the productive economic use of this access to finance rather than passive consumption alone. As their business grows, they will require a whole slew of tools and services tailored to their needs. This could be as simple as a basic book keeping app or as complex as customized commodity (assets, livestock, non perishable foodstuffs, grains and cereals) exchange platforms that integrate the disruptive new services percolating through the entire ecosystem.

 

In conclusion

These few steps outlined above are only the beginning of laying the foundation for disrupting the current social and economic development trajectory of small town and rural Kenya. I see immense potential for both direct to consumer as well as business to business segments for forward looking organizations seeking a foothold in the burgeoning East African markets.

We, at Emerging Futures Lab, would be pleased to offer you customized white papers on the opportunities for new products, services, and even business models, based on this emerging financial environment recently signed into law by President Kenyatta. Contact us for an exploratory conversation on the scope and scale of your particular industry’s needs. Our experienced team can help you maximize these opportunities from concept design and prototyping all the way through to path to market strategies.

India: Dragging the reluctant elephant into a digital, cashless future

IMG_6947

Final processing for India’s digital identity platform Aadhaar, New Delhi on 3 March 2017 (Photo Credit: Niti Bhan)

My recent immersion in Delhi a mere four months after demonetization (or, notebandi as it’s locally known) was a bit of a letdown. Oh sure, there were numerous, visible changes in the 2 years since my last trip – mostly very clear indicators of India’s socio-economic development – but none of the sense of chaos that I was expecting, having relied primarily on third party news sources, that too, in English, in the weeks leading up to my departure.

The headlines would have it that people were dropping like flies on the streets. A grand total of 187* people died visibly due to notebandi, or so I heard. The two most common responses were either sympathy – people should not have had to die for something like this and it was a sad thing to happen; or pragmatism – “people die everyday, who knows why, maybe his time had come and he was standing in line.”

The overall atmosphere was one of energy – there’s less of a sense of lackadaisical chaos that used to characterise the neighbourhood market and it’s sleepy vendors waiting for the evening strollers. There’s a sense of purpose in the hustle, as though there was money to be made. Digital money.

IMG_6950The combination of a digital identity platform and the disruption of demonetization could indeed be said to describe ideal conditions for triggering cashless India. Cards are accepted far more easily than before. “Paytm” – a local payments app – is visible everywhere, from on demand cars (Ola, Uber, Meru, etc), small kiosks, through to shiny upmarket shops. As a taxi driver told me with a smirk, everyone’s using Paytm now, even the beggars.

Rural India is said to have suffered far more, according to the reports I’d read prior to my trip. This might be unevenly distributed according to geography and growing season – a factoryworker returning from his home village in Bihar said he’d attended a wedding with hundreds of people and surely someone would have had a sob story to share.

Instead, he’d heard it was the intermediaries in the farm to fork supply chain who purchase from myriads of small farms in order to aggregate in bulk prior to selling onwards towards the cities who’d been hit harder by the sudden lack of liquidity. They were caught in the middle of the cash based chain of transactions and had to carry the burden of wastage if they weren’t able to move produce fast enough. Anecdotes included them distributing potatoes freely to farmers to use as seed for the next harvest, and tomato prices crashing.

Articles in the news state that the economy was hit harder than people would admit to but none, as yet, have complimented the common man for his endurance under conditions of scarcity and hardship, nor praised the hardworking women who kept their families fed through their social networks of give and take.

All the papers – domestic and foreign – only go on about India’s GDP, the economy, the vast business sectors, and the politics. If at all the average Indian is mentioned it is through the lens of pity – “oh, the poor farmer is suffering” or some such heartrending sob story from the “informal sector” – there’s never any mention of their ingenuity in keeping things going without cash; or the way it was all held together under conditions of adversity and scarcity.

IMG_7319That, perhaps was my biggest takeaway from my open ended conversations with a wide range of people from different socio-economic strata, professions, backgrounds, and age groups.

Their palpable pride in themselves in having come through upheaval relatively unscathed, or having the wherewithal to manage.  All the rest of it, the Aadhaar digital ID, the use of technology for transparency and accountability, the mobile platform and its ubiquity, all of these and more, I believe, will sort themselves out in time.

I’m minded to end this with a quote from Rositta J. Valiyamattam writing, ironically, on the topic of Indian fiction (page xii):

“Their novels testify to the amazing resilience of the masses in a nation wherein the commoner is rendered helpless by an often corrupt mighty polity. What stands out is the assertion of the individual will over uncontrolled powers and unfavourable circumstances. They salute the heroic struggles of ordinary Indians in times of extraordinary transformation.”

 

 

*Word of mouth number, every report has a different total, so whatever. All photographs not captioned were taken in Delhi by Niti Bhan during March 2017.

Unforeseen outcomes of India’s demonetization shine light on the value of our design philosophy

Informal Economy, Market Analysis and SegmentationLatest news on India’s demonetization informs us how the rural economy is bearing the brunt of this initiative.

The action was intended to target wealthy tax evaders and end India’s “shadow economy”, but it has also exposed the dependency of poor farmers and small businesses on informal credit systems in a country where half the population has no access to formal banking.

The details shed light on the consequences of implementing interventions without a holistic understanding of the landscape of the operating environment. In this case, it is the rural, informal cash intensive economy.

…the breakdown in the informal credit sector points to a government that has failed to grasp how the cash economy impacts ordinary Indians.

“It is this lack of understanding and not appreciating the importance of the cash economy in India on the part of the government that has landed the country in such an unwarranted situation today,” said Sunil Kumar Sinha, an economist and director of public finance at India Ratings.

This lack of understanding the dynamics of the cash economy (I don’t mind calling it the prepaid economy, in this context) and it’s role in the rural Indian value web has led to unforeseen challenges at a time when farmers are planting seeds for the next harvest, hampering the flow of farm inputs as traditional lines of credit face the obstacle of an artificial shortage of liquidity.

I want to use this clear example of systems design failure to explain my philosophy and approach to our work in the informal economies of the developing world. I’ve written often enough about what we do, now I have an opportunity to explain why we do it, and why it’s important.

Read On…

Part 2: Enabling development’s paradigm shift from ‘best practice’ to ‘best fit’

Workshop I_end user in sight during evaluation

Programming in International Development jumps directly into the Design phase of the projects. This is the root of the challenge they face now as they seek to change the paradigm away from ‘best practice’ to putting the end users at the center of their strategies, with ‘best fit’. I identified this problem in the Autumn of 2012 whilst delving into the internal project development processes with civil servants at the Netherlands Ministries of Foreign Affairs and Economy during a customized internal workshop.

It should be mentioned at this point that while Robert Chambers has extensively promoted the participatory approach, there were issues in the process that were explored during our work, and can be covered in a separate article. Participatory design is not synonymous with user centered design, and neither approach includes a robust methodology for assessing the landscape of the operating environment in conjuction with solution development for ‘best fit’, particularly in the developing world context.

Before we can jump into the design of a project or programme – whether with or without the participation of the end users/beneficiaries, we need a structured approach to grasping the context of the challenge. Without a map of the landscape of the ‘wicked problem’, one cannot navigate the complexity (1). This so called landscape map of the ecosystem in which the development project will be introduced, should not only include understanding the people and their operating environment, but identify and frame the touchpoints for the design of ‘best fit’ interventions.

That is, there’s a need for framing the problem in a manner such that the outcome narrows down the solution space i.e. delineating the boundaries for ‘best fit’ prior to the inception of the design process. In the field of design, these boundary conditions can be known as design criteria and constraints, along with filters for assessing optimal solutions at the conceptual stage from the plurality available.

UCSD

These first three steps in the process BEFORE jumping into design are collectively known as Design Planning, and their outcome minimizes the wasteful experimentation of ‘suits to try’ for ‘best fit’ as the design phase begins with the ‘measurements’ necessary for a ‘bespoke suit’ tailored to fit, to stretch the analogy. Bespoke tailors do not expect their carefully measured suit to fit their client on the first try, and usually one returns two or three times for the final fitting. Similarly, customized programming may require tweaks and can be considered a working prototype (a pilot program, for instance, prior to scaling) where the kinks are worked out together with the participants.

This will require work upfront at the start of the multi-year programmes. There are no silver bullets to addressing complexity.

 

(1) Part 1: An Interdisciplinary Approach to “Best Fit” for International Development: Process and Tools

An Interdisciplinary Approach to “Best Fit” for International Development: Process and Tools

This post follows on from the previous one which introduced the concept of a ‘best fit’ approach to the ‘wicked problems’ in development. There I posited that consumer facing private enterprises looking at the African market would benefit from considering Development’s thought-leadership in this regard, given their experience in the challenging operating environments of the developing world.

I also noted that while the ‘best fit’ concept was a welcome paradigm shift for addressing complexity, the siloed thinking common to academia left far too many gaps in their approach and process.

In this post, I will begin to explore the seminal thinking (1) at the intersection of business and design  – also known as innovation planning – for methods and tools to address complexity in a holistic way, all the while keeping in mind that we need to ensure the end users (the rural poor, the people, or the beneficiaries) are at the center of the strategy (Chambers 1988).

Where is the gap?

A careful review of the working paper provides evidence that the challenge faced by international development practitioners when considering a ‘best fit’ approach to programme design is the lack of a robust methodology proven to take one from A to B. Here, we can think of point A as their original ‘best practice’ paradigm, and the attendant methods learnt through study and experience. Point B would be a validated process, with an accompanying toolkit, for applying the ‘best fit’ approach. One can confidently say a How To Handbook is missing, and the siloed thinking creates the barrier to developing one within the field.

What is the challenge?

While Ramalingam et al (2014) recognize the need for tools and processes from other disciplines more familiar with complex systems, one can gather a sense that they don’t know where to start. One cannot simply throw various methods and tools at problems, like spaghetti on the wall, to see which sticks. Even in mathematics, formulae are carefully selected based on the variables available, and the answer to be calculated. One doesn’t blindly throw data at all the available equations hoping to discover the one that fits the problem statement.

This challenge is better articulated in Matt Andrew’s blogpost which posits that the ‘best fit’ approach to policy and programme design is akin to choosing a new suit of clothes. The implication is one must try many different suits in order to discover the ‘best fit’. This is wasteful and time consuming.

What can people centred innovation planning offer?

First, the fundamental premise of human centered design firmly focuses the outcome of the processes on the context and needs of the end users. This orientation offers design a headstart in considering Robert Chambers’ emphasis on putting people first. The entire discipline is eminently suited to take on this challenge for international development, in an empathetic and holistic manner.

Second, addressing complex systems designed for human interaction is another key facet of the field of design, particularly the specializations that deal with computer human interaction of all types. This means there is a vast body of work created over decades meant to consider exactly this point.

Third, rather than wasting time and money on “trying on different suits” for ‘best fit’, there are proven approaches developed to minimize the failure rate of innovations introduced in the consumer market, and maximize the adoption rate by the end users. In particular, the areas of design thinking, design planning and design innovation have years of expertise in considering exactly this.

Finally, for development policies, and programmes to provide value for money, and sustainable, beneficial outcomes for their target audience, they must be designed such that they are viable, feasible, and desirable. This requires a holistic approach to solution development integrating elements from more than just one discipline, whether its design or development.

The philosophy of the methodology required to leap from “We must pivot to ‘best fit'” to bridging the gap of knowledge of “How to map the wicked problem and assess the context for programming” will be covered in the next article.

 

(1)

Strategy as a Wicked Problem by John Camillus (HBR 2008)
Living with Complexity by Don Norman (MIT Press 2010) Chapter 1 PDF
A Short Grandiose Theory of Design by Jay Doblin (STA Design Journal 1987)
Wicked Problems in Design Thinking by Richard Buchanan (Design Issues, 1992)

Pivoting from “best practice” to “best fit”: An interdisciplinary perspective

There has been an evolution in thinking about development practice. Buckley and Ward (2015) found a broad consensus for a shift from a ‘best-practice paradigm’ (Chambers 2011) to one of ‘best fit’ — that is, development interventions that are ‘optimally adapted’ to the socioeconomic, political and ecological context at any given moment (Ramalingam et al. 2014: 3).

While the private sector’s approach to consumer marketing and product innovation offers much to improve the success rates of government policy and development programming, there are lessons from development’s thought leadership that offer global brands a strategic advantage when considering the frontier markets on the African continent.

One of these is the pivot away from the ‘best practice paradigm’ – Robert Chambers anticipated the contemporary concept of design thinking in his lifetime’s body of work – to design for ‘best fit‘, an approach to crafting solutions to ‘wicked problems’ embraced recently by the UK’s DFID. Indeed, the UNECA’s recently released Transformative Industrial Policy for Africa explicitly mentions the need for industrial policy designed for ‘best fit’.

Corporate strategy consulting tends to rely on the ‘best practice paradigm’, and this is demonstrated in the slew of analysis and reports by large firms, and boutiques. While the African continent’s markets are still considered nascent, this approach may pass scrutiny, but as the South Africans are discovering to their cost, their own legacy of ‘best practices’ are not always fit for purpose further north of the SADC.

What can we take away from the field of development research?

Ramalingam et al’s abstract for their working paper “From best practice to best fit: understanding and navigating wicked problems in international development” starts with,

The methods of complex systems research are increasingly being used and valued by international development organisations. These approaches enable a shift away from existing tools and business processes that reinforce a focus on static, simple and linear problems. The evidence is that these methods can help development partners better navigate the complex, dynamic realities they face on a day-to-day basis.

However, scanning their references shows gaps that emerge from siloed thinking natural to narrowly focused academic research. Businesses of all stripes daily navigate complex, dynamic realities with greater vulnerability.  An interdisciplinary perspective, as espoused by Aalto University, would thus encourage the consideration of adding a soupçon of Business and Design, to the Engineering, prior to synthesizing the key elements of ‘best fit’ for new market entry strategy, viz.,

Strategy as a Wicked Problem by John Camillus (HBR 2008)
Living with Complexity by Don Norman (MIT Press 2010) Chapter 1 PDF
A Short Grandiose Theory of Design by Jay Doblin (STA Design Journal 1987)
Wicked Problems in Design Thinking by Richard Buchanan (Design Issues, 1992)

As we can see, business, and then design, both have given much thought to this space now being touched upon by development researchers and theorists. This will be the topic of the next post, what lessons my teachers might have to share with the practice of development. For now, we’ll consider the value inherent in their explorations of the subject matter.

Development’s value to the practice of business strategy and innovation (design) planning lies in its deep and decades long experience in developing countries. As Ha-Joon Chang et al state:

Insofar as most African economies look rather similar to each other economically, it is not because they are in the same continent but because all economies – in whichever continent they are – at low levels of development look rather similar to each other, due to the lack of specialisation and diversification in the production structure, which then leads to high degrees of homogeneity in occupational structures, social organisations, and lifestyles.

What the Development industry brings to the table is experience in operating in the challenging operating environments of the erstwhile third world, especially among the lower income segments of the population, and outside of the population dense conurbations. Only a handful of consumer facing global brands have anywhere near this type of experience, and that too from the profit maximization point of view. Emerging market consumer firms, hyper local startups, and others in the distribution chain with such ground level expertise in traditional markets tend to keep their strategies close to their chests and their trusted relationship networks even closer.

Till now, ‘best practice’ as conventionally approached by private sector and social enterprises keen on addressing these untapped opportunities has been to partner logically with local NGOs for local expertise. But the last mile of customer experience has always struggled to translate itself from thinking of satisfying demanding consumers to resonating with established mindsets of passive beneficiaries. This has had its own problems.

So, what does ‘best fit’ mean, then, in this context?

Matt Andrews, at the Harvard Kennedy School, thinks of it as choosing a new suit of clothes. However, this description I’ll hold on to for the next post as it contains the problem statement that our interdisciplinary methods are designed to address.

Ramalingam et al’s original version with authors’ formatting:

‘Best fit’, a concept stemming from governance efforts, describes aid programmes that are optimally adapted to the political, social and economic context. Such programmes can take advantage of a plurality of possible solutions, which can be deployed flexibly. They often work at multiple levels simultaneously – from community to national and even global policy levels – in order to facilitate and bring about change.

Businesses contemplating the African consumer market would do well to take such a holistic approach to their market entry strategies, and the design of products, services, and business models. Adapting to the complexity and challenges inherent in the developing world’s operating environment for ‘best fit’ becomes even more critical for successfully bridging the disparities of context.

This shift in orientation requires questioning the dominant logic of existing corporate best practices, and, instead, a willingness to explore, discover, and experiment with crafting wholly new approaches to sustainable business practice, on multiple levels simultaneously. They have the advantage of proven and robust methods and tools from the disciplines of design and business, requiring only a little tweaking of the lenses. Understanding customer needs should already be in their DNA.

 

 

 

 

NB: Interdisciplinarity involves the combining of two or more academic disciplines into one activity (e.g., a research project). It is about creating something new by crossing boundaries, and thinking across them.