Systems strategy

What is Systems Strategy?

The pandemic brought home that we can only address our systemic challenges by working together. One way we can do this is to better coordinate our work towards shared goals. We need to embed this way of working at the strategic level. This has not generally been how charities operate.

An organisation-centric approach to strategy may be necessary for the business of maintaining organisations, but it’s not generally the best way of achieving missions or changing the systems that create or maintain the challenges that many charities seek to solve.

No single organisation working alone can ever achieve its mission. No one homelessness charity can end homelessness, nor can one conservation charity protect a natural habitat from the complex range of forces threatening it.

How organisations develop their strategies is ripe for rethink. Our strategies should be informed by greater humility and honesty about our role, our limitations, and our interdependence with others in the system, and a focus on causes as well as symptoms.

Strategies are critical because they guide our plans and actions. When charities set strategy, they almost always do so with reference to their place in the external environment. But they rarely go the step further to bring others into their process at that early stage. Collaborative working more often happens within a specific project or programme, in a forum, or in response to a particular opportunity. It is not generally built into central strategic planning.

For charities and funders to achieve their missions, this needs to change. We all need to work with other organisations that are trying to change the same systems and develop our strategies together, rather than in isolation. In short, we need a systems strategy.

Systems strategy requires organisations to consider collaborative and coordinated working at a more fundamental level, embedding a systemic approach to core strategy.

Why we should adopt a systems strategy

New light on old needs: The pandemic shone fresh light on the depth of social inequalities and systemic failings. This renewed impetus provides an opportunity to develop new methodologies and strengthen our experience in systemic working.

Embedding post-pandemic collaboration: The pandemic forced organisations to adapt their strategies and collaborate with others to respond to the crisis. This meant moving faster to fill gaps in provision and working across siloes. For some, the experience revealed what the sector can achieve when working in this way and left an eagerness to make these temporary collaborations permanent.

Need to turn theory into practice: Some charities have long been aware of the need for more systemic and collective approaches but have struggled to move from a philosophical to a practical approach. These are new ways of working, which our current system – built, as it is, around a competition model – is not set up for. We therefore need to practice, to try a range of approaches, and learn together.

Why there’s an opportunity for change

The pandemic has encouraged funders to think about doing things differently. In our workshops and webinars, we have spoken with numerous funders who are considering a more collective approach to their work — either through funding groups of organisations with similar objectives or taking a place-based approach.

There is work to build on. Collaborations are nothing new, but systems strategy is about going one step further by adding systemic analysis to this and moving from programmatic to organisational collaboration. Some organisations have begun to take this approach, for example through Collective Impact and collective theories of change models, so there are lessons that can be built on and shared. At the same time, other organisations we spoke to would like to take this approach but do not know where to start. For these organisations, gathering knowledge and making it accessible would be helpful.

There is enthusiasm for change. In our participatory Rethink Rebuild workshops, participants voted overwhelmingly to take forward this work, as they believed it had significant potential to transform the sector.

What are the challenges to a systems strategy?

Systems strategy represents a big change in attitudes, culture, and practice. It requires us to shift from a competitor mindset, which has over time created division and distrust between organisations that in fact are often working towards the same thing.

Navigating this shift whilst still thriving in a funding system built on competition is extremely challenging. We are not arguing against competition per se, which can itself be healthy, driving innovation and quality. Rather, we believe competition can coexist with cooperation. To draw an Olympic comparison, teams of athletes both compete and cooperate with each other.

Different organisations will have different capacities and possibilities for this kind of joined-up approach to strategy. It is a journey that will take patience and courage, and organisations won’t be able to apply a step-by-step guide to achieving it overnight.

How a systems strategy can work

Systems strategy needs to work on a spectrum, as shown in this graphic, between individual and fully collective approaches.

At the ‘individual’ end, systems strategy can mean organisations ‘bringing the system into their strategy’ – perhaps through systems mapping or other analysis tools. At this end, it would be an internal process without direct input from external stakeholders.

The other end represents strategy that is set collectively, through a shared systems analysis process, between a group of organisations working together within a particular system towards an agreed set of shared objectives (for example, within a Collective Impact programme).

Other points on the spectrum represent varying degrees of collaboration in strategy-setting across organisations.

How this idea was developed

Our systems strategy idea is based on conversations, workshops and research with numerous charities and funders who have taken part in our Rethink Rebuild initiative. Here’s what we’ve learnt from this work.

How strategy is changing

We have identified the following ways in which strategy is being rethought:

Strategy that can adapt to uncertainty: The pandemic brought home the uncertainty inherent within charities’ operating environments and the importance of being alert to changes in those environments and community needs. It made many we heard from question the viability of setting 5-year strategic plans. Instead, some charities are now building processes with greater flexibility and responsiveness and instilling shorter strategy and planning cycles.

Strategy that decentralises decision-making and power: Being agile means improving and speeding up decision-making by devolving decisions to where knowledge is held. This presents an opportunity for longer-term power shifts towards more bottom-up decision-making. With decision-making power concentrated at the top, changes sensed at the frontline need to be passed all the way up and back down again before a change is made, which is not a particularly agile or responsive way of working.

Different approaches for different moments: The pandemic presented a conundrum to those trying to decentralise decision-making—many needed to pivot rapidly through top-down methods. This highlighted the importance of different kinds of decision-making for different circumstances, of knowing when to be agile, when to be adaptive, and what’s the difference. For example, centralised decision-making may be needed in a crisis, within which decentralised, or context-specific decisions, can then be made rapidly and with confidence. NPC explored adaptation and decentralisation in this blog: Being adaptive means sharing decision-making and power.

Strategy based on culture: A charity’s culture can undermine or reinforce its ability to implement its strategy. Some charities who adapted quickly to the pandemic cite their organisational culture as helping them to do this. Culture determines how an organisation does what it does, by setting the limits of what can happen. We explored the role of culture in strategy and what to do if they don’t align in this NPC Labs post.

Strategy based on a systems approach: Charities and community groups collaborated with others during the initial crisis stage of the pandemic to meet need. For many we heard from, this has cemented the benefits of working together and created an appetite for more permanent collaborative working. This means building in collaboration at the strategic level, not just the programmatic level where it usually sits.

Participants in our workshops told us that systems strategy was the area that they wanted us to develop further through our Rethink strategy programme, as they felt it had the biggest potential to have a transformative impact on organisations’ strategies and, from that, their activities.