Humans destroy about $7.3 trillion in natural capital, that is 13 percent of our GDP, according to Trucost. The oil industry benefits from half a trillion dollars in subsidies and reaps economic gains comparable to the $2.5 trillion Afghanistan war, however the environmental and social damage goes largely unaddressed. “We’ve created perverse economic growth at the cost of natural and social capital,” said Geert-Jan Van der Zanden, former Sasin Visiting Professor, now Sustainability Advisor at Ver der Zanden. Together with Rozanne Henzen, former Researcher & Case Writer at Sasin, now External PhD Candidate at Vrije Universiteit Amsterdam (VU Amsterdam), they have co-written a book ‘Transforming our Critical Systems– How Can We Achieve the Systemic Change the World Needs.’ Building on research by American environmental scientist Donella Meadows, Van der Zanden and Henzen proposed a “WHAT-HOW-WHY” framework, a radical reinvention of critical systems. “Systemic change requires leveraging WHAT, HOW, and WHY interventions in harmony. Progress hinges on building collaborative capacity, mindset alignment, and shared vision across all intuitional boundaries,” said Henzen. She introduced the concept of systems at Sasin Research Seminar by citing American environmental scientist and educator, Donella Meadows, who defined systems as “a set of interconnected components that together produce a pattern of behavior over time.” Meadows stated that systems are made up of interconnected components that influence one another. One of her key insights is that fundamental changes often require shifts in the underlying beliefs and values that drive a system. “This means that to change a system effectively, one must also address the mental models and assumptions of the people within it,” Henzen added.  

The WHAT-HOW-WHY interventions:

• WHAT are changing conditions: Adjusting these can improve outcomes, but real transformation requires alignment with mindsets and objectives: e.g. incentives, constraints, and system parameters.
• HOW are dynamics – Engaging stakeholder in redesigning dynamics has more leverage for systemic change: e.g. governing rules, information flows, and power distributions
• WHY- are intent and purpose. Transforming these has immense potential for systemic change but also meets the most resistance; e.g. mindsets, values and objectives underlying the system’s design. For example, shifting from taxing labor to taxing material resources, which can increase employment.

Despite good intentions, interventions lack transformative focus. A literature review by Dorninger et al. (2020) found that 80 percent of interventions in food and energy systems are not explicitly transformative or systemic in nature. Henzen identified some key learnings from their analysis of critical transformation:

1. WHAT interventions without alignment to WHY often backfire or enable greenwashing. One example is pushing ideas from another culture that doesn’t fit in with the local culture, resulting in failure.
2. Misalignment between subsystems hinders systematic change. An example is when institutions create law departments with the same values but they are not aligned
3. Well-intended silver bullet solutions risk unintended consequences. Achieving WHY interventions requires investing in collaborative processes and depolarizing dialogue to build shared purposes.
4. Old mindsets cannot produce new systems. Leading transformation journey requires a need in addressing resistance, and creating an organization with shared values

“Risk management perspective cannot drive the sustainable transformation needed, but the world is still looking at the climate crisis with a risk management perspective; we need a new paradigm of looking at things,” said Henzen. The book also outlines how organizations/individuals can deliberately change systems:

1. Enabling policy and regulation: Governments investing in specific industries
2. Enable finance: Upfront investments in technologies and transition finance
3. Enabling technology: Information sharing to get more people engaged in the systems and more people contributing in moving a system.
4. Empowering education and empowered citizens: Making sure that people are aware and educated so that they can move systems.

Van der Zanden emphasized the role of transformational leaders in driving systemic change. Essential qualities include:

• Contextual mindfulness: Curiousness as individual leaders, understanding the world around you, aware of your own bias, ability to connect different data points
• Systems range: Leaders foresee the bigger picture within a system
• Future consciousness: A long-term, intergenerational perspective on leadership.
• Radical impact agility: Leaders need to pursue radical change, and focus on how to get through challenges along the way.
• Cross-collaborative competence: Building partnerships beyond traditional allies.
• Purpose: Connecting personal and business values to envision a sustainable world.

In essence, systemic change requires a balanced approach to WHAT, HOW, and WHY interventions, along with collaboration and alignment of mindsets across institutions.