Changing systems

Many startups aspire to go beyond creating impact for their end users and also focus on changing the entire system they are operating in, including healthcare, financial, political and education systems. Examples could include more equitable access to healthcare or changing the way financial resources move around a system. Any time a startup is trying to tilt a system to a more impactful equilibrium, this is an example of an indirect pathway to creating impact.

A helpful framework to think about systems change is FSG's inverted triangle framework. This highlights six systems conditions which determine the outcomes that the system generates. These conditions are often the targets of systems change interventions.

FSG's six systems conditions

Defining FSG's six systems change conditions

Here are some examples of startups trying to tilt systems against these systems conditions:

System Condition	Startup	Approach
Policies	Organise	Their platform gives workers the tools to organise and take collective action to change policies around working conditions
Practices	Applied	Recruitment software that de-biases the recruitment and selection process leading to a fairer way of hiring
Resource Flows	Circa5000	Making it easier for capital to flow to impactful business models
Relationships & Connections	Common Place	Making it easier for organisations to engage with their communities
Power Dynamics	Oyster	By enabling remote working through their distribute HR platform, Oyster is trying to shift the balance of power to those who are underserved by the current labour market
Mental Models	Wagestream	Change mental models often happens organically when startups demonstrate a radically better way of doing things. Wagestream is a good example of dispelling the idea that the only way to provide financial services to those on low incomes was through extortionate interest rates.

For any organisation trying to create systems change, it's worth going through a process to analyse the system in question and identify where the key levers for change are. Here is an example of the process that Oyster went through to map out and understand how they wanted to change the employment system to a more equitable status quo.

The process includes:

1. Mapping the system:

   1. What problem have we observed?

   2. What are the systems change conditions that drive it?

   3. What would a better version of this system look like?

   4. How might we close the gap?

2. Focussing on impact on people:

   1. What outcomes for people do we want the new system to look like?

   2. What are the key levers to achieving this?

   3. What might go wrong along the way?