Hello! I’m Steve Waddell. For over three decades I've been working on transformation, change that is referred to sometimes as a paradigm shift, radical change and large systems change. This type of change fundamentally reorients our society’s power structures, values, and the way we think about things. Therefore, it involves lots and lots of people and organizations and all of society. We’ve seen this type of change with marriage equality, overturning of political apartheid in South Africa, and with the movement from a mining approach to nature and energy, to a more harmonious, sustainable approach. Transformation socially is driven by a variety of factors. One is change in beliefs and ideas, such as occurred with ending slavery, which reflected new beliefs about human equality. Another transformation source is technological change, such as occurred with the displacement of agricultural societies with the rise of industrial technologies. Natural disasters can cause transformations such as with the Maya in Central America, who stressed their environment to overpopulation and overly intensive agriculture to the point that the natural systems collapsed, as did their civilization. Wars can produce transformative change, such as with the First World War, that resulted in displacement of dynastic empires in favor of forms of elected representation. A system’s [inaudible] is critical to understanding and taking action for this type of change. So let's look at some types of systems. All systems are defined around a purpose and comprise all the activities, people, and organizations and resources necessary to achieve that purpose. Narrowly speaking, the purpose of a corporation is to produce goods and services. You're probably familiar with this view of the corporation as the hub of a range of stakeholders. This can be referred to as the system that sustains and supports a company. It's a company focused perspective. For large systems change, we look at issue systems, all those stakeholders influencing an issue such as food, education, war, and peace, or, in this case, climate change. In this issue-focused system, the corporation is one of many stakeholders. Another type of system particularly important for corporations is production systems. This is typically presented as an input/output linear model depicting a set of activities. In this case, we have the food system as described by General Mills. But these production systems depend upon the relationships amongst a diverse group of stakeholders. Look at this example of the food system from this perspective: This is considered the food governance system for community in which production is only one of the activities. These perspectives on systems provide us with important insights on transformations, the role of business and ways to approach them. In a transformation process, there is one type of system that is particularly important. I call this the societal change system. It comprises all of the initiatives that aim to bring about transformation. Important from a corporation's perspective is to understand that these change systems are acting to bring about change in its behavior, to better align corporations with changing environments, physical, technological and social. I use this model of the double helix of the DNA to describe the societal change system’s relationship with production systems. To be healthy, there should be lots of relationships, even though their purposes are distinct. Here we have the example of the financial production system where government agencies are also important. This system map describes exchanges between these different organizations and stakeholders. They perform a range of production system functions, organizing, enforcing, measuring, learning, and producing to support consuming. In many countries, access to the financial system is possible for only the more wealthy, and the vast majority of the people are too poor to pay fees and access its benefits. To change this situation, the finance production system has to develop new competencies. Here is a map of some of the production organizations that were involved changing this situation in Kenya, where, by 2015, over 75 percent of Kenyans had access to the finance system, a 50 percent increase over just ten years earlier. The transformation was supported by technology of mobile banking. The production system was changed by integrating mobile banking providers, referred to here as MNOs, Mobile Network Organizations. The production system participated in the change process with varying degrees of acceptance but had distinct change system roles. You can see here that experimenting in the form of prototyping was a major activity. But to change the production system required a broad range of other entities, NGOs, governments, multi-stakeholder initiatives, foundations, advocacy groups, and others. For example, the Gates Foundation and the British Donor Agency DFID provided funding. The Alliance for Financial Inclusion, an NGO of central bankers, helped through organizing and advocacy and learning support. A key local multi-stakeholder organization, FSD, supported coordination and continual pressure for change. Corporations become deeply involved in these transformation processes, given their important role in society and the fact that these transformations require that the corporations change. In response to broad pressure for corporations to integrate triple bottom-line concerns, we're beginning to see not just new actions by corporations, but a new type of corporation emerge. In the United States, it's referred to as the B Corporation, which is an organizational innovation in response to transformational pressures which agrees to particularly rigorous standards of social and environmental performance, accountability, and transparency. In these change processes, there are typically four different strategies. These are defined by two spectrums: one from confrontation to collaboration, the other from creation to destruction. Joseph Schumpeter famously called capitalism creative destruction. And it's useful to remember that any transformation involves both creation and destruction. In this figure, one strategy is referred to as the lover strategy. It's where stakeholders get together to collaboratively set in motion and develop transformation processes. This can be seen with initiatives such as the UN Global Compact, Transparency International, and the Forest Stewardship Council. A second strategy is that of the entrepreneur, particularly social entrepreneurs. These are people who simply act according to new beliefs or using new technologies and set up new enterprises that actively challenge and displace old ones. Then there is the warrior strategy, which is most commonly associated with transformation. Greenpeace is a great example. This is when people organize to push for change. It might be as violent as civil war or as peaceful as demonstrations. The fourth transformation strategy I referred to as the missionary strategy. This concerns changing established organizations, such as a corporation, to fully integrated transformation. It requires enormous effort and conviction, hence the missionary name. The transformed entity might bear a little resemblance to its predecessor. Some think of Unilever as undertaking this strategy. Others might point to those changing from traditional to B corporations. I hope that this short look at transformation helps inform your understanding of an ability to work with this phenomenon. Wherever you are, it's a critical element in our ability to realize our highest aspirations and greatest potential. Thank you.
