Using leverage analysis for systemic strategy

Last updated Mar 7, 2023 | Originally published Jun 21, 2020

• Design
• Complexity
• Systemic Design
• Systemic Strategy
• Leverage

The map represents your current mental model of how this system works.

Leverage analysis examines the patterns of connection between phenomena (using algorithms adapted from social network analysis and graph theory) in order to present relative rankings of the phenomena of the system.

These rankings are entirely dependent on the structure of the map. All phenomena are equal, and all connections are equal. It is theoretically possible to encode the degrees to which one phenomena influences another in strict mathematical terms and formulae. In turn, we could represent the map as a systems dynamics model and use it to simulate the behaviour of the system. However, this is usually impractical, especially with imprecisely-understood or hard-to-quantify concepts (e.g., what exactly is the rate of change in wildlife due to climate change, or how exactly does culture influence conspicuous consumption?)

For this reason, using leverage analysis is a fuzzy procedure. It depends on your intuition. Fortunately, the goal of leverage analysis is not to inductively estimate how the system will change, nor deductively falsify hypotheses about the system. Instead, using leverage analysis for strategic planning involves abductive logic: the generation of creative, useful conclusions from a set of observations.

The goal here is to look at the model as it is rendered and to think creatively about strategic opportunities. Broadly, this means asking several questions:

• “What is missing?”
  • If some major gap in the logic of the model is missing, it means that the associated phenomena haven’t been adequately discussed in this process. Why is that? What might it mean for strategic planning?
• “What must be true?”
  • If this is how the system currently works, what must be true about how it should work?
• “Where do we work?”
  • Based on your organization’s strategic capabilities and advantages, what phenomena do you hold influence over? How do the effects you have on the system relate to these phenomena?
• “What do we aim to influence?”
  • In other words, what phenomena do you really want to change? In what way should they change?

These questions can be answered via the following process.

The systems map represents a kind of high-complexity theory of change: it describes how all of these phenomena interlock and respond to one another. We can therefore use leverage analysis to weave systemic theories of action:

1. Identify the goal phenomena. What do we want to influence? What’s the ultimate impact we aim to have?
2. Identify the opportunities within our control. What phenomena are we already influencing? What could we be influencing without developing a lot of new capacity?
3. “Walk” the paths on the map between your chosen opportunities, any possible high-leverage phenomena, and your goals. As you do:
   1. Identify any key strategic options along the path. What kinds of activities or programs could you engage in to influence these phenomena in the right way?
   2. Identify any feedback loops. How do these paths grow, shrink, or maintain balance over time?

The chains of phenomena (and any loops they connect with) that result from the three steps above are the seeds of systemic strategy. Use them to identify key intervention points for programming (e.g., how might you take advantage of high-leverage phenomena? how might you address bottlenecks?), signals for monitoring and evaluation, and to communicate your theory of change/theory of action to others.