Tag: Leverage

• Leverage theory

  Last updated Mar 7, 2023 | Originally published Feb 24, 2023

  We seek leverage to find the best ways of making change.

  Leverage points are places in systems where a little effort yields a big effect (Meadows, 1997). They are also ideas that help us grab on to strategic ways forward when we’re working in complexity (Klein & Wolf, 1998).

  Acting on leverage points may accelerate systemic change towards progress and reform, but acting on the wrong ones may instead accelerate systemic change towards regression and deformity. Well-designed leverage strategies may be catalyzing or even transformative, but poorly designed ones may merely be futile (figure 1).

  

  One way of finding leverage points is to think through your system with reference to Meadows’s (1997) 12 types:

  Table 1. Twelve types of leverage points, in order of increasing power (adapted from Meadows, 1997).

  Twelve types of leverage points, in order of increasing power	Example
  12. Constants, parameters, numbers (such as subsidies, taxes, standards)	Wages, interest rates
  11. The sizes of buffers and other stabilizing stocks, relative to their flows.	Current levels of debt/assets
  10. The structure of material stocks and flows (such as transport networks, population age structures)	An individual’s financial structure (e.g., fixed costs and incomes)
  9. The lengths of delays, relative to the rate of system change	How long it takes to find a higher-paying job
  8. The strength of negative feedback loops, relative to the impacts they are trying to correct against	Rising costs of living vs. fixed income
  7. The gain around driving positive feedback loops	Recession causing reducing spending
  6. The structure of information flows (who does and does not have access to what kinds of information)	How aware you are of impending recession/future rising costs
  5. The rules of the system (such as incentives, punishments, constraints)	Who suffers as a result of poorly-managed recessions
  4. The power to add, change, evolve, or self-organize system structure	Central banks, Ministries of Finance
  3. The goals of the system	GDP Growth
  2. The mindset or paradigm out of which the system—its goals, structure, rules, delays, parameters—arises	Growth above all
  1. The power to transcend paradigms	Sustainable development, flourishing

  Another approach, which may be complementary to the above, is to model the system as a causal loop diagram (e.g., Kim, 1992) and then to conduct leverage analysis (Murphy & Jones, 2020) on the model.

  An understanding of leverage in a system allows us to generate systemic strategies (Murphy & Jones, 2020). These strategies can also be adapted into Theories of Systemic Change (Murphy & Jones, 2020).

  # Background

  Donella Meadows (1997) popularized the idea of leverage in systemic change with her essay “Leverage Points: Places to Intervene in Complex Systems.” She proposed a typology of phenomena in a system, suggesting that acting on certain types of phenomena are higher-leverage than others.

  In an article published in the Contexts journal of systemic design, I challenged Meadows’s (1997) paradigm, proposing a few other possible ways of viewing leverage. My aim was to link the search for leverage directly to the design of powerful strategies for systemic change, and to propose a few ways forward in advancing our understanding of leverage in complex systems.

  # Related

  • Leverage analysis in systemic design
  • 𖠫 Towards Systemic Theories of Change- High-Leverage Strategies for Managing Wicked Problems - Murphy, Jones - 2021

  • Strategy
  • Systemic Change
  • Systemics
  • Design
  • Systemic Design
  • Leverage

• Using leverage analysis for systemic strategy

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

  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.

  # Developing Systemic Theories of Change

  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.

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