Systems Thinking- Changing our way of thinking and doing
Talking about systems is easier than thinking and working in systems on the ground! Applying systems thinking to market development is a challenge because of many factors. Systems thinking requires that we start to look at the whole instead of just one piece of what is going on and thinking that is all there is to it. But when we live in a world dominated by compartmentalizing everything and reductionism, where we reduce the whole to its parts, our mental models, can be resistant to a new way of thinking and being.
It has been awhile, sorry for the absence. Between getting settled, the end of year holidays and technical difficulties, well things got delayed in the blog-posting arena 🙂
Reductionism vs Systems Thinking: Ideas at odds with each other
I have been learning about inspiring systems thinking. The women I am working with did not look at themselves, and the economic activity they are investigating, as connected to a larger group of actors. Their understanding of a market system was limited to them as producers and customers- which is their experience of participating in markets. Reducing a market to these two actions will compromise decision making and problem solving when the entire market system is affected, for instance by a dry rainy season. There are many actors, and factors, that influence and affect the market we work in, not just the core economic activity of transactions between buyers and sellers. Without understanding the connection to other actors, then any sort of market analysis is extremely limited.
Simon Herbert, an institutional economics, talks about bounded rationality. Bounded rationality is the idea that when individuals make decisions, their logic based on facts and reason (rationality) is limited by: the information they have, the intellectual boundaries of their minds, and the time available to make the decision. If people have limited awareness due to lack of experience and they do not have information, they cannot make informed decisions. This stands in the face of orthodox neo classical economics which believes that everyone is a rational atomized individual who has access to all the information they need. To introduce a systems lens to market development I opted to deconstruct the term market system.
Deconstructing Market System
So we started off the third class by deconstructing the words market and system and market system. This I have found in the past as being very helpful when learners put common terms into their own words. It not only illustrates to me if everyone understands the concept we are working with, but it also assists in ensuring that we are all on same page when we are talking about the common terms we use in everyday life. We came up with:
A Market System: A group, of many types of actors that have distinct roles to facilitate the exchange of goods and services.
So who were these types of actors? This is what we came up with: private sector actors (MSMEs, corporations, farmers – anyone who provides a good or service and receives money for delivering that good or service); Public Sector actors (State Government and their associations, Ministry of Agriculture, National Government, World Bank, Donor Governments etc.) and Civil Society (NGO’s, Religious groups, professional associations, chamber of commerce, social movements, gangs, mafia).
And all of these types of actors have specific roles that they play in assisting, and sometimes even impeding, the development of the market. We came up with the following roles that the aforementioned actors provide: technical assistance, capacity building, information, technology – equipment/machines, financial services, input supplies, infrastructure (transport, telecommunications, utilities, roads, etc. and those that create laws and treaties. The Exchange of Goods and Services was deconstructed to being buying and selling.
There were flipcharts and descriptions and the dialogue was lively. The next class I started out with a review exercise to see how the women producers had grasped the idea of markets as a system which was beyond the roles of buying and selling the product they were producing. I had written each of the specific activities on to a paper. These headline titles were pasted around the room on the wall. The women each received cue cards with a type of actor written on each one. The women were to put the type of actor under the type of activity that the actor could perform; for instance capacity building could have NGO, Ministry of Agriculture and seed seller under it. This exercise was to give them a visual of how each different type of actor played a different role, and some actors played various roles.
They were getting it, or so I thought they were. When it came to indicating what activities they required to assist them at each stage of transformation of their products, they looked at me blankly. They were not able to transfer what was on the wall to their own experience. I had to accept that I needed to try something else to inspire them to look at their economic activity through a systems lens.
I had to go back to their experience outside of their market idea, which I have learned is really a microenterprise idea (I will explore that in another blog post). I returned to the inspiration of Paulo Freire with a ‘poster’ story. So I started the next class with a review exercise with a poster story.
I created a story about three women in a village – Maria, Martha y Elena who were all raising chickens. One had a chicken coop, the others had them run free. In town there was a small restaurant and the owner who knew Martha needed 5 dozen eggs daily from kitchen garden chickens (patio chickens). So Martha talked with her friends and they decided they would respond to the offer. Then the story evolved to what they needed to do to supply the 5 dozen eggs a day- how many chickens, building coops, feeding the chickens, learning about vaccinations and chicken health, on and on. As they came up with what they needed I made a cue card up and labelled it with the activity with the actor who could assist the women in bringing their idea to reality. The story then had evolved into a lesson.
The women got involved in the story, adding to it and embellishing it. When they saw all the things that the women in the story needed and the actors who could provide the product or service, this is when the idea of the market system became concrete and real.
Poverty and Paradigms
When people are marginalized through poverty, they are confined to a world that compromises of making ends meet. And women are often physically confined to their homes where they fulfill their daily tasks of washing clothes, preparing food, tending to the children, they may go to the market in their town or village, and the list goes on and on. Their world is separate from their children who go to school and start to expand their horizons or their husband’s world that engages in the public sphere to get things done according to their role in the household. To introduce a new idea, like we are all connected and that there are so many factors that influence our daily activities, I found it was imperative that I start in a place that they were very familiar- like the three women in the village who were raising chickens. The life experience of the women I am working with is that they are connected to their children and husband, maybe a religious group, but not much outside of that.
It was a good lesson to re-learn for me. Systems thinking is a new paradigm and requires a new way of thinking. I have to start to be sensitized to what is familiar with them and facilitate the re-presenting of the idea that demonstrates how we are all interconnected. This is not a one-off exercise, I will have to keep on finding new ways of presenting the idea of systems so that eventually it becomes the way of thinking.
DFID & SDC,2014. The Operational Guide for the Making Markets Work for the Poor (M4P) Approach, 2nd Edition [online]. London UK: DFID & SDC. Available from: https://www.eda.admin.ch/content/dam/deza/en/documents/Publikationen/Diverses/mp4_operational_guide_EN.pdf [Accessed December 10, 2014].