How businesses, governments and NGOs can address the complex issues of the modern world and provide the best possible outcomes for all stakeholders.
By Dr. Gilbert Probst and Dr. Andrea M. Bassi
Our socio-economic systems continue to grow and evolve; consequently, our decisions often fail – they are ineffective and create unexpected side effects. The speed of execution is increasing constantly, with markets and systems responding almost immediately, making decision making more challenging. There is little or no room for failure in the new VUCA –Volatile, Uncertain, Complex, Ambiguous – world order.
Given the increasing pressure to make decisions and provide error-free solutions to problems, the question is: How can businesses, governments and NGOs address the complex, interconnected issues of the modern world and provide the best possible outcomes for all stakeholders?
In our book, Tackling Complexity: A Systemic Approach for Decision Makers, we identify the following guidelines to help decision makers and strategists turn even the most complex issues into opportunities:
- Identify the causes and effects of the problem across social, economic and environmental dimensions. The system is characterized by feedbacks, which may create synergies or cause the emergence of side effects.
- Use a multi-stakeholder approach to take a variety of points of view into consideration and to incorporate as much varied knowledge as possible in the analysis.
- Evaluate the impacts across sectors and find a balanced strategy aimed at improving the entire system’s performance rather than a strategy aimed at maximizing some areas at the expense of others.
- Evaluate the impacts across actors and find an inclusive strategy that will allocate the costs consistently and distribute the benefits fairly across the key actors in the system.
- Think long term and prioritize resilience because success often depends on resilience in the light of unforeseen events, which means focusing on increasing a system’s capacity to absorb change and adapt to it with clear, long-term goals.
- Monitor the performance of the system to learn how—there will be many ways—systems respond to strategy and policy implementation, which provides an opportunity to—step by step—improve decision making by learning about the causes of success and failure to implement these.
Adopting this simple, structured approach is invaluable for those in high-pressure environments, where decision-making not only has to be swift but has to provide the best possible outcomes for all stakeholders across the social, economic and environmental dimensions.
However, how do decision makers get ahead of the curve?
Surveys, Scenarios, Social Media
Organizations like the World Economic Forum (WEF) and Dual Citizen use surveys and social media to capture trends thus leveraging interactions with their constituents to gain a competitive advantage. The use of a multi-stakeholders approach is critical if these organizations are to effectively contribute to their field and develop relevant products and services.
Further, the WEF uses scenarios to foster long-term thinking and prioritize resilience. Building on a wide consultation of stakeholders, these scenarios are based on extrapolating identified trends and systemically evaluating impacts across actors and sectors.
Turning Challenges into Opportunities
This process helps facilitate strategic dialogues among stakeholders that are truly forward-looking and aimed at building sustainable strategies in both the public and private sectors.
For example, working with a wide range of stakeholders, the Forum contributed to building momentum behind economic reforms in Russia through its Scenarios for the Russian Federation that continue to animate policy discussions. Similarly, the Forum facilitated strategy discussions about future challenges for metals and mining companies through its Mining & Metals Scenarios to 2030 that have continuously been used by leading companies in that sector.
Dual Citizen uses social media to monitor and evaluate progress, for instance the impact of policy implementation in the context of low carbon development and the green economy.
Once a strategy is implemented, the system needs to be analyzed and compared with the expected results. An understanding of the dynamic system elements—developed through the strategy and policy formulation and assessment process—will certainly help identify gaps and early warning signs in the monitoring phase.
Dual Citizen combines the analysis of quantitative data and information collected through social media with the perceptions of experts to bridge the gap between history, actual progress and future goals (see the Global Green Economy Index as an example). Decision makers can then design complementary actions to reduce any gaps and prevent negative effects from spreading across the system – removing complexity from the system and enabling innovative decision-making.