OU supports sustainable systems development initiatives through a three-prong approach. We focus on facilitating changes to the systems around the poor, or those vulnerable to poverty, working to ensure any change pursued is grounded in evidence and context and is undertaken in partnership with those best positioned to influence the change. Underlying all of this is a flexible approach that ensures we can adapt as results and situations demand, and that we support programs/organizations to do the same.

Development assistance is no longer about ‘giving support to poor people’. While there are situations when direct assistance is necessary – such as humanitarian crises – ‘giving things’ to the poor, whether individuals, households or businesses, does little to reduce the impacts of poverty or vulnerability to poverty. It does not create change. 

At OU, we specialize in facilitating systems change. We aim to influence the environment around those living in poverty, or vulnerable to poverty, or those being excluded, with a view to improving livelihoods, building resilience to economic and climatic shocks and providing the opportunity to thrive. The opportunity to thrive also comes with access to better nutrition and reduced stunting and access to affordable housing, education and healthcare. 

As an example, a farmer (and, yes, farming is a business) has been growing potatoes for many years. In recent years he noticed he is producing less, and the quality of his harvest has reduced. He is therefore selling less, resulting in a drop in income and his situation is reflective of other potato farmers in his community. A donor-assistance program may seek to address this by introducing a new crop to improve livelihoods, or by giving the farmer seed on occasion. 

But what if they looked at the ‘system’ around the potato farmers? They would identify that there is no local seed supply. If farmers had access to quality seed, their potato yield would improve, their income would be secure. So why not direct development assistance at strengthening, or addressing the gaps in the system (in this case, the lack of local seed supply), or environment, so that the farmers can maintain and secure their livelihood?

This is a simple example. The reality is more complex, and that is why we apply the three-pronged approach described below. 

System Facilitation

To influence or facilitate change to the environment within which farmers and other businesses operate, we need to understand that environment. We look at the market system – the system surrounding a particular business or industry – which comprises what a business needs to produce (e.g. seeds, fertilizer, equipment), the services it needs to function (e.g. access to finance, transport and logistics), and policy and regulatory environment needed for productive and competitive business operations. We identify what is needed to put in place commercially sustainable business models. 

At OU, we analyze the market system, we ground-truth our assumptions and we identify what is working and where the gaps or weaker links are. Importantly, we identify where the business opportunities are, and even more importantly, we find the business opportunities that will also contribute to the achievement of development outcomes. Then we work with market players to identify solutions and establish commercially sustainable business models that also influence the ability of people to thrive and reduce the impacts of poverty. 

Finding these business opportunities is a skill and a talent. The OU team knows how to find business opportunities in hard-to-research and information-poor market environments. The OU team can also identify the potential of unexpected partners to meet the unmet market demand.

Analysis and Learning

Market systems are complex, and to truly understand and influence a system, rigorous analysis is required. Market systems are also dynamic, so to work within them and to influence change, this rigorous analysis must be coupled with learning. This is a continuous cycle – the analysis is ongoing and triggers a lot of questions, the team then seeks the answers, more analysis is undertaken and more questions are raised – and so it goes. 

For example, the following questions might arise in the analysis of the market system surrounding the potato farmer mentioned above: If farmers could produce more and earn more with access to good seed, why is seed not available? Is seed available but not affordable? Is the quality poor? Are the seed varieties not suitable for the climate? Is seed distribution poorly developed? Are there seed companies? If there are, do they know the farmers are having problems with yields? Do the seed companies understand the income potential if they were better connected to farmers? Do agricultural research and government organizations understand the need for better seed?

Simply providing the potato farmers with seed will not address the systemic issues that have resulted in there being no local seed supply. It will not result in a commercially sustainable business model. Facilitating change from within the system presents a better opportunity to improve the economic outcomes for the farmers, and this can only be done if the system is truly understood. This understanding requires research - a combination of secondary data (e.g government statistics) and fieldwork that ensures we are talking to the people who work within the system, and who know and understand their business needs.

Strong, Fit-for-Purpose Teams

It is not unusual for us to begin working with clients only to realize a genuine desire to apply systems thinking and create commercially sustainable solutions is being held back by a limited understanding of these (market) systems, low analytical capabilities within the team, and an organizational structure not equipped to support the systems analysis, analysis and learning and the adaptive management processes needed to facilitate change.