How would you approach it if you were tasked with changing a system?
Well, basically there are two ways, says Graham Boyd, author of the book “The Ergodic Investor and Entrepreneur” and my conversation partner in our series on money and impact.
“You can either start by pressuring the entire system, or you can start with the individual building blocks,” he says.
Series: New World, New Economy
We need a showdown with the usual way of thinking of economics, and give much more space to nature, if we want to avoid exceeding the planetary boundaries.
That is the message from Graham Boyd, author of the book “The Ergodic Investor and Entrepreneur”. He professes ergodicity economics, a central pillar of an economy capable of delivering net positive impact, regeneration, and everything else needed for all life, including ourselves, to flourish.
In a series of conversations with Graham Boyd, we explore whether a more nature-based approach to economics is what is needed to create companies that have a more positive impact on the world.
You can contribute to the series with questions, criticism and ideas. Send them to carsten@impactinsider.
Graham Boyd would not recommend the first approach – simply because in the vast majority of cases it is too big to change.
“To change the whole system at once means you have to change the tools of governments: policies, incentives, regulation. And yes, it can cause system changes. But it requires a lot of effort from you,” says Graham Boyd.
This is not least because the system will fight back with everything it has – simply to protect itself, even if it no longer serves the purpose it exists for.
Traditional impact investing falls short
Instead, Graham Boyd suggests a different approach. But before we dive into it, perhaps I should mention why this is relevant in a series about money and impact.
This is because impact investing – despite all its advantages – has weaknesses when it comes to changing systems.
In an article in the Stanford Social Innovation Review, three researchers describe how impact investors typically believe that they can create social change by investing in a single technology, a single project or an individual company.
But regardless of the fact that it may work in terms of unlocking a very specific potential, it falls short where actual systemic change is needed. Something else and more is simply needed, the researchers point out.
That’s why I talk to Graham Boyd about what it takes for impact investors and social entrepreneurs to create structural change. And now we come to his preferred angle of attack.
“The second way to create systemic change is to change the basic building blocks with which we build our businesses,” says Graham Boyd:
“When you change power structures at the elementary level, you also change how companies interact with each other and how capital flows between companies, and then the system changes itself. Because it wants to.”
A revolution à la Gustave Eiffel
Graham Boyd compares it to the construction revolution Gustave Eiffel set in motion with his observation tower in the heart of Paris at the end of the 19th century.
Until then, no tower had been built that surpassed Ulm’s skyward 161 meter church steeple. But by changing his building blocks from stone to metal, Gustave Eiffel succeeded in erecting a tower 330 meters high. And the Eiffel Tower stands today as a bold quantum leap in engineering.
“By changing the essence of the building blocks, as Gustav Eiffel did, you end up changing the whole system with more ease, because the system doesn’t notice for a while that it’s being changed,” says Graham Boyd.
If you bring in the big guns from the start, you will activate the entire system’s immune defenses, and all antibodies will be thrown into the fray.
“The second approach works like a virus or a Trojan horse, changing the basic building blocks until at some point they reach a tipping point where they spread throughout the system. And then the whole system will collapse and be integrated into the new system,” says Graham Boyd.
Briefly summarized, his advice is what Buckminster Fuller advised: Don’t try to change the system. Build a new one that works better and then the old system will move over when the time is right.
Or like that old chestnut about how many psychologists it takes to change a lightbulb. Just one, but the lightbulb must really want to change.
How to approach it as an investor and entrepreneur is what we talk about in our fifth – and for now final – interview. See the video here in the article.
And then please feel free to send me curious and challenging questions for me to ask Graham Boyd when we return with season 2 of our impact and money video chats. You can write to me at carsten@impactinsider.dk
