Stronger together: foundation building for third sector system working - part one

“… If you want to understand function, study structure.” - Francis Crick.

Despite advancements in health, technology, living standards, education and wealth, their benefits have not been evenly distributed, giving rise to the wicked social challenges that blight many people’s lives. Climate change, conflict, and growing levels of inequality in health, wealth, and opportunity are challenges that are complex. To tackle them we need to learn how to work with complexity. The skillsets and mindsets required to do so are profoundly different to those required to deal with linear problems. Indeed, our mistakes of the past have been to apply linear cause and effect principles to complex problems. This grossly myopic approach blindsides us from our ability to see the multitude of factors influencing outcomes in complex systems, and by tinkering only with one or two variables this leads to unexpected and often deleterious consequences. The uncompromising faith of many governments around the world in free-market economics as a means of resolving such problems has in many ways compounded inequalities and entrenched societal problems affecting generations. The Covid-19 pandemic and the cost-of-living crisis now taking hold are impacting communities and people already living under tough circumstances and are pushing huge numbers of people into destitution.

These are communities where policy and markets have failed many people and it is here that we see the 'third’ or plural sector at its most active and innovative. This sector comprises voluntary, community and faith groups and social enterprises (VCFSE) - the latter of which bring sustainable business practices to tackle societal challenges. The VCFSE sector has always supported the most vulnerable in society and those hardest hit by complex societal problems and its necessity and impact have never been more visible than in recent times. Its core advantages are that it can reach people and places most in need and do so more quickly, more cost-effectively and arguably more responsively than the statutory sector. Yet investment in the sector remains sporadic, uncertain and subject to the tyranny of meaningless metrics, budget cuts and false competition and its value is narrowly judged in efficiency terms. So how then can the VCFSE sector break these shackles and fulfil the critical role it can play in tackling these inherently complex, wicked social problems of our time?

To a large extent, the answer lies in the way the diverse range of VCFSE organisations collaborate to harness resources, and strengths, and work with the complexity of the challenges. This is essentially about the way the sector structures itself and the functions and behaviours that flow from this. More than that, of course, such collaboration is not only within the sector but also between sectors. In particular, the VCSFE and statutory sectors, and how they collaborate and develop new ways of engaging with, supporting and commissioning for the benefit of the communities they all serve.

We’ve identified three factors that might enable this.

1. The public sector should commission for complexity and incentivise the behaviours prerequisite for complexity working

Despite the extraordinary contribution VCFSE organisations continue to make throughout the pandemic and cost of living crisis, the challenge of acquiring investment to sustain such activity has never been more difficult. Diminishing grant funding opportunities are compounded by shrinking public sector funding pots, increased competition (including from the private sector often undercutting costs) and spiralling operating costs. As a result, this can lead to unhelpful behaviours in the sector and system as a whole. It creates too much competition which leads to a lack of openness, trust and collaboration.

If this wasn’t challenging enough, the legacy of new public management approaches continues to cast a long-lasting shadow over service commissioning. All too often, commissioners choose to block contract larger organisations to ‘fix problems’ based on grossly simplified logic models resulting in services that meet the specification but fail to deliver for people. Failing to give due regard to the complexity of a social problem leads to inadequate responses. However, commissioners often feel daunted by the prospect of opening what many believe is the ‘pandora box’ of complexity. It is politically expedient to seek to ‘buy a solution’ than admit there isn’t necessarily one yet to be found. More training and support for commissioners and providers alike in the skillsets and mindsets necessary to work with complexity would surely help.

Ultimately, we will have more success tackling complex societal problems if commissioners:

• advocate a well-thought through stakeholder-led analysis of the complexity of the challenge.
• involved those impacted by the issue
• prefigured learning ahead of outputs before going out to a procurement exercise.

It will lead to better, whole-system solutions that get to the root of the issue and importantly involve everyone in delivery. It will result in stronger collaboration, promote partnership tendering, and build stakeholder networks that pool strengths and capabilities and generate new insights about the system.

Commissioners therefore ought to take time to develop commissioning frameworks that promote the behaviours conducive to complexity working within the VCFSE sector. They should actively incentivise partnership working, joint tendering and co-design and co-production principles. These frameworks/structures will ultimately drive the behaviours that play out. We need commissioning frameworks that incentivise system-enhancing behaviours – and collective learning about the system - as a priority.

2. The VCFSE sector must embody what it advocates

We have long believed that we should advocate only for the change that communities say they want and need to live a valued, dignified life. It isn’t for others to make those decisions for us. The way citizens and communities ought to lead the change is captured by the mantra of ‘nothing about me, without me’. Hopefully, we will reach a point in time soon when there are many more examples of this, including participatory budgeting, where citizens decide how public resources are spent and citizen assemblies, where people come together to grapple with complex issues democratically, to find consensus and a shared way forward. We ought to trust more in the wisdom and capabilities of people and communities. After all, communities were never built on their deficiencies but rather on their assets and strengths.

You’d be hard-pressed to find a VCFSE leader that does not advocate the principles of participatory approaches, co-production, user-led design and other consultative and democratic methods with citizens and communities. Yet, when it comes to building a compelling, shared vision for the sector, one that truly represents the views and opinions of a broad spectrum of VCFSE players, this is often far more elusive and problematic. This is one of the biggest challenges the sector faces. How can it build democratic and participatory forms of VCFSE sector engagement and representation and avoid the well-documented pitfalls of chasing power and influence without a legitimate mandate? This challenge is not unique to the VCFSE sector of course, but it does hold the sector back.

3. Building democratic forms of participation, representation and accountability across the sector is vital

One could argue that this is another legacy of new public management approaches which actively promoted competition for limited resources setting off a chain reaction of counterproductive behaviours among organisations, making it difficult to focus on shared purpose and priorities. But roots also extend deeper into the history of the sector and the relationships and alliances that have been fought and won over time. In the old-world order of things, power (and resource) grabbing, and/or exerting power and influence over others has bestowed a competitive advantage for some, irrespective of whether this is a good thing for the community or addresses their needs. The sector would do well to work together to design new structures for enabling the diverse views and opinions of sector players to be heard, understood, and respected. This ought to be a democratic structure with rules and processes, that enable healthy, inclusive and constructive debates and reflection, with mechanisms for voting on issues and arriving at consensus.

Building democratic structures and processes for sector representation is a critical next step in helping the sector achieve more as a whole than its individual organisations can when acting alone and in competition. Surely those who resist this could be said to oppose the principles of democratic accountability. We believe a VCFSE congress or council is the right next step, operating at the level of the local authority with representatives that come together regionally with elected city region mayors to discuss key matters.

This is not an unachievable proposition. Leaders and followers are becoming more confident in speaking out about the lack of effective democratic representation and participation in the sector’s decision-making. The whispers of discord are growing into a chorus of concern. Real power and influence of course reside in every organisation playing its part in the sector’s contributions, if only it could be harnessed more effectively. Creating democratic structures and processes for the sector’s voice will mobilise the collective energy for change that resides within. It is an enabler of prosocial behaviours such as trust, reciprocity, fairness, goodwill, and integrity. It is also a prerequisite for creating safe spaces to learn and grow together which are needed to develop the collective intelligence to tackle the complexity of social challenges.

If these three improvements start to enable commissioners and the sector to collaborate more clearly on complex challenges, is there more the sector needs to do to make it easier for commissioners to invest in them? We believe so. In part two we will present a framework for the sector to do just that.

• Read part two of his Comment article here.