Part two of a three-part series
Last week, I shared a summary of Jess Daggers’ series of thoughtful explorations of how a suitably crafted approach to measuring impact could help to inform systemic investing, and the work of the TransCap Initiative (TCI) specifically. Jess’s explorations of what a systemic approach to measuring impact might look like survey a rich landscape of possibilities. In what follows, I share what resonates for me, and some of the issues and questions that have come up as I’ve read and re-read the various pieces.
My summarized highlights of Jess’s work can be found here, alongside a fuller selection of TCI resources, including various pieces by Dominic Hofstetter (TCI’s Executive Director) and Ivana Gazibara (TCI’s Director of Systemic Investment Programmes).
Resonances with my thinking and practice
Jess’s explorations and the work of the TransCap Initiative more broadly resonate strongly with my own work. First, I find TCI’s clearly articulated view that the landscape of investing for social change can best be understood as a complex, social and adaptive system hugely helpful. This perspective, along with an associated understanding of how change emerges in such systems - through networks of relationships, and cycles of action and learning, in and across multiple interconnected levels - challenges the traditional logic of impact investing and investors.
It also requires grappling with the limits of knowability as Jess puts it, acknowledging that establishing causality (especially simple X leads to Y causality) is challenging, and accepting that delivering pre-determined outcomes in predictable ways is impossible. Taking this perspective in a field that has yet to fully embrace complexity and systems thinking, and is keen to find effective approaches to addressing increasingly urgent challenges, is a bold move, and a very important one.
Second, this foundational insight raises a deeper and yet eminently practical question about how we ensure our approaches are fit for purpose. To this end, Jess’s emphasis on aligning methodology with epistemology and ontology - inspired by the work of Jean Boulton - is a helpful reminder of something that seems essential (see my previous piece on Making sense of emergence for more on this). Action in the social world is more likely to be effective, if it is based on information and knowledge about aspects of the world that shape its workings and evolution. (See Going deeper into the landscape of systems and complexity thinking, and my piece from 2024 on Ecosystems, emergence and social change).
Third, this issue of alignment then comes out most practically in Jess’s reframing of measurement as being about generating flows of information that can inform action. Jess’s clear articulation of this idea - an idea that has been central to discussions of adaptive management - opens up new possibilities for thinking and practice. This bodes well for the process of crafting an approach to measuring impact that will inform and support systemic investments and associated actions.
A number of related ideas from Jess’s series are also particularly valuable: that relationships provide an infrastructure for knowledge and learning; that investments, and portfolios of investments, can and should not just generate “impact” but also drive learning and the production of knowledge; and, that capital is both a resource and a systemically connective tissue (see the first part of Jess’s series, on What could and should impact measurement look like in systemic investing?)
Fourth, I also appreciate Jess’s emphasis on democratizing, distributing and embedding evaluation and evaluative practice, so that learning - along with power, resources and incentives - is positioned appropriately in efforts to support complex processes of social change. Putting this emphasis into practice can help to nurture the inclusive learning systems needed to support systemic and collaborative approaches to investing. (See my recent explorations of adaptive processes and learning systems).
Last but not least, I find the way that Jess and the wider TCI team put theory to work for practical effect, finding concrete ways of working towards a truly ambitious vision, inspiring. As Jess put it in conversation with me, the more abstract methodology conversations with academics need to connect with practitioners doing real contextual work.
Issues and questions to explore
Orchestration, emergence and measurement
A central element of TCI’s approach involves orchestrating different streams of capital to achieve strategic coherence and generate synergies that can shift the dynamics and outcomes of systemic investing. (See What is systemic investing?, Definition and hallmarks of systemic investing, and, more recently, Financial backbones, and a shorter version in the Stanford Social Innovation Review). The idea of orchestration raises important questions about how strategic coherence can be enhanced in complex social systems, where change - including changes in the level of strategic coherence - emerges through actors’ interactions rather than through central direction.
To my mind “orchestration” risks suggesting more control than may be possible, or desirable, suggesting a central authority telling different actors what notes to play, how loud and when, rather than a process in which different actors respond as they wish - driven primarily by their own interests - in a landscape of incentives. (See also Hansika Singh’s recent piece on systems change as sangat, not orchestration). TCI and its partners are the experts on their context, and have given careful consideration to orchestration and its limits. So I hesitate to offer an alternative; “orchestration” may indeed strike an appropriate and investor-friendly balance between control and emergence. Nevertheless, I would be very interested to learn more about the role that incentives (what incentives, shaping the behaviours of which actors, how, and with what behavioural effects?) play in TCI’s thinking about capital orchestration and how incentives might be dynamically shaped, in particular contexts, through processes of collective intelligence.
While not especially prominent in Jess’s published explorations of measuring impact, this (creative) tension between orchestration and emergence raises important questions about measurement, specifically about how TCI’s approach to measuring impact relates to TCI’s overall process, including the idea of orchestrating capital to achieve strategic coherence. So, for instance, how might one assess or measure the degree of strategic coherence or the magnitude of synergies achieved through combinatorial effects? And, how might measures of strategic coherence and synergies support efforts to further enhance them, via collective intelligence?
More broadly, this got me wondering about where in TCI’s overall process measures of impact - and broader measures of the health, vitality or adaptive capacity of the system within which “impact” and outcomes emerge - are expected to be brought to bear. I’d be very interested to learn more about TCI’s thinking in this regard. Making explicit where in the process, including the capital orchestration process, measures of impact (and more) might support good decisions and effective action - including whose actions, in what contexts - could, alongside thinking about ontology, epistemology and methodology, helpfully inform efforts to craft a suitable approach to measurement.
”Impact” and causal relations
This tension between nurturing emergence and exercising control also plays out in how “impact”, and the causal relations that lead to change, are thought of. I have little doubt that emergence is more appropriate than control or delivery for talking about how change happens in complex systems, and thinking about how processes of change might be supported. I am also sympathetic to the argument that talking of “impact” can suggest that causal relationships are complicated and mechanical, rather than complex and emergent, and might therefore be problematic (see Toby Lowe’s piece on explode on impact).
However, whatever language is used, and even if attention is also given to the health and vitality of the wider system, it will still be important to be able to say something about what difference an investor’s actions - and, as David Bent’s review notes, the actions of other players in the system - seem to be making as regards the landscape of investing and the outcomes that are generated. Individual investors, wanting to make decisions about whether, how and in what areas to invest, will need to have some sense of how their investments have contributed to making a difference - through the work of investees, “on the ground”, as part one of Jess’s explorations helpfully reminds us - and what returns, financial and otherwise, they might expect from future investments.
This is challenging terrain, but while there may be better language, jettisoning notions of impact, causality and outcomes - what difference the actions taken by investors and other players seem to be contributing to, and how - would not, as TCI clearly recognizes, be a sensible way to go. Again, this raises important questions for measuring impact and making sense of how change happens; finding a way forward that is aligned with both the complex realities of systemic investing and the decision-making needs of financial investors and others who in different ways are also invested in the system and whose actions are the things that make change happen.
Returns, ripples and rigour
The challenges of measuring impact in complex and emergent systems raise two related questions: first, about how one might assess value and think about returns on investment; and second, about how one might rigorously validate the insights that are generated through the process of measuring impact and more, and which provide vital inputs for learning, decisions and action.
On returns, it strikes me that it might be fruitful to broaden the notion of returns on investment, and of “impact” more broadly - perhaps considering returns as ripples of difference that create value and are generated through actions taken in a complex social system constituted by actors, behaviours, relationships and inter-actions.
Such a move is pre-figured in a piece by Dominic Hofstetter in 2023 in which he talks about “conceptualizing and measuring progress by studying the health of a system and/or systems-level properties (structure, feedback loops, etc) rather than end-of-causal-chain outcome metrics (e.g., CO2 saved)”. It also connects to the work of Emily Gates, with Tom Schwandt, and with Pablo Vidueira, about how evaluative inquiry - including measurement - can play a role in the co-creation of value (including but not limited to financial value), in systemic approaches to addressing complex social challenges.
On rigour there is much to explore, including interesting parallels between the ways in which “meaning”, and its close-cousin “value”, are co-created in complex social systems. However, it seems clear that rethinking rigour in ways that are appropriate for complex social systems - crafting robust inter-subjective processes for assessing the validity, value, and meaning, of emergent insights, for instance - could help to strengthen the credibility, and value, of systemic impact measurement. I’ve been glad to explore some of these issues with Jess, and look forward to further discussions. (See my recently curated resources on rethinking rigour for some entry points to a rich body of literature, along with the excellent IDS-led work on inclusive rigour).
The political economy dynamics of systems change
The questions raised above about impact, causal relations, returns, ripples and rigour point to a deeper challenge: understanding the contextual factors that shape how value is created and distributed in complex systems. Until recently, TCI has been relatively quiet, at least publicly, on the political economy dynamics of systems change - how the distribution of power, the flow of resources, and the landscape of incentives shape the workings and evolution of complex social systems and the outcomes they generate. This gap, while not uncommon in “systems change” conversations and evaluations (see Emily Gates and colleagues’ recent review of efforts to evaluate systems change and transformation), is significant, with important implications for the approach taken to measuring impact and understanding system health, in order to inform effective actions, because political economy factors fundamentally shape system dynamics and outcomes.
This matters for measurement because, as Emily Gates and colleagues observe, “the creation of fundamentally new structures, through which new systems emerge, implies power changes that upend the current system(s).” If monitoring, evaluation and learning doesn’t engage with distributions of power, flows of resources, and landscapes of incentives, and illuminate the role they play in shaping system dynamics, then such efforts are likely to leave system dynamics - and the outcomes that emerge - fundamentally unchanged. (See also my recent review of UNDP’s MEL 360 Tools and Guidance, and the work of SOAS-ACE on navigating the political economy of corruption).
Dominic Hofstetter’s insightful piece on the limitations of investing in universal solutions, as well as a related post, signals growing attention to these political economy dynamics, and their contextual specificities. As he notes, “A lot of systems innovation work operates at the macro-level, where problems and solutions are of a generic nature and thus never quite fit the specificity and idiosyncrasies of the contexts in which decision-making happens.” Given that the same intervention will produce different outcomes depending on local power structures, institutional arrangements and economic incentives, the specificity and idiosyncrasies of context include, most importantly, their political economy dynamics. As Dominic puts it, “the challenge with context-agnostic impact investing is that, in the end, the extent to which a particular innovation actually solves any tangible challenge will always, still, depend on how it integrates into the contexts in which it is used”. Centering context in systemic investing, and the political economy dynamics of particular contexts, is key.
If monitoring, evaluation and learning is to inform effective action, approaches to measuring impact, and the health, vitality and adaptive capacity of the broader system from which impact emerges, must pay attention to contextual factors, including the political economy dynamics. What this might look like will take some working out, with much to be learned from related experience as regards the political economy of governance reform, and various approaches to understanding the political economy dynamics of complex social systems, but will likely involve in-context engagement with questions such as:
- How are different actors behaving, what shapes their behaviours, and how do their behaviours shape the dynamics of the system?
- How does the landscape of power and incentives, and relationships amongst actors, shape, constrain and encourage actors’ behaviours, and in turn the prospects of systemic change
- How are the costs and benefits of the way the system currently works distributed across various actors?
- What incentives drive the behaviour of investees “on the ground”, in particular contexts, beyond the intentions of investors?
- How can the dynamics of a complex social system be shifted in ways that take account of the existing political economy landscape?
By implication, measurement approaches that are intended to support sense-making that informs systemic investing should illuminate three interconnected dimensions: first, how actors behave and what shapes those behaviours; second, how the landscape of power, incentives and relationships - particularly the distribution of costs and benefits - shapes and is shaped by those patterns of behaviour; and third, how these dynamics are shifting over time, through changing coalitions, evolving incentives, and emerging institutional arrangements. As Jess’s piece on what could and should impact measurement look like in systemic investing hints, this should include considering investor-investee relationships - as well as a broader set of relationships - as sites where political economy dynamics play out, and where behavioural changes, nudged along by policies and incentives that are tailored for and in context, might contribute to sustainable systems change.
Paying attention to these political economy dynamics should, I believe, be part of an approach to measurement that goes beyond “impact” to assess and illuminate the health and vitality of the broader system within which ripples of impact and outcomes emerge, in a process of co-creating value. As the work of Cathy Sharp, Indy Johar and Yuen Yuen Ang, as well as Emily Gates referenced, in my recent review makes clear, this also raises questions about who is best positioned to surface and interpret these political economy dynamics - likely requiring distributed sense-making that includes actors positioned differently within the system.
Up next: Making things systemic
Having explored my resonances and questions, in a third and final installment I will consider what might be done to make measurement, sensemaking, learning and action, more fully systemic. In that piece, I’ll provide three things:
- First, a brief recap of where things are for TCI as regards measuring impact, and of my resonances and questions;
- Second, some broad-brush thoughts about what an integrated approach to measurement, sensemaking and learning, to inform the practice of systemic investing, might look like;
- Third, some suggestions of priority areas for further exploration that might support progress towards the sort of integrated approach I’ve sketched out.
The resonances, questions and tensions explored above point to both the challenges and opportunities in crafting approaches to measurement that are truly fit for purpose in complex systems. I’ve invested a lot of time in getting my head around the work of the TransCap Initiative, and in particular the initiative’s approach to measuring impact to inform action. This is because I think what TCI is doing is important and valuable, with their work playing an important role in shaping the field of systemic investing. It’s also because the sorts of challenges that they are creatively grappling with are common in the systems change landscape.
This means that my reflections and questions also have wider relevance for anyone grappling with complex social challenges in learning-centered ways. By engaging deeply with TCI’s work, I hope to have contributed some ideas that might be useful to TCI and others as we collectively try to make sense of the complex social challenges we face, in order to take more effective action.
Update, 25th November 2025 - part three of this three part series, on ***full-stack systemic: measurement, learning, investing*** is now out, with a consolidated version of my series of three pieces now available here.
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First published on LinkedIn, 18 November 2025.